EXECUTION COPY

EXHIBIT 10.36

LIMITED PARTNERSHIP AGREEMENT

OF

THOMAS HIGH PERFORMANCE GREEN FUND, L.P.

Dated as of December 18, 2007

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TABLE OF CONTENTS

 

         Page ARTICLE I.           THE PARTNERSHIP    1 1.1   Formation    1 1.2
  Name    2 1.3   Principal Place of Business    2 1.4   Purposes and Powers   
2 1.5   Registered Office and Agent    2 1.6   Fiscal and Taxable Year    2 1.7
  Term    2 1.8   Filings    2 ARTICLE II.           DEFINITIONS    3
ARTICLE III.           CAPITAL CONTRIBUTIONS    14 3.1   Closings; Acceptance of
Subscriptions    14 3.2   Capital Commitments    15 3.3   Capital Contributions;
Capital Calls    15 3.4   Partnership Borrowings; Pledge of Capital Commitments
   17 3.5   Remedies upon a Capital Default    18 3.6   Set-off and Withholding
of Certain Amounts    19 3.7   No Right to Redemption of Interests or Return of
Capital Contributions    19 3.8   Uncertificated Interests    20 3.9  
Limitation on Liability of Limited Partners    20 3.10   Interest    20 3.11  
Negative Capital Accounts    20 ARTICLE IV.           ALLOCATIONS OF PROFITS AND
LOSSES    20 4.1   Losses    20 4.2   Profits    20 4.3   Special Allocations   
21 ARTICLE V.           DISTRIBUTIONS    23 5.1   Distributions    23 5.2  
Amounts Withheld    25 ARTICLE VI.           MANAGEMENT    26 6.1   Management
of the Partnership; Management Fees    26 6.2   ERISA    30 6.3   Restrictions
on the Partnership    31

 

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TABLE OF CONTENTS

(continued)

 

         Page 6.4   Participation by Limited Partners    32 6.5   Filing of
Schedules, Reports, Etc    32 6.6   Advisory Committee    32 6.7   UBTI Matters
   35 6.8   Listed Transactions    35 ARTICLE VII.           EXPENSES AND FEES
   35 7.1   Operating Expenses    35 7.2   Organizational Expenses    36
ARTICLE VIII.           INVESTMENTS    36 8.1   Investments.    36 8.2  
Vehicles    37 8.3   Parallel Investment Vehicles    37 ARTICLE IX.  
        EXCULPATION AND INDEMNIFICATION    38 9.1   Exculpation and
Indemnification    38 9.2   Liability Insurance    39 ARTICLE X.  
        BOOKS, MEETINGS AND RECORDS    40 10.1   Books and Accounts    40 10.2  
Reports to Partners    40 10.3   Annual Meeting    40 ARTICLE XI.  
        TRANSFERABILITY OF A PARTNER’S INTEREST    41 11.1   Restrictions on
Transfer    41 11.2   Prohibition on Transfers of General Partner Interests   
42 11.3   Transfers of Limited Partner Interests    43 11.4   Substituted
Partners    43 11.5   Amended Certificate    43 11.6   Deceased or Incompetent
Individual Limited Partners    43 ARTICLE XII.           REMOVAL OF THE GENERAL
PARTNER    44 12.1   Removal of the General Partner For Cause    44 12.2  
Removal of the General Partner Without Cause    45 12.3   Effect of Removal of
the General Partner    45

 

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TABLE OF CONTENTS

(continued)

 

         Page 12.4   Effect of the Bankruptcy of the General Partner    47
ARTICLE XIII.           EXCLUSIVITY    47 13.1   Investment Exclusivity    47
13.2   Other Funds    48 ARTICLE XIV.           DISSOLUTION    48 14.1   Events
of Dissolution    48 14.2   Final Accounting; Clawback    49 14.3   Cancellation
of Certificate    50 14.4   Compliance With Timing Requirements of Regulations
   50 14.5   Termination    51 ARTICLE XV.           NOTICES; POWER OF ATTORNEY
   51 15.1   Method of Notice    51 15.2   Routine Communications; Wire
Transfers    52 15.3   Computation of Time    52 15.4   Power of Attorney    52
ARTICLE XVI.           GENERAL PROVISIONS    53 16.1   Entire Agreement    53
16.2   Amendments and Waivers    53 16.3   Approvals    53 16.4   Side Letters
   54 16.5   Governing Law    54 16.6   Captions    54 16.7   Successors    54
16.8   Severability    54 16.9   Gender and Number    54 16.10   Third-Party
Rights    54 16.11   Counterparts    55 16.12   Confidentiality.    55 16.13  
Service of Process    56 16.14   Trial    57

 

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TABLE OF CONTENTS

(continued)

TABLE OF EXHIBITS

 

     Page

FORM OF SUBSCRIPTION AGREEMENT

   A

SCHEDULE OF PARTNERS

   B

ILLUSTRATION OF MANAGEMENT FEES

   C

FORM OF CONTRACT WITH AFFILIATES

   D

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LIMITED PARTNERSHIP AGREEMENT

OF

THOMAS HIGH PERFORMANCE GREEN FUND, L.P.

This LIMITED PARTNERSHIP AGREEMENT (this “Agreement”) of THOMAS HIGH PERFORMANCE
GREEN FUND, L.P., a Delaware limited partnership (the “Partnership”), is dated
as of December 18, 2007 (the “Formation Date”), by and among Thomas HPGF-GP,
LLC, as the general partner of the Partnership (the “General Partner”), and each
Person (as defined herein) admitted to the Partnership as a limited partner from
time to time pursuant to this Agreement who is identified in the records of the
Partnership as a limited partner of the Partnership (each such Person, a
“Limited Partner”). The General Partner and the Limited Partners are hereinafter
sometimes referred to collectively as the “Partners” and each of them
individually as a “Partner”.

W I T N E S S E T H:

WHEREAS, the parties hereto desire to provide for the governance of the
Partnership and to set forth in detail their respective rights and duties
relating to the Partnership.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto do
hereby agree as follows:

ARTICLE I.

THE PARTNERSHIP

1.1 Formation. The Partners hereby agree to form a limited partnership under the
Act pursuant to this Agreement and the Certificate of Limited Partnership (the
“Certificate”) filed with the Secretary of State of the State of Delaware on the
date hereof. The Partners, acting directly or through an attorney-in-fact,
hereby authorize, or as applicable, ratify, the filing by the General Partner of
the Certificate, and, in order to comply with all requirements of law for the
continuation and operation of a limited partnership among the Partners pursuant
to the laws of the State of Delaware and all other jurisdictions where the
Partnership may elect to conduct its operations, hereby further authorize the
General Partner on behalf of the Partnership from time to time to execute any
amendment of the Certificate and any other appropriate documents, and take any
other necessary or appropriate action in connection therewith, including the
making and filing with the office of the Secretary of State of the State of
Delaware of such amendments to the Certificate. A Partner may obtain a copy of
the Certificate upon written request to the General Partner. Upon a Person’s
execution of a counterpart signature page of this Agreement as a limited
partner, which counterpart signature page is accepted by the Partnership, such
Person will be admitted to the Partnership as a Limited Partner of the
Partnership and will be shown as a Limited Partner on the books and records of
the Partnership as of the effective date of such acceptance. Upon its execution
of a counterpart signature page to this Agreement, Thomas HPGF-GP, LLC is hereby
admitted as the general partner of the Partnership.

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1.2 Name. The name of the Partnership shall be “Thomas High Performance Green
Fund, L.P.” All business of the Partnership shall be conducted under such name
and such name shall continue to be used at all times in connection with the
Partnership’s business and affairs; provided that the General Partner may,
without the consent of any other Partner, change the name of the Partnership
from time to time by filing a certificate of amendment or amended and restated
Certificate with the Secretary of State of the State of Delaware, in which event
the General Partner shall notify the Partners of such name change promptly
thereafter.

1.3 Principal Place of Business. The principal place of business of the
Partnership shall be at c/o Thomas Properties Group, L.P., City National Plaza,
515 South Flower Street, Sixth Floor, Los Angeles, CA 90071, or such place or
places as the General Partner may, from time to time, designate. The General
Partner shall give notice to all of the Partners of any change in the
Partnership’s principal place of business.

1.4 Purposes and Powers. Subject to the limitations set forth herein, the
business and purposes of the Partnership shall be directly and indirectly to
acquire, hold, maintain, operate, improve, develop, renovate, expand, originate,
use, lease, finance, manage and dispose of Investments and to engage in any and
all activities as are related or incidental to the foregoing, as determined by
the General Partner in its sole discretion. The Partnership shall have the power
to do anything and everything necessary, suitable or proper for the
accomplishment of or in furtherance of any of the purposes set forth herein, and
to do every other act or acts, thing or things, incidental or appurtenant to or
arising from or connected with any of such purposes.

1.5 Registered Office and Agent. The registered office of the Partnership in the
State of Delaware shall be The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, New Castle County, Wilmington, Delaware 19801, or
such other address within the United States as may be designated from time to
time by the General Partner. The name and address of the registered agent for
service of process on the Partnership in the State of Delaware shall be The
Corporation Trust Company at the above address, or such other agent and address
as may be designated from time to time by the General Partner.

1.6 Fiscal and Taxable Year. The fiscal year and taxable year of the Partnership
shall be the calendar year (the “Fiscal Year”), unless such other taxable year
is otherwise required by Section 706 of the Code.

1.7 Term. The Term of the Partnership commenced on the Formation Date and shall
end on the earlier of (i) the seventh anniversary of the Final Closing Date,
provided that the General Partner may extend the term of the Partnership for a
one-year period, in the General Partner’s sole discretion, and an additional
one-year period, with the approval of the Advisory Committee, to allow for the
orderly liquidation and distribution of the Partnership’s assets, and (ii) the
date that the Partnership is dissolved in accordance with the provisions of
Article XIV hereof.

1.8 Filings. Upon the execution of this Agreement by the parties hereto, the
General Partner shall do, and continue to do, all things as may be required or
advisable to continue and maintain the Partnership as a limited partnership,
qualified to do business in such

 

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jurisdictions as may be required, and to protect the limited liability of the
Limited Partners in any jurisdiction in which the Partnership shall transact
business.

ARTICLE II.

DEFINITIONS

The following defined terms used in this Agreement shall have the respective
meanings specified below.

“Act” shall mean the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time.

“Adjusted Capital Account Deficit” shall mean, with respect to any Partner, the
deficit balance, if any, in such Partner’s Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:

(a) credit to such Capital Account any amounts which such Partner is obligated
to restore pursuant to any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and (i)(5) of the Regulations; and

(b) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

The foregoing definition of “Adjusted Capital Account Deficit” is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.

“Advisory Committee” shall have the meaning set forth in Section 6.6(a) hereof.

“Affiliate” shall mean, with respect to any Person, any Person Controlling,
Controlled by, or under common Control with, such Person.

“Agreement” shall mean this Limited Partnership Agreement of the Partnership, as
the same may be amended from time to time.

“Annual Meeting” shall have the meaning set forth in Section 10.3 hereof.

“Annual Meeting Notice” shall have the meaning set forth in Section 10.3 hereof.

“Bankruptcy” shall mean, with respect to any Person, (a) the filing by such
Person of a voluntary petition seeking liquidation, reorganization, arrangement
or readjustment, in any form, of its debts under Title 11 of the United States
Code or any other federal, state or foreign insolvency law, or such Person’s
filing an answer consenting to or acquiescing in any such petition, (b) the
making by such Person of any assignment for the benefit of its creditors,
(c) the expiration of sixty (60) days after the filing of an involuntary
petition under Title 11 of the United States Code, an application for the
appointment of a receiver for a material portion of the

 

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assets of such Person, or an involuntary petition seeking liquidation,
reorganization, arrangement or readjustment of its debts under any other
federal, state or foreign insolvency law; provided that the same shall not have
been vacated, set aside or stayed within such sixty-day period or (d) the entry
against it of a final and nonappealable order for relief under any bankruptcy,
insolvency or similar law now or hereafter in effect. The term “Bankruptcy” as
defined in this Agreement and used herein is intended, and shall be deemed to,
supersede and replace the events of withdrawal described in Section 17-402(a)(4)
and (5) of the Act.

“Business Day” shall mean any day except a Saturday, Sunday or other day on
which commercial banks in Los Angeles, California are authorized by law to be
closed.

“Capital Account” shall mean, with respect to any Partner, the Capital Account
maintained for such Partner in accordance with the following provisions:

(a) To each Partner’s Capital Account there shall be credited the aggregate
amount of such Partner’s Capital Contributions, such Partner’s distributive
share of Profits and any items in the nature of income or gain which are
specially allocated pursuant to Article IV hereof, and the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Partnership property distributed to such Partner.

(b) To each Partner’s Capital Account there shall be debited the amount of cash
and the Gross Asset Value of any Partnership property distributed to such
Partner pursuant to any provision of this Agreement, such Partner’s distributive
share of Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Article IV hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or which are secured by
any property contributed by such Partner to the Partnership.

(c) If any Interest is Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the transferred Interest.

(d) In determining the amount of any liability for purposes of determining
Capital Account balances hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Treasury
Regulations.

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with
Section 1.704-1(b) of the Treasury Regulations, and shall be interpreted and
applied in a manner consistent with such Treasury Regulations. If the General
Partner shall determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto, are computed in order to
comply with such Treasury Regulations, the General Partner may make such
modification if, and only if, it is not likely to have an adverse effect on the
amounts distributable to any Partner pursuant to Article XIV hereof upon the
dissolution of the Partnership.

“Capital Call” shall have the meaning set forth in Section 3.3(b) hereof.

“Capital Call Notice” shall have the meaning set forth in Section 3.3(b) hereof.

 

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“Capital Commitment” shall have the meaning set forth in Section 3.2 hereof.

“Capital Contributions” shall have the meaning set forth in Section 3.3(a)
hereof.

“Capital Default” shall mean any failure by a Partner to pay in full when due
(after the expiration of any cure period) any Capital Contribution.

“Capital Event” shall mean, with respect to any Investment, (a) the sale,
transfer, exchange, pledge, hypothecation, or other disposition of all or any
portion of such Investment or interests in any entity which directly or
indirectly holds such Investment, (b) the incurrence of any Indebtedness by the
Partnership or by any entity which directly or indirectly holds such Investment
and which is secured by such Investment or interests in any entity which
directly or indirectly holds such Investment, other than any incurrence of
Indebtedness the proceeds of which are used to acquire such Investment, (c) the
refinancing of any Indebtedness allocated to such Investment, and (d) any
similar transaction with respect to such Investment.

“Capital Interest” shall mean the General Partner’s Interest, if any, other than
its Carried Interest.

“Carried Interest” shall mean the General Partner’s rights with respect to
Carried Interest Distributions.

“Carried Interest Distributions” shall mean the amounts distributable to the
General Partner pursuant to Sections 5.1(b)(iii)(B) and (iv)(B) hereof.

“Certificate” shall have the meaning set forth in Section 1.1 hereof.

“Closing” shall mean the Initial Closing and each Subsequent Closing.

“Closing Date” shall have the meaning set forth in Section 3.1(a) hereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time (or any corresponding provisions of succeeding law).

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of another Person
without the consent or approval of any other Person.

“Covered Persons” shall have the meaning set forth in Section 9.1(a) hereof.

“Cure Period” shall have the meaning set forth in Section 3.5(a) hereof.

“Damages” shall have the meaning set forth in Section 9.1(a) hereof.

“Debt Limit” shall have the meaning set forth in Section 8.1(b)(vi) hereof.

“Default Rate” shall have the meaning set forth in Section 3.5(a) hereof.

 

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“Defaulting Partner” shall mean any Partner who has committed a Capital Default.

“Delaware Arbitration Act” shall have the meaning set forth in Section 12.1(b)
hereof.

“Depreciation” shall mean, for each Fiscal Year or other period, an amount equal
to the depreciation, amortization or other cost recovery deduction allowable
with respect to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the adjusted tax basis of such property is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.

“Designated Key Person” shall have the meaning set forth in Section 6.1(d)
hereof.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

“ERISA-Covered Partner” shall have the meaning set forth in Section 6.2(a)
hereof.

“ERISA Notice” shall have the meaning set forth in Section 6.2 hereof.

“Estate Planning Affiliate” shall mean, with respect to any Person, each of the
following: (a) any spouse or descendant or adopted child of such Person, spouse
or descendant; (b) any spouse of any descendant of any individual or individuals
referred to in clause (a) hereof; (c) any trust created for the benefit of any
individual or individuals referred to in clauses (a) and (b) hereof; (d) any
executor, trustee or administrator for any Persons referred to in clauses
(a) through (c) hereof; (e) any partnership or limited liability company
comprised solely of Persons referred to in clauses (a) through (d) hereof;
provided that any Person identified in clause (d) hereof is acting in such
capacity; (f) any foundation created by any of the foregoing Persons for
charitable or eleemosynary purposes; and (g) any corporation, partnership or
limited liability company (including, without limitation, any subsidiary or
sub-subsidiary of any such corporation, partnership or limited liability
company) which is owned and Controlled, directly or indirectly, solely by
Persons referred to in clauses (a) through (g) hereof; provided that any Person
identified in clause (d) hereof is acting in such capacity.

“Exclusivity Period” shall mean the period beginning on the Initial Closing Date
and ending on the earlier of (a) the termination of the Investment Period and
(b) the date on which all Capital Commitments have been drawn and/or committed
or allocated (i) to specific Investments with respect to which the Partnership
has entered into an acquisition agreement with an unaffiliated third party, or
the Partnership and an unaffiliated third party co-venturer have entered into a
limited liability company operating agreement or similar joint venture agreement
for the acquisition, holding and development of a specific property or
properties, or (ii) to the payment of Operating Expenses.

 

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“Fair Market Value” shall mean, with respect to any Interest, the fair market
value thereof as of the applicable date of determination, as determined in good
faith by the General Partner. In making such determination, the General Partner
shall assume that all of the assets of the Partnership will be sold on the
applicable date of determination in a commercially reasonable manner and the
proceeds of such sale, net of estimated closing costs, as reasonably determined
by the General Partner, and all obligations of the Partnership (other than the
redemption of any redeeming ERISA-Covered Partners), will be distributed to the
Partners pursuant to this Agreement. If the applicable Partner (or, in the case
of the determination of the Fair Market Value of the Interests of the General
Partner and its Affiliates, Limited Partners holding more than 50% of the LP
Percentage Interests) disagree(s) with the General Partner’s determination of
the Fair Market Value of the applicable Interest, such Partner(s) shall
negotiate in good faith to resolve such disagreement and if such Partners
continue to disagree after negotiations are held, either side may request that
an independent evaluator (who must be reasonably acceptable to the other party)
be retained, whose valuation shall be final and binding on the Partnership and
all the Partners.

“Final Closing Date” shall have the meaning set forth in Section 3.1(a) hereof.

“Fiscal Year” shall have the meaning set forth in Section 1.6 hereof.

“Follow-on Non-Development Investment” shall mean a non-development Investment
which (i) in the good faith judgment of the General Partner, is appropriate or
necessary for the Partnership to make for the purpose of preserving, protecting
or enhancing an existing Investment, and (ii) either is adjacent to such
existing Investment or is intended to ease or eliminate regulatory restrictions
applicable to such existing Investment.

“Formation Date” shall have the meaning set forth in the introductory paragraph
hereto.

“GP Authorized Representative” shall have the meaning set forth in
Section 16.12(b) hereof.

“General Partner” shall have the meaning set forth in the introductory paragraph
of this Agreement.

“General Partner For Cause Removal Event” shall have the meaning set forth in
Section 12.1(a) hereof.

“General Partner Removal Notice” shall have the meaning set forth in
Section 12.1(a) hereof.

“General Partner Removing Limited Partners” shall have the meaning set forth in
Section 12.1(a) hereof.

 

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“Gross Asset Value” shall mean, with respect to any asset, the asset’s adjusted
basis for federal income tax purposes, except as follows:

(a) the initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset at the time of
such contribution, as agreed between the General Partner and such Partner;

(b) the Gross Asset Values of all Partnership assets may, in the sole discretion
of the General Partner, be adjusted to equal their respective gross fair market
values, as determined by the General Partner, as of the following times: (i) the
acquisition of an additional Interest by any new or existing Partner in exchange
for more than a de minimis Capital Contribution; (ii) the distribution by the
Partnership to a Partner of more than a de minimis amount of Partnership
property as consideration for an Interest; and (iii) the liquidation of the
Partnership within the meaning of Treasury Regulations
Section 1.704-l(b)(2)(ii)(g);

(c) the Gross Asset Value of any Partnership asset distributed to any Partner
shall be the gross fair market value of such asset on the date of distribution,
as determined by the General Partner; and

(d) the Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Section 1.704-l(b)(2)(iv)(m) of the Treasury Regulations and
Article IV hereof; provided, however, that Gross Asset Values shall not be
adjusted pursuant to this clause (d) to the extent the General Partner
determines that an adjustment pursuant to clause (b) above is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this clause (d).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
clause (a), (b) or (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.

“Indebtedness” shall mean any indebtedness incurred by the Partnership or any
Vehicle, including, but not limited to, any guarantees by the Partnership or any
Vehicle of any indebtedness incurred by any Vehicle and any repurchase
obligations of the Partnership or any Vehicle.

“Initial Closing” shall mean the first Closing at which Persons are admitted to
the Partnership as Limited Partners.

“Initial Closing Date” shall mean the date on which the Initial Closing occurs.

“Interest” shall mean, with respect to any Partner, the interest of such Partner
as a partner in the Partnership at any particular time, including the partner
interest of such Partner and the rights and obligations of such Partner as
provided in this Agreement and the Act.

 

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“Interim Investments” shall mean each of the following, provided that, in each
case, such obligations are payable in United States Dollars:

(a) domestic and Eurodollar certificates of deposit, time or demand deposits or
bankers’ acceptances maturing within six months and one day from the date of
acquisition and money market deposit accounts issued or offered by:

(i) any commercial bank organized under the laws of the United States or any
state thereof or the District of Columbia having combined capital, surplus and
undivided profits (less any undivided losses) of not less than $500 million;

(ii) any branch located in the United States of a commercial bank organized
under the laws of the United Kingdom or Canada having combined capital, surplus
and undivided profits (less any undivided losses) of not less than $500 million
or;

(iii) any domestic commercial bank the deposits of which are guaranteed by the
Federal Deposit Insurance Corporation; provided that (A) the full amount of such
Interim Investment are so guaranteed and (B) the aggregate amount of all Interim
Investments under this clause does not exceed $500,000;

(b) marketable direct obligations issued or unconditionally guaranteed by the
United States or issued by an agency thereof and backed by the full faith and
credit of the United States, in each case maturing within six months and one day
from the date of acquisition thereof;

(c) marketable general obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof maturing within six months and one day from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
generally obtainable from either Standard & Poor’s Corporation or Moody’s
Investors Service, Inc.;

(d) commercial paper maturing no more than six months and one day from the date
of acquisition, having a rating of A-1 (or the equivalent) or higher from
Standard & Poor’s Corporation and P-1 (or the equivalent) or higher from Moody’s
Investors Service, Inc.; and

(e) full collateralized repurchase agreements with a term of not more than 30
days for underlying securities of the type described in paragraphs (b) and
(c) of this definition, entered into with any institution meeting the
qualifications specified in subclauses (i) or (ii) of clause (a) of this
definition.

“Invested Capital” shall have the meaning set forth in Section 6.1(f)(i) hereof.

“Investment” shall mean an investment by the Partnership in real estate or real
estate-related assets consisting of office buildings, mixed-use properties that
are primarily office buildings, and multi-family residential properties in the
United States through the acquisition and renovation of existing properties and
the development of new properties, provided that the Partnership shall use
reasonable efforts to ensure that most of the properties acquired or renovated
by the Partnership have a LEED certification with the intent to obtain a

 

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“silver level” LEED certification and an Energy Star label or the substantial
equivalent and; provided, further that the Partnership shall use reasonable
efforts to achieve a higher LEED level to the extent consistent with the
investment objectives and strategy of the Partnership.

“Investment Committee” shall mean the Investment Committee of the General
Partner, as established from time to time.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended from time to time (or any corresponding provisions of succeeding law).

“Investment Period” shall mean the period beginning on the date that the
Designated Key Person has been appointed as such by the General Partner as
provided in Section 6.1(d) and ending on the earliest to occur of: (a) the
second anniversary of the Final Closing Date; provided that such period may, in
the sole discretion of the General Partner, be extended for up to an additional
twelve (12) months if aggregate Capital Commitments exceed $250 million; and
(b) the date of the removal of the General Partner by the Limited Partners in
accordance with Section 12.1 or Section 12.2 hereof. Notwithstanding the
foregoing, the Investment Period shall be suspended for any period as provided
in Section 6.1(d) hereof.

“JAMS” shall mean Judicial Arbitration and Mediation Services.

“Key Person” shall have the meaning set forth in Section 6.1(d) hereof.

“Lien” shall mean any lien, pledge, hypothecation or other encumbrance.

“Limited Partner” shall have the meaning set forth in the introductory paragraph
of this Agreement, each in its capacity as of limited partner of the
Partnership. For purposes of the Act, the Limited Partners shall constitute a
single class, group or series of limited partners.

“LP Authorized Representative” shall have the meaning set forth in
Section 16.12(a) hereof.

“LP Percentage Interest” shall mean, with respect to each Limited Partner (not
including any Limited Partner that is the General Partner, any officer,
employee, member or owner thereof, or their respective Affiliates), a
representation of such Limited Partner’s Interest as of the applicable date of
determination, expressed as a percentage of all such Limited Partners’ Interests
and based on relative aggregate Capital Contributions, provided that, if no
Capital Contributions have been called from such Limited Partners, then the LP
Percentage Interests of the Limited Partners shall be based on the relative
Capital Commitments of such Limited Partners.

“Major Investment Decision” shall mean any decision to acquire or originate any
Investment, any decision regarding a Capital Event with respect to any
Investment and any other decision regarding the Partnership or any Investment
which the General Partner determines should be made by the Investment Committee.

“Management Fee” shall have the meaning set forth in Section 6.1(f) hereof.

 

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“Net Distributable Cash” shall mean all cash receipts from operations of the
Partnership (including, without limitation, amounts released from Reserves) and
from Capital Events, reduced by the portion thereof used to, in the sole
discretion of the General Partner (a) pay principal or interest on any
Indebtedness, (b) establish Reserves and (c) pay Operating Expenses and
Organizational Expenses. Net Distributable Cash shall not be reduced by
depreciation, amortization, cost recovery deductions or similar non-cash
allowances and expenses.

“New Partner” shall have the meaning set forth in Section 3.3(c) hereof.

“Nonrecourse Deductions” shall have the meaning set forth in
Section 1.704-2(b)(1) of the Treasury Regulations.

“Notice of Returned Capital” shall have the meaning set forth in Section 3.3(c)
hereof.

“Operating Expenses” shall have the meaning set forth in Section 7.1 hereof.

“Organizational Expenses” shall have the meaning set forth in Section 7.2
hereof.

“Over-Distribution” shall have the meaning set forth in Section 14.2 hereof.

“Partner” shall have the meaning set forth in the introductory paragraph of this
Agreement.

“Partner Nonrecourse Debt” shall have the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.

“Partner Nonrecourse Debt Minimum Gain” shall have the meaning set forth in
Section 1.704-2(i)(2) of the Regulations.

“Partnership” shall have the meaning set forth in the introductory paragraph of
this Agreement.

“Partnership Minimum Gain” shall have the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.

“Percentage Interest” shall mean, with respect to each Partner, a representation
of such Partner’s Interest as of the applicable date of determination, expressed
as a percentage of all Partners’ Interests and based on relative aggregate
Capital Contributions.

“Person” shall mean any individual, partnership, joint venture, corporation,
limited liability company, trust or other entity.

“Prime Rate” shall mean the rate of interest publicly announced from time to
time by JP Morgan Chase in New York City as such bank’s prime reference rate.

 

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“Profits” and “Losses” shall mean, for each Fiscal Year or other period, an
amount equal to the Partnership’s taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

(a) any income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Profits and Losses shall be added to
such taxable income or loss;

(b) any expenditures of the Partnership described in Code Section 705(a)(2)(B)
or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations, and not otherwise
taken into account in computing Profits or Losses shall be subtracted from such
taxable income or loss;

(c) if the Gross Asset Value of any Partnership asset is adjusted pursuant to
clause (b) or clause (d) of the definition of Gross Asset Value herein, the
amount of such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses;

(d) gain or loss resulting from any disposition of Partnership property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;

(e) in lieu of the depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such Fiscal Year or other period, computed
in accordance with the definition of Depreciation herein; and

(f) notwithstanding any other provisions hereof, any items which are specially
allocated pursuant to Article IV hereof shall not be taken into account in
computing Profit or Losses.

“Qualified Organization” shall mean a qualified organization as defined in
Section 514(c)(9)(C)(i)-(ii) of the Code.

“Redemption Date” shall have the meaning set forth in Section 6.3(a)(iii)
hereof.

“Regulatory Allocations” shall have the meaning set forth in Section 4.3(e)
hereof.

“Reserves” shall mean reserves established by the Partnership, in the sole
discretion of the General Partner, for all expenses, debt payments, capital
improvements, replacements and contingencies, including, but not limited to,
loss and liquidity reserves, of the Partnership.

 

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“Returned Capital” shall mean (a) the amount of any Subsequent Closing True-Up
distributed to Partners in accordance with Section 3.3(c) hereof and (b) the
amount of any Net Distributable Cash which represents the return of the
Partnership’s invested capital in any Investment that has been disposed of or
refinanced.

“Schedule of Partners” shall mean the Schedule of Partners of the Partnership, a
copy of which is attached as Exhibit B hereto, as the same may be amended from
time to time. The Partnership shall keep an up-to-date Schedule of Partners
which shall include a statement of each Partner’s Percentage Interest and each
Limited Partner’s LP Percentage Interest.

“Side Letter Partner” shall have the meaning set forth in Section 16.4 hereof.

“Side Letter” shall have the meaning set forth in Section 16.4 hereof.

“Subscription Agreement” shall mean an agreement whereby a Person subscribes to
acquire a Limited Partner Interest in the Partnership, a copy of the form of
which is attached hereto as Exhibit A, as the same may be amended, supplemented
or replaced from time to time.

“Subscription Line Indebtedness” shall have the meaning set forth in
Section 3.4(a) hereof.

“Subscription Line Lender” shall have the meaning set forth in Section 3.4(a)
hereof.

“Subsequent Closing” shall mean a closing, subsequent to the Initial Closing, at
which the Partnership accepts a subscription or subscriptions from one or more
Limited Partners.

“Subsequent Closing Date” shall mean the date after the Initial Closing on which
a Subsequent Closing occurs.

“Subsequent Closing Fee” shall have the meaning set forth in Section 3.3(c)
hereof.

“Subsequent Closing True-Up” shall have the meaning set forth in Section 3.3(c)
hereof.

“Successor General Partner” shall have the meaning set forth in Section 12.3(a)
hereof.

“Term” shall have the meaning set forth in Section 1.7 hereof.

“TPG” shall mean Thomas Properties Group, Inc.

“Transfer” shall mean, as applicable, a sale, exchange, transfer, assignment,
pledge, hypothecation or other disposition, whether voluntary or by operation of
law of (a) all or any portion of an Interest (and the related Capital
Commitment) or (b) all or any portion of a Partner’s obligations to make Capital
Contributions pursuant to its Capital Commitment or its

 

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right to acquire an Interest in exchange therefor, in each case, either directly
or indirectly, to another Person. When used as a verb, the term “Transfer” shall
have a correlative meaning.

“Treasury Regulations” shall mean the final, temporary and proposed Income Tax
Regulations promulgated under the Code, as the same may be amended from time to
time (including corresponding provisions of succeeding regulations).

“UBTI” shall have the meaning set forth in Section 6.7 hereof.

“Uniform Commercial Code” shall mean, with respect to any Partner, the Uniform
Commercial Code of the State of Delaware and the comparable laws of the
jurisdiction of residence of such Partner.

“Valuation Plan” shall have the meaning set forth in Section 6.6(e) hereof.

“Vehicle” shall have the meaning set forth in Section 8.2 hereof.

ARTICLE III.

CAPITAL CONTRIBUTIONS

3.1 Closings; Acceptance of Subscriptions.

(a) Subscriptions for Limited Partner Interests submitted by Persons to the
Partnership shall be accepted in the sole discretion of the General Partner at
the Initial Closing and at one or more Subsequent Closings that may be held, in
the sole discretion of the General Partner, at any time one (1) year after the
Initial Closing Date. A Person shall be admitted as a Limited Partner upon
(i) acceptance of such Person’s Subscription Agreement by the Partnership, and
(ii) execution by or on behalf of such person of a counterpart signature page of
this Agreement and acceptance thereof by the Partnership. The date on which the
final Subsequent Closing occurs is referred to herein as the “Final Closing
Date”. Subject to the foregoing, each Closing shall be held on such date as may
be determined by the General Partner (each a “Closing Date”).

(b) Except as otherwise provided herein, no Person shall be admitted to the
Partnership as a Limited Partner unless such Person has made a minimum Capital
Commitment to the Partnership of at least $10 million; provided, however, that
the General Partner, in its sole discretion, may waive this requirement with
respect to the admission of one or more Limited Partners.

(c) The Partnership shall not accept any subscription for a Limited Partner
Interest, whether from an existing Limited Partner or a New Partner, if the
acceptance of such subscription would (i) occur subsequent to the Final Closing
Date, (ii) cause the aggregate amount of Capital Commitments to exceed $500
million, without the approval of the Advisory Committee, (iii) cause a
dissolution of the Partnership under the Act, (iv) cause the Partnership’s
assets to be deemed to be “plan assets” for purposes of Section 4975 of the Code
or ERISA, (v) result in the taxation of the Partnership at the entity level or
(vi) violate, or cause the Partnership to violate, any applicable law or
regulation, including any applicable federal or state securities

 

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laws. The Partnership may not issue, classify or accept any subscription for any
Interest in the Partnership except as contemplated by this Agreement.

3.2 Capital Commitments. The General Partner and each Limited Partner has agreed
to make Capital Contributions in the aggregate amount set forth as such
Partner’s “Capital Commitment” in the Schedule of Partners attached hereto as
Exhibit B (such Partner’s “Capital Commitment”) in whole or, from time to time,
in part and at such times as the Partnership shall specify as provided herein.

3.3 Capital Contributions; Capital Calls.

(a) Payments made by a Partner to the Partnership with respect to such Partner’s
Capital Commitment (such Partner’s “Capital Contributions”) shall be made in
United States Dollars by wire transfer of immediately available funds to an
account or accounts of the Partnership specified by the General Partner to the
Limited Partners. Notwithstanding any other provision of this Agreement or the
Subscription Agreements to the contrary, except as otherwise required by the Act
or other applicable law, in no event shall any Limited Partner be required to
make aggregate Capital Contributions in excess of such Limited Partner’s Capital
Commitment; provided, however, that with respect to each Partner (i) in the
event that any amount constituting a Subsequent Closing True-Up is received by
such Partner pursuant to Section 3.3(c), such amount shall be deemed a
reinstatement of undrawn Capital Commitments and be subject to future Capital
Calls in accordance with the provisions of this Section 3.3 and (ii) in the
event that any amount constituting Returned Capital is distributed to such
Partner during the Investment Period, such amount may, in the sole discretion of
the General Partner, be deemed a reinstatement of undrawn Capital Commitments
and be subject to future Capital Calls in accordance with the provisions of this
Section 3.3.

(b) From time to time after the start of the Investment Period, the General
Partner will deliver written notices (each, a “Capital Call Notice”) to the
Partners, each of which shall call for a Capital Contribution from each
Partner’s undrawn Capital Commitments (a “Capital Call”) equal to such Partner’s
share of the amount determined by the General Partner to be appropriate for the
Partnership to: (i) make Investments; (ii) pay Management Fees; (iii) pay
Operating Expenses and Organizational Expenses; (iv) establish Reserves; and
(v) repay any Indebtedness. All Capital Calls shall, unless the circumstances
require otherwise, be pro rata among the Partners based upon each Partner’s
Capital Commitment in relation to the aggregate Capital Commitments of all the
Partners. Notwithstanding the foregoing, Capital Calls may be made after the
termination of the Investment Period (to the extent of any undrawn Capital
Commitments), but only if such Capital Calls are required by the Partnership to
(A) pay amounts owing or that come due under any Subscription Line Indebtedness;
(B) complete the development or re-development of one or more Investments,
provided that any Capital Calls for such purpose are made within two (2) years
after the expiration of the Investment Period, which two-year period may be
extended for an additional one-year period with the approval of at least 66 2/3%
of the Advisory Committee and, upon the expiration of the Investment Period, the
Partnership shall provide the Partners with a budget for the development and
re-development of such Investments; (C) make Follow-on Non-Development
Investments; provided that the aggregate amount of Capital Contributions which
the Partnership may call following the Investment Period to fund Follow-on
Non-Development Investments shall not exceed 10% of the

 

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aggregate amount of Capital Commitments; and (D) pay Operating Expenses (other
than Indebtedness, except for clause (A) of this paragraph), including
Management Fees. After the Investment Period, all Partners shall be released
from any obligations in respect of their undrawn Capital Commitments except as
set forth in this Section 3.3(b). The General Partner shall have the right in
its sole discretion to terminate all or a portion of the unused Capital
Commitments at any time prior to the end of the Investment Period if the General
Partner determines that it is impractical for the General Partner to continue to
seek out and make Investments consistent with the Partnership’s investment
objectives.

(c) On each Subsequent Closing Date, the Partnership will require each Person
subscribing for a Limited Partner Interest on such Subsequent Closing Date (a
“New Partner”), and each Limited Partner that elects to increase its Capital
Commitment on such Subsequent Closing Date, to contribute to the Partnership, in
cash, an amount equal to the sum of (i) a percentage of such New Partner or
Limited Partner’s Capital Commitment or increased Capital Commitment equal to
the percentage of the Capital Commitments of the previously admitted Partners
called through such Subsequent Closing Date (regardless of the purpose for which
such calls have been made, but not including any Capital Contributions in the
form of Contributed Properties) (the “Subsequent Closing True-Up”) and (ii) an
amount, calculated like interest, on the aggregate amount of Capital
Contributions which would have been required to be made by such New Partner or
Limited Partner had such New Partner or Limited Partner subscribed for such New
Partner’s Capital Commitment, or the increased amount of such Limited Partner’s
Capital Commitment, on the Initial Closing Date, at an annual rate of nine
percent (9%) (the “Subsequent Closing Fee”). The Subsequent Closing True-Up made
by such New Partner or such Limited Partner shall be considered a Capital
Contribution by such Partner made as of the date or dates that such Capital
Contributions, or portions thereof, would have been made if such New Partner had
been admitted to the Partnership, or such Limited Partner had made such
increased Capital Commitment, on the Initial Closing Date and such New Partner’s
or Limited Partner’s unfunded Capital Commitment shall be reduced by a like
amount. No Subsequent Closing Fee paid by any New Partner or Limited Partner
shall entitle such Partner to receive a Limited Partner Interest in exchange
therefor or be considered a Capital Contribution by such New Partner for
purposes of reducing such Partner’s unpaid Capital Commitment or otherwise. The
Subsequent Closing True-Up made by each such New Partner or Limited Partner
shall be used to pay the Management Fees due and payable with respect to such
New Partner’s Capital Commitment or the increased Capital Commitment of an
Existing Limited Partner, with the balance distributed to all of the Partners on
a pro rata basis (based upon each Partner’s Capital Commitment in relation to
the aggregate Capital Commitments of all Partners). The Subsequent Closing
True-Up received by any Partner at a Subsequent Closing shall be deemed a return
of Capital Contributions and a reinstatement of undrawn Capital Commitments and
be subject to future Capital Calls in accordance with the provisions of this
Section 3.3; provided that the General Partner delivers a written notice of
returned capital (a “Notice of Returned Capital”) to each affected Partner; and
no Partner will receive a distribution pursuant to Section 5.1(b) with respect
to any such returned Capital Contributions. The Subsequent Closing Fee paid by
each such New Partner or Limited Partner shall be distributed to previously
admitted Partners on a pro rata basis (based upon each Partner’s Capital
Commitment in relation to the aggregate Capital Commitments of all such Partners
prior to the Subsequent Closing in respect of which the Subsequent Closing Fee
is being paid), except that the portion of such Subsequent Closing Fee that
relates to any Management Fee paid to the General Partner from the Subsequent

 

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Closing True-Up shall be distributed to the General Partner. The distribution of
such Subsequent Closing Fees will be effected outside the Partnership such that
no Partner’s Capital Account will be affected thereby.

(d) Each Capital Call Notice shall provide a brief description of the
Partnership’s proposed use of the funds requested in such notice and shall
include a schedule setting forth, for each Partner, such Partner’s Capital
Commitment, the aggregate amount of Capital Contributions payable by such
Partner pursuant to such Capital Call Notice and the aggregate amount of Capital
Contributions made to date by such Partner. Each Partner shall be required to
make such Partner’s Capital Contributions in the amount stated in a Capital Call
Notice on the date specified in the Capital Call Notice, which date shall not be
earlier than ten (10) Business Days after the date such Capital Call Notice was
delivered to the Limited Partners.

3.4 Partnership Borrowings; Pledge of Capital Commitments.

(a) The Partnership and any Vehicle may secure any Indebtedness with a pledge or
assignment of all or any part of the Partnership’s and the General Partner’s
right to call for and receive Capital Contributions. Any such Indebtedness which
is so secured is referred to herein as “Subscription Line Indebtedness” and any
provider of such Subscription Line Indebtedness to the Partnership or any
Vehicle is referred to herein as a “Subscription Line Lender”. The Partnership
shall not have outstanding at any one time more than one Subscription Line
Indebtedness arrangement, and shall not pledge or assign all or any part of the
Partnership’s and the General Partner’s right to call for and receive Capital
Contributions to more than one Subscription Line Lender at any one time. To the
extent that the Partnership has outstanding obligations under Subscription Line
Indebtedness, each Partner shall be obligated to fund any remaining portion of
its Capital Commitment; provided that (i) such obligation was outstanding during
the Investment Period, (ii) the Partnership repays such obligation within nine
(9) months after the first date on which such obligation was first outstanding
and (iii) such obligation to fund shall not act as a waiver of any claim or
defense that the Partner may have against any other Partner or the Partnership.

(b) In connection with any Subscription Line Indebtedness or other Partnership
business, the General Partner, on behalf of the Partnership, may require each
Limited Partner to execute (if applicable) and deliver to the General Partner
the following documents:

(i) financial statements regarding such Limited Partner (but only to the extent
that such financial statements are publicly available);

(ii) an investor letter in favor of the Subscription Line Lenders acknowledging
the amount of such Limited Partner’s total Capital Commitment, unfunded Capital
Commitment and funded Capital Contributions and that in the event of default
under any Subscription Line Indebtedness, the Subscription Line Lenders may
exercise the General Partner’s right to make a Capital Call to satisfy such
default; provided that the aggregate amount called from such Limited Partner
pursuant to such Capital Call does not exceed the unfunded Capital Commitment of
such Limited Partner and that the aggregate amount called from all Partners
pursuant to such Capital Call does not exceed the aggregate amount of
outstanding Subscription Line Indebtedness; and

 

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(iii) an opinion of counsel addressed to the Subscription Line Lender and the
Partnership regarding the enforceability of the Subscription Agreement entered
into by such Limited Partner.

Notwithstanding the foregoing, no such documentation shall be deemed to increase
the amount for which a Limited Partner is obligated to the Partnership. Each
Limited Partner covenants and agrees that such Limited Partner will not suffer
to exist any Lien on such Limited Partner’s Interest without the prior written
consent of the General Partner.

3.5 Remedies upon a Capital Default.

(a) Upon any Capital Default by a Defaulting Partner, the Partnership shall
provide such Defaulting Partner with written notice thereof and a ten
(10) Business Day period from the date of delivery of such notice within which
to cure such Capital Default (the “Cure Period”) and, in the sole discretion of
the General Partner, shall immediately have the right to declare that interest
shall accrue on the outstanding unpaid balance of such requested Capital
Contribution, from and including the date such payment was due until the earlier
of the date of payment to the Partnership or, following the expiration of the
Cure Period, the election by the Partnership to pursue the other remedies set
forth in this Section, at a rate equal to the lesser of the rate of nine percent
(9%) per annum over the Prime Rate and the maximum rate permitted by applicable
law (the “Default Rate”). In the event that the Defaulting Partner has not cured
the Capital Default prior to the expiration of the Cure Period, then, following
the expiration of the Cure Period, the Partnership, in the sole discretion of
the General Partner, shall have the right to take one or more of the following
actions (including, but not limited to, all of the rights afforded to a secured
party under the Uniform Commercial Code): (i) continue to charge interest at the
Default Rate on the outstanding unpaid balance of such requested Capital
Contribution until the date of payment to the Partnership, (ii) cause any
distributions otherwise payable to the Defaulting Partner under this Agreement
to be set off or withheld from such Defaulting Partner in accordance with
Section 3.6 hereof, (iii) suspend all voting rights and rights to distributions,
(iv) redeem up to thirty percent (30%) of the Interest then owned by the
Defaulting Partner at a price equal to $1.00 which would result in corresponding
pro rata increases to the Interests of the non-Defaulting Partners, (v) offer
the Defaulting Partner’s Interest for sale to the other Partners at such price
and on such terms determined by the Partnership in the reasonable discretion of
the General Partner, subject to compliance with the Transfer provisions of this
Agreement, and/or (vi) cause the Defaulting Partner’s Interest to be sold to a
third party at such price and on such terms as may be determined by the
Partnership in the reasonable discretion of the General Partner. The proceeds
from the sale of a Defaulting Partner’s Interest under clauses (v) and
(vi) above shall be used to fund the Capital Contribution requested from the
Defaulting Partner and/or set off or withheld from such Defaulting Partner in
accordance with Section 3.6 hereof and any remaining amounts may be used for any
appropriate Partnership purpose, which purpose shall be determined by the
Partnership in the sole discretion of the General Partner. A Defaulting Partner
shall remain liable for the payment of Capital Contributions as the same are
called under this Agreement and the Partnership may exercise the remedies set
forth above for every subsequent Capital Default by the Defaulting Partner. The
rights and remedies referred to in this Section shall be in addition to, and not
in limitation of, any other rights available to the Partnership under this
Agreement, the relevant Subscription Agreement or at law or in equity. The
Partnership may proceed to collect from any Defaulting

 

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Partner any amount due from such Defaulting Partner as and when due, as well as
all costs and expenses of collection incurred by the Partnership (including
reasonable fees and disbursements of legal counsel).

(b) Upon any Capital Default, the Partnership may deliver Capital Call Notices
to the non-Defaulting Partners which shall call for a Capital Contribution from
each non-Defaulting Partner equal to such non-Defaulting Partner’s pro rata
share (based upon such non-Defaulting Partner’s Capital Commitment in relation
to the aggregate Capital Commitments of all the non-Defaulting Partners) of the
Capital Contribution which the Defaulting Partner(s) failed to make, provided
that, no non-Defaulting Partner shall be required to make a Capital Contribution
with respect to a Capital Default by a Defaulting Partner that is greater than
twenty-five percent (25%) of such non-Defaulting Partner’s initial Capital
Contribution with respect to such Capital Call. Each non-Defaulting Partner
which shall have made an additional Capital Contribution as a result of a
Capital Default by a Defaulting Partner shall have its Percentage Interest in
the Partnership increased and the Defaulting Partner shall have its Percentage
Interest in the Partnership decreased, so that each Partner’s Percentage
Interest in the Partnership shall be based on the amount of Capital
Contributions contributed by such Partner divided by the total Capital
Contributions contributed to the Partnership by all Partners. A Capital Default
by any Partner shall not relieve any other Partner of its obligation to make
Capital Contributions to the Partnership. Any Capital Call made pursuant to this
Section 3.5(b) shall not increase any non-Defaulting Partner’s Capital
Commitment. Notwithstanding the foregoing, this Section 3.5(b) shall not be
applied in a manner that is inconsistent with Section 3.5(a) hereof.

3.6 Set-off and Withholding of Certain Amounts. Notwithstanding anything to the
contrary contained in this Agreement or the relevant Subscription Agreement(s),
the Partnership may, in the General Partner’s sole discretion, set-off against
or withhold from any distribution to any Partner pursuant to this Agreement any
amounts due from such Partner to the Partnership pursuant to this Agreement and
the relevant Subscription Agreement(s), to the extent not otherwise paid. Any
amounts so set-off or withheld pursuant to this Section shall be applied by the
Partnership to discharge the obligation in respect of which such amounts were
withheld; provided, however, that with respect to any such obligation which
serves as security for Subscription Line Indebtedness, the Partnership shall pay
an amount equal to the amount to be set-off to the related Subscription Line
Lender and such set-off shall only discharge such obligation to the extent that,
and in connection therewith, such amount is paid by the Partnership to the
related Subscription Line Lender. All amounts set-off or withheld pursuant to
this Section with respect to any Partner shall be treated as amounts distributed
to such Partner by the Partnership and paid to the Partnership by such Partner
for all purposes under this Agreement. The Partnership shall give written notice
of any such set-off or withholding to each Partner subject thereto within ten
(10) Business Days after such set-off or withholding.

3.7 No Right to Redemption of Interests or Return of Capital Contributions.
Except as provided in Section 6.3 hereof, no Partner shall have the right to
withdraw from the Partnership or require that the Partnership redeem all or any
portion of such Partner’s Interest. No Partner shall have a right to receive a
return of its Capital Contributions or a dividend in respect of such Partner’s
Interest from any specific assets of the Partnership. Each Partner waives any
right which it may have to cause a partition of all or any part of the
Partnership’s assets.

 

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3.8 Uncertificated Interests. Interests shall be recorded in book-entry form and
no Partner shall have the right to demand that the Partnership produce and/or
deliver certificates representing such Interests. Without limiting the
foregoing, the General Partner may produce and deliver certificates representing
Interests if the General Partner, in its sole discretion, determines that such
production and delivery would be in the best interests of the Partnership.

3.9 Limitation on Liability of Limited Partners. Except as otherwise required by
this Agreement, the Act or other applicable law, the liability of each Limited
Partner, in its capacity as such, shall be limited to the aggregate amount of
such Limited Partner’s Capital Commitment and Subsequent Closing Fee payment
obligation. Each Limited Partner, to the fullest extent permitted by applicable
law, shall not have any fiduciary or other duty to the Partnership or any other
Partner express or implied, except not to act in bad faith.

3.10 Interest. No Partner shall receive any interest on its Capital
Contributions.

3.11 Negative Capital Accounts. At no time during the term of the Partnership or
upon dissolution and liquidation thereof shall a Limited Partner with a negative
balance in such Limited Partner’s Capital Account have any obligation to the
Partnership or the other Partners to eliminate or restore such negative balance.

ARTICLE IV.

ALLOCATIONS OF PROFITS AND LOSSES

4.1 Losses. Except as otherwise provided in this Article, Losses of the
Partnership for each Fiscal Year with respect to an Investment attributable to
the General Partner’s Percentage Interest shall be allocated to the General
Partner, and Losses of the Partnership for each Fiscal Year with respect to an
Investment attributable to the Limited Partners’ Percentage Interests shall be
allocated as follows:

(a) First, to each Partner in an amount equal to the excess of the amount of
Profits previously allocated to such Partner pursuant to Sections 4.2(b),(c) and
(d) hereof, in proportion to and in the inverse order to the order in which such
Profits were allocated, over the amount of Losses previously allocated pursuant
to this Section 4.1(a); and

(b) Second, to the Limited Partners, pro rata in accordance with their
respective Percentage Interests.

4.2 Profits. Except as otherwise provided in this Article, Profits of the
Partnership for each Fiscal Year with respect to an Investment attributable to
the General Partner’s Percentage Interest shall be allocated to the General
Partner, and Profits of the Partnership for each Fiscal Year with respect to an
Investment attributable to the Limited Partners’ Percentage Interests shall be
allocated as follows:

(a) First, to the Partners in an amount necessary to reverse all prior
allocation of Losses pursuant to Section 4.1(b), in the same proportion and in
the reverse order as such Losses were allocated;

 

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(b) Second, to the Limited Partners, pro rata in accordance with their
respective Percentage Interests, until each Limited Partner has been allocated
an aggregate amount of Profits under this Section 4.2(b) equal to the aggregate
amount of the Preferred Return distributed to such Partner pursuant to
Section 5.1(b)(i) hereof;

(c) Third, 50% to the Limited Partners, pro rata based upon their respective
Percentage Interests, and 50% to the General Partner, until the General Partner
has been allocated 20% of the aggregate amounts allocated under subparagraph
(b) above and this subparagraph (c); and

(d) Fourth, 80% to the Limited Partners, pro rata based upon their respective
Percentage Interests, and 20% to the General Partner.

4.3 Special Allocations.

(a) Partnership Minimum Gain Chargeback. Notwithstanding anything contained in
this Article to the contrary, if there is a net decrease in Partnership Minimum
Gain during any Fiscal Year, except as otherwise permitted by Sections
1.704-2(f)(2), (3), (4) and (5) of the Treasury Regulations, items of
Partnership income and gain for such Fiscal Year (and subsequent years, if
necessary) in the order provided in Section 1.704-2(j)(2)(i) of the Treasury
Regulations shall be allocated among all Partners whose shares of Partnership
Minimum Gain decreased during that year in proportion to and to the extent of
such Partner’s share of the net decrease in Partnership Minimum Gain during such
year. The allocation contained in this Section 4.3(a) is intended to be a
minimum gain chargeback within the meaning of Section 1.704-2 of the Treasury
Regulations, and shall be interpreted consistently therewith.

(b) Partner Nonrecourse Debt Minimum Gain. Notwithstanding anything contained in
this Article to the contrary, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain, except as provided in Section 1.704-2(i) of the Treasury
Regulations, items of Partnership income and gain for such Fiscal Year (and
subsequent years, if necessary) in the order provided in
Section 1.704-2(j)(2)(ii) of the Treasury Regulations shall be allocated among
all Partners whose share of Partner Nonrecourse Debt Minimum Gain decreased
during that year in proportion to and to the extent of such Partner’s share of
the net decrease in Partner Nonrecourse Debt Minimum Gain during such year. This
Section 4.3(b) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2 of the Treasury Regulations and shall be
interpreted consistently therewith.

(c) Qualified Income Offset. Notwithstanding any provisions of this Article to
the contrary, in the event any Partner unexpectedly receives any adjustments,
allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations,
items of Partnership income and gain (including gross income) shall be specially
allocated to each such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Treasury Regulations, the Adjusted Capital Account
Deficit of such Partner as quickly as possible; provided that an allocation
pursuant to this Section 4.3(c) shall be made only if and to the extent that
such Partner would have an Adjusted Capital Account Deficit. The allocation
contained in this Section 4.3(c) is intended to

 

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be a “qualified income offset” within the meaning of
Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations, and shall be subject
thereto.

(d) Ordering. Sections 4.3(a), (b) and (c) hereof shall be applied in the order
provided in Section 1.704-2 of the Treasury Regulations.

(e) Curative Allocations. The allocations set forth in Sections 4.3(a), (b) and
(c) hereof (the “Regulatory Allocations”) are intended to comply with certain
requirements of Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations.
Notwithstanding any other provisions of this Section 4.3 (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating other Profits, Losses, and items of income, gain, loss and
deduction among the Partners so that to the extent possible, the net amount of
such allocations of other Profits, Losses and other items and the Regulatory
Allocations to each Partner shall be equal to the net amount that would have
been allocated to each such Partner if the Regulatory Allocations had not
occurred.

(f) Section 754 Election Adjustments. To the extent that the General Partner
elects, in its sole discretion, to cause the Partnership to make an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code
Section 734(b) or 743(b), pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), that is required to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be specially allocated to the Partners in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted
pursuant to such Section of the Treasury Regulations.

(g) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other
period shall be allocated in accordance with Section 4.1 hereof.

(h) Partner Nonrecourse Deductions. In accordance with Section 1.704-2(i)(1) of
the Treasury Regulations, any item of Partnership loss or deduction which is
attributable to Partner Nonrecourse Debt for which a Partner bears the economic
risk of loss (such as a non-recourse loan made by a Partner to the Partnership
or an otherwise non-recourse loan to the Partnership that has been guaranteed by
a Partner) shall be allocated to that Partner to the extent of its economic risk
of loss.

(i) Tax Allocations. In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account to the fullest
extent possible of any variation between the adjusted basis of such property to
the Partnership for federal income tax purposes and its initial Gross Asset
Value. If the Gross Asset Value of any Partnership asset is adjusted pursuant to
clause (b) or (d) of the definition thereof, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Treasury Regulations thereunder. Any elections or other
decisions relating to such allocations shall be made by the General Partner.
Allocations pursuant to this

 

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Section 4.3(i) are solely for purposes of Federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, any Person’s
Capital Account or share of Profits, Losses, other items or distributions
pursuant to any provision of this Agreement.

(j) Varying Interests. If a Partner sells or exchanges its Interest or otherwise
is admitted as a substituted Limited Partner, Profits and Losses shall be
allocated between the Transferor and the Transferee by taking into account their
varying Interests during the Fiscal Year in accordance with Code Section 706(d),
using the interim closing of the books method or the daily proration method, as
determined by the General Partner in its sole discretion. Notwithstanding any
other provision of this Agreement to the contrary, as soon as practical after
each Closing Date, Profits, Losses and items thereof shall be allocated among
the Partners so as to cause the Capital Accounts of the Partners to be in the
same ratio as the ratio of the Partners’ Percentage Interests.

(k) Tax Credits. Tax credits and tax credit recapture shall be allocated among
the Partners pursuant to Section 1.704-1(b)(4)(ii) of the Treasury Regulations.

ARTICLE V.

DISTRIBUTIONS

5.1 Distributions. (a) Net Distributable Cash shall be distributed to the
Partners in accordance with the provisions of this Section 5.1; provided,
however, that with respect to the portion of any Net Distributable Cash which
represents Returned Capital, the Partnership may, in the sole discretion of the
General Partner, (i) during the Investment Period, reinvest such Returned
Capital in other Investments or (ii) distribute such Returned Capital to the
Partners; provided that to the extent that any amounts constituting Returned
Capital are distributed to any Partner pursuant to this Section 5.1 during the
Investment Period, such amounts may, in the sole discretion of the General
Partner, be deemed a reinstatement of undrawn Capital Commitments and be subject
to future Capital Calls in accordance with the provisions of Section 3.3; and
provided further, that at the time that the Partnership distributes such
Returned Capital to the Partners during the Investment Period, the General
Partner delivers a Notice of Returned Capital to the Limited Partners in respect
of such Returned Capital. If there is a change in the Percentage Interests of
any of the Partners during any period in which Net Distributable Cash has been
received by the Partnership, distributions shall be made to the Partners in a
manner reasonably determined by the General Partner which takes into account the
varying Percentage Interests of the Partners during such period, using the
interim closing of the books method or the daily proration method, as determined
by the General Partner in its sole discretion.

(b) Subject to the provisions of Section 5.1(c) hereof, distributions of Net
Distributable Cash shall be calculated on an “investment-by-investment basis”
and shall be allocated among the Partners in proportion to each Partner’s
respective Percentage Interest and shall be distributed to the Partners on a
quarterly basis, except that Net Distributable Cash attributable to Capital
Events shall be distributed upon the realization of such Capital Event. With
respect to each Investment, the full amount of Net Distributable Cash allocated
to the General Partner or its Affiliates shall be distributed to the General
Partner or such Affiliates.

 

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The amount of Net Distributable Cash allocated to the Limited Partners who are
not Affiliated with the General Partner shall be distributed in the following
manner:

(i) First, 100% to the Limited Partner until it has received an amount equal to
an annual rate of nine percent (9%), compounded annually, on such Limited
Partner’s aggregate unreturned Capital Contributions allocable to such
Investment;

(ii) Second, 100% to the Limited Partner pro rata until it has received an
amount equal to the aggregate of such Limited Partner’s unreturned Capital
Contributions allocated to such Investment plus such Limited Partner’s allocable
share of all Management Fees and other expenses paid by the Partnership expenses
that were paid from Partnership cash flow rather than from Capital
Contributions;

(iii) Third, (A) 50% to the Limited Partner and (B) 50% to the General Partner,
until the General Partner has received a cumulative distribution pursuant to
this clause (B) equal to 20% of all distributions made pursuant to clause
(i) and this clause (iii); and

(iv) Fourth, (A) 80% to the Limited Partner and (B) 20% to the General Partner.

(c) Notwithstanding the provisions of Section 5.1(b), prior to any distribution
of Net Distributable Cash pursuant to Section 5.1(b), the General Partner may
cause the Partnership to distribute to the General Partner an amount of Net
Distributable Cash equal to the sum of any taxable income of the Partnership
allocable to the General Partner with respect to the applicable Fiscal Year,
after taking into account all tax losses allocable to the General Partner with
respect to such Fiscal Year and any prior Fiscal Year (to the extent that such
tax losses have not previously been applied against taxable income allocable to
the General Partner with respect to such Fiscal Year or any prior Fiscal Year),
multiplied by an assumed tax rate equal to the then maximum federal, state and
local (as applicable) tax rates that could be applicable to the General Partner
(or its partners) with respect to the character of taxable income allocated to
the General Partner for which such distribution is to be made (whether taxable
income classified for tax purposes as ordinary income, or taxable income
classified for tax purposes as long term capital gains, as applicable).
Distributions to the General Partner pursuant to this Section 5.1(c) shall be
made only to the extent that the General Partner would not receive, for the
applicable Fiscal Year, distributions pursuant to Section 5.1(b) in an amount at
least equal to the amount described in this Section 5.1(c). Any amount
distributed to the General Partner pursuant to this Section 5.1(c) shall be
treated as an advance against future distributions to which the General Partner
is entitled pursuant to Section 5.1(b). Notwithstanding the foregoing, the
Partnership will not call capital to fund any or all of the distributions to
which the General Partner is entitled pursuant to this Section 5.1(c). In the
event that all such tax distributions and interest are not offset against
subsequent distributions to the General Partners, the General Partner shall
return such non-offset tax distributions upon liquidation of the Partnership for
distribution pro rata to the Limited Partners.

 

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(d) Pending distribution, funds held by the Partnership which are required to be
distributed pursuant to this Section 5.1 shall be invested in Interim
Investments, to the extent practicable, at the sole discretion of the General
Partner.

(e) Any receipts or other revenues of the Partnership (excluding Capital
Contributions) not included in Net Distributable Cash, including, without
limitation, the net revenues from Interim Investments, may be applied by the
General Partner to pay or reserve for the payment of Management Fees, Operating
Expenses, Organizational Expenses and Indebtedness, to establish Reserves, or be
distributed in accordance with the provisions of Section 5.1(b) hereof, in each
case in the sole discretion of the General Partner.

(f) All distributions shall be made to the Partners in cash.

(g) Notwithstanding any provision of this Agreement to the contrary, neither the
Partnership, nor the General Partner on behalf of the Partnership, shall make
any distribution to any Partner if such distribution would violate the Act or
other applicable law.

5.2 Amounts Withheld. The Partners shall be required, upon request by the
Partnership, to fund their share of any applicable withholding taxes with
respect to the Partnership. If the Partnership is required pursuant to the Code,
the laws of any state, or any other provision of law, to withhold any amount
from amounts otherwise distributable to any Partner, the Partnership shall
withhold such amounts as shall be required by law and any amounts so withheld
shall be deemed to have been distributed to such Partner under this Agreement.
If any sums are withheld pursuant to this provision, the Partnership shall remit
the sums so withheld to, and file the required forms with, the Internal Revenue
Service and the appropriate authority of any such state or other applicable
government agency. In the event of any claimed over-withholding, a Partner shall
be limited to an action against the Internal Revenue Service, the appropriate
authority of any such state, or other applicable government agency for refund
and each Partner hereby waives any claim or right of action against the
Partnership on account of such withholding. Furthermore, if the amounts required
to be withheld exceed the amounts which would otherwise have been distributed to
such Partner, such Partner shall contribute any deficiency to the Partnership
within ten (10) Business Days after notice from the General Partner. If such
deficiency is not contributed within such time, any non-contributed amounts
shall be considered a demand loan from the Partnership to such Partner, with
interest at a rate equal to the lesser of (a) the Prime Rate plus five percent
(5%) (but in no event less than nine percent (9%)) and (b) the highest rate
permitted by law, which interest shall be treated as an item of Partnership
income, until discharged by such Partner by repayment. Such demand loan shall be
repaid, without prejudice to other remedies at law or in equity that the
Partnership may have, out of distributions to which the debtor Partner would
otherwise subsequently be entitled under this Agreement.

 

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ARTICLE VI.

MANAGEMENT

6.1 Management of the Partnership; Management Fees.

(a) In General. The management, operation and control of the Partnership and its
business and the formulation of its investment policy shall be vested
exclusively in the General Partner, subject to the terms and provisions of this
Agreement. The General Partner shall, in its sole discretion, exercise all
powers necessary and convenient for the purposes of the Partnership and all of
the powers conferred by the Act on the general partner of a limited partnership,
including the power to conduct the Partnership’s business as described in
Section 1.4 hereof and the power to delegate to one or more Persons the power to
perform any of the acts described above, but subject to the limitations and
restrictions expressly set forth herein, including those enumerated in this
Article. The General Partner shall not employ, or permit another to employ, such
funds or assets in any manner except for the exclusive benefit of the
Partnership. The General Partner shall use its best efforts to ensure that the
Partnership is and continues throughout its term to be classified as a
partnership (but not a publicly-traded partnership) for federal income tax
purposes.

(b) Powers of the General Partner. Subject to the limitations and restrictions
expressly set forth herein, the General Partner shall perform or cause to be
performed all management and operational functions relating to the day-to-day
business of the Partnership. Without limiting the generality of the foregoing,
the General Partner is authorized on behalf of the Partnership to cause the
Partnership to do the following (either directly or through the use of
Vehicles):

(i) enter into the Subscription Agreements and the Side Letters, and exercise
and perform the Partnership’s rights and obligations thereunder;

(ii) acquire, originate, hold, finance, manage and dispose of Investments;

(iii) pay, in accordance with the provisions of this Agreement, all expenses,
debts and obligations of the Partnership to the extent that funds of the
Partnership are available therefor;

(iv) make Interim Investments (which may be made through an agent) of cash
reserves and other liquid assets of the Partnership prior to their use for
Partnership purposes or distribution to the Partners;

(v) bring, compromise, settle and defend actions at law or in equity;

(vi) engage in any kind of activity and perform and carry out contracts of any
kind necessary to, or in connection with, the accomplishment of the purposes of
the Partnership;

 

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(vii) enter into agreements and contracts with third parties in furtherance of
the Partnership’s business, (including all documents and agreements as may be
required in connection with the acquisition, management, development or
disposition of Investments), including, but not limited to, one or more
agreements with Affiliates of the General Partner to provide development,
property management or leasing services with respect to the Investments of the
Partnership, provided that no such agreement with an Affiliate of the General
Partner shall provide for the payment of fees or other compensation in excess of
the fees and compensation provided in Exhibit C hereto and such agreement shall
not materially modify the form contract provided in Exhibit D hereto without the
approval of the Advisory Committee in accordance with Section 6.6, and provided,
further, that the General Partner shall provide an annual summary to the
Advisory Committee of the fees received by the General Partner and its
Affiliates pursuant to this paragraph and Section 6.6(c)(i) during each Fiscal
Year;

(viii) maintain, at the expense of the Partnership, adequate records and
accounts of all operations and expenditures;

(ix) purchase, at the expense of the Partnership, liability, casualty, fire and
other insurance and bonds to protect the Partnership’s assets and business;

(x) purchase, at the expense of the Partnership, director and officer liability
insurance to protect the General Partner, its members, managers, officers and
employees, the Investment Committee members and the Advisory Committee members
and their designees who serve on the Advisory Committee;

(xi) open accounts and deposit, maintain and withdraw funds in the name of the
Partnership in any bank, savings and loan association, brokerage firm or other
financial institution;

(xii) establish Reserves for contingencies and for any other proper Partnership
purpose;

(xiii) retain, and dismiss from retainer, any and all Persons providing legal,
accounting, engineering, brokerage, consulting, appraisal, investment advisory
or management services to the Partnership, or such other agents as the General
Partner deems necessary or desirable for the management and operation of the
Partnership and the Investments;

(xiv) incur and pay all expenses and obligations incident to the operation and
management of the Partnership, including, without limitation, the services
referred to in paragraph (xiii) hereof, taxes, interest, travel, rent, insurance
and supplies;

(xv) distribute funds to the Partners by way of cash or otherwise, all in
accordance with the provisions of this Agreement;

(xvi) prepare and cause to be prepared reports, statements and other relevant
information for distribution to Partners;

 

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(xvii) prepare and file all necessary returns, reports and statements and pay
all taxes, assessments and other impositions relating to the assets or
operations of the Partnership;

(xviii) effect a dissolution of the Partnership as provided herein;

(xix) organize wholly-owned or partially-owned Vehicles as subsidiaries of the
Partnership, including one or more Vehicles organized to operate as real estate
investment trusts, and take all necessary actions to maintain the legal and tax
status of such Vehicles;

(xx) cause the Partnership to be and remain organized in such a manner as to not
be deemed to hold “plan assets” for purposes of ERISA, including by taking such
actions described in Section 6.3;

(xxi) act for and on behalf of the Partnership in all matters incidental to the
foregoing; and

(xxii) authorize any partner, officer or other agent of the General Partner to
act for and on behalf of the Partnership in all matters incidental to the
foregoing.

By executing this Agreement, each Limited Partner shall be deemed to have
consented to any exercise by the General Partner of any of the foregoing powers
or other powers of the General Partner contained in this Agreement.

(c) Investment Committee. The General Partner shall form and maintain an
investment committee as a committee of the General Partner (the “Investment
Committee”), which will make all Major Investment Decisions. The Investment
Committee shall be comprised of certain Key Persons and other senior real estate
professionals of the General Partner and its Affiliates appointed by the General
Partner. The initial members of the Investment Committee are James A. Thomas, as
chairman of the Investment Committee, John R. Sischo, Thomas S. Ricci, Diana M.
Laing, and Randall L. Scott. All decisions of the Investment Committee shall be
approved by a majority of the members of the Investment Committee.

(d) Key Persons; Suspension of the Investment Period. The following Persons (or
their replacements who have been approved by Limited Partners holding a majority
of the LP Percentage Interests) shall be deemed to be the Key Persons (each a
“Key Person”) with respect to the Partnership: James A. Thomas, Thomas S. Ricci,
Diana M. Laing and an individual to be appointed by the General Partner and
approved by Limited Partners holding a majority of the LP Percentage Interests
to serve as a Key Person (the “Designated Key Person”). In that event that
(i) James A. Thomas, Thomas S. Ricci or Diana M. Laing (or their replacements
approved as provided herein) fail during the Investment Period to remain on the
Investment Committee, to remain actively involved in the Partnership and to
devote a substantial amount of attention to the Partnership, or (ii) the
Designated Key Person fails to devote substantially all of his or her business
time to the Partnership during the Investment Period, then the Investment Period
shall be suspended until such time as either such failure has been corrected by
such Person or a replacement has been appointed by the General Partner and
approved by Limited Partners holding a majority of the LP Percentage Interests.
In addition, James A.

 

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Thomas, Thomas S. Ricci and Diana M. Laing (or their replacements who have been
approved as Key Persons by Limited Partners holding a majority of the LP
Percentage Interests) shall, during the Term of the Partnership, devote the
amount of time to the Partnership that is necessary for it to achieve its goals.

(e) Authority of the General Partner. Any person dealing with the Partnership or
the General Partner may rely upon a certificate signed by the General Partner as
to:

(i) the identity of the General Partner or any Limited Partner hereof;

(ii) the existence or non-existence of any fact or facts which either constitute
a condition precedent to acts by a General Partner, or are in any other manner
germane to the affairs of the Partnership;

(iii) the Persons who are authorized to execute and deliver any instrument or
document of or on behalf of the Partnership; or

(iv) any act or failure to act by the Partnership or as to any other matter
whatsoever involving the Partnership or any Partner.

(f) Management Fee. The Partnership shall pay to the General Partner, quarterly
in arrears, a Management Fee for the performance of the services described above
(the “Management Fee”). The Management Fee shall be paid with respect to each
Limited Partner’s Capital Commitment during the Investment Period, and each
Limited Partner’s Invested Capital (as defined below) after the Investment
Period, as follows:

(i) During the Investment Period, the Management Fee shall be 1.5% per annum of
each Limited Partner’s Capital Commitment. After the Investment Period, the
Management Fee shall be 1.5% per annum of each Limited Partner’s aggregate
Capital Commitments that have been invested and not returned as a distribution
or written-off (“Invested Capital”). For this purpose, the Invested Capital with
respect to any Investment shall also include any Capital Contributions that are
reasonably assumed to be required for the development or redevelopment of an
Investment at the time of acquisition of the property with respect to such
Investment (which shall include an allocable share of a development fee for the
General Partner or its Affiliates of four percent (4%) of total construction
costs). The Management Fee shall be pro rated for any period less than a
calendar quarter based on the number of days during such period. For purposes of
calculating the Management Fee, the Capital Commitments of all Limited Partners
shall be deemed to have been made as of the Initial Closing Date. Concurrently
with the admission of any New Partner or any increase in the Capital Commitment
of an existing Limited Partner after the Initial Closing Date, the Partnership
shall pay to the General Partner an amount equal to the Management Fee that
would have been payable prior to the date of such admission with respect to such
New Partner’s Capital Commitment or the increased amount of such existing
Limited Partner’s Capital Commitment had such Capital Commitment been made on
the Initial Closing Date. Notwithstanding the foregoing, the Management Fee
shall be waived with respect to any

 

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investment in the Partnership by the General Partner and its Affiliates. Exhibit
C illustrates the application of the above Management Fees in relation to new
construction.

(ii) To the extent that the General Partner, the Key Persons or their officers,
directors, employees or Affiliates receive any origination, disposition,
break-up fees, directors’ fees, consulting fees or similar fees in connection
with the investment activities of the Partnership, the entire amount of such
fees shall be allocated pro rata among the Limited Partners and applied to
offset against and reduce the Management Fee otherwise payable to the General
Partner for the quarter in which such fees are received or for any subsequent
calendar quarter.

(g) Standard of Care of the Partners. The General Partner shall at all times act
in good faith and in the best interests of the Partnership. In managing the
affairs of the Partnership and in its dealings with the Limited Partners, the
General Partner shall be subject to a standard of performance which includes:
(i) a duty of loyalty, which requires the General Partner to carry out its
responsibilities with loyalty, honesty, good faith, and fairness toward the
Partnership and the Limited Partners, and (ii) a duty of care, which requires
the General Partner to discharge its duties with the diligence, care and skill
that an ordinarily prudent institutional real estate investment manager in a
like position would exercise under similar circumstances. The General Partner
shall not commit any act that would subject any Partner to liability in its
capacity as a Partner in any jurisdiction in which the Partnership transacts
business. To the fullest extent permitted by law, the Limited Partners shall not
owe a fiduciary duty to the General Partner or to any other Limited Partner.

6.2 ERISA. The General Partner shall use its reasonable best efforts to cause
the Partnership to be and remain organized in such a manner as to not be deemed
to hold “plan assets” for purposes of ERISA. If at any time the General Partner
reasonably believes that the assets of the Partnership are, or are about to
become, “plan assets” for purposes of ERISA and, thus, subject to Title I of
ERISA, the General Partner shall take such actions within its powers as the
General Partner reasonably believes to be appropriate to preclude the assets of
the Partnership from becoming “plan assets” under ERISA. If the General Partner
reasonably determines that no such actions are reasonably available, the General
Partner shall promptly notify all of the Partners of the potential change in
“plan assets” status for the Partnership (the “ERISA Notice”) and shall take the
following actions:

(a) The Partnership shall offer to each Partner that is subject to ERISA (an
“ERISA-Covered Partner”) the opportunity to have such ERISA-Covered Partner’s
Interest redeemed by the Partnership, to the extent permitted by applicable law,
as follows:

(i) Any ERISA-Covered Partner which elects to have its Interest redeemed shall
notify the Partnership to that effect within ten (10) Business Days after the
date of the ERISA Notice.

(ii) The Partnership shall redeem the Interest of each such redeeming
ERISA-Covered Partner for the Fair Market Value thereof as of the Redemption
Date with cash, to the extent available, and a promissory note of the
Partnership in respect of any remaining balance.

 

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(iii) The Partnership shall set a date for the redemption of the Interest of
each redeeming ERISA-Covered Partner (which date will be no later than thirty
(30) days after the date of the ERISA Notice (the “Redemption Date”)). On the
Redemption Date, the Partnership shall redeem the Interest of each redeeming
ERISA-Covered Partner as set forth in (ii) above.

(iv) If all remaining ERISA-Covered Partners do not choose to be redeemed as
aforesaid, and the percentage of the interests in the Partnership then held by
ERISA-Covered Partners is twenty-five percent (25%) or more of the total amount
of the interests in the Partnership then held by all Partners (other than the
General Partner and its affiliates), the General Partner shall redeem the
Interest of each remaining ERISA-Covered Partner in the manner set forth above,
either pro rata (based upon each remaining ERISA-Covered Partner’s Capital
Commitment in relation to the aggregate Capital Commitments of all remaining
ERISA-Covered Partners) or on such other basis as may be required to cause the
total value of the investment in the Partnership of ERISA-Covered Partners to be
reduced below twenty-five percent (25%) of the total amount of the Interests
then held by all Partners.

(v) Notwithstanding the foregoing, the Partnership shall not be required to sell
any asset if such sale would not be in the best interest of the Partnership or
the other Partners.

(vi) A Person shall cease to be a Partner upon the redemption of such Person’s
entire Interest.

(b) From and after the date that any ERISA-Covered Partner withdraws from the
Partnership or has its Interest redeemed as set forth above, the Partnership
shall release such ERISA-Covered Partner from such Partner’s obligations (or
that portion of such Partner’s obligations from which such Partner has been
released in the event of a partial redemption) to make any further contributions
to the Partnership; provided that, prior to such release, the Partnership may
require that such Partner make a Capital Contribution to the Partnership in an
amount appropriate to repay any Subscription Line Indebtedness which the
Partnership is required to repay as a result of such redemption. The Partnership
shall use commercially reasonable efforts to find other sources to repay such
Subscription Line Indebtedness and to avoid requiring such Partner to make any
such Capital Contribution.

6.3 Restrictions on the Partnership. Notwithstanding anything to the contrary
contained in this Agreement, without the consent of all the Partners, the
Partnership shall not:

(a) do any act in contravention of this Agreement or receive any rebate or
give-up or participate in any reciprocal business arrangements which circumvent
the provisions hereof;

(b) commingle the funds of the Partnership with those of any other Person;

(c) issue Interests or any other equity interests in the Partnership except in
accordance with the express terms of this Agreement and the Subscription
Agreements; or

 

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(d) knowingly commit any act that would subject any Partner to liability in its
capacity as a Partner in any jurisdiction in which the Partnership transacts
business.

6.4 Participation by Limited Partners. Except as otherwise expressly provided
herein, no Limited Partner, in its capacity as a Limited Partner, shall
participate in the management of the business and affairs of the Partnership. No
Limited Partner, in its capacity as a Limited Partner, shall have any right or
power to sign for or to bind the Partnership in any manner or for any purpose
whatsoever, or have any rights or powers with respect to the Partnership except
those expressly granted to such Limited Partner by the terms of this Agreement
or those conferred upon such Limited Partner by law, and no prior consent or
approval of the Limited Partners shall be required in respect of any act or
transaction to be taken by the General Partner on behalf of the Partnership
unless otherwise provided in this Agreement.

6.5 Filing of Schedules, Reports, Etc. Each Partner agrees to reasonably
cooperate with the Partnership in the filing of any schedule, report,
certificate or other instrument required to be filed by the Partnership under
the laws of the United States, any state or political subdivision thereof or any
foreign nation or political subdivision thereof. In connection therewith, each
Partner agrees to reasonably provide the Partnership with all information
required to complete such filings.

6.6 Advisory Committee.

(a) After the Initial Closing Date, the Partnership shall establish and maintain
an Advisory Committee (the “Advisory Committee”) selected by the General Partner
from among Limited Partners which represent a majority-in-interest of the
Limited Partners, who shall appoint individuals to represent their interests at
all meetings of the Advisory Committee. At no time shall the total number of
Advisory Committee members exceed seven members. None of the members of the
Advisory Committee may be the General Partner or its Affiliates. The General
Partner shall attend all meetings of the Advisory Committee; provided that the
General Partner shall excuse itself from any meeting at the request of the
Advisory Committee. The Advisory Committee shall meet as required pursuant to
this Agreement, upon the request of two or more Advisory Committee members or
upon the request of the General Partner, but not less frequently than
semi-annually. Notwithstanding the foregoing, one such meeting of the Advisory
Committee must coincide with the Annual Meeting of the Partners.

(b) If any Advisory Committee member shall resign or be removed, a successor may
be appointed in accordance with subsection (a) above. Any Advisory Committee
member representing a Limited Partner who becomes a Defaulting Partner shall
automatically be deemed removed from the Advisory Committee during the pendency
of such default. Advisory Committee meetings may be held in person or by
telephone conference and any and all actions and decisions of the Advisory
Committee may be taken and made by written consent in lieu of a meeting. Unless
otherwise provided herein, any recommendation or approval to be made by the
Advisory Committee shall require the approval of at least a majority of the
Percentage Interests held by the Advisory Committee members. The Advisory
Committee may establish such other rules of procedure as a majority of the
Advisory Committee members shall agree. Neither the Advisory Committee nor any
Advisory Committee member acting in such capacity shall have the power to bind
or act for or on behalf of the Partnership in any manner. No fees shall be paid

 

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by the Partnership to the Advisory Committee members, but the Partnership shall
bear all reasonable costs and expenses of the Advisory Committee members
incurred in the performance of their responsibilities in their capacities as
Advisory Committee members.

(c) The General Partner shall not take any of the following actions without
first obtaining the approval of the Advisory Committee:

(i) cause the Partnership to extend the Term of the Partnership beyond the
eighth anniversary of the Final Closing Date.

(ii) cause the Partnership or any Vehicle to engage the General Partner or any
of its Affiliates to provide property management, development management,
leasing or other services to the Partnership or to such Vehicle for fees or
other compensation in excess of or in addition to those set forth in the Fee
Schedule attached hereto as Exhibit C or cause the Partnership or any Vehicle to
enter into such agreement for services which materially modifies the form
contract as set forth in Exhibit D hereto;

(iii) cause the Partnership to enter into a transaction whereby the Partnership
or any Vehicle acquires an Investment from or transfers an Investment to the
General Partner, James A. Thomas, their respective Affiliates and any entities
in which any of the foregoing own a direct or indirect interest.

(iv) cause the Partnership to transfer any Investment to any other investment
fund or client account maintained by the General Partner or its Affiliates;

(v) cause the Partnership to invest more than twenty percent (20%) of the
aggregate Capital Commitments in any single Investment other than as permitted
by Section 8.1(b) hereof;

(vi) cause the Partnership to invest more than twenty percent (20%) of the
aggregate Capital Commitments in multi-family residential properties;

(vii) cause the Partnership to invest more than ten percent (10%) of the
aggregate Capital Commitments in unentitled land held for development;

(viii) cause the Partnership at any point in time to have more than forty
percent (40%) of the aggregate Capital Commitments committed to ground-up
development opportunities that have not been completed;

(ix) cause the Partnership to exceed the Debt Limit, provided, however, that,
the Advisory Committee may approve exceptions to the Debt Limit as provided in
Section 8.1(b) in any case in which the Debt Limit has been exceeded without the
prior approval of the Advisory Committee; or

(x) cause the Partnership to enter into any agreement to settle any claim or
litigation involving the General Partner or any of its Affiliates.

 

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(d) The Advisory Committee may elect to have an audit of the operations of the
Partnership made by such independent certified public accountant as it
determines to select, including, in particular, but without limitation, an audit
as to the costs and expenses charged or otherwise allocated to the Partnership
by the General Partner or any of its Affiliates. Any such election may be made
no more than once annually. Such audit is not to be a re-audit of the books and
records of the Partnership as provided for in other provisions of this
Agreement, but is a more detailed audit of such items as the Advisory Committee
determines is appropriate. The costs of any such audit shall be borne by the
Partnership unless such audit determines that the Partnership has been
materially overcharged and/or over allocated costs and expenses by the General
Partner and/or its Affiliates, in which event the costs of such audit shall be
borne by the General Partner. The determination of materiality shall be made by
the accountants making the audit. If such audit determines that there has been
an overcharge and/or over allocation, then the General Partner shall, within
fifteen (15) days after the delivery of the written report of such audit to the
General Partner, repay or cause to be repaid, to the Partnership any such
overcharge and/or over allocation.

(e) At least ninety (90) days prior to the beginning of each Fiscal Year, the
General Partner shall present to the Advisory Committee for its approval a
valuation plan (the “Valuation Plan”) for such Fiscal Year. The Valuation Plan
shall include a recommendation by the General Partner as to the appropriate
methods of valuation of each of the Partnership’s Investments in accordance with
Real Estate Information Standards adopted by the National Council of Real Estate
Investment Fiduciaries. The Valuation Plan may recommend independent appraisals,
General Partner estimates or other reasonable methods of valuation.

(f) Unless otherwise waived by such Limited Partner, the General Partner shall
provide each Limited Partner with no less than ten (10) Business Days’ prior
written notice of each Advisory Committee meeting and will provide, together
with such written notice, all necessary materials relating to the matters to be
discussed including the following:

(i) a description of each matter to be considered by the Advisory Committee at
such meeting;

(ii) the recommendation(s) of the General Partner and/or the Investment
Committee with respect to each such matter and the argument(s) in support of
such recommendation(s);

(iii) a summary of all relevant facts pertaining to each such matter;

(iv) the reasons for submitting each such matter to the Advisory Committee;

(v) an explanation of why each requested matter is in the best interests of the
Limited Partners; and

(vi) a summary of any issues and/or risks that may adversely affect the
Partnership as a result of taking any action recommended by the General Partner
and/or the Investment Committee.

 

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(g) The Advisory Committee may appoint independent legal counsel and financial
advisors to assist it in its consideration of matters presented to it by the
General Partner. The costs of any such appointment shall be borne by the
Partnership.

6.7 UBTI Matters. In the event that one or more Limited Partners is a Qualified
Organization immediately following the Final Closing Date, the Partnership may,
in the discretion of the General Partner, seek to structure any or all of its
Investments in a manner that the General Partner reasonably believes will
minimize unrelated business taxable income (“UBTI”), as such term is used in
Sections 512 through 514 of the Code, for Qualified Organizations to the extent
commercially feasible and consistent with the Partnership’s overall investment
and return objectives; provided, however, that neither this Section 6.8 nor
anything else in this Agreement shall be interpreted as obligating the
Partnership to refrain from entering into transactions (or structuring
transactions in a manner) that may result in the recognition by a Qualified
Organization of UBTI.

6.8 Listed Transactions. The General Partner shall not knowingly cause the
Partnership, any Investor Vehicle, or any Vehicle, to engage directly or
indirectly in a transaction that, as of the date the Partnership or such other
entity enters into a binding contract to engage in such transaction, is a
“listed transaction” as defined in Treasury Regulation §1.6011-4(b)(2), and will
undertake reasonable due diligence to determine whether any such transaction is
a listed transaction. If the General Partner reasonably determines that the
Partnership or other entity has engaged directly or indirectly in a transaction
that is a listed transaction or “reportable transaction” as defined in Treasury
Regulation §1.6011-4(b)(1), it shall promptly notify the Limited Partners of
such determination.

ARTICLE VII.

EXPENSES AND FEES

7.1 Operating Expenses. The General Partner shall bear the ordinary day-to-day
expenses incidental to the administration of the General Partner including,
without limitation, (i) all costs and expenses incurred by the General Partner
which relate to office space, facilities, utility services, supplies and
necessary administrative and clerical functions (including the preparation of
all internal Partnership reports required hereunder) and (ii) compensation and
benefits of all employees engaged in the Partnership’s and the General Partner’s
business. The General Partner shall not bear or otherwise be charged with any
third party costs or expenses of the Partnership’s or any Vehicle’s activities
and operations (“Operating Expenses”), all of which shall be borne by or
otherwise charged to the Partnership and such Vehicles, including, without
limitation, (i) all expenses incurred in connection with identifying,
evaluating, structuring, negotiating and closing any potential Investment
(including unconsummated investments) and the acquisition, holding, operation,
hedging, financing, monitoring, sale, proposed sale or valuation of any
Investments; (ii) all litigation-related and indemnification expenses; and
(iii) all ordinary administrative expenses of the Partnership, including fees of
auditors, accountants, attorneys, engineers, appraisers and other professionals,
the cost of Advisory Committee meetings and the cost of annual meetings, reports
and tax returns to the Partners. To the extent that any Operating Expenses are
paid by the General Partner or its Affiliates, such Operating Expenses shall be
reimbursed by the Partnership.

 

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7.2 Organizational Expenses. The Partnership shall bear and be charged with all
third party costs and expenses pertaining to the organization of the
Partnership, including, without limitation, legal and accounting expenses (but
excluding any fees payable to any placement agent) (collectively the
“Organizational Expenses”), up to a maximum of $750,000. To the extent that
Organizational Expenses exceed $750,000, such Organizational Expenses shall be
borne by the General Partner. The General Partner shall be responsible for the
payment of any fees payable to any placement agent in connection with the sale
of the Interests.

ARTICLE VIII.

INVESTMENTS

8.1 Investments.

(a) The assets of the Partnership, to the extent at any time not required for
the payment of expenses or otherwise not necessary for the conduct of the
Partnership’s business in accordance with this Agreement, shall be invested in
such Investments as shall be approved by the Investment Committee, used to
establish Reserves or invested in Interim Investments.

(b) The Partnership shall make Investments consistent with the following (in
each case determined as of the time that the Partnership commits to make an
Investment):

(i) Not more than twenty percent (20%) of the aggregate Capital Commitments may
be invested in any single Investment unless (A) the Advisory Committee has
approved the Partnership’s deviation from such restriction, or (B) prior to or
contemporaneously with making such Investment, the Partnership has secured
written commitments from one or more parties to finance and/or acquire
syndicated interests in such Investment such that, following such financing or
syndication, the Partnership would be in compliance with the above concentration
limitation.

(ii) Not more than twenty percent (20%) of the aggregate Capital Commitments may
be invested in multi-family residential properties.

(iii) Not more than ten percent (10%) of the aggregate Capital Commitments may
be invested in unentitled land held for development; provided that the
Partnership shall not invest in any unentitled land unless such unentitled land
is acquired for impending development.

(iv) The Partnership shall use reasonable efforts to ensure that most of the
properties underlying the Investments have a LEED certification with the intent
to obtain a “silver level” LEED certification and an Energy Star label or the
substantial equivalent and; provided, further that the Partnership shall use
reasonable efforts to achieve a higher LEED level to the extent consistent with
the investment objectives and strategy of the Partnership to acquire a “silver
level” LEED certification and an Energy Star label or the substantial
equivalent, and the Partnership shall use reasonable efforts to achieve a higher
LEED level to the extent consistent with the investment objectives and strategy
of the Partnership. For the avoidance of doubt, the Partnership may acquire
Investments in which the underlying properties do not have, or intend to have, a
“silver level” LEED certification or an Energy Star label; provided that the
General Partner, in

 

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its sole discretion, determines that such Investments are consistent with the
investment objectives and strategy of the Partnership; provided further that the
General Partner shall promptly disclose to the Limited Partners any Investments
acquired by the Partnership that do not have a “silver level” LEED certification
or Energy Star label.

(v) The Partnership may not make any Investments: (A) prior to the start of the
Investment Period; (B) during any suspension of the Investment Period pursuant
to Section 6.1(d) hereof; or (C) following the Investment Period, other than the
funding of Investments that were existing or subject to a binding commitment as
of the end of the Investment Period.

(vi) The Partnership and any Vehicle may incur Indebtedness as deemed
appropriate by the General Partner, provided that neither the Partnership nor
any Vehicle may incur any Indebtedness if, as a result of incurring such
Indebtedness, that aggregate outstanding amount of Indebtedness incurred by the
Partnership would exceed seventy-five (75%) of the aggregate value of the
Partnership’s Investments as determined by the General Partner at the time that
the Partnership or any such Vehicle incurs such Indebtedness (the “Debt Limit”),
provided, however, that, with the approval of the Advisory Committee, the
Partnership may exceed the Debt Limit if the General Partner cures such
non-compliance in a manner that it deems to be in the best interests of the
Partnership within twelve (12) months after the date that the Partnership
exceeded such Debt Limit, and provided, further, that Subscription Line
Indebtedness shall not be included in calculating the Debt Limit to the extent
that any outstanding Subscription Line Indebtedness is repaid within ninety
(90) days of any such obligation. In the case of a Partnership asset which is
not wholly-owned by the Partnership, including where one or more joint venture
partners own an interest in such asset, only the Partnership’s proportionate
interest in such asset shall be considered for purposes of calculating the
Partnership’s compliance with the Debt Limit. For the purpose of calculating the
Partnership’s compliance with the Debt Limit, “Indebtedness” shall mean the
aggregate outstanding principal balance of all loans made to the Partnership or
any Vehicle.

8.2 Vehicles. The Partnership may own Investments through corporations, limited
liability companies, partnerships, real estate investment trusts or other
entities, organized in the United States, substantially all of the interests in
which are, directly or indirectly, owned by the Partnership, or in joint
ventures and other co-ownership vehicles organized in the United States with
third parties (any such entities through which the Partnership may own
Investments, “Vehicles”).

8.3 Parallel Investment Vehicles. The General Partner may, in its sole
discretion, establish parallel and/or feeder partnerships, real estate
investment trusts, group trusts or other investment vehicles to address the tax,
regulatory or other concerns of certain prospective investors in the
Partnership, including members of the General Partner and their Affiliates,
where the General Partner, in its sole discretion, determines that such
arrangements will not have a material adverse effect on the Partnership and are
reasonably expected to preserve in all material respects the overall economic
relationship of the Partners and the investors in such parallel or feeder
investment vehicles. The expenses associated with establishing and maintaining
any such parallel or feeder investment vehicle will be borne on a

 

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pro rata basis (based upon capital commitments to such investment vehicle) by
the investors therein (and shall not reduce such investors’ unfunded capital
commitments to such vehicle or be treated as capital contributions thereto).

ARTICLE IX.

EXCULPATION AND INDEMNIFICATION

9.1 Exculpation and Indemnification. (a) To the fullest extent permitted by
applicable law, none of the Advisory Committee members and their designees who
represent them on the Advisory Committee, the Investment Committee members, the
General Partner and partners, directors, officers, employees, Affiliates and
other agents or the directors, officers, employees and agents of any Vehicle
(collectively, the “Covered Persons”) shall be liable to the Partnership, any
Vehicle or the Limited Partners for monetary damages for any losses, claims,
damages or liabilities (“Damages”) resulting from any act or omission performed
or omitted by such Covered Persons arising out of or in connection with this
Agreement or the Partnership’s business or affairs, except to the extent that
any such Damages are attributable to: (i) the bad faith of such Advisory
Committee member or its designee on the Advisory Committee; (ii) the gross
negligence, willful misconduct, or bad faith of, or material breach of this
Agreement by, any other such Covered Person; or (iii) with respect to the
General Partner, a breach by the General Partner of its standard of performance
as set forth in Section 6.1(g).

(b) The Partnership shall, to the fullest extent permitted by applicable law,
indemnify, defend and hold harmless each Covered Person against any Damages to
which such Covered Person may become subject in connection with any matter
arising out of or in connection with this Agreement or the Partnership’s
business or affairs, except to the extent that any such Damages are attributable
to: (i) the bad faith of such Covered Person in the case of an Advisory
Committee member or its designee on the Advisory Committee; (ii) the gross
negligence, willful misconduct, or bad faith of, or material breach of this
Agreement by, such Covered Person in the case of a Covered Person other than an
Advisory Committee member or its designee on the Advisory Committee; or
(iii) with respect to the General Partner, a breach by the General Partner of
its standard of performance as set forth in Section 6.1(g). If a Covered Person
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter arising out of or in connection with this Agreement
or the Partnership’s business or affairs, the Partnership shall reimburse such
Covered Person for its reasonable legal and other expenses (including the cost
of any investigation and preparation) as they are incurred in connection
therewith; provided that, such Covered Person shall provide the Partnership with
an undertaking to promptly repay to the Partnership the amount of any such
reimbursed expenses paid to it if it shall ultimately be determined by a court
order of final adjudication that such Covered Person was not entitled to be
indemnified by the Partnership in connection with such action, proceeding or
investigation, and provided further that, no such reimbursement shall be
provided to a Covered Person in any case involving an action, claim, proceeding
or investigation brought or commenced by such Covered Person against the
Partnership or involving an action, claim, proceeding or investigation brought
or commenced by a Partner or the Partnership against such Covered Person. If for
any reason (other than by reason of the exclusions from indemnification set
forth above) the foregoing indemnification is unavailable to such Covered
Person, or insufficient to hold it harmless, then the Partnership

 

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shall, to the fullest extent permitted by law, contribute to the amount paid or
payable by such Covered Person as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect the
relative benefits received by the Partnership on the one hand and such Covered
Person on the other hand or, if such allocation is not permitted by applicable
law, to reflect not only the relative benefits referred to above but also any
other relevant equitable considerations.

(c) No Limited Partner shall have any obligation to the Partnership or any other
Partner to bring or join in any action against any Covered Person pursuant to
Section 9.1(a) or (b) hereof. Nothing contained in this Section 9.1 shall be
construed as any waiver of insurance claims or recoveries by the Partnership or
any Covered Person.

(d) Each Partner covenants for itself, its successors, assigns, heirs and
personal representatives that such Person will, at any time prior to or after
the dissolution of the Partnership, on demand, whether before or after such
Person’s withdrawal from the Partnership, pay to the Partnership or the General
Partner any amount which the Partnership or the General Partner, as the case may
be, pays in respect of taxes (including withholding taxes) imposed upon income
of or distributions to such Partner, to the extent that such amounts have not
been withheld from amounts otherwise distributable to such Partner.

(e) The obligations of the Partnership under Section 9.1(b) shall (i) be in
addition to any liability which the Partnership may otherwise have and
(ii) inure to the benefit of the Covered Persons and any successors, assigns,
heirs and personal representatives of such Covered Persons. The General Partner
shall cause the Partnership to purchase, at the Partnership’s expense, insurance
to insure the Covered Persons against any Damages to which the Covered Persons
may become subject in connection with any matter arising out of or in connection
with this Agreement or the Partnership’s business or affairs, under this
Agreement or applicable law.

9.2 Liability Insurance. (a) The Partnership shall acquire and maintain adequate
liability insurance at Partnership expense with customary limits and deductibles
covering the Advisory Committee members and their designees on the Advisory
Committee and the other Covered Persons, to the extent the General Partner
determines that the same is available on commercially reasonable terms. The
Partnership shall not incur the cost of that portion of any insurance which
insures any party against any liability the indemnification of which is herein
prohibited. Any person entitled to indemnification from the Partnership
hereunder shall first use its best efforts to seek recovery under any other
indemnity or any insurance policies by which such person is indemnified or
covered, but if such recovery or advancement is not promptly forthcoming, the
Partnership shall provide the indemnification and shall be subrogated to the
right of the indemnified party to recover from such other sources.

(b) The General Partner shall maintain a fidelity bond (or insurance policies
providing equivalent coverage) of not less than $5,000,000 covering all
employees or agents of the General Partner handling assets of the Partnership.

 

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ARTICLE X.

BOOKS, MEETINGS AND RECORDS

10.1 Books and Accounts. Complete and accurate books and accounts shall be kept
and maintained for the Partnership at the principal place of business of the
Partnership, as determined by the General Partner. Each Partner shall at all
reasonable times have access to, and may inspect and make copies of, such books
and accounts. Funds of the Partnership shall be deposited in the name of the
Partnership in such bank or other account or accounts as the General Partner may
designate and withdrawals therefrom shall be made upon such signature or
signatures on behalf of the Partnership as the General Partner may designate.

10.2 Reports to Partners.

(a) The General Partner shall cause to be prepared, in accordance with U.S.
generally accepted accounting principles, and delivered to each Partner: (i) on
or before the thirtieth (30th) day after the end of each quarter of each Fiscal
Year, an unaudited quarterly financial report for such quarter for the
Partnership and descriptive investment information for each Investment, (ii) on
or before the ninetieth (90th) day after the end of each Fiscal Year, annual
financial statements for such fiscal year audited by a firm of independent
certified public accountants, together with a summary of all transactions
between the Partnership and the General Partner and its Affiliates, which
summary shall include any fees paid in connection with such transactions, and a
summary of all legal and regulatory proceedings and settlements involving the
Partnership, and (iii) on or before the ninetieth (90th) day after the end of
each Fiscal Year, a Schedule K-1 regarding the respective Limited Partner’s
investment in the Partnership, copies of the Partnership’s information returns
and such other information about the Partnership as may be required to enable
each Partner to properly complete its federal income tax return, any income tax
return of any state and any other reporting or filing requirement imposed by any
governmental agency or authority for such fiscal year.

(b) The General Partner shall determine the value of the Partnership’s
Investments in accordance with the Valuation Plan. Within ninety (90) days after
the end of each Fiscal Year or such other date as set forth in the Valuation
Plan, the General Partner shall provide a report to the Limited Partners as to
the valuation of the Partnership’s Investments.

(c) The General Partner shall be the “tax matters partner,” as such term is
defined in Section 6231(a)(7) of the Code.

(d) Promptly following the admission of any additional Person to the Partnership
as a Limited Partner pursuant to the terms of this Agreement, the General
Partner shall distribute an updated Schedule of Partners to each Partner.

10.3 Annual Meeting. An annual meeting of the Partners (an “Annual Meeting”)
shall be held in each year beginning in calendar year 2008, on a date and at the
time set by the General Partner. The General Partner shall call an Annual
Meeting by delivering written notice of an Annual Meeting to the Partners (the
“Annual Meeting Notice”). The Annual

 

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Meeting Notice shall state the location, date and time of the Annual Meeting and
shall describe the specific actions to be taken or matters to be addressed at
the Annual Meeting.

ARTICLE XI.

TRANSFERABILITY OF A PARTNER’S INTEREST

11.1 Restrictions on Transfer. No Limited Partner shall Transfer all or any part
of its Interest without the consent of the General Partner. The General Partner
shall consent to a Transfer of all or a portion of a Limited Partner’s Interest
and the admission of the Transferee of such Interest as a Limited Partner if the
following requirements are satisfied:

(a) The Transferee executes and delivers to the General Partner the following
documents:

(i) an instrument, in form and substance satisfactory to the General Partner in
its sole discretion, pursuant to which the Transferee agrees to be bound by the
terms of this Agreement;

(ii) executed copies of all instruments and agreements required to be delivered
by a Limited Partner to the General Partner pursuant to Section 3.4(b); and

(iii) such additional instruments and documents, in form and substance
satisfactory to the General Partner in its sole discretion, as shall be
reasonably required by the General Partner (including opinions of counsel with
respect to matters set forth in Section 11.1(b)).

(b) Such Transfer would not:

(i) result, directly or indirectly, in the termination of the Partnership for
federal income tax purposes;

(ii) result in the violation of the Securities Act of 1933, as amended, or any
other applicable federal or state laws or order of any court having jurisdiction
over the Partnership;

(iii) contravene, conflict with, or result in a violation or breach of any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify any instrument or agreement to which the Partnership or any
Vehicle is a party or to which the Partnership’s or any Vehicle’s assets are
subject;

(iv) result in the imposition or creation of any encumbrance upon or with
respect to any of the assets of the Partnership or any Vehicle;

(v) result in or create a “prohibited transaction” or cause the Partnership or a
Partner or an Affiliate of a Partner to be or become a “party in interest” (as
defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in

 

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Section 4975 of the Code) with respect to any “plan” (as defined in Section 3(3)
of ERISA and/or Section 4975 of the Code) or result in or cause the Partnership
or any Partner or any Affiliate of a Partner to be liable for tax under Chapter
42 of the Code or otherwise cause any such Person to incur tax liabilities;

(vi) result in the Partnership’s assets being deemed “plan assets” for the
purposes of Section 4975 of the Code or ERISA;

(vii) be a Transfer to an individual who is not legally competent or who has not
achieved his or her majority under the law of the State (excluding trusts for
the benefit of minors);

(viii) cause a substantial risk, in the opinion of the Partnership’s counsel,
that the classification of the Partnership as a partnership for purposes of the
Code could be adversely affected;

(ix) result in a reassessment for local real estate tax purposes of any real
property in which the Partnership has an interest, directly or indirectly; or

(x) result in the Partnership being subject to regulation under the Investment
Company Act.

(c) The Transferee:

(i) in the reasonable opinion of the General Partner, has sufficient liquid
assets to satisfy any unfunded Capital Commitment of the transferor;

(ii) is acquiring the Interest solely for the purpose of investment;

(iii) in the reasonable opinion of the General Partner, is not a competitor of
the General Partner and will not be unduly disruptive in the management or
conduct of the business affairs of the Partnership; and

(iv) meets the investment and suitability requirements established by the
General Partner for investment in the Partnership.

(d) The Transferor or Transferee pays to the Partnership any and all costs
incurred and to be incurred by the Partnership as a result of such Transfer
(exclusive of indirect costs or consequential damages).

(e) The Transferor shall use reasonable efforts to ensure that any Interests it
Transfers to any new Partner(s) are in large blocks, so as to minimize the
number of new Partner(s) and maintain the integrity of the existing Partnership.

11.2 Prohibition on Transfers of General Partner Interests. The General Partner,
TPG and any Limited Partner which is an Affiliate of the General Partner shall
not have the right to Transfer all or any portion of their direct or indirect
Interest (or their respective interests in any co-investment) other than to
their Affiliates, except after the termination of the

 

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Investment Period and with the approval of Limited Partners holding at least
seventy-five percent (75%) or more of the LP Percentage Interests; provided that
this Section 11.2 shall not apply to TPG with respect to Transfers by TPG to its
Estate Planning Affiliates or employees. All such approved Transfers shall also
be subject to the provisions of Section 11.1. If the General Partner, TPG or any
Limited Partner which is an Affiliate of the General Partner makes a Transfer in
violation of Section 11.1 or prior to the termination of the Investment Period
and without obtaining the approval of Limited Partners holding at least
seventy-five percent (75%) or more of the LP Percentage Interests or if the
General Partner, TPG or any Limited Partner which is an Affiliate of the General
Partner dissolves, or withdraws from the Partnership, prior to the expiration of
the term of the Partnership without the approval of Limited Partners holding at
least seventy-five percent (75%) or more of the LP Percentage Interests, such
Transfer, dissolution or withdrawal shall, to the fullest extent permitted by
law, be void ab initio and the Transferee and dissolved or withdrawing General
Partner, TPG or Limited Partner which is an Affiliate of the General Partner as
applicable shall be jointly and severally liable to the Partnership and the
other Partners for such direct Damages as any of them may sustain as a result of
such Transfer, dissolution or withdrawal. The removal of the General Partner
pursuant to Article XII shall not be considered a withdrawal for the purposes of
this Section 11.2.

11.3 Transfers of Limited Partner Interests. If a Limited Partner (a) makes a
Transfer in violation of Section 11.1, or (b) dissolves or withdraws from the
Partnership prior to the expiration of the Term of the Partnership, in either
case without the consent of the General Partner, such Transfer, dissolution or
withdrawal shall be void to the fullest extent permitted by law, and the
Transferor or dissolved or withdrawing Limited Partner shall be liable to the
Partnership and the other Partners for such damages as any of them may sustain
as a result of such Transfer, dissolution or withdrawal.

11.4 Substituted Partners. The General Partner is authorized to execute
appropriate instruments evidencing the admission of a Transferee of an Interest
which is admitted as a Limited Partner.

11.5 Amended Certificate. The General Partner shall amend the Certificate to
reflect each Transfer for which such amendment is required by law to be filed.

11.6 Deceased or Incompetent Individual Limited Partners. If any Limited Partner
who is a natural person shall die or be adjudged by a court of competent
jurisdiction to be incompetent to manage such Limited Partner’s person or
property, such Limited Partner’s executors, administrators, guardians,
conservators or other legal representatives shall, subject to Section 11.1,
become assignees of such Limited Partner hereunder and shall succeed to all of
the rights and obligations of such deceased or incompetent Limited Partner. Any
Transferee of an Interest or portion thereof pursuant to this Section 11.6 not
admitted as a Partner shall not be a Partner hereunder and shall have no rights
under this Agreement other than to participate in distributions made to all
Partners. Until the admission of its Transferee as a Partner, a Transferor of an
Interest shall not be released from any obligations under this Agreement.
Notwithstanding the foregoing, the provisions of Section 3.3 shall be fully
applicable to Transferees of any Interest pursuant to this Section 11.6, and
each such Transferee shall be treated as if it were a Limited Partner, and have
the obligations of a Partner, for the limited purposes of such Section.

 

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ARTICLE XII.

REMOVAL OF THE GENERAL PARTNER

12.1 Removal of the General Partner For Cause.

(a) If any of the following events shall occur (each a “General Partner For
Cause Removal Event”): (i) the General Partner is grossly negligent or commits
willful misconduct in the performance of its duties to the Partnership, (ii) the
General Partner misappropriates funds from, or perpetrates a fraud upon, the
Partnership, (iii) the General Partner or any of its Affiliates fails to make a
Capital Contribution to the Partnership as required by this Agreement, or
(iv) the General Partner engages in a material breach of this Agreement which
has not been cured within thirty (30) days after the receipt of written notice
of such breach by the General Partner from the Advisory Committee, then Limited
Partners holding at least a majority of the LP Percentage Interests (the
“General Partner Removing Limited Partners”) may deliver a written notice to the
General Partner (the “General Partner Removal Notice”) setting forth a
description of the relevant General Partner For Cause Removal Event(s) and
stating that the General Partner shall be removed as the general partner of the
Partnership.

(b) The General Partner may, but shall not be required to, submit the issue of
whether or not a General Partner For Cause Removal Event has occurred for
arbitration to a panel of three arbitrators (each of which shall be an attorney
with at least ten (10) years of practice (at least five (5) of which must be
predominantly in the area of partnership and/or real estate law) and who has
served as an arbitrator in at least five JAMS arbitrations) in accordance with
the applicable arbitration rules of JAMS. Each of the General Partner and
General Partner Removing Limited Partners holding more than fifty percent
(50%) of the Percentage Interests of all General Partner Removing Limited
Partners shall appoint one arbitrator within ten (10) days from the time of the
filing of the demand for arbitration (in the case of the claimant) and within
ten (10) days of receipt of the demand (in the case of the respondent). The two
arbitrators so selected shall select a third arbitrator within (10) days from
the time the last of the two party-appointed arbitrators is selected and the
names and addresses thereof shall be communicated to the General Partner, the
General Partner Removing Limited Partners and JAMS. The applicable JAMS rules
concerning failure to appoint shall govern the failure to appoint any arbitrator
as provided herein. Arbitration shall be held at the offices of JAMS in Los
Angeles, California or, if arbitration cannot be held there, at such other
specific location in close proximity to Los Angeles, California, as may be
agreed upon by the parties or decided by the arbitrators. Except as otherwise
provided herein, any challenge to the validity, scope or binding nature of this
arbitration clause shall be decided solely by the arbitrators. The arbitrators
shall, to the fullest extent permitted by law, have the power to grant
provisional remedies of all kinds, including orders in the nature of preliminary
injunctions and orders requiring the posting of pre-award security, and to grant
specific performance. The Partners understand that this agreement to arbitrate
does not constitute a waiver of the right to seek a judicial forum where such a
waiver would be void under federal securities laws. Notwithstanding any
provision of the Agreement to the contrary, this Section 12.1(b) shall be
construed to the maximum extent possible to comply with the laws of the State of
Delaware, including the Uniform Arbitration Act (10 Del. C § 5701 et seq.) (the
“Delaware Arbitration Act”). If, nevertheless, it shall be determined by a court
of competent jurisdiction that any provision or wording of this Section 12.1(b),
including any

 

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Commercial Arbitration Rules or rules of JAMS shall be invalid or unenforceable
under the Delaware Arbitration Act or other applicable law, such invalidity
shall not invalidate all of this Section 12.1(b). In that case, this
Section 12.1(b) shall be construed so as to limit any term or provision so as to
make it valid or enforceable within the requirements of the Delaware Arbitration
Act or other applicable law, and, in the event such term or provision cannot be
so limited, this Section 12.1(b) shall be construed to omit such invalid or
unenforceable provision.

12.2 Removal of the General Partner Without Cause. At any time after the second
anniversary of the Initial Closing Date, Limited Partners holding seventy-five
percent (75%) or more of the LP Percentage Interests may deliver a General
Partner Removal Notice to the General Partner stating that the General Partner
shall be removed as the General Partner without the occurrence of an event of
cause as described in Section 12.1(a).

12.3 Effect of Removal of the General Partner. (a) In any case in which the
General Partner has received a General Partner Removal Notice, the General
Partner shall no longer (i) make any Capital Calls except to fund commitments of
the Partnership existing on or before the date of receipt of such notice, to pay
Partnership expenses, or to repay any outstanding Subscription Line
Indebtedness, (ii) make any new commitments for Investments, or (iii) make any
draw of Subscription Line Indebtedness. Upon the General Partner’s receipt of
the General Partner Removal Notice, or if the General Partner is being removed
pursuant to Section 12.1 and the issue of whether or not a General Partner For
Cause Removal Event has occurred has been submitted to arbitration as provided
in Section 12.1(b), upon the date of a decision by the arbitrators that a
General Partner For Cause Removal Event has occurred, Limited Partners holding a
majority of the LP Percentage Interests shall (A) elect a successor general
partner to the Partnership (the “Successor General Partner”) and (B) elect
either to continue the business of the Partnership or liquidate the assets of
the Partnership.

(b) Upon the election of a Successor General Partner in accordance with the
terms of Section 12.3(a), the Successor General Partner shall be admitted to the
Partnership as a general partner of the Partnership upon its execution of a
counterpart signature page to this Agreement effective as of the date of the
removal of the General Partner. The Successor General Partner shall have all of
the non-economic rights, powers and obligations of the former General Partner as
the general partner of the Partnership under this Agreement. If the Partners
elect to continue the business of the Partnership, the Successor General Partner
shall do so; provided, however, that the Successor General Partner shall not
cause or permit the Partnership to acquire any Investments other than
Investments that were subject to a binding commitment on the date of removal. If
the Partners elect to liquidate the assets of the Partnership, the Successor
General Partner shall proceed to do so in an orderly manner.

(c) Upon the removal of the General Partner:

(i) the Investment Period shall terminate;

(ii) the General Partner shall forfeit its right to receive any fees not already
due and payable; provided that, in the event of the removal of the General
Partner pursuant to Section 12.2, the Partnership shall pay to the General
Partner a termination fee equal

 

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to one hundred twenty (120) days’ Management Fees (calculated, and payable, as
of the date of the termination of the General Partner);

(iii) if the removed General Partner is removed pursuant to Section 12.1:

(A) the removed General Partner shall be deemed admitted as a limited partner of
the Partnership and shall have no right, other than rights generally possessed
by all Limited Partners, to participate in the management of the business of the
Partnership;

(B) subject to paragraph (D) below, the removed General Partner’s Carried
Interest shall convert into and be deemed the right to receive one hundred
percent (100%) of all future Carried Interest Distributions until the removed
General Partner has received a cumulative amount of Carried Interest
Distributions equal to sixty-two and one-half percent (62.5%) of the Fair Market
Value of the Carried Interest immediately prior to the removal of the removed
General Partner, but the removed General Partner shall have no right to receive
any Carried Interest Distributions in excess of such amount; provided that any
amount received by the removed General Partner (or any of its Affiliates) under
this clause (B) shall be reduced, on a dollar-for-dollar basis, by the actual
amount of direct Damages suffered by the Partnership in respect of the act or
omission of the General Partner which constituted the grounds for removal of the
General Partner pursuant to Section 12.1(a), but only to the extent that a court
order of final adjudication establishes the amount of such Damages and
determines that such Damages were primarily attributable to the General Partner
For Cause Removal Event.

(C) subject to paragraph (D) below, the removed General Partner’s Capital
Interest, if any, shall convert into and be deemed to be an Interest as a
limited partner, and the removed General Partner and any Limited Partner that is
an Affiliate of the General Partner shall continue to share as a Limited Partner
in such Profits and Losses, to receive such distributions, to be subject to such
Capital Calls and to receive such allocations of income, gain, loss, deduction
or credit, to which the removed General Partner and such Limited Partner would
have been entitled or obligated as a Limited Partner prior to such removal; and

(D) the Partnership shall have the right, but not the obligation, to redeem the
removed General Partner’s Carried Interest and Capital Interest, if any, and the
Interests of Affiliates of the removed General Partner for an aggregate amount
equal to the Fair Market Value of such Interests immediately prior to the
removal of the removed General Partner and either in cash promptly following
removal or, at the election of the Partnership, by means of a promissory note
that bears interest at the Prime Rate and requires payment in full by no later
than six (6) months after the date for removal, provided that, no distributions
may be made pursuant to Section 5.1 until the principal and interest under such
promissory note have been paid in full; and provided further that any amount
received by the removed General Partner (or any of its Affiliates) under this
clause (D) shall be reduced, on a dollar-for-dollar basis, by the actual amount
of direct Damages suffered by the Partnership in respect of the act or omission
of the General Partner which constituted the grounds for removal of the General
Partner pursuant to Section 12.1(a), but only to the extent that a court order
of final adjudication establishes the amount of such Damages and determines that
such Damages were primarily attributable to such act or omission by the General
Partner;

 

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(iv) if the removed General Partner was removed pursuant to Section 12.2, the
Partnership shall redeem the Carried Interest and Capital Interest of the
removed General Partner and the Interests of all Affiliates of the General
Partner for an aggregate amount equal to the Fair Market Value of such Interests
immediately prior to the removal of the removed General Partner payable either
in cash promptly following removal or, at the election of the Partnership, by
means of a promissory note that bears interest at the Prime Rate and requires
payment in full by no later than six (6) months after the date for removal,
provided that, no distributions may be made pursuant to Section 5.1 until the
principal and interest under such promissory note have been paid in full; and

(v) the General Partner, its Affiliates and their respective members, partners,
stockholders, officers and employees shall resign as a director, officer or
manager of each other Vehicle and portfolio company in which the Partnership has
invested, directly or indirectly; provided that such resignation will not
violate the terms of any agreement to which such entity is a party or, in the
reasonable judgment of the General Partner, cause material adverse harm to the
Partnership, such Vehicle or such portfolio company.

(d) Nothing contained in this Article XII shall relieve the former General
Partner from any liabilities of, or obligations to, the Partnership or any
creditor thereof, or to any Partner, incurred or arising on or prior to the
effective date of the removal of the General Partner and the former General
Partner shall remain liable for same until the expiration of the applicable
statute of limitations; provided that the former General Partner’s obligations
to refund any Over-Distribution pursuant to Section 14.2 shall be limited to the
amount of any Over-Distribution which the former General Partner would be
required to refund pursuant to Section 14.2, had the assets of the Partnership
been sold at Fair Market Value as of the date that the former General Partner is
removed as the general partner of the Partnership.

12.4 Effect of the Bankruptcy of the General Partner. Unless otherwise removed
in accordance with Sections 12.1 or 12.2, the Bankruptcy of the General Partner
shall not cause the General Partner to cease to be the general partner of the
Partnership.

ARTICLE XIII.

EXCLUSIVITY

13.1 Investment Exclusivity. During the Exclusivity Period, the General Partner
and its Affiliates shall not acquire for renovation or development for their own
account or the account of any client other than the Partnership any property for
which it is intended on the date of acquisition that a LEED certification will
be obtained without the prior approval of the Advisory Committee; except for the
following:

(a) Properties owned by the General Partner or its Affiliates or any client
thereof on or before the Formation Date, or for which any such Person had
entered into a commitment to purchase on or before such date;

(b) Investments made for occupational or personal use by the General Partner or
its Affiliates; and

 

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(c) Investments which have a cost of less than $25 million each.

Notwithstanding the foregoing, the General Partner and its Affiliates may
acquire for renovation or development for their own account or the account of
any client other than the Partnership any property for which it is intended on
the date of acquisition that a LEED certification will be obtained in the event
that the Partnership has first been offered the opportunity to invest in such
property and the Advisory Committee has rejected the Partnership’s investment in
such property pursuant to Section 6.6(c) hereof.

13.2 Other Funds. During the period commencing on the Initial Closing Date and
ending on the earlier of (i) the end of the Investment Period and (ii) the first
date on which seventy-five percent (75%) or more of Capital Commitments have
been drawn and/or committed or allocated to Investments (excluding Interim
Investments) or to the payment of Operating Expenses, (A) the Partnership shall
serve as the exclusive vehicle in which the General Partner or its Affiliates
shall invest in Investments, and (B) none of the General Partner or its
Affiliates shall advise or act as a primary source of transactions on behalf of
another pooled investment vehicle with the similar investment strategy as the
Partnership.

ARTICLE XIV.

DISSOLUTION

14.1 Events of Dissolution.

(a) The Partnership shall be dissolved upon the first to occur of:

(i) the date that the General Partner, with the consent of Limited Partners
holding at least sixty-six percent (66%) of the LP Percentage Interests, elects
to dissolve the Partnership;

(ii) the date that Limited Partners holding at least seventy-five percent
(75%) of the LP Percentage Interests elects to dissolve the Partnership;

(iii) the expiration of the Term of the Partnership;

(iv) the sale or other disposition of all or substantially all of the assets of
the Partnership and the collection of the proceeds therefrom, which the General
Partner shall accomplish within the Term (including any extensions thereof);

(v) the removal of the General Partner (unless a replacement general partner is
admitted to the Partnership in accordance with Section 12.3 hereof) or the
occurrence of any other event that causes the General Partner to cease to be the
general partner of the Partnership under the Act, unless the Partnership is
continued without dissolution in accordance with the Act;

(vi) at any time there are no limited partners of the Partnership, unless the
Partnership is continued without dissolution in accordance with the Act; and

 

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(vii) the entry of a decree of judicial dissolution under Section 17-802 of the
Act.

(b) Following the dissolution of the Partnership, the General Partner (or
liquidating trustee) shall liquidate the assets of the Partnership as promptly
as shall be practicable and in a commercially reasonable manner. The proceeds of
such liquidation shall be applied in the following order of priority:

(i) first, to the satisfaction (whether by payment or the reasonable provision
for payment) of debts and liabilities of the Partnership, including the
establishment of any reserves that the General Partner may deem reasonably
necessary to satisfy any contingent liabilities of the Partnership, and the
satisfaction of the costs and expenses of the dissolution and liquidation; and

(ii) then, to the Partners in accordance with Section 5.1(b).

(c) The Partners intend that the allocation provisions contained in this
Section 14.1 will result in distributions to each Partner upon the liquidation
of the Partnership in accordance with this Section 14.1 that are the same as the
distributions that would have been made at such time in accordance with
Section 5.1. However, if upon the liquidation of the Partnership, the Capital
Accounts of the Partners are in such ratios or balances that the distributions
to be made under Section 14.1 would not be the same as those that would have
been made at such time in accordance with Section 5.1, then the General Partner
(or the liquidating trustee) shall first make or shall cause to be made one or
more special allocations of Net Income, Net Loss, gross income, gain, loss
and/or deduction between or among the Partners (including by effecting
reallocations for prior years and amending prior tax returns to reflect the
same) so that, to the extent possible, the Capital Account balance of each
Partner will have a balance prior to distribution under Section 14.1 equal to
the amount of the distributions that would have been made at such time to such
Partner under Section 15.1; provided, however, that any such allocation or
reallocation shall be made only to extent such allocation conforms with the
fractions rule.

14.2 Final Accounting; Clawback. Within 120 days after the disposition of the
last Investment held by the Partnership and the distribution of the Net
Distributable Cash arising from such disposition pursuant to Sections 5.1 and
14.1(b) hereof, the General Partner shall, after consulting with the
Partnership’s independent public accountants, determine whether the General
Partner has received, over the life of the Partnership, any Over-Distribution
with respect to any Limited Partner. For purposes hereof, an “Over-Distribution”
shall mean, with respect to any Limited Partner (i) in the event that such
Limited Partner has not received, over the life of the Partnership, a return of
all of such Limited Partner’s Capital Contributions plus an amount equal to an
annual rate of nine percent (9%), compounded annually, on such Partner’s
aggregate unreturned Capital Contributions allocable to all of the Partnership’s
Investments, then the Over-Distribution shall be an amount equal to the
aggregate amount of Carried Interest Distributions received by the General
Partner with respect to such Limited Partner, and (ii) in the event that the
General Partner has received, over the life of the Partnership, an aggregate
amount of Carried Interest Distributions with respect to such Limited Partner
which exceeds the amount of Carried Interest Distributions that the General
Partner would have received if the Carried Interest

 

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Distributions had been determined with respect to all of the Partnership’s
Investments taken as a whole, then the Over-Distribution shall be an amount
equal to the amount of such excess. In the event that both clauses (i) and
(ii) above are applicable with respect to any Limited Partner, the
Over-Distribution shall be the greater of the amounts determined under
clauses (i) and (ii) above. Notwithstanding the foregoing, in no event shall the
amount of the Over-Distribution with respect to any Limited Partner exceed the
aggregate amount of Carried Interest Distributions received by the General
Partner with respect to such Limited Partner. As soon as practicable after
determining the amount of any such Over-Distribution (or the absence of any
Over-Distribution), but in all events within thirty (30) days after making such
determination, the General Partner shall provide notice thereof to the
applicable Limited Partner(s), which notice shall set forth in reasonable detail
the amount and manner of computation of such Over-Distribution and the General
Partner shall pay the amount of such Over-Distribution to the Partnership (and
to the extent that the General Partner is entitled to any liquidating
distributions pursuant to Section 14.1(b), such distributions shall be offset
against the Over-Distribution), which shall then be promptly distributed by the
Partnership to the applicable Limited Partner(s) in accordance with
Section 14.1(b) hereof. Such payment of any Over-Distribution shall not be
considered a Capital Contribution to the Partnership by the General Partner. The
obligation of the General Partner under this Section 14.2 to make payment to the
Partnership shall be considered undertaken, in a transaction governed by
Section 707(a)(1) of the Code, in order to induce the tax exempt Limited
Partners to participate in the Partnership. Accordingly, the payment by the
General Partner pursuant to this Section 14.2 shall be considered additional
proceeds with respect to the disposition of the Partnership’s assets in
connection with the dissolution of the Partnership, reflected in the calculation
of gain or loss of the Partnership, in the nature of residual value insurance or
proceeds of a cash-settled put option issued to the Partnership.

14.3 Cancellation of Certificate. Upon the dissolution of the Partnership and
the completion of the winding up of the Partnership, the General Partner shall
cause the cancellation of the Certificate and shall take such other actions as
may be necessary or appropriate to terminate the Partnership. Except as set
forth in Section 14.5, upon cancellation of the Certificate in accordance with
the Act, the Partnership and this Agreement shall terminate.

14.4 Compliance With Timing Requirements of Regulations. If the Partnership is
“liquidated” within the meaning of Section 1.704-l(b)(2)(ii)(g) of the Treasury
Regulations, distributions shall be made pursuant to this Article (if such
liquidation constitutes a dissolution of the Partnership) or Article V hereof
(if it does not). In the sole discretion of the General Partner, a pro rata
portion of the distributions that would otherwise be made to the General Partner
and the Limited Partners pursuant to the preceding sentence may be:

(a) distributed to a trust established for the benefit of the General Partner
and the Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent
liabilities or obligations of the Partnership or of the General Partner arising
out of or in connection with the Partnership; provided that, subject to the
provisions of Section 5.1(f), the assets of any such trust shall be distributed
to the General Partner and the Limited Partners from time to time, in the
reasonable discretion of the General Partner, in the same proportions as the
amount distributed to such trust by the Partnership would

 

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otherwise have been distributed to the General Partner and the Limited Partners
pursuant to this Agreement; or

(b) withheld to provide a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the unrealized portion of any
installment obligations owed to the Partnership; provided that such withheld
amounts shall be distributed to the General Partner and the Limited Partners as
soon as practicable.

14.5 Termination. Upon the cancellation of the Certificate of the Partnership in
accordance with the Act, this Agreement shall terminate (other than
Sections 9.1(b) and 16.13 hereof, which shall survive for periods of three
(3) years and one (1) year, respectively, following the dissolution of the
Partnership).

ARTICLE XV.

NOTICES; POWER OF ATTORNEY

15.1 Method of Notice. All notices required to be delivered hereunder shall be
in writing and must be delivered either by hand in person, by facsimile
transmission, by U.S. certified mail, return receipt requested, or by nationally
recognized overnight delivery service (receipt request) and shall be deemed
given when so delivered by hand (with written confirmation of receipt), sent by
facsimile transmission (with confirmation of receipt of transmission from
sender’s equipment) or, if mailed by U.S. certified mail, three days after the
date of deposit in the U.S. mail, or if delivered by overnight delivery service,
when received by the addressee, in each case at the appropriate addresses set
forth below (or to such other addresses as a party may designate for that
purpose upon fifteen (15) days written notice to the other party).

If to the Partnership (c/o TPG) or to the General Partner at:

c/o Thomas Properties Group, L.P.

City National Plaza

515 South Flower Street

Sixth Floor

Los Angeles, CA 90071

Attn: James A. Thomas

Fax: [            ]

with a copy to:

Paul, Hastings, Janofsky &Walker LLP

75 East 55th Street

New York, NY 10022

Attn: Lawrence J. Hass

Fax: (212) 319-4090

 

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If to a Limited Partner, to such Limited Partner at such Limited Partner’s
address set forth on the signature page of the Subscription Agreement between
such Limited Partner and the Partnership.

15.2 Routine Communications; Wire Transfers. Notwithstanding the provisions of
Section 15.1 hereof, routine communications such as distribution checks or
financial statements of the Partnership may be sent by first-class mail, postage
prepaid. The Partnership shall cause distributions to be made by means of wire
transfer to any Partner who requests the same and who provides the Partnership
with wire transfer instructions or by such other electronic means as are agreed
to by the Partnership and such Partner.

15.3 Computation of Time. In computing any period of time under this Agreement,
the day of the act or event from which the designated period of time begins to
run shall not be included. The last day of the period so computed shall be
included, unless it is not a Business Day, in which event the period shall run
until the end of the next day that is a Business Day.

15.4 Power of Attorney. Each Limited Partner does hereby constitute and appoint
the General Partner, and any officer, partner or representative of the General
Partner acting on its behalf from time to time, as such Limited Partner’s true
and lawful representative and attorney-in-fact, in its name, place and stead to
make, execute, sign, deliver and file (a) any amendment to the Certificate
required by the Act because of an amendment to this Agreement or in order to
effectuate any change in the Partners of the Partnership, (b) any amendment to
this Agreement permitted to be made by the General Partner pursuant to
Section 16.2 hereof; provided, however, that if such amendment is stated in
Section 16.2 hereof to be an amendment which requires the prior written consent
(or other specified approval) of the affected Limited Partner, Limited Partners
holding more than fifty percent (50%) of the LP Percentage Interests, Limited
Partners holding sixty-six percent (66%) or more of the LP Percentage Interests
or all of the Limited Partners, as the case may be, such prior written consent
(or such other specified approval) must be obtained, (c) any and all financing
statements, continuation statements and other documents necessary or desirable
to create, perfect, continue or validate any security interest granted by such
Limited Partner or to exercise or enforce the Partnership’s rights hereunder
with respect to such security interest, and (d) all such other instruments,
documents and certificates which may from time to time be required by the laws
of the United States, the State of Delaware or any other state, or any political
subdivision or agency thereof, to effectuate, implement and continue the valid
and subsisting existence of the Partnership and its power to carry out its
purposes as set forth in this Agreement or to dissolve and terminate the
Partnership in accordance with the Act. The General Partner shall deliver a copy
of each document executed pursuant to this power of attorney to each Partner in
whose name such document was executed. This power of attorney may be exercised
by such attorney-in-fact for all Limited Partners (or any of them) by a single
signature of the General Partner acting as attorney-in-fact with or without
listing all of the Limited Partners executing an instrument. Insofar as possible
pursuant to applicable law, the power of attorney granted hereby is irrevocable.
This power of attorney is coupled with an interest and shall survive the
subsequent incapacity, disability or dissolution of the Limited Partner granting
such power.

 

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ARTICLE XVI.

GENERAL PROVISIONS

16.1 Entire Agreement. This Agreement, the Subscription Agreements and, as
between any Limited Partner party to a Side Letter, on the one hand, and the
General Partner and the Partnership, on the other hand, such Side Letter,
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof, and supersede any prior agreement or
understanding among the parties hereto with respect to the subject matter hereof
or thereof.

16.2 Amendments and Waivers. Except as required by law or as otherwise set forth
expressly in this Agreement, this Agreement and the Certificate may be amended,
or any term provision or requirement of this Agreement may be waived, by the
General Partner from time to time with the approval of Limited Partners holding
sixty-six and two-thirds percent (66 2/3%) of the LP Percentage Interests;
provided, however, that amendments or waivers which do not adversely affect the
Limited Partners or the Partnership, as determined by the General Partner in its
sole and reasonable discretion, may be made from time to time by the General
Partner in its sole discretion without the prior written consent of any of the
Limited Partners to: (a) admit any Person to the Partnership as a Limited
Partner pursuant to the terms of this Agreement; (b) amend any provision of this
Agreement and the Certificate which requires any action to be taken by or on
behalf of the General Partner or the Partnership pursuant to requirements of
Delaware law if the provisions of Delaware law are amended, modified or revoked
so that the taking of such action is no longer required; (c) take such action in
light of changing regulatory conditions or of the then current ERISA or
Investment Company Act regulations, as the case may be, as is necessary in order
to permit the Partnership to continue in existence on the basis contemplated by
this Agreement; (d) add to the representations, duties or obligations of the
Partnership or the General Partner, or to surrender any right granted to the
Partnership or the General Partner herein, for the benefit of the Limited
Partners; (e) correct any clerical mistake herein or in the Certificate or
correct any printing, stenographic or clerical errors, or omissions, which shall
not be inconsistent with the provisions of this Agreement or the status of the
Partnership as a partnership for federal income tax purposes; and (f) change the
name of the Partnership or to make any other change or take any action which is
for the benefit of, or not adverse to the interests of, the Limited Partners.
Notwithstanding the foregoing, no amendment or waiver shall: (i) require
additional Capital Contributions of any Limited Partner (other than as provided
in this Agreement), increase the liability of any Limited Partner beyond the
liability of such Limited Partner set forth in this Agreement, or adversely
affect the limited liability of any Limited Partner, in each case, without the
written consent of the affected Partner or (ii) without the approval of all
Partners, amend or waive this Section or any provision thereof. The General
Partner shall give prompt written notice to all of the Limited Partners of any
amendments or waivers effected pursuant to this Section.

16.3 Approvals. Except as otherwise expressly provided for herein, whenever the
General Partner desires to take any action which requires the consent or
approval of all or a portion of the Limited Partners, the General Partner shall
give written notice thereof to each Partner from which any consent or approval
is required describing the proposed action. Except as otherwise specifically
provided herein and to the extent permitted by applicable law, each

 

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Partner agrees that the written approval of Partners holding the required
Percentage Interests shall bind the Partnership and each Partner and shall have
the same legal effect as the written approval of each Partner, for purposes of
granting the approval of the Partners with respect to any proposed action of the
Partnership, the General Partner or any of their respective Affiliates. The
General Partner shall give prompt written notice to all the Limited Partners of
any approvals received from Partners holding the required Percentage Interests
pursuant to this Agreement. Each Limited Partner further agrees that for
purposes of any vote a Defaulting Limited Partner’s Percentage Interest will not
be included in the numerator or denominator for purposes of calculating the
percentage required for any approval.

16.4 Side Letters. Notwithstanding any provisions of this Agreement (including
Section 16.2 hereof) or of any Subscription Agreement to the contrary, it is
hereby acknowledged and agreed that the Partnership, and the General Partner on
its own behalf or on behalf of the Partnership, may, without the approval of any
Limited Partner, enter into a side letter or similar agreement (each, a “Side
Letter”) with, or deliver a Side Letter to, an existing or prospective Limited
Partner who becomes a Limited Partner (a “Side Letter Partner”) which has the
effect of establishing rights under, or altering or supplementing the terms of,
this Agreement or of a Subscription Agreement between such Side Letter Partner
and the Partnership. The parties hereto agree that any terms contained in a Side
Letter shall govern with respect to such Side Letter Partner notwithstanding the
provisions of this Agreement or of any Subscription Agreement.

16.5 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without giving effect to the
provisions, policies or principles thereof relating to choice or conflict of
laws.

16.6 Captions. The section and other headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

16.7 Successors. Except as otherwise provided herein, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs, successors and assigns.

16.8 Severability. In case any one or more of the provisions contained in this
Agreement or any application thereof shall be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and other application thereof shall not in an way be
affected or impaired thereby.

16.9 Gender and Number. Whenever required by the context hereof, the singular
shall include the plural and the plural shall include the singular. The
masculine gender shall include the feminine and neuter genders.

16.10 Third-Party Rights. Each Covered Person shall be deemed a third party
beneficiary of the provisions of Article IX hereof. Subject to the foregoing,
nothing in this Agreement shall be deemed to create any right in any Person not
a party hereto (other than any Subscription Line Lender and the permitted
successors and assigns of the parties hereto) and this

 

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Agreement shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third party (except as aforesaid).

16.11 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument.

16.12 Confidentiality.

(a) Unless otherwise approved in writing by the General Partner, each Limited
Partner agrees to keep confidential, and not to make any use of (other than for
purposes reasonably related to its Interest in the Partnership or for purposes
of filing such Limited Partner’s tax returns or for other routine matters
required by law) or to disclose to any Person, any information or matter
relating to the Partnership and its affairs and any information or matter
related to any Investment (other than disclosure to such Limited Partner’s
owners, employees, agents, advisors or representatives (each such Person being
hereinafter referred to as an “LP Authorized Representative”), except that a
Person who is not subject to the direction or control of such Limited Partner
will not constitute an LP Authorized Representative unless such Person shall
agree for the benefit of the Partnership and the General Partner to be bound by
a confidentiality undertaking on substantially the same terms as set forth in
this Section 16.12(a)); provided that such Limited Partner and its LP Authorized
Representatives may make such disclosure to the extent that (i) the information
being disclosed is publicly known at the time of any proposed disclosure by such
Limited Partner or LP Authorized Representative, (ii) the information
subsequently becomes publicly known through no act or omission of such Limited
Partner or LP Authorized Representative, (iii) the information otherwise is or
becomes legally known to such Limited Partner other than through disclosure by
the General Partner or the Partnership, (iv) such disclosure, in the opinion of
legal counsel (which may be inside counsel) of such Limited Partner or LP
Authorized Representative, is required by law or (v) such disclosure is in
connection with any litigation or other proceeding between any Limited Partner
and the General Partner or the Partnership; provided further that each Limited
Partner will be permitted, after notice to the General Partner, to correct any
false or misleading information which may become public concerning such Limited
Partner’s relationship to the General Partner, the Partnership or any Person in
which the Partnership holds, or contemplates acquiring, an Investment. Prior to
making any disclosure required by law, each Limited Partner shall notify the
General Partner of such disclosure and advise the General Partner as to the
opinion referred to above. Prior to any disclosure to any LP Authorized
Representative, each Limited Partner shall advise such LP Authorized
Representative of the obligations set forth in this Section 16.12(a), inform
such LP Authorized Representative of the confidential nature of such information
and direct such LP Authorized Representative to keep all such information in the
strictest confidence and to use such information only for purposes relating to
such Limited Partner’s Interest. Notwithstanding any foregoing provision to the
contrary, each Limited Partner and its LP Authorized Representatives may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of its investment in the Partnership and of any
transactions entered into by the Partnership, and all materials of any kind
(including opinions or other tax analyses) that are provided to the Limited
Partner relating to such tax treatment and tax structure, except to the extent
maintaining confidentiality is necessary to comply with any applicable federal
or state securities laws.

 

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(b) The General Partner agrees to keep confidential, and not to make any use of,
nor to disclose to any Person, any information relating to a Limited Partner
provided to the General Partner by the Limited Partner in connection with the
establishment or operation of the Partnership (other than disclosure to the
General Partner’s owners, employees, agents, advisors or representatives (each
such Person being hereinafter referred to as a “GP Authorized Representative”));
provided that the General Partner and the GP Authorized Representatives may make
such disclosure to the extent that (i) the information being disclosed is
publicly known at the time of any proposed disclosure by the General Partner or
the GP Authorized Representative, (ii) the information subsequently becomes
publicly known through no act or omission of the General Partner or the GP
Authorized Representative, (iii) the information otherwise is or becomes legally
known to the General Partner or the GP Authorized Representative, other than
through disclosure by the Limited Partner, (iv) such disclosure, in the opinion
of legal counsel (which may be inside counsel) of the General Partner or the GP
Authorized Representative, is required by law, (v) such disclosure is in
connection with any litigation or other proceeding between any Limited Partner
and the General Partner or the GP Authorized Representative or (vi) such
disclosure or use is reasonably related to the General Partner’s activities in
such capacity (including any disclosure to any Subscription Line Lender);
provided further that the General Partner will be permitted, after notice to the
relevant Limited Partner, to correct any false or misleading information which
may become public concerning such Limited Partner’s relationship to the
Partnership, the General Partner or any Person in which the Partnership holds,
or contemplates acquiring, any Investment; and provided further, that the
General Partner is permitted, without notice to or consent of the relevant
Limited Partner, to disclose the name of such Limited Partner, the fact that
such Limited Partner holds an Interest in the Partnership and the amounts of
such Limited Partner’s Capital Commitment and Capital Contributions to the
Subscription Line Lenders, their agents and the other Partners. Prior to making
any disclosure required by law, the General Partner shall notify the relevant
Limited Partner of such disclosure and advise such Limited Partner as to the
opinion referred to above. Prior to any disclosure to any GP Authorized
Representative, the General Partner shall advise such GP Authorized
Representative of the obligations set forth in this Section 16.12(b), inform
such GP Authorized Representative of the confidential nature of such information
and direct such GP Authorized Representative to keep all such information in the
strictest confidence.

(c) The provisions of this Section 16.12 will survive for a period of one year
from the date of dissolution of the Partnership. The provisions of this
Section 16.12 were negotiated in good faith by the parties hereto and the
parties hereto agree that such provisions are reasonable and are not more
restrictive than is necessary to protect the legitimate interests of the
Partners and the Partnership.

16.13 Service of Process. EACH PARTNER HEREBY IRREVOCABLY CONSENTS TO THE
FULLEST EXTENT PERMITTED BY LAW TO THE SERVICE OF PROCESS BY THE MAILING OF
COPIES THEREOF, BY CERTIFIED MAIL (RETURN RECEIPT REQUESTED), TO SUCH PARTY AT
ITS ADDRESS AS SET FORTH IN SECTION 15.1 HEREOF, SUCH SERVICE TO THE FULLEST
EXTENT PERMITTED BY LAW TO BE DEEMED EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY PARTY TO

 

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BRING PROCEEDINGS AGAINST ANY OTHER PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.

16.14 Trial. EACH OF THE PARTNERSHIP AND EACH PARTNER HEREBY WAIVES SUCH PARTY’S
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE APPLICABLE SUBSCRIPTION AGREEMENT(S) BETWEEN THE
PARTNERSHIP AND SUCH PARTNER, ANY INVESTOR LETTER OF SUCH PARTNER REFERRED TO IN
SUCH SUBSCRIPTION AGREEMENT(S), ANY SIDE LETTER BETWEEN THE PARTNERSHIP AND SUCH
PARTNER AND ALL OTHER DOCUMENTS OR TRANSACTIONS AND ANY OTHER DEALINGS BETWEEN
THE PARTNERSHIP AND SUCH PARTNER RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF. EACH OF THE PARTNERSHIP AND THE PARTNER ALSO WAIVES ANY BOND OR SURETY
OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE
PARTNERSHIP AND EACH PARTNER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO THE OTHER PARTY’S DECISION TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH PARTY HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, THE APPLICABLE SUBSCRIPTION AGREEMENT(S) BETWEEN THE PARTNERSHIP AND
SUCH PARTNER, ANY SIDE LETTER BETWEEN THE PARTNERSHIP AND SUCH PARTNER AND ALL
OTHER DOCUMENTS OR TRANSACTIONS AND ANY OTHER DEALINGS BETWEEN THE PARTNERSHIP
AND SUCH PARTNER RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF AND THAT EACH
PARTY WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
OF THE PARTNERSHIP AND EACH PARTNER FURTHER WARRANTS AND REPRESENTS THAT SUCH
PARTY HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL COUNSEL, AND THAT SUCH
PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THAT THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, THE APPLICABLE SUBSCRIPTION AGREEMENT(S) BETWEEN THE PARTNERSHIP AND
SUCH PARTNER, ANY SIDE LETTER BETWEEN THE PARTNERSHIP AND SUCH PARTNER AND ALL
OTHER DOCUMENTS OR TRANSACTIONS AND ANY OTHER DEALINGS BETWEEN THE PARTNERSHIP
AND SUCH PARTNER RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

 

THE GENERAL PARTNER:

THOMAS HPGF-GP, LLC

By:   /s/ James A. Thomas   Name: James A. Thomas   Title:   Chief Executive
Officer and President

THE LIMITED PARTNERS:

The Limited Partners listed on the Schedule of Partners have signed this
Agreement by their signature on their respective Subscription Agreements by
which they acquired Interests in the Partnership as Limited Partners.

 

ACKNOWLEDGED AND AGREED, with respect to Section 11.2 hereof, as of the date
first written above.

THOMAS PROPERTIES GROUP, INC. By:   /s/ James A. Thomas   Name: James A. Thomas
  Title:   Chief Executive Officer and President

 

-i-

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EXHIBIT A

FORM OF SUBSCRIPTION AGREEMENT

 

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EXHIBIT B

SCHEDULE OF PARTNERS

 

Partner

   Capital Commitment    Percentage Interest

Thomas HPGF-GP, LLC

   $50,000,000    33.333%

CalSTRS

   $100,000,000    66.667%

Total:

   $150,000,000    100%

 

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EXHIBIT C

ILLUSTRATION OF MANAGEMENT FEES

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EXHIBIT D

FORM OF CONTRACT WITH AFFILIATES