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Exhibit 10.26

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

HINES-SUMISEI US CORE OFFICE PROPERTIES LP

September 20, 2004

[Schedule Amended October 4,2004]

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TABLE OF CONTENTS

              Page  
ARTICLE I
    2  
 
       
SECTION 1.1 Definitions
    2  
SECTION 1.2 Interpretation; Terms Generally
    15  
 
       
ARTICLE II General Provisions
    16  
 
       
SECTION 2.1 Formation and Continuation
    16  
SECTION 2.2 Name
    16  
SECTION 2.3 Organizational Certificates and Other Filings
    16  
SECTION 2.4 Principal and Other Offices
    17  
SECTION 2.5 Registered Office; Registered Agent
    17  
SECTION 2.6 Purpose
    17  
SECTION 2.7 Powers
    17  
SECTION 2.8 Fiscal Year
    17  
SECTION 2.9 Term
    18  
SECTION 2.10 Feeder Entities
    18  
 
       
ARTICLE III Partnership Capital
    18  
 
       
SECTION 3.1 Partnership Capital
    18  
SECTION 3.2 Capital Commitments
    18  
SECTION 3.3 Initial Offering Period
    19  
SECTION 3.4 Initial Investment Period
    20  
SECTION 3.5 Additional Capital
    20  
SECTION 3.6 Partnership Indebtedness
    21  
SECTION 3.7 Issuance of OP Units and Participation Interests
    22  
SECTION 3.8 Redemption Rights
    24  
SECTION 3.9 Priority Redemption Rights
    29  
SECTION 3.10 Liquidating Redemptions
    29  
SECTION 3.11 Redemption and Repurchase of Shares
    30  
SECTION 3.12 Redemption of Trust Shares
    30  
 
       
ARTICLE IV General Partner
    30  
 
       
SECTION 4.1 General Partner
    30  
SECTION 4.2 Powers of the General Partner
    31  
SECTION 4.3 Time Commitment
    33  
SECTION 4.4 Outside Investments
    33  
SECTION 4.5 Transactions with Affiliates
    34  
SECTION 4.6 Co-Investment Opportunities
    34  
SECTION 4.7 Other Activities not Restricted
    34  
 
       
ARTICLE V Partnership Management
    35  
 
       
SECTION 5.1 Investment Guidelines
    35  
SECTION 5.2 Advisory Committee
    36  
SECTION 5.3 Officers
    36  
SECTION 5.4 Management Rights of Limited Partners
    37  

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              Page  
SECTION 5.5 Advisory Agreement
    37  
SECTION 5.6 Property Services Agreements
    37  
SECTION 5.7 REIT Requirements
    37  
SECTION 5.8 Consideration of All Investors
    38  
SECTION 5.9 Asset Valuations; Determination of Current Unit Value; Cancellations
of OP Units
    38  
 
       
ARTICLE VI Exculpation and Indemnification
    40  
 
       
SECTION 6.1 Exculpation of the General Partner
    40  
SECTION 6.2 Indemnification of General Partner
    41  
SECTION 6.3 Treatment of Management Board, Advisory Committee, Board of
Trustees, Et. al
    42  
SECTION 6.4 Limited Liability of Limited Partners
    42  
SECTION 6.5 Other Activities of Limited Partners
    42  
 
       
ARTICLE VII Expenses and Fees
    42  
 
       
SECTION 7.1 General Partner Expenses
    42  
SECTION 7.2 Asset Management Fee
    43  
SECTION 7.3 Acquisition Fees
    44  
SECTION 7.4 Partnership Expenses
    45  
SECTION 7.5 Trust Expenses
    46  
 
       
ARTICLE VIII Capital Accounts; Allocations
    46  
 
       
SECTION 8.1 Capital Accounts
    46  
SECTION 8.2 Interest on and Return of Capital
    47  
SECTION 8.3 Negative Capital Accounts
    47  
SECTION 8.4 Allocation of Profits
    47  
SECTION 8.5 Allocations of Losses
    48  
SECTION 8.6 Special Allocations
    49  
SECTION 8.7 Curative Allocations
    50  
SECTION 8.8 Tax Allocations: Code Section 704(c)
    51  
 
       
ARTICLE IX Distributions
    51  
 
       
SECTION 9.1 Operating Cash Flow
    51  
SECTION 9.2 Capital Cash Flow
    52  
SECTION 9.3 Reinvestment of Capital Cash Flow
    52  
SECTION 9.4 Right to Limit Distributions
    52  
SECTION 9.5 Limitations on Distribution Rights
    53  
SECTION 9.6 Special Distributions for REIT Requirements
    53  
SECTION 9.7 Tax Distributions
    53  
 
       
ARTICLE X Transfers; Withdrawals and Defaults
    53  
 
       
SECTION 10.1 Voluntary Transfer of General Partner Interest
    53  
SECTION 10.2 Transfers of OP Units by Limited Partners
    54  
SECTION 10.3 Conditions to Transfer
    54  
SECTION 10.4 Admissions and Withdrawals Generally
    55  
SECTION 10.5 Required/Elective Withdrawals
    55  

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              Page  
SECTION 10.6 Defaulting Limited Partner
    56  
 
       
ARTICLE XI Partnership Administration
    58  
 
       
SECTION 11.1 Books and Records
    58  
SECTION 11.2 Partnership Auditor
    58  
SECTION 11.3 Filing of Tax Returns
    58  
SECTION 11.4 Tax Matters
    58  
SECTION 11.5 Reports to Partners
    59  
SECTION 11.6 Meetings of Partners
    60  
SECTION 11.7 Meetings of Fund Investors
    62  
 
       
ARTICLE XII Dissolution, Termination and Winding Up
    62  
 
       
SECTION 12.1 Dissolution
    62  
SECTION 12.2 Termination
    62  
SECTION 12.3 Winding up
    62  
SECTION 12.4 Liquidating Distributions
    63  
 
       
ARTICLE XIII Miscellaneous
    64  
 
       
SECTION 13.1 Waiver of Partition
    64  
SECTION 13.2 Power of Attorney
    64  
SECTION 13.3 Amendments
    65  
SECTION 13.4 Confidentiality
    65  
SECTION 13.5 Entire Agreement
    66  
SECTION 13.6 Severability
    66  
SECTION 13.7 Notices
    66  
SECTION 13.8 Governing Law
    67  
SECTION 13.9 Successors and Assigns
    67  
SECTION 13.10 Headings
    67  
SECTION 13.11 Counterparts
    67  
SECTION 13.12 Third Party Beneficiary
    67  

List of Schedules:

     
2.1
  Limited Partners
3.1
  OP Units and Funded Commitments
4.4
  Hines Investment Allocation Procedure

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SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

HINES-SUMISEI US CORE OFFICE PROPERTIES LP

          This SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
HINES-SUMISEI US CORE OFFICE PROPERTIES LP, a Delaware limited partnership
(together with its successors, the “Partnership”), is entered into as of
September 20, 2004 by and among Hines-Sumisei U.S. Core Office Trust, a Maryland
real estate investment trust (the “Trust” and “General Partner”), as the general
partner of the Partnership, and the Persons identified as Limited Partners on
Schedule 2.1, as limited partners of the Partnership.

Recitals

          WHEREAS, Hines US Core Office Capital LLC, a Delaware limited
liability company (the “Original GP”), and the Hines Limited Partner entered
into that certain Agreement of Limited Partnership of the Partnership, dated as
of March 5, 2003 (the “Original Agreement”);

          WHEREAS, Hines US Core Office Capital LLC, a Delaware limited
liability company (the “Original GP”), and Hines US Core Office Capital
Associates Limited Partnership, a Texas limited partnership (the “Hines Limited
Partner”), entered into that certain Agreement of Limited Partnership of the
Partnership, dated as of March 5, 2003 (the “Original Agreement”);

          WHEREAS, the Original Agreement was amended and restated as provided
in the Amended and Restated Agreement of Limited Partnership of the Partnership,
dated May 6, 2004 (the “First Restated Agreement”), and, in connection
therewith, Hines Interests Limited Partnership, a Delaware limited partnership
(together with its successors, “Hines”), and Sumitomo Life Realty (N.Y.), Inc.,
a New York corporation (“SLR”), were admitted as Limited Partners;

          WHEREAS, immediately prior to the execution and delivery of the First
Restated Agreement, the Original GP transferred all of its interest in the
Partnership, including its interest as general partner, to the Trust and
withdrew from the Partnership, and the Trust was admitted as the general partner
of the Partnership; and

          WHEREAS, the General Partner desires to amend and restate the First
Restated Agreement in its entirety as provided herein as permitted by
Section 13.3 of the First Restated Agreement.

          NOW, THEREFORE, in consideration of the premises, the terms and
conditions set forth herein, the mutual benefits to be gained by the performance
thereof and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the

 

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General Partner and the Limited Partners hereby amend and restate the First
Restated Agreement in its entirety as follows:

ARTICLE I

          SECTION 1.1 Definitions. As used in this Agreement (including in the
preamble and recitals), the terms set forth below have the meanings indicated.

          “Act”: The Delaware Revised Uniform Limited Partnership Act, as
amended from time to time, and any successor statute.

          “Acquisition Fee”: As defined in Section 7.3(a).

          “Adjusted Capital Account”: At any time, the then balance in the
Capital Account of a Partner, after giving effect to the following adjustments:

     (i) add to such Capital Account any amounts that such Partner is obligated
to restore under any provision of this Agreement or such Partners’ Subscription
Agreement or is deemed obligated to restore as described in the penultimate
sentences of Regulations Section 1.704-2(g)(l) and Regulations
Section 1.704-2(i)(5), or any successor provisions; and

     (ii) subtract from such Capital Account the items described in Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6).

          “Adjusted Capital Account Deficit”: With respect to any Partner, the
deficit balance, if any, in that Partner’s Adjusted Capital Account.

          “Advisory Agreement”: The Amended and Restated Advisory Agreement,
dated as of April 1, 2004, by and among the Partnership, the General Partner,
the Fund Partnership, the Fund General Partner, SLR and such other Fund Entities
as may become party thereto as contemplated by Section 5.7 of the Fund
Partnership Agreement.

          “Advisory Committee”: As defined in the Fund Partnership Agreement.

          “Affiliate”: With respect to any Person, a Person which, directly or
indirectly, Controls, is Controlled by or is under common Control with such
Person.

          “Aggregate Debt Limit”: As defined in Section 3.6(a)(i)(A).

          “Agreement”: This Second Amended and Restated Agreement of Limited
Partnership of the Partnership, together with all Schedules and Exhibits hereto,
as of the date hereof and as each may be amended from time to time.

          “Applicable Percentage”: As defined in Section 5.9(c)(i).

          “Appraiser”: As defined in the Fund Partnership Agreement.

          “Approved Agreement”: As defined in the Fund Partnership Agreement.

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          “Asset Management Fee”: As defined in Section 7.2(a).

          “Asset Management Fee Base”: As defined in Section 7.2(a).

          “Board of Trustees”: As defined in the Declaration of Trust.

          “Business Day”: Any day other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York City
are authorized or required by law, regulation or executive order to close.

          “Capital Account”: As defined in Section 8.1.

          “Capital Call Notice”: As defined in Section 3.2(a).

          “Capital Calls”: As defined in Section 3.2(a).

          “Capital Cash Flow”: As defined in Section 9.2.

          “Capital Commitment”: As defined in Section 3.2(a).

          “Capital Contribution”: With respect to any Partner, any contribution
to the capital of the Partnership by such Partner in accordance with this
Agreement.

          “Capital Transaction Gain or Loss”: Any Profits or Losses described in
paragraphs (iii), (iv) and (vi) of the definition of Profits and Losses
contained in this Section 1.1.

          “Cash Amount”: An amount of cash equal to the value of the REIT Shares
Amount based upon the Current Unit Value (and Current Participation Interest
Value as applicable) on the date of receipt by the General Partner of a Notice
of Redemption.

          “Cash Needs”: Any cash needs or requirements of whatever kind of the
Partnership for which sufficient funds are not available from investment income
or from reserves held by the Partnership, including (i) the cost of acquiring
Investments or paying costs and expenses related thereto, (ii) any operating
expenses related to any Property, (iii) debt service (including the repayment of
principal and the payment of interest and fees ), (iv) any other Partnership
Expenses, and (v) the cost of redeeming Partnership Interests in accordance with
this Agreement.

          “CBD”: As defined in Section 5.1(b)(i).

          “Certificate”: As defined in Section 2.1.

          “Class A Major Investor”: An Unaffiliated Limited Partner with an
aggregate Capital Commitment of at least $300 million.

          “Class B Major Investor” An Unaffiliated Limited Partner with an
aggregate Capital Commitment of at least $150 million, but less than
$300 million.

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          “Class C Major Investor” An Unaffiliated Limited Partner with an
aggregate Capital Commitment of at least $75 million, but less than
$150 million.

          “Class D Major Investor” An Unaffiliated Limited Partner with an
aggregate Capital Commitment of at least $50 million, but less than $75 million.

          “Code”: The Internal Revenue Code of 1986, as amended as of the date
hereof and as the same may be amended from time to time, and any successor
statute.

          “Committed Capital”: (i) As to any Partner, the sum of
(A) Partnership’s total equity capital multiplied by a fraction, the numerator
of which is the total number of OP Units held by such Partner and the
denominator of which is the total number of OP Units outstanding plus, prior to
the termination of the Investment Period, (B) the Unfunded Commitment of such
Partner, and (ii) as to the Partnership, the aggregate of the Committed Capital
of all Partners.

          “Constituent Documents”: With respect to any Entity, its constituent,
governing or organizational documents, including (a) in the case of a limited
partnership, its certificate of limited partnership and its limited partnership
agreement, (b) in the case of a limited liability company, its articles or
certificate of formation and its operating agreement or limited liability
company agreement, (c) in the case of a corporation, its articles or certificate
of incorporation and its bylaws and (d) in the case of a trust, its declaration
of trust and bylaws.

          “Control”: With respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.

          “Contributing Partner”: As defined in Section 3.7(b).

          “Current Market Value”: As defined in Section 5.9(b)(i).

          “Current Participation Interest Value”: As defined in
Section 5.9(b)(iii).

          “Current Total Equity Value”: As defined in Section 5.9(b)(ii).

          “Current Unit Value”: As defined in Section 5.9(b)(iv).

          “Declaration of Trust”: The Amended and Restated Declaration of Trust
of the Trust, as in effect on the date hereof and as the same may be amended
from time to time hereafter.

          “Defaulting Limited Partner”: As defined in Section 10.6(b).

          “Default Rate”: The rate of interest per annum equal to the lesser of
(i) the Prime Rate plus four percent and (ii) the highest rate permitted by
applicable law.

          “Depreciation”: For any Fiscal Year or portion thereof, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such period for federal income tax
purposes, except that if the Gross Asset Value of an asset

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differs from its adjusted basis for federal income tax purposes at the beginning
of such period, Depreciation shall be an amount that bears the same relationship
to such beginning Gross Asset Value as the depreciation, amortization or cost
recovery deduction in such period for federal income tax purposes bears to the
beginning adjusted tax basis; provided however, that if the adjusted basis for
federal income tax purposes of an asset at the beginning of such period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.

          “Entity”: Any corporation, partnership, limited partnership, limited
liability company, trust, association, joint stock company or other legal
entity.

          “ERISA”: The Employee Retirement Income Security Act of 1974, as
amended.

          “Event of Withdrawal”: As defined in Section 12.1 (a).

          “Exchange Date”: As defined in Section 3.8(e).

          “Fees”: Asset Management Fees and Acquisition Fees.

          “Feeder Entity”: As defined in Section 2.10.

          “First Restated Agreement”: As defined in the Recitals of this
Agreement.

          “Fiscal Quarter”: As defined in Section 2.8.

          “Fiscal Year”: As defined in Section 2.8.

          “Fund”: As defined in the Fund Partnership Agreement.

          “Fund Entity”: As defined in the Fund Partnership Agreement.

          “Fund General Partner”: (i) Prior to the admission of the Non-Managing
General Partner (as defined in the Fund Partnership Agreement) to the Fund
Partnership, the “General Partner” as such term is defined in the Fund
Partnership Agreement, and (ii) following the admission of the Non-Managing
General Partner to the Fund Partnership, the “Managing General Partner” as such
term is defined in the Fund Partnership Agreement.

          “Fund Interests”: All interests in the Partnership held by Fund
Investors, directly through the ownership of OP Units, and indirectly through
the ownership of interests in the Trust or the Fund Partnership.

          “Fund Investor”: As defined in the Fund Partnership Agreement.

          “Fund Partnership”: Hines-Sumisei U.S. Core Office Fund, L.P., a
Delaware limited partnership.

          “Fund Partnership Agreement”: The Fourth Amended and Restated
Agreement of Limited Partnership, dated as of August 11, 2004, of the Fund
Partnership.

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          “Funded Commitment”: As defined in Section 3.2(a).

          “GAAP”: Generally accepted accounting principles in the United States,
consistently applied.

          “GECC”: General Electric Capital Corporation, and its successors.

          “General Partner”: The Trust, in its capacity as general partner of
the Partnership, and its successors, and any Person hereafter admitted as
general partner of the Partnership in accordance with the terms of this
Agreement.

          GM Investor Rights Agreement”: The Amended and Restated Investor
Rights Agreement, dated as of December 23, 2003, among Hines, the Fund
Partnership, NY Trust, General Motors Investment Management Corporation and the
other Persons party thereto.

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

     (i) 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, as
determined by the General Partner and agreed to by the Contributing Partner;

     (ii) The Gross Asset Value of all Partnership assets shall be adjusted to
equal their respective gross fair market values, as determined by the General
Partner, (which determination shall be based upon, and consistent with, the most
recent Current Market Values), as of the following times: (a) the acquisition of
an additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (b) the distribution
by the Partnership to a Partner of more than a de minimis amount of Partnership
property as consideration for an interest in the Partnership; (c) the
liquidation of the Partnership within the meaning of Regulations Section 1.704-1
(b)(2)(ii)(g); and (d) upon the occurrence of any other event for which such an
adjustment is permitted under the Regulations; provided however, that
adjustments pursuant to clauses (a), (b) and (d) above shall be made only if the
General Partner reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership;

     (iii) The Gross Asset Value of any Partnership asset distributed to any
Partner shall be adjusted to equal the gross fair market value of such asset on
the date of distribution as determined by the General Partner (which
determination shall be based upon, and consistent with, the most recent Current
Market Values); and

     (iv) The Gross Asset Value 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 Regulations Section 1.704-l(b)(2)(iv)(m) and paragraph (vi) of the
definition of

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Profits and Losses and Section 8.6(g); provided, however, that Gross Asset Value
shall not be adjusted pursuant to this paragraph (iv) to the extent the General
Partner determines that an adjustment pursuant to paragraph (ii) above is
necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this paragraph (iv).

          If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraphs (i), (ii) or (iv) 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.

          “Hines”: As defined in the Recitals to this Agreement.

          “Hines Controlled Entity”: Any partnership, limited liability company,
corporation, trust or other entity which is, directly or indirectly, Controlled
by (a) Hines, (b) HREH, and/or (b) Jeffrey C. Hines and/or Gerald D. Hines or,
in the event of the death or disability of Jeffrey C. Hines and/or Gerald D.
Hines, the heirs, legal representatives or estates of either or both of them.

          “Hines Investment Allocation Committee”: As defined on Schedule 4.4.

          “Hines Limited Partner”: As defined in the Recitals to this Agreement.

          “HREH”: Hines Real Estate Holdings Limited Partnership, a Texas
limited partnership.

          “Indebtedness”: With respect to any Person, (i) any indebtedness for
borrowed money evidenced by a note payable by such Person, (ii) any obligation
to pay money secured by any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind existing on any asset owned or held by such Person,
whether or not such Person has assumed or become personally liable for the
obligations secured thereby, and (iii) any guaranty by such Person of the
Indebtedness (as defined in clause (i) and (ii) of this definition) of another
Person; provided that “Indebtedness” with respect to any Person shall not
include obligations in respect of any accounts payable that are incurred in the
ordinary course of such Person’s business (or guarantees by such Person of such
obligations of another Person) and are not delinquent or are being contested in
good faith by appropriate proceedings.

          “Indemnified Person”: As defined in Section 6.1.

          “Initial Date”: As defined in the Declaration of Trust.

          “Initial Investment Period”: As defined in the Fund Partnership
Agreement.

          “Initial Offering Period”: As defined in the Fund Partnership
Agreement.

          “Initial Offering Price”: $1000.00 per OP Unit

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          “Investment Advisor”: An Affiliate of Hines or SLR that provides
advisory services to the General Partner pursuant to the Advisory Agreement.

          “Investment Company Act”: The Investment Company Act of 1940, as
amended as of the date hereof and as the same may be amended from time to time,
and any successor statute.

          “Investment Guidelines”: As defined in Section 5. l(b).

          “Investments”: As defined in Section 5.1(a).

          “Investor”: As defined in Section 3.2(a).

          “Limited Partner”: Any Person now or hereafter admitted as a limited
partner in accordance with the terms of this Agreement. The Limited Partners as
of the date hereof are the Persons identified as such on Schedule 2.1.

          “Liquidating Event”: As defined in Section 12.1.

          “Liquidating Redemption”: As defined in Section 3.10, and, as the
context requires, as defined in the corresponding provisions of the Declaration
of Trust and the Fund Partnership Agreement.

          “Major Investor”: An Investor with a Capital Commitment of at least
$50 million.

          “Majority LP Vote”: As defined in Section 11.6(f).

          “Management Board”: As defined in the Fund Partnership Agreement.

          “Moody’s”: Moody’s Investor Services, Inc.

          “Non-Managing General Partner”: As defined in the Fund Partnership
Agreement.

          “NOP”: National Office Partners Limited Partnership, a limited
partnership formed by the State of California Public Employees’ Retirement
System and an Affiliate of Hines.

          “Notice of Redemption”: As defined in Section 3.8(a), and, as the
context requires, as defined in the corresponding provisions of the Declaration
of Trust and the Fund Partnership Agreement.

          “NY Trust”: As defined in the Fund Partnership Agreement.

          “NY Trust II”: As defined in the Fund Partnership Agreement.

          “Officer”: As defined in Section 5.3.

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          “Operating Cash Flow”: As defined in Section 9.1.

          “Operating Entity”: As defined in Section 5.1(a).

          “OP Unit”: A unit of Partnership Interest having the rights,
privileges and restrictions prescribed therefor by the terms of this Agreement.

          “Original Agreement”: As defined in the Recitals of this Agreement.

          “Original GP”: As defined in the Recitals of this Agreement..

          “Outstanding Unit Equivalents”: As of the end of a Fiscal Quarter or
other relevant time, a number equal to the number of OP Units outstanding as of
the end of such quarter or other relevant time, divided by the difference
between 100% and the total Percentage Interests attributable to the
Participation Interests as of the end of such Fiscal Quarter or other relevant
time.

          “Owner”: As defined in the Property Services Agreement.

          “Participation Interest”: As defined in Section 3.7(c).

          “Partner Nonrecourse Debt”: As defined in Regulations
Section 1.704-2(b)(4).

          “Partner Nonrecourse Debt Minimum Gain”: As defined in Regulations
Section 1.704-2(i).

          “Partner Nonrecourse Deductions”: As defined in Regulations
Section 1.704-2(i).

          “Partners”: Collectively, the General Partner and the Limited
Partners, or any additional or successor partners of the Partnership admitted to
the Partnership in accordance with the terms of this Agreement. References to a
Partner shall be to any one of the Partners.

          “Partnership”: As defined in the Preamble to this Agreement.

          “Partnership Auditor”: As defined in Section 11.2.

          “Partnership Expenses”: As defined in Section 7.4(a).

          “Partnership Interest”: The ownership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which such Partner may be entitled as provided in this
Agreement, and to the extent not inconsistent with this Agreement, under the
Act, together with the obligations of such Partner to comply with all of the
terms and provisions of this Agreement and the Act.

          “Partnership Minimum Gain”: As defined in Regulations
Sections 1.704-2(b)(2) and l.704-2(d).

          “Payment Date”: As defined in Section 3.2(b).

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          “Percentage Interest”: With respect to each Partner (i) for each
Fiscal Quarter ending prior to the termination of the Initial Investment Period,
a percentage equal to the number of OP Units then owned by such Partner, divided
by the number of OP Units then outstanding, and (ii) for each Fiscal Quarter
ending after termination of the Initial Investment Period, a percentage
determined for each Partner as of each Quarterly Payment Date in the following
manner:

     (a) End of Quarter Calculation of Percentage Interest Attributable to
Participation Interests. As of each Quarterly Payment Date, each of Hines and
SLR shall have a Percentage Interest in respect of its Participation Interest
equal to the sum of:

     (i) (A) the Percentage Interest attributable to such Participation Interest
as of the end of the immediately preceding Fiscal Quarter (which shall be 0% in
the case of each Fiscal Quarter beginning prior to the termination of the
Initial Investment Period), adjusted as provided in clause (c) below for OP
Units issued during the Fiscal Quarter just ended; plus

     (ii) its AM Sharing Percentage (as defined below) of a fraction (A) whose
numerator is 0.09375% of the aggregate Unrecovered Capital of all Class A Major
Investors, plus 0.10625% of the aggregate Unrecovered Capital of all Class B
Major Investors, plus 0.1125% of the aggregate Unrecovered Capital of all
Class C Major Investors, plus 0.11875% of the aggregate Unrecovered Capital of
all Class D Major Investors, plus 0.125% of the aggregate Unrecovered Capital of
all Unaffiliated Limited Partners that are not Major Investors, each determined
as of the end of the current Fiscal Quarter, and (B) whose denominator is the
Current Total Equity Value of the Partnership as of the end of the current
quarter; plus

     (iii) (A) its AQ Sharing Percentage (as defined below) of 0.5% of the Gross
Real Estate Investments (as defined below) made by the Partnership during the
Fiscal Quarter just ended, multiplied by (B) the aggregate Percentage Interest
of the Unaffiliated Limited Partners in respect of their OP Units only
immediately prior to any adjustment under clause (d) below, divided by (C) the
Current Total Equity Value of the Partnership as of the end of the Fiscal
Quarter just ended.

  •   “AM Sharing Percentage”: As to Hines or SLR, as applicable, that
percentage of the total Asset Management Fee that such Person is entitled to
receive pursuant to Section 2 of the Advisory Agreement.     •   “AQ Sharing
Percentage”: As to Hines or SLR, as applicable, that percentage of the total
Acquisition Fee that such Person is entitled to receive pursuant to Section 3 of
the Advisory Agreement.     •   “Gross Real Estate Investments”: The value of
the total consideration (including any assumed Indebtedness) paid in respect of
each Investment made by an Operating Entity (other than an Operating Entity
which makes its investments indirectly through another Operating Entity), other
than any Investment in a Property acquired by such Operating Entity from SLR or
any

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      of its Affiliates.

     (b) When Change to Participation Interest Becomes Effective. The Percentage
Interest determined under clause (a) as of the end of a particular Fiscal
Quarter shall become effective as of the beginning of the immediately following
Fiscal Quarter.

     (c) Adjustment of Percentage Interests Attributable to Participation
Interest Following Issuance or Redemption of OP Units. Immediately after the
issuance or redemption by the Partnership of any OP Units, the Percentage
Interest attributable to the Participation Interest shall be adjusted so that it
equals (i) the Percentage Interest attributable to the Participation Interest
immediately prior to the issuance or redemption of such OP Units, multiplied by
(ii) a fraction whose numerator is (A) the number of Outstanding Unit
Equivalents immediately prior to the issuance or redemption of such OP Units and
whose denominator equals (B) the number of Outstanding Unit Equivalents
immediately prior to the issuance or redemption of such Partnership, plus the
number of OP Units then being issued, or minus the number of OP Units then being
redeemed, as the case may be.

     (d) Calculation of Percentage Interests of Partners’ Holding OP Units. As
of each Quarterly Payment Date, each Partner holding OP Units shall have a
Percentage Interest in respect of such OP Units equal to (i) 100%, minus the sum
of the Percentage Interests attributable to the Participation Interests
determined pursuant to clauses (a) and (c) above, multiplied by (ii) a fraction
whose numerator is the number of OP Units then owned by such Partner and whose
denominator is the total number of OP Units outstanding.

     (e) Calculation of Total Percentage Interests of Hines and SLR. The total
Percentage Interest of Hines and SLR, as the case may be, shall equal such
person’s Percentage Interest in respect of its Participation Interest
(determined under clauses (a) and (c) above), plus such person’s Percentage
Interest in respect of its OP Units (determined under clause (d) above).

          “Person”: An individual, corporation, partnership, limited liability
company, estate, trust, association, joint stock company or other legal entity,
or a group as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

          “Prime Rate”: The rate of interest per annum announced from time to
time by JPMorgan Chase Bank, or its successor, at its principal office in New
York City as its prime rate.

          “Priority Redemption Right”: As defined in Section 3.9.

          “Priority Redemptions”: As defined in Section 3.9, and, as the context
requires, as defined in the Fund Partnership Agreement and the Declaration of
Trust.

          “Private Placement FTP Exemption”: The exemption from publicly traded
partnership status provided in Regulation Section 1.7704-l(h) (which generally
applies if (i) all interests in a partnership are issued in a transaction or
series of transactions that are not required to be registered under the
Securities Act and (ii) the partnership does not have more than 100 partners at
any time during taxable year of the partnership).

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          “Private Transfer”: Any of the following:

     (i) transfers in which the basis of the Partnership Interest in the hands
of the transferee is determined, in whole or in part, by reference to its basis
in the hands of the transferor or is determined under Code Section 732;

     (ii) transfers at death, including transfers from an estate or testamentary
trust;

     (iii) transfers between members of a family;

     (iv) transfers involving the issuance of interests by (or on behalf of) the
Partnership in exchange for cash, property, or services;

     (v) transfers involving distributions from a qualified retirement plan or
an individual retirement account;

     (vi) the transfer by a Partner and any related persons (within the meaning
of Code Section 267(b) or 707(b)(l)) in one or more transactions during any
thirty calendar day period of Partnership Interests representing in the
aggregate more than 2 percent of the total interests in Partnership capital or
profits;

     (vii) transfers by one or more Partners of interests representing in the
aggregate 50 percent or more of the total interests in Partnership capital and
profits in one transaction or a series of related transactions; and

     (viii) transfers not recognized by the Partnership within the meaning of
Regulation Section 1.7704-l(d)(2) (i.e., the Partnership neither admits the
transferee as a partner nor recognizes any rights of the transferee as a
partner).

          “Profits” and “Losses”: For each Fiscal Year or portion thereof, an
amount equal to the Partnership’s items of taxable income or loss for such year
or period, determined by the General Partner in accordance with Code Section
703(a) with the following adjustments:

     (i) any income which is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses shall be added to taxable
income or loss;

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

     (iii) in the event that the Gross Asset Value of any Partnership asset is
adjusted pursuant to the definition of Gross Asset Value contained in this
Article I, 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 and
Losses;

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     (iv) gain or loss resulting from any disposition of Partnership assets 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;

     (v) 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;

     (vi) to the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in complete liquidation of a Partner’s Partnership Interest, or is required
pursuant to the last sentence of Regulations Section 1.704-l(b)(2)(iv)(m)(2) to
be taken into account in determining Capital Accounts, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes
of computing Profits or Losses; and

     (vii) any items specially allocated pursuant to Section 8.6 or Section 8.7
shall not be considered in determining Profits or Losses.

          “Property”: As defined in Section 5.1(a).

          “Property Manager”: As defined in Section 5.6.

          “Property Services Agreement”: As defined in Section 5.6.

          “Property Services Agreement Form”: As defined in the Fund Partnership
Agreement.

          “Quarterly Payment Date”: The first Business Day following the end of
each Fiscal Quarter.

          “Recapitalization”: As defined in Section 3.8(d).

          “Redeeming Partner”: As defined in Section 3.8(a).

          “Redemption Amount”: Either the Cash Amount or the REIT Shares Amount
as determined pursuant to Section 3.8.

          “Redemption Right”: As defined in Section 3.8(a).

          “Regulations”: The Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

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          “Regulatory Allocations”: As defined in Section 8.7.

          “REIT”: As defined in Section 5.7.

          “REIT Distribution Objectives”: As defined in Section 9.6.

          “REIT Requirements”: As defined in Section 5.7.

          “REIT Shares Amount”: A number of Shares equal to (i) the number of OP
Units offered for redemption by a Redeeming Partner, plus (ii) (A) the Current
Participation Interest Value associated with the portion of the Participation
Interest offered for redemption by a Redeeming Partner, multiplied by (B) a
fraction whose numerator equals the number of OP Units outstanding and whose
denominator equals the difference between the Current Total Equity Value and the
Current Participation Interest Value.

          “Required Vote”: As defined in Section 13.3(a).

          “Rights”: As defined in Section 3.8(e).

          “S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.

          “Securities Act”: The Securities Act of 1933, as amended.

          “Selected Prior Closing Partner”: As defined in Section 3.3(b).

          “Shareholder”: As defined in the Declaration of Trust.

          “Shares”: As defined in Section 6.1 of the Declaration of Trust.

          “Similar Law”: Any federal, state, local, non-U.S. or other law or
regulation that contains one or more provisions that are similar to any of the
provisions contained in Title I of ERISA or Section 4975 of the Code.

          “Single Asset Debt Limit”: As defined in Section 3.6(a)(i)(B).

          “SLR”: As defined in the Recitals to this Agreement.

          “SLR Designee”: As defined in the Fund Partnership Agreement.

          “Specified Redemption Date”: As defined in Section 3.8(a).

          “Subscription Agreement”: As defined in Section 3.2(a).

          “Subsequent Closing”: As defined in Section 3.3(b).

          “Subsequent Closing Partner”: As defined in Section 3.3(b).

          “Super Majority LP Vote”: As defined in Section 11.6(f).

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          “Tax Matters Partner”: As defined in Section 11.4(a).

          “Temporary Investment”: Any repurchase agreements of primary Federal
Reserve dealers using treasury securities only; bankers acceptances which are
legal for purchase by the Federal Reserve Bank; United States Treasury bills and
agency discount notes; commercial paper that is rated by Moody’s or S&P in its
highest rating category; accounts or mutual funds which invest in any of the
foregoing; and any other investment approved by the Advisory Committee as a
Temporary Investment.

          “Term”: As defined in Section 2.9.

          “Transfer”: As a noun, any sale, transfer, gift, exchange, assignment,
devise or other disposition, as well as any other event that causes any Person
to acquire beneficial ownership, or any agreement to take any such actions or
cause any such events, with respect to Partnership Interests, or the right to
vote or receive distributions with respect to Partnership Interests, including
(a) the granting or exercise of any option (or any disposition of any option),
(b) any disposition of any securities or rights convertible into or exchangeable
for Partnership Interests or any interest in Partnership Interests or any
exercise of any such conversion or exchange right and (c) Transfers of interests
in other entities that result in changes in beneficial ownership of Partnership
Interests; in each case, whether voluntary or involuntary, whether owned of
record or beneficially owned, and whether by operation of law or otherwise. The
terms “Transferor,” “Transferee,” “Transferred” and “Transferring” have
correlative meanings.

          “Trust”: As defined in the Preamble to this Agreement.

          “Unaffiliated Limited Partner” A Limited Partner that is not an
Affiliate of the General Partner or of Hines.

          “Unfunded Commitment”: As defined in Section 3.2(a).

          “Unrecovered Capital”: An amount, determined for each Limited Partner,
which equals the aggregate amount of all Capital Contributions made by such
Limited Partner to the Partnership less the aggregate amount of capital returned
to such Limited Partner by the Partnership by either the redemption of OP Units
or the distribution of Capital Cash Flow.

          “Voting Fund Investors”: As defined in the Fund Partnership Agreement.

          “Withdrawn General Partner”: As defined in Section 12.1.

          “75% Majority LP Vote”: As defined in Section 11.6(f).

          SECTION 1.2 Interpretation; Terms Generally. The definitions set forth
in Section 1.1 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Unless otherwise indicated, the words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation.”
The words “herein”, “hereof and “hereunder” and words of similar import shall be
deemed to refer to this Agreement (including the Exhibits and Schedules) in its
entirety and not

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to any part hereof, unless the context shall otherwise require. All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless
the context shall otherwise require. Unless the context shall otherwise require,
any references to any agreement or other instrument or statute or regulation are
to it as amended and supplemented from time to time (and, in the case of a
statute or regulation, to any corresponding provisions of successor statutes or
regulations). Any reference in this Agreement to a “day” or number of “days”
(that does not refer explicitly to a “Business Day” or “Business Days”) shall be
interpreted as a reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given on, the next Business Day.

ARTICLE II

General Provisions

          SECTION 2.1 Formation and Continuation. The Partnership was formed as
a limited partnership under the Act by the filing of its certificate of limited
partnership (the “Certificate”) with the Secretary of State of the State of
Delaware on March 5, 2003. The Original GP shall have no right, title or
interest in or to the Partnership and no rights or obligations under this
Agreement other than its rights as an Indemnified Person under Sections 6.1 and
6.2. The General Partner shall continue as the general partner of the
Partnership and each Person admitted as a Limited Partner shall continue as a
limited partner of the Partnership. As of the date hereof, each Person
identified as a Limited Partner on Schedule 2.1 is a Limited Partner. The
General Partner may amend Schedule 2.1 from time to time to reflect the
admission of additional Limited Partners.

          SECTION 2.2 Name. The name of the Partnership shall be “Hines-Sumisei
US Core Office Properties LP.” The General Partner shall, with the affirmative
written consent of SLR (which consent shall not be unreasonably withheld) and
upon notice to the Limited Partners, have the right to change the name of the
Partnership and, in connection therewith, may execute and file (pursuant to the
power-of-attorney provided for in Section 13.2, where necessary) such amendments
to this Agreement, the Certificate and such other documentation, as shall be
necessary or desirable to effect such name change. The Partnership shall do
business under the name of the Partnership or under such other name (including
any assumed name) as the General Partner may from time to time determine in its
sole discretion. Upon the dissolution and termination of the Partnership, the
General Partner shall retain all rights with respect to the name of the
Partnership and the use of such name.

          SECTION 2.3 Organizational Certificates and Other Filings. If
requested by the General Partner, the Limited Partners will promptly execute all
certificates and other documents consistent with the terms of this Agreement
necessary for the General Partner to accomplish all filing, recording,
publishing and other acts as may be appropriate to comply with all requirements
for (a) the formation and operation of a limited partnership under the laws of
the State of Delaware, (b) if the General Partner deems it advisable, the
operation of the Partnership as a limited partnership, or partnership in which
the Limited Partners have limited liability, in all

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jurisdictions where the Partnership proposes to operate and (c) all other
filings required to be made by the Partnership.

          SECTION 2.4 Principal and Other Offices. The principal executive
office of the Partnership shall be c/o Hines Interests Limited Partnership, 2800
Post Oak Boulevard, Suite 5000, Houston, Texas 77056-6118, or such other place
as may from time to time be designated by the General Partner in its sole
discretion. The General Partner shall give prompt notice to each Partner of any
change in the principal office of the Partnership. The Partnership may also have
such other offices and places of business as the General Partner determines to
be appropriate.

          SECTION 2.5 Registered Office; Registered Agent. The address of the
registered office of the Partnership in the State of Delaware shall be c/o
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801 or
such other place as may be designated from time to time by the General Partner
in its sole discretion. The name and address of the registered agent for the
Partnership in the State of Delaware which shall act as its agent for service of
process in the State of Delaware shall be The Corporation Trust Company, 1209
Orange Street, Wilmington, Delaware 19801, or such other agent as may be
designated from time to time by the General Partner in its sole discretion.

          SECTION 2.6 Purpose. The purpose of the Partnership is to make, hold,
own, sell, convey, exchange, transfer or otherwise dispose of investments in
accordance with the Investment Guidelines and to engage in such other activities
as are permitted hereby or are incidental or ancillary thereto as the General
Partner deems necessary or advisable, all upon the terms and conditions set
forth in this Agreement.

          SECTION 2.7 Powers. The Partnership shall have all the powers now or
hereafter conferred by the laws of the State of Delaware on limited partnerships
formed under the Act and, subject to the express limitations set forth in this
Agreement, may do any and all lawful acts or things that are necessary,
appropriate, incidental or convenient for the furtherance and accomplishment of
the purposes of the Partnership or for the protection and benefit of the
Partnership or its properties and assets. Without limiting the generality of the
foregoing, and subject to the terms of this Agreement, the Partnership may enter
into, deliver and perform all contracts, agreements and other undertakings and
engage in all activities and transactions as may be necessary or appropriate to
carry out its purposes and conduct its business. Without limiting the generality
of the foregoing, the Partnership, and the General Partner on behalf of the
Partnership, are authorized and empowered to enter into, deliver and perform the
Partnership’s obligations under the Advisory Agreement.

          SECTION 2.8 Fiscal Year. The fiscal year (“Fiscal Year”) and taxable
year of the Partnership will be the calendar year, and its fiscal quarters
(each, a “Fiscal Quarter”) shall end on the last day of each calendar quarter.
The General Partner may change the ending date of the Fiscal Year if the General
Partner determines in good faith that such change is necessary or appropriate.
The General Partner will change the taxable year of the Partnership if and to
the extent necessary to comply with Code Section 706 and the Regulations
thereunder. The General Partner will give prompt written notice of any such
change to the Limited Partners.

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          SECTION 2.9 Term. The term of the Partnership (the “Term”) commenced
upon the filing of the Certificate and shall continue until the Partnership is
dissolved and its affairs are wound up in accordance with Article XII.

          SECTION 2.10 Feeder Entities. In order to facilitate investment in the
Partnership by certain investors, the General Partner may establish or
facilitate the establishment of one or more collective investment vehicles or
other arrangements (each such vehicle or arrangement, a “Feeder Entity”) through
which investors may invest in the Partnership by acquiring interests in such
Feeder Entity. Affiliates of the General Partner may hold interests in any such
Feeder Entity or in the general partner (or advisor or similar entity) of such
Feeder Entity. In case of a default by any such Feeder Entity, the General
Partner may treat one or more of such investors (rather than such Feeder Entity)
as a Defaulting Limited Partner as provided in Section 10.6. In addition, the
terms of the governance and/or organizational documents of any such Feeder
Entity may permit the payment to the general partner (or advisor or similar
entity) of such Feeder Entity of management, advisory or other fees, and any
such fees paid by such Feeder Entity to its general partner (or advisor or other
entity) may be used to reduce and offset the Asset Management Fee or Acquisition
Fees payable under this Agreement, in which event the General Partner shall
amend this Agreement so that the benefit of any such reduction inures to such
Feeder Entity.

ARTICLE III

Partnership Capital

          SECTION 3.1 Partnership Capital. As of the date of this Agreement, the
Partners have been issued OP Units and have Funded Commitments in the amounts
set forth opposite their names on Schedule 3.1. The General Partner shall record
all issuances and redemptions of OP Units on the books of the Partnership.

          SECTION 3.2 Capital Commitments.

     (a) The Partnership may from time to time, at the discretion of the General
Partner, issue additional OP Units and admit additional Limited Partners to the
Partnership. Any Person (other than the Trust) that acquires a Partnership
Interest for cash (an “Investor”) after the date hereof will acquire such
interest pursuant to an agreement (a “Subscription Agreement”) between such
Investor and the Partnership pursuant to which such Investor agrees to acquire,
and the Partnership agrees to issue, a specified number of OP Units in exchange
for Capital Contributions in cash at a specified price per OP Unit, all on such
terms and conditions as are provided in this Agreement and as may be provided in
such Subscription Agreement. A Subscription Agreement shall become effective as
of the date it has been executed and delivered by the Investor party thereto and
accepted by the General Partner on behalf of the Partnership. OP Units issuable
pursuant to a Subscription Agreement may be issuable in installments, with each
installment being issuable, and the Capital Contribution therefore being
payable, in accordance with calls for capital (“Capital Calls”) issued pursuant
to written notice (the “Capital Call Notice”) to the Investor party to such
Subscription Agreement. The total purchase price payable by any Investor under a
Subscription Agreement for the OP Units

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issuable pursuant thereto is referred to as such Investor’s “Capital
Commitment”. Each Investor which acquires any OP Units pursuant to a
Subscription Agreement shall be deemed to be admitted to the Partnership as a
Limited Partner immediately upon the payment of the purchase price for the first
OP Units so issued to such Investor. The aggregate amount of Capital
Contributions made by a Partner (in cash or property) is referred to herein as
such Partner’s “Funded Commitment,” and the portion of the Capital Commitment
provided for in any Subscription Agreement that remains unpaid after any closing
of a purchase and issuance of OP Units pursuant thereto shall be referred to as
the “Unfunded Commitment” of the Limited Partner party to such Subscription
Agreement. Subject to Section 11.4(c), in no event will any Limited Partner be
required to contribute any capital to the Partnership in excess of such Limited
Partner’s Capital Commitment.

     (b) If at any time the General Partner determines to raise capital by
issuing Capital Calls to Partners having Unfunded Commitments, it shall
generally coordinate the issuance of such Capital Calls with the Fund General
Partner so that capital is called pro rata from all Fund Investors having
unfunded commitments to contribute capital to the Fund Partnership, the Trust
and/or the Partnership based on the relative unfunded commitments of such Fund
Investors to such Entities. However, the General Partner and Fund General
Partner may, in their discretion, issue Capital Calls other than on such a pro
rata basis to the extent required by the terms of any Subscription Agreement or
other agreement between the Partnership or the General Partner and one or more
Partners, or if the General Partner or the Fund General Partner otherwise deems
it advisable to issue Capital Calls in some manner other than on such a pro rata
basis (for example, to assist in achieving or maintaining the status of the
Trust as a “domestically controlled” REIT). Each Capital Call Notice issued by
the General Partner shall specify the account to which Capital Contributions are
to be delivered pursuant thereto and the date on which such Capital
Contributions are due (“Payment Date”) which date shall be no sooner than ten
Business Days after the date such Capital Call Notice is issued. All Capital
Contributions made on or before the Payment Date specified in a Capital Call
Notice shall be deemed to have been made on such Payment Date.

          SECTION 3.3 Initial Offering Period.

     (a) All Subscription Agreements entered into during the Initial Offering
Period shall provide for the issuance of OP Units at the Initial Offering Price;
provided that any such Subscription Agreement may, in the discretion of the
General Partner, provide for the issuance of OP Units at a price different from
the Initial Offering Price in any Subscription Agreement entered into after the
date of this Agreement if, in the reasonable determination of the General
Partner in its sole discretion, such different price is appropriate based on any
appreciation or depreciation of any Investments from the date of this Agreement
to the effective date of such Subscription Agreement; provided further. that no
Subscription Agreement entered into during the Initial Offering Period shall
provide for the issuance of OP Units at a price per OP Unit less than the
Initial Offering Price without the consent of the Limited Partners holding OP
Units immediately prior to the effective date of such Subscription Agreement by
a Majority LP Vote.

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     (b) If, following a closing of the issuance of OP Units during the Initial
Offering Period (any such closing, a “Subsequent Closing”), there remain any
Unfunded Commitments, then each Limited Partner that was admitted or increased
its Capital Commitment at such Subsequent Closing may (a “Subsequent Closing
Partner”) may, at the discretion of the General Partner, be required to make a
Capital Contribution (and be issued OP Units in respect thereof) in an amount up
to its pro rata share (based on the Capital Commitments of all Partners
immediately after such Subsequent Closing) of the Funded Commitments of all
Partners holding OP Units immediately prior to such Subsequent Closing. The
General Partner may, in its discretion, use the proceeds of any such Capital
Contributions to redeem OP Units held by one or more Partners (selected at the
discretion of the General Partner) holding OP Units immediately prior to such
Subsequent Closing (each, a “Selected Prior Closing Partner”) at the same price
per OP Unit at which such OP Units were acquired by such Selected Prior Closing
Partner, such that, after making such Capital Contributions and redemptions,
each Subsequent Closing Partner’s Funded Commitment relative to its Capital
Commitment is the same as or less than the Funded Commitment of each Selected
Prior Closing Partner relative to its Capital Commitment. The Funded Commitment
of any Partner having OP Units redeemed pursuant to the preceding sentence shall
be reduced by the amount received by such Partner for the OP Units redeemed,
such Partner’s Unfunded Commitment shall be increased by such amount, and such
Partner shall remain obligated to purchase additional OP Units at the price per
share provided for in its Subscription Agreement to the full extent of its
Unfunded Commitment as so increased.

          SECTION 3.4 Initial Investment Period. Upon the termination of the
Initial Investment Period, any remaining Unfunded Commitments attributable to
Subscription Agreements entered into during the Initial Offering Period shall be
canceled automatically and without any further action by any party, and the
General Partner shall have no further right to issue Capital Calls, and
Investors shall have no further right to purchase OP Units in respect of such
canceled Unfunded Commitments pursuant to any such Subscription Agreement;
provided that the foregoing shall not affect (i) the right of the General
Partner or the Partnership to pursue any remedies available to it under this
Agreement or at law in respect of any default in respect of a Capital Call
issued prior to the termination of the Initial Investment Period, or (ii) the
obligation of any Limited Partner with respect to a Capital Commitment
attributable to a Subscription Agreement entered into after the Initial Offering
Period.

          SECTION 3.5 Additional Capital.

     (a) Except as specifically provided in this Agreement or any Subscription
Agreement, no Partner (including the General Partner) shall be required to, and
no Limited Partner shall have the right to, contribute additional funds or other
property to the Partnership. The Partnership may from time to time incur
Indebtedness in accordance with Section 3.6 and issue additional OP Units in
accordance with Section 3.7.

     (b) Except (i) for the net proceeds of the issuance by the Trust of debt
securities that are loaned by the Trust to the Partnership, and (ii) where the
Trust determines that the net proceeds generated by the issuance of additional
Shares or other securities (whether for debt or equity) shall be retained by the
Trust for a valid business

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reason consistent with the purposes of the Partnership and such retention does
not materially adversely affect the Limited Partners, the net proceeds of any
and all funds raised by or through the Trust through the issuance of Shares or
other securities shall be contributed to the Partnership as additional Capital
Contributions, in which event the Trust shall be issued additional OP Units in
accordance with Section 3.7.

          SECTION 3.6 Partnership Indebtedness.

     (a) The General Partner shall have the right, at its option, to cause the
Partnership to incur or assume Indebtedness from any Person for any Partnership
purpose including to cover Partnership Expenses, make Investments, provide
permanent financing or provide interim financing to the extent necessary to
consummate the purchase of Investments prior to completion of the permanent debt
financing therefor or prior to the receipt of Capital Contributions, and to
pledge or otherwise encumber assets of the Partnership or any Operating Entity
to secure any such Indebtedness, subject to the following:

     (i) The Partnership shall not incur any Indebtedness unless after giving
effect to such incurrence,

     (A) the aggregate amount of Indebtedness of the Partnership, the Trust and
the Fund Partnership is not more than 50% of the Current Market Value of all of
the Partnership’s Investments at the time any such Indebtedness is incurred (the
“Aggregate Debt Limit”); and

     (B) the total amount of Indebtedness that is secured by any one Investment
shall not exceed 65% of the Current Market Value of such Investment at the time
such Indebtedness is incurred (the “Single Asset Debt Limit”).

     (ii) Notwithstanding clause (i) of this Section 3.6(a), the General Partner
may cause the Partnership to incur Indebtedness in excess of the Aggregate Debt
Limit and/or the Single Asset Debt Limit if the General Partner determines that
it is advisable to do so in connection with the acquisition of a new Investment;
provided that, at the time such excess Indebtedness is incurred, the General
Partner makes a reasonable determination that the aggregate Indebtedness of the
Partnership, the Trust and the Fund Partnership will be within the Aggregate
Debt Limit, and the Indebtedness secured by such Investment will be within the
Single Asset Debt Limit, within one year after the incurrence of such excess
Indebtedness.

     (b) The General Partner may cause the Partnership to issue debt securities
to the Trust in exchange for funds that the Trust has raised through the
incurrence of Indebtedness or the issuance of debt securities; provided that
(i) the terms of the debt securities so issued by the Partnership are
substantially the same as the terms of the Indebtedness incurred or the debt
securities issued by the Trust in respect of such funds, and (ii) the principal
amount of the debt securities so issued by the Partnership, taken

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together with other Indebtedness of the Partnership, the Trust and the Fund
Partnership, but without duplication of the corresponding debt securities issued
by the Trust, would not exceed the Aggregate Debt Limit.

     (c) In connection with the incurrence of Indebtedness, the General Partner
shall have the right, in its discretion, to pledge to the lender the right of
the General Partner to issue Capital Calls in respect of the Unfunded
Commitments of the Partners, and to enforce the obligations of the Limited
Partners to make Capital Contributions in respect thereof, in accordance with
the terms and conditions of this Agreement and the Subscription Agreements. Each
Limited Partner having an Unfunded Commitment shall, upon the written request of
the General Partner, for the benefit of one or more lenders or other Persons
extending credit to the Partnership, (A) acknowledge its obligations pursuant to
this Agreement and its Subscription Agreement to make Capital Contributions
(which may, as determined by the General Partner, include an acknowledgment that
the General Partner or the lender on behalf of the General Partner (in
accordance with the agreements between such lender and the Partnership and/or
the General Partner), may call such Capital Contributions in accordance with
this Agreement and such Limited Partner’s Subscription Agreement to pay the
outstanding obligations to such lenders without, except as expressly set forth
in this Agreement, defense, counterclaim or offset of any kind); provided that
the liability of the Limited Partners to make Capital Contributions shall not be
increased thereby and shall not result in the loss of a Limited Partner’s
limited liability status under this Agreement, and (B) execute such documents as
may be reasonably required to create a security interest in such Limited
Partner’s obligations to make such Capital Contributions, which the General
Partner may perfect and assign for the benefit of a lender as determined by the
General Partner in its sole discretion. For purposes of determining whether the
aggregate Indebtedness of the Partnership, the Trust and the Fund Partnership is
within the Aggregate Debt Limit, Indebtedness secured by a pledge of the General
Partner’s right to make Capital Calls in respect of the Partners’ Unfunded
Commitments shall not be treated as outstanding Indebtedness; provided that no
assets of the Partnership are pledged to secure such Indebtedness other than the
right of the General Partner to issue Capital Calls in respect of the Unfunded
Commitments of the Partners and to enforce the obligations of the Limited
Partners to make Capital Contributions in respect thereof.

          SECTION 3.7 Issuance of OP Units and Participation Interests. The
General Partner shall cause the Partnership to issue additional OP Units and
Participation Interests from time to time as follows:

     (a) The Partnership shall issue OP Units to the Trust upon the issuance by
the Trust of additional Shares (other than in exchange for OP Units) and the
contribution of the net proceeds thereof as a Capital Contribution to the
Partnership as provided for in Section 3.7(b), it being understood, however,
that (i)(A) the Trust may issue Shares upon conversion or exchange of any
securities issued by the Trust in accordance with the terms of the Declaration
of Trust and that are convertible into or exchangeable for Shares in cases where
the Trust then owns comparable securities in the Partnership that are
convertible or exchangeable for OP Units or (B) the Trust may issue Shares in
lieu of fees or compensation for services to the Trust, the Partnership or any
Operating Entity without

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receiving any proceeds, and (ii) the issuance of Shares as described in clauses
(i)(A) and (i)(B) shall nonetheless entitle the Trust to receive additional OP
Units pursuant to this Section 3.7(a) (provided that, in the case of
transactions described in clause (i)(A), the Trust actually exchanges or
converts such Partnership securities). The number of OP Units issued to the
Trust pursuant to this Section 3.7(a) shall be equal to the number of Shares
issued by the Trust.

     (b) The Partnership may issue OP Units, as determined by the General
Partner in its discretion, to existing or newly-admitted Partners, (i) in
exchange for the making by such a Partner (a “Contributing Partner”) of a
Capital Contribution to the Partnership in cash, or (ii) in connection with the
acquisition, directly or indirectly, of an Investment from such Contributing
Partner or an Affiliate of such Contributing Partner by the Partnership or a
Fund Entity in which the Partnership, has a direct or indirect interest;
provided, that no OP Units may be issued pursuant to this Section 3.7(b) at a
price per OP Unit that is less than the Current Unit Value as of the date on
which the Partnership enters into a binding agreement to issue such OP Units
without the consent of the Limited Partners by a Majority LP Vote. The General
Partner will not permit the Partnership or any Fund Entity that the Partnership
Controls to issue equity interests to third party investors at a valuation that
reflects a valuation of any Property in which the Partnership or such Fund
Entity has a direct or indirect interest of less than Current Market Value as of
the date a binding commitment is made for the issuance of such equity interests
without the written consent of Voting Fund Investors holding, without
duplication, sixty- six and two-thirds percent (66 2/3%) or more of the
aggregate outstanding equity interests in the Fund Partnership, the Trust and
the Partnership held by Voting Fund Investors, excluding any equity interest
which is specifically designated a non-voting interest under the Constituent
Documents of the issuer of such equity interest.

     (c) Effective as of the date hereof, the Partnership is issuing to each of
Hines and SLR a limited partnership interest denominated as a “Participation
Interest.” The Participation Interest is an equity interest in the Partnership
which is granted in consideration for services rendered by Hines and SLR as
Investment Advisors to the Fund pursuant to the Advisory Agreement. The
Participation Interest is in addition to, and distinct from, the OP Units
described above, and any references to “OP Units” shall not be deemed to include
the Participation Interest. A Partner’s percentage interest attributable to its
Participation Interest (if any), together with the percentage of the total
outstanding OP Units held by it, equal its Percentage Interest in the
Partnership. The Participation Interest is an interest solely in profits and
shall not have any Capital Commitment or initial Capital Account associated with
it. It is intended that the Participation Interest constitute a profits interest
within the meaning of Section 2.02 of IRS Revenue Procedure 93-27, 1993-2 C.B.
343.

     (i) The formula for the calculation of the Participation Interest is
included in the definition of Percentage Interest in Section 1.1. The
Participation Interest is intended to provide each Investment Advisor holding it
with an interest in the Partnership that approximates the interest it would
acquire if it received Asset Management Fees and Acquisition Fees after the
Initial Investment Period in the same amounts payable in respect of such fees
during the Initial Investment

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Period and then invested half of such amounts in the Partnership through the
acquisition of additional OP Units. (However, since the Participation Interest
is a profits interest, this interest will be substantially economically
equivalent to the ownership of OP Units only if the Partnership has adequate
gain or profit to allocate to the holder of the Participation Interest.) Without
considering the effect of additional equity investments or redemptions by
existing or new Partners, the grant of the Participation Interest has the effect
of decreasing the Percentage Interest of all Unaffiliated Limited Partners after
the Initial Investment Period as the Percentage Interest associated with the
Participation Interests increases in a manner corresponding to the accrual of
additional Asset Management Fees and Acquisition Fees that would occur if such
fees were payable in cash after the Initial Investment Period in the same
amounts as such fees are payable during the Initial Investment Period pursuant
to the terms of this Agreement. This is accomplished by the OP Unit cancellation
procedure described in Section 5.9. (Schedule 5.9 of the Fund Partnership
Agreement provides an example of OP Unit cancellations as contemplated by
Section 5.9.)

     (ii) SLR may, at any time prior to the end of the Initial Investment
Period, elect to return its Participation Interest to the Partnership by giving
written notice to such effect to the General Partner. In such event, the General
Partner shall amend this Agreement and the Advisory Agreement (in a manner
reasonably acceptable to SLR) as necessary to provide for (A) only Hines having
a Percentage Interest calculated by reference to a Participation Interest, and
(B) the payment to the General Partner for the benefit of SLR of additional cash
amounts in respect of Asset Management Fees and Acquisition Fees to which SLR
would be entitled under the Advisory Agreement if the Partnership continued to
pay such fees after the Initial Investment Period in the manner that such fees
are required to be paid under this Agreement during the Initial Investment
Period.

     SECTION 3.8 Redemption Rights.

     (a) Subject to the provisions of Sections 3.8(b) and (d), each Limited
Partner shall have the right (a “Redemption Right”) to require the Partnership
to redeem all or a portion of the OP Units and/or Participation Interest held by
such Limited Partner at a redemption price equal to and in the form of the
Redemption Amount at any time after the later of (i) the last day of the Initial
Investment Period and (ii) the first anniversary of the date such Limited
Partner acquired the OP Units it seeks to redeem. The Redemption Right shall be
exercised pursuant to a notice (a “Notice of Redemption”) delivered to the
Partnership (with a copy to the General Partner) by the Limited Partner who is
exercising the Redemption Right (the “Redeeming Partner”); provided, however,
that the Partnership shall not be obligated to satisfy such Redemption Right if
the Trust elects to purchase the OP Units and/or Participation Interest subject
to the Notice of Redemption pursuant to Section 3.8(c). The Redeeming Partner
shall have no right, with respect to any OP Units and/or Participation Interests
so redeemed, to receive any distribution paid with respect to OP Units if the
record date for such distribution is on or after the tenth Business Day
following the date the General Partner receives the Notice of Redemption (the
“Specified Redemption Date”). If, and beginning with the first day of the first

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taxable year in which, the Partnership no longer qualifies for the Private
Placement FTP Exemption, the Redemption Right shall comply with the requirements
of Regulations Section 1.7704-l(f) and shall be construed and administered in
accordance therewith. The General Partner may modify the Redemption Right from
time to time in its discretion to ensure that the terms of the Redemption Right
comply and continue to comply with such requirements.

     (b) In addition to other restrictions on Redemption Rights in any other
provision of this Agreement, the following restrictions apply to all Redemption
Rights (other than the redemption right of the Trust set forth in Section 3.12):

     (i) Notwithstanding any other provision of this Article III, but subject to
the last sentence of clause (iii) below, a Limited Partner shall be entitled to
exercise the Redemption Right only if (x) the redemption or purchase of the
Limited Partner’s OP Units and Participation Interest, as the case may be, would
constitute a Private Transfer or (y) the Percentage Interest attributable to the
OP Units and Participation Interest to be purchased or redeemed, when aggregated
with other Transfers of OP Units within the same taxable year of the Partnership
(but not including Private Transfers), would constitute a Percentage Interest
often percent (10%) or less.

     (ii) The General Partner may establish such policies and procedures as it
may deem necessary or desirable in its discretion to administer the 10% limit
set forth in subparagraph (i) above, including imposing further limitations on
the number of OP Units and portion of Participation Interest with respect to
which the Redemption Right may be exercised during any period of time shorter
than a calendar year and establishing procedures to allocate the ability to
exercise the Redemption Right among the Limited Partners.

     (iii) The restrictions set forth in subparagraphs (i) and (ii) of this
Section 3.8(b) shall continue in effect until such time as the Partnership is no
longer potentially subject to classification as a publicly traded partnership,
as defined in Code Section 7704, in the absence of such restrictions, as
determined by the General Partner in its discretion. The restrictions set forth
in such clauses (i) and (ii), together with the restrictions on the Transfer of
Partnership Interests set forth in Section 10.3(a)(iii), are intended to limit
transfers of interests in the Partnership in such a manner as to permit the
Partnership to qualify for the safe harbors from treatment as a publicly traded
partnership set forth in Treasury Regulations Sections 1.7704-l(d), (e), (f) and
(j) and shall be construed and administered in accordance therewith. The General
Partner may modify the restrictions set forth in such clauses (i) and (ii), and
the provisions of Section 10.3(c), from time to time in its discretion to ensure
that the Partnership complies and continues to comply with the requirements of
the Code and Regulations described above. Notwithstanding anything herein to the
contrary, the provisions of subparagraphs (i)-(iii) shall only apply if, and
beginning with the first day of the first taxable year in which, the Partnership
no longer qualifies for the Private Placement PTP Exemption.

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     (iv) A Limited Partner shall not be entitled to exercise a Redemption Right
if such exercise (assuming, in the case of the exercise of a Redemption Right,
that the Trust elects to purchase all OP Units and/or Participation Interests
proposed to be redeemed in exchange for Shares pursuant to Section 3.8(c)) would
(a) result in the total number of outstanding Shares and any other ownership or
beneficial interests in the Trust being owned by fewer than one hundred persons
within the meaning of Code Section 856(a)(5); (b) result in such Limited Partner
or any other Person owning, directly or constructively under Code
Section 856(d)(5), in excess of 9.9% of the total Shares (and any other
ownership or beneficial interests) in the Trust; (c) cause more than 50% of the
value of the Trust’s Shares (and any other ownership or beneficial interests) to
be held by five or fewer individuals and certain organizations under Code
Section 856(h) and 542(a)(2); (d) cause the Trust to own, directly or
constructively, 10% or more of the ownership interests of any person that is a
tenant with respect to any real property owned or constructively owned by the
Trust (so as to prevent the application of Code Section 856(d)(2)); (e) cause
the Trust to no longer qualify as a “domestically-controlled REIT” as defined in
Code Section 897(h)(4) if the Trust is so qualified at the time of the proposed
redemption; (f) cause the Trust to become a “Pension-Held REIT” as such term is
defined in Code Section 856(h)(3) if the Trust was not a “Pension-Held REIT”
immediately prior to the proposed redemption; or (g) cause the acquisition of
Shares (and any other ownership or beneficial interests) in the Trust by such
Limited Partner to be “integrated” with any other distribution of interests in
the Trust for purposes of complying with the registration provisions of the
Securities Act of 1933. The General Partner may modify the restrictions set
forth in this Section 3.8(b) from time to time in its discretion to ensure that
the Partnership complies and continues to comply with Code Section 856. The
General Partner may, in its sole discretion, waive the restrictions on
redemption set forth in this Section 3.8(b); provided, however, that in the
event a restriction is waived, the applicable Redeeming Partner shall be paid
the Cash Amount.

     (v) A Limited Partner shall not be entitled to exercise a Redemption Right
if it prejudices or affects the continuity of the Partnership for purposes of
Code Section 708. Prior to any such redemption, the General Partner may require
an opinion of counsel, which counsel and opinion shall be satisfactory to the
General Partner, to the effect that such redemption will not cause adverse tax
consequences to the non-redeeming Partners, and such Limited Partner exercising
the Redemption Right shall be responsible for paying said counsel’s fee for such
opinion.

     (vi) The Partnership shall not redeem any Partnership Interests for the
Cash Amount pursuant to this Section 3.8(a) requested to be redeemed pursuant to
a Notice of Redemption that did not request a Liquidating Redemption, unless the
Partnership and the Trust can also make, in accordance with Section 3.10, all
Liquidating Redemptions requested to be made pursuant to Notices of Redemption
then in effect that did request Liquidating Redemptions.

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     (c) Notwithstanding the provisions of Section 3.8(a), a Limited Partner
that exercises the Redemption Right shall be deemed to have offered to sell the
Partnership Interests described in the Notice of Redemption to the Trust, and
the Trust (or any designee thereof) may, in its sole and absolute discretion,
elect to purchase directly and acquire such Partnership Interests by paying to
the Redeeming Partner either the Cash Amount or the REIT Shares Amount, as
elected by the Trust or any designee thereof (each in its sole and absolute
discretion), on the Specified Redemption Date, whereupon the Trust or any
designee thereof shall acquire the Partnership Interests offered for redemption
by the Redeeming Partner and shall be treated for all purposes of this Agreement
as the owner of such Partnership Interests as of the Specified Redemption Date.
If the Trust or any designee thereof shall elect to exercise its right to
purchase Partnership Interests under this Section 3.8(c) with respect to a
Notice of Redemption, it shall so notify the Redeeming Partner within five
Business Days after the receipt by the General Partner of such Notice of
Redemption. Unless the Trust or any designee thereof (each in its sole and
absolute discretion) shall exercise its right to purchase Partnership Interests
from the Redeeming Partner pursuant to this Section 3.8(c), neither the Trust
nor any designee thereof shall have any obligation to the Redeeming Partner or
the Partnership with respect to such Redeeming Partner’s exercise of such
Redemption Right. In the event that the Trust or any designee thereof shall
exercise its right to purchase Partnership Interests with respect to the
exercise of a Redemption Right in the manner described in the first sentence of
this Section 3.8(c), the Partnership shall have no obligation to pay any amount
to the Redeeming Partner with respect to such Redeeming Partner’s exercise of
such Redemption, and each of the Redeeming Partner, the Partnership, and the
Trust or any designee thereof, as the case may be, shall treat the transaction
between the Trust or its designee, as the case may be, and the Redeeming Partner
for federal income tax purposes as a sale of the Redeeming Partner’s Partnership
Interests to the Trust or such designee. Each Redeeming Partner agrees to
execute such documents as the General Partner or the Trust may reasonably
require in connection with the issuance of Shares equal to the REIT Shares
Amount upon exercise of the Redemption Right by a Limited Partner and the
election to purchase such Partnership Interests by the Trust. Notwithstanding
the foregoing, the Trust may not elect, pursuant to this Section 3.8(c), to
acquire Partnership Interests for the Cash Amount pursuant to any Notice of
Redemption that did not request a Liquidating Redemption, unless the Trust and
the Partnership can also make, in accordance with Section 3.10, all Liquidating
Redemptions requested to be made pursuant to Notices of Redemption then in
effect that did request Liquidating Redemptions.

     (d) The Trust shall at all times reserve and keep available out of its
authorized but unissued Shares, solely for the purpose of effecting the exchange
of Partnership Interests for Shares, a number of Snares equal to the number of
Outstanding Unit Equivalents not owned by the Trust. No Limited Partner shall,
by virtue of being the holder of a Partnership Interest be deemed to be a
Shareholder of or have any other interest in the Trust. In the event of any
change in the outstanding Shares of the Trust or its successor by reason of any
share dividend, split, recapitalization, merger, consolidation, combination,
exchange of shares or other similar corporate change other than the issuance of
Rights, as further described in Section 3.8(e) (a “Recapitalization”), the
number of OP Units held by each Partner shall be adjusted upward or downward to

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equal such number of Shares of the Trust (or as applicable, the Shares or
equivalent class of securities of the successor thereto) as would have been held
by the Partner immediately following the Recapitalization if such Partner had
held a number of Shares equal to such number of OP Units immediately prior to
such Recapitalization, In the event the Trust or any designee thereof acquires
Participation Interests pursuant to Section 3.8(c), any Participation Interest
so acquired shall be automatically converted into a number of OP Units which
equals the REIT Shares Amount attributable to such Participation Interest, and
the General Partner shall record the transfer on the books of the Partnership so
that the Trust or any designee thereof, as applicable, is thereupon the owner
and holder of such OP Units. As is more particularly described in
Section 3.8(b)(iv), notwithstanding any other provisions of this Section 3.8, a
Limited Partner shall not have the right to exercise a Redemption Right if, upon
payment of the REIT Shares Amount to such Limited Partner, (i) the Trust would,
as a result thereof, no longer qualify (or it would be reasonably possible in
the judgment of the General Partner that the Trust no longer would qualify) as a
real estate investment trust under the Code; or (ii) the payment of such REIT
Shares Amount to the Limited Partner would constitute or be reasonably possible
in the judgment of the General Partner to constitute a violation of applicable
federal or state securities laws or would violate any applicable provisions of
the organizational documents of the Trust (including without limitation any
restrictions on ownership of securities of the Trust set forth in the
Declaration of Trust or Bylaws of the Trust). In either such event, to the
extent the consequences described in clause (i) or (ii) of the preceding
sentence could be eliminated by reasonable action of the General Partner or the
Trust without any material detriment to the General Partner or the Trust and at
the expense of such Limited Partner(s) requesting such exchange, the Trust or
the General Partner shall take all such reasonable action to effect the exchange
of Partnership Interests for Shares by such Limited Partner(s) as herein
provided.

     (e) In the event that a Redeeming Partner exercises the Redemption Right,
and the Trust or any designee thereof elects to make the payment of the REIT
Shares Amount to the Redeeming Partner in accordance with the first sentence of
Section 3.8(c), and in the event that the Trust issues to all of its holders of
Shares as of a certain record date rights, options, warrants or convertible or
exchangeable securities entitling such Shareholders to subscribe for or purchase
Shares or any other securities or property (collectively, “Rights”), with the
record date for such Rights issuance falling within the period starting on the
date that the Trust receives the Notice of Redemption from the Redeeming Partner
and ending on the day immediately preceding the date upon which the Trust, or
its designee delivers the Shares to the Redeeming Partner in exchange for such
Redeeming Partner’s Partnership Interests (the date upon which such exchange
occurs being referred to herein as the “Exchange Date”), which Rights will not
be distributed before the Exchange Date, then the Trust or its designee shall be
required to deliver to the Redeeming Partner in exchange for the Partnership
Interest being redeemed under this Section 3.8, in addition to the REIT Shares
Amount, such Rights that the Redeeming Partner would have received if it had
been the owner of the Shares to be delivered by the Trust to the Redeeming
Partner prior to the record date for the issuance of the Rights.

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          SECTION 3.9 Priority Redemption Rights. In connection with the
issuance of OP Units to a Contributing Partner, the Partnership may agree,
subject to the terms of any Priority Redemption Rights, in the sole discretion
of the General Partner, as part of the terms and conditions for such issuance,
to grant such Contributing Partner a right to redeem all or a portion of the OP
Units held by such Limited Partner at a redemption price equal to the Current
Unit Value at the time of redemption in respect of some or all of the OP Units
issued to such Contributing Partner in such issuance on or before a specified
date or dates (any such preferential or modified redemption right, a “Priority
Redemption Right”). Pursuant to any such agreement, the General Partner may
apply any Capital Cash Flow and any funds received from Capital Contributions of
Limited Partners that would otherwise be available for making distributions to
the Partners or redeeming OP Units pursuant to Redemption Rights generally to
the making of any redemptions required to be made pursuant to any Priority
Redemption Rights. Redemptions made or required to be made pursuant to the
exercise of Priority Redemption Rights are referred to herein as “Priority
Redemptions”.

          SECTION 3.10 Liquidating Redemptions. Notwithstanding the contrary
provisions of Section 3.8(c), a Limited Partner delivering a Notice of
Redemption within the last forty-five days of any calendar year following the
termination of the Initial Investment Period may specify in such Notice of
Redemption that the OP Units or Participation Interest subject thereto may not
be purchased for the REIT Share Amount but must be purchased for the Cash
Amount. If a Limited Partner requests a redemption pursuant to the preceding
sentence (a “Liquidating Redemption”), the General Partner shall use its
reasonable best efforts to redeem such OP Units or Participation Interest for
the Cash Amount on or before the last day of the calendar year following the
year in which such Notice of Redemption was delivered, subject to the following:

     (a) All Liquidating Redemptions must meet the applicable requirements of
Section 3.8(b).

     (b) In no event shall the Trust, the Partnership and the Fund Partnership
collectively be required to redeem for cash in any calendar year, in the
aggregate, more than 10% of the total Fund Interests outstanding as of the first
day of such calendar year. If, for any calendar year, Partners, Shareholders and
partners of the Fund Partnership request Liquidating Redemptions with respect to
an aggregate amount of Fund Interests which exceeds 10% of the total amount of
Fund Interests outstanding as of the first day of such calendar year, then each
such Person entitled to participate in such redemption shall be entitled to
redeem its pro rata share of the total amount of Fund Interests requested to be
redeemed in such calendar year based on the amount of Fund Interests requested
to be redeemed in each such Person’s Notice of Redemption.

     (c) If more than one Partner, Shareholder or limited partner of the Fund
Partnership submits a request for a Liquidating Redemption in a calendar year,
then funds available to effect such redemptions shall be applied pro rata to the
redemption of the interests in the Partnership, the Trust and/or the Fund
Partnership subject to each such Fund Investor’s Notice of Redemption, based on
such Fund Investor’s share of the total equity in such Entities.

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     (d) In no event will any OP Units or Participation Interest be redeemed
pursuant to a Liquidating Redemption to the extent that (i) the General Partner
determines in good faith that such redemption would be inconsistent with the
best interests of the Partnership or the Trust (including adversely impacting
the Trust’s qualification to be taxed as a REIT or the Trust’s, the
Partnership’s or the Fund Partnership’s financial condition), or (ii) the
Partnership is unable to raise or acquire sufficient funds to pay the Cash
Amount on terms acceptable to the Partnership, as determined by the General
Partner in good faith.

     (e) Each Notice of Redemption requesting a Liquidating Redemption will
expire and be of no further force or effect as of the last day of the calendar
year following the year in which such Notice of Redemption was delivered. A
Limited Partner will be entitled to participate in Liquidating Redemptions in
any given calendar year only to the extent of the OP Units or Participation
Interest subject to a Notice of Redemption requesting a Liquidating Redemption
within the last forty-five days of the preceding calendar year.

          SECTION 3.11 Redemption and Repurchase of Shares. Notwithstanding any
other provision of this Agreement which may be contrary to this Section 3.11, in
the event of the repurchase or redemption for cash by the Trust of Shares, the
Partnership shall, concurrently with such repurchase or redemption, redeem or
repurchase OP Units held by the Trust that correspond to the Shares and/or other
securities being redeemed or repurchased by the Trust.

          SECTION 3.12 Redemption of Trust Shares, In addition to the other
redemption rights provided for in this Agreement, and in priority over the
redemption rights available to Partners under this Agreement (other than, to the
extent applicable, any Priority Redemption Rights), the General Partner may use
the proceeds of any Capital Contribution to redeem OP Units held by the Trust if
the Trust or the Fund Partnership requires funds to pay expenses or to make any
Priority Redemption applicable to it, including any redemption of an interest in
the Fund held by Hines or any Affiliate of Hines as contemplated by Section 3.10
of the Fund Partnership Agreement.

ARTICLE IV

General Partner

          SECTION 4.1 General Partner. Subject to the express limitations set
forth in this Agreement, all rights and powers to manage and control the
business and affairs of the Partnership shall be vested exclusively in the
General Partner, which shall have full authority to exercise in its discretion,
on behalf of and in the name of the Partnership, all rights and powers of the
sole general partner of a limited partnership formed under the Act. The General
Partner shall have the power to delegate all or any part of its rights and
powers to manage and control the business and affairs of the Partnership to such
officers, employees, Affiliates, agents and representatives of the General
Partner or the Partnership as it may from time to time deem appropriate. Any
authority delegated by the General Partner to any other Person shall be subject

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to the limitations on the rights and powers of the General Partner specifically
set forth in this Agreement.

          SECTION 4.2 Powers of the General Partner.

     (a) Subject to the express limitations set forth in this Agreement, the
power to direct the management, operation and policies of the Partnership shall
be vested exclusively in the General Partner, which shall have the power by
itself and shall be authorized and empowered on behalf and in the name of the
Partnership to carry out any and all of the objects and purposes of the
Partnership and to perform all acts and enter into and perform all contracts and
other undertakings that it may in its sole discretion deem necessary or
advisable or incidental thereto, all in accordance with and subject to the other
terms of this Agreement.

     (b) Without limiting the foregoing general powers and duties, the General
Partner is hereby authorized and empowered on behalf and in the name of the
Partnership, or on its own behalf and in its own name, or through agents as may
be appropriate, subject to the limitations contained elsewhere in this
Agreement, to:

     (i) make all decisions concerning the investigation, selection,
negotiation, structuring, commitment to, monitoring of and disposition of
Investments, and enter into Advisory Agreements with Investment Advisors under
which such Investment Advisors provide advice and recommendations to the General
Partner for the Partnership with respect to origination, investigation,
structuring, finance, acquisition, monitoring and/or disposition of Investments;

     (ii) direct the formulation of investment policies and strategies for the
Partnership, and select and approve the investment of Partnership funds, all in
accordance with the Investment Guidelines and the other limitations of this
Agreement;

     (iii) acquire (directly or indirectly through one or more intermediate
holding or investment entities), hold, sell, transfer, exchange, pledge and
dispose of Investments, and exercise all rights, powers, privileges and other
incidents of ownership or possession with respect to Investments, including,
without limitation, the exercise of any voting rights with respect to an
Investment, the approval of a restructuring of an Investment, participation in
arrangements with creditors, the institution and settlement or compromise of
suits and administrative proceedings and other similar matters;

     (iv) manage Investments generally, including, but not limited to, the
owning, holding, financing, managing, servicing, operating, maintaining,
improving, developing, rehabilitating, leasing and otherwise dealing with the
Investments; selling, exchanging, compromising, collecting, mortgaging or
otherwise disposing of all or any portion of the Investments and, in connection
therewith, accepting, collecting, holding, selling, exchanging, mortgaging,

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pledging or otherwise disposing of evidences of Indebtedness or other property
received pursuant thereto;

     (v) open, maintain and close bank accounts and draw checks or other orders
for the payment of money and open, maintain and close brokerage, money market
fund and similar accounts;

     (vi) hire for usual and customary payments and expenses consultants,
investment bankers, brokers, appraisers, attorneys, accountants and such other
agents for the Partnership as it may deem necessary or advisable, including,
without limitation, for any management, construction, leasing and other property
management services, and authorize any such agent to act for and on behalf of
the Partnership;

     (vii) enter into, execute, maintain and/or terminate contracts,
undertakings, agreements and any and all other documents and instruments in the
name of the Partnership, and do or perform all such things as may be necessary
or advisable in furtherance of the Partnership’s powers, objects or purposes or
to the conduct of the Partnership’s activities, including entering into
agreements to acquire or dispose of Investments which may include such
representations, warranties, covenants, indemnities and guaranties as the
General Partner deems necessary or advisable;

     (viii) incur Indebtedness and provide indemnities in connection therewith,
on a recourse (only with respect to the assets of the Partnership or any
Operating Entity) or non-recourse basis, on behalf of any Operating Entity or
the Partnership and, in its discretion, secure any and all of such Indebtedness
with the assets of the Partnership or any Investment or any Operating Entity,
including the Unfunded Commitments of the Limited Partners, and to assign the
Partnership’s and the General Partner’s rights to issue Capital Calls and to
deliver Capital Call Notices to the Limited Partners, to receive Capital
Contributions from Limited Partners and to enforce such rights under the terms
of this Agreement and any Subscription Agreement;

     (ix) act as the “tax matters partner” under the Code and in any similar
capacity under state, local or foreign law;

     (x) make, in its sole discretion, any and all elections for U.S. federal,
state, local and foreign tax matters, including any election to adjust the basis
of Partnership property pursuant to Sections 734(b), 743(b) and 754 of the Code
or comparable provisions of state, local or foreign law; and

     (xi) delegate any powers or responsibilities of the General Partner under
this Agreement as they relate to any Operating Entity to the trustees,
directors, or managers, as applicable, of such Operating Entity.

     (c) Notwithstanding Subsections (a) and (b) of this Section 4.2, the
General Partner shall not take any action in the name or on behalf of the
Partnership which under

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the terms of this Agreement requires the approval or consent of the Advisory
Committee or the Limited Partners, unless the approval or consent required by
this Agreement has been obtained, or that violates Section 5.7 hereof.

          SECTION 4.3 Time Commitment. The General Partner shall, and shall
cause its Affiliates and their respective employees, officers and agents to,
devote to the Partnership and its Investments such time as shall be necessary to
conduct the business and affairs of the Partnership and its Investments in an
appropriate manner consistent with the terms of this Agreement. The Limited
Partners acknowledge that the General Partner and other Affiliates of Hines and
their respective employees, officers and agents may also engage in activities
unrelated to the Partnership and may provide services to Persons other than the
Partnership.

          SECTION 4.4 Outside Investments. So long as the Partnership has the
capacity to make new Investments, the General Partner will not and will cause
each Affiliate of Hines not to make (i) any new equity investment which
satisfies the Investment Guidelines (other than through an interest in the
Partnership) or (ii) act as a manager or the primary source of transactions on
behalf of another pooled investment fund focusing on substantially the same
types of investment opportunities as those targeted by the Partnership; provided
that such restriction shall not apply to the following:

     (a) any investment which the General Partner has decided not to make or
pursue based on a good faith determination that such investment is inappropriate
or inadvisable for the Partnership, whether due to capacity, diversification,
rate of return objectives or other considerations; provided that to the extent
the General Partner determines in good faith that it is desirable for the
Partnership to make some but not all of a particular investment, then the
Partnership may make such investment to such extent and the General Partner or
another Affiliate of Hines (alone or with other Strategic Investors) may co-
invest with the Partnership in such investment on a side-by-side basis on terms
no more favorable than those applicable to the Partnership’s share of the
investment;

     (b) any investment by the Hines U.S. Office Value Added Fund, or any other
fund or investment program affiliated with Hines which has investment policies
and objectives which differ substantially from those of the Partnership and
which, in the good faith judgment of the General Partner, does not compete in
any material way for investments that would be suitable for the Partnership;

     (c) any investment in an office building more than 75% leased to a single
tenant under a lease having at least two years remaining on its term (excluding
extension options);

     (d) any reinvestment of proceeds by any of NY Trust, NY Trust II or any
Controlled Affiliate thereof from the transfer, sale or other disposition of any
asset held by such Entity, or any additional investment by any of NY Trust, NY
Trust II or any Controlled Affiliate thereof in any asset in which it holds an
interest;

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     (e) passive investments (i.e., investments which do not involve active
participation in management by any Affiliate of Hines); and

     (f) any investment made by NOP pursuant to an investment opportunity
allocated to NOP in accordance with the Hines investment allocation procedure
described in Schedule 4.4.

          SECTION 4.5 Transactions with Affiliates. Except for the Approved
Agreements and for transactions the terms of which are expressly contemplated or
approved by this Agreement or the Fund Partnership Agreement, neither the
General Partner nor any other Affiliate of Hines shall engage in any material
transaction with the Partnership or any Fund Entity in which the Partnership has
an interest unless the terms of such transaction have been approved by the
Advisory Committee and the General Partner. The Advisory Committee shall not
unreasonably withhold its consent to any such transaction proposed by the
General Partner. The General Partner will not consent to or propose to the
Advisory Committee any such transaction which the General Partner does not
believe is on fair market terms for comparable transactions.

          SECTION 4.6 Co-Investment Opportunities. The General Partner may
permit one or more Persons, including Fund Investors and Affiliates of the
General Partner, to co-invest in Properties in which the Partnership invests if
the General Partner determines that it is not in the best interest of the
Partnership to invest (or that the Partnership is prohibited from investing
pursuant to the terms of this Agreement or any Approved Agreement) the entire
amount required to fund such Investment because of the size of or risk inherent
in such Investment or due to legal, regulatory or tax considerations. Any such
co-investment made by a Fund Investor or an Affiliate of a Fund Investor may be
made through an investment vehicle in which such co-investor has an interest
separate from its interest in the Fund, and if the General Partner and/or its
Affiliates are the co-investor, such co-investment shall have economic terms
that are materially no more favorable to the General Partner and/or its
Affiliates, as applicable, than the terms of this Agreement or the terms
contemplated by any Approved Agreement. If the General Partner, Hines or any
Affiliate of the General Partner or Hines co-invests in a Property with the
Partnership, then, unless otherwise approved by the Advisory Committee, the
General Partner, Hines or such Affiliate, as applicable, shall be required to
dispose of its interest in such Property at the same time as the Partnership
disposes of its interest in the Property on terms no more favorable to such
Person than those received by the Partnership. For the avoidance of doubt,
nothing in this Section 4.6 shall restrict (i) the offering of co-investment
rights to Co-Investors (as defined in the GM Investor Rights Agreement) to the
extent permitted by the GM Investor Rights Agreement, or (ii) any Operating
Entity or other Fund Entity from entering into partnership or other joint
venture arrangements with third parties providing for shared ownership of an
Investment to the extent such arrangements are deemed necessary or desirable to
facilitate the acquisition, operation or disposition of, or otherwise add value
to, any Investment.

          SECTION 4.7 Other Activities not Restricted. Except as provided in
Section 4.2(c), Sections 4.3 through 4.6 and Article V, this Agreement shall not
be construed in any manner that precludes the General Partner or any Affiliate
of Hines, or any of their respective officers, employees or agents from engaging
in any activity whatsoever permitted by applicable law.

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ARTICLE V

Partnership Management

          SECTION 5.1 Investment Guidelines.

     (a) The Partnership will invest, directly and indirectly, in real estate
properties in the United States in accordance with the Investment Guidelines.
Any real estate and related personal property in which the Partnership invests
is referred to herein as a “Property”, any intermediate entity through which the
Partnership holds its interest in a Property is referred to herein as an
“Operating Entity,” and the Partnership’s Properties and its interests in
Operating Entities are referred to generally as “Investments.” The Partnership
will maintain in Temporary Investments or cash any funds of the Partnership that
are not invested in Investments, distributed to the Partners or applied toward
the expenses of the Partnership.

     (b) The investment objective of the Partnership is to (A) achieve an
average cash return to Limited Partners of 7% to 8% on their capital invested in
respect of OP Units and (B) generate an internal rate of return to Limited
Partners of 10% to 12% on their capital invested in respect of OP Units, net of
Partnership expenses, over an assumed ten year holding period while adhering to
the following guidelines (the “Investment Guidelines”).

     (i) The Partnership will invest in existing office properties that the
General Partner believes are desirable long term “core” holdings. The
Partnership will target high quality properties in attractive Central Business
District (“CBD”) and suburban locations, with the expectation that approximately
70% of the Partnership’s Invested Capital will be invested in CBD Properties.

     (ii) A Property may be a mixed-use property (i.e., some part of its value
and/or operating income may be attributable to non-office components), so long
as at least 70% of the projected net operating income of such Property is
attributable to office components.

     (iii) The Partnership will not invest in raw land, except where such
investment is incidental to an investment in an existing developed office
property or made as part of an investment in a portfolio of existing office
properties; provided that, in any case, subject to clause (v) below, the
Partnership shall not make an investment in raw land if such investment would
cause the value of Partnership’s total investment in raw land to exceed 2% of
the total value of all Partnership Investments at the time the Partnership makes
such investment.

     (iv) Subject to clause (v) below, the Partnership will not invest in any
property or asset that has a material hotel or lodging component.

     (v) Notwithstanding clauses (iii) and (iv) of this Section 5.1(b), the
Partnership may make an investment in raw land or hotel or lodging assets that
would otherwise be prohibited by such clauses (iii) and (iv) if such investment
is

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made as part of a transaction involving existing office properties, and the
General Partner has a reasonable plan for disposing of its investment in the
prohibited assets to the extent necessary to comply with the requirements of
such clauses (iii) and (iv) within twelve months after making such investment.

     (vi) After the Initial Investment Period, the Invested Capital in any
single Investment will not exceed 25% of the Partnership’s Committed Capital;
provided that the Partnership may acquire an Investment that exceeds such 25%
limit (but which does not in any event exceed 50% of the Partnership’s Committed
Capital), if the General Partner expects to reduce the Committed Capital of the
Partnership invested in such Investment to 25% or less of the Committed Capital
of the Partnership within nine months after making such investment.

          SECTION 5.2 Advisory Committee.

     (a) The Advisory Committee’s approval will not be required for any actions
or decisions of the General Partner, except that approval of the Advisory
Committee shall be required for:

     (i) any transaction between the Partnership or any Operating Entity, on the
one hand, and Hines or any Affiliate of Hines or the General Partner on the one
hand, other than: (A) the provision of services pursuant to any Property
Services Agreement, (B) the leasing of a limited amount of office space on
market terms by Hines or any of its Affiliates for conducting its operations,
(C) the sale of OP Units, Shares or of any equity securities of the Partnership
or the Trust to Hines or any of its Affiliates at the same price per share or
unit as is offered to other investors or, if no such securities are being
offered to unaffiliated investors, at the Current Unit Value or at such other
price as may be approved by the Limited Partners by a Super Majority LP Vote,
(D) the redemption of Partnership Interests held by Affiliates of Hines pursuant
to the terms of this Agreement, and (E) any other transaction specifically
permitted by this Agreement or the Fund Partnership Agreement;

     (ii) the ratification of any Appraiser selected in accordance with the Fund
Partnership Agreement;

     (iii) any in kind distribution by the Partnership of publicly traded
securities; and

     (iv) notwithstanding clause (i)(A) above, any increase of fees payable to
any Property Manager pursuant to any Property Services Agreement to amounts
greater than those provided for in the Property Services Agreement Form.

          SECTION 5.3 Officers. The General Partner may, in its discretion,
designate one or more persons as officers of the Partnership (any such Person,
an “Officer”). Officers shall hold such offices as the General Partner may
establish and have such powers and duties as the

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General Partner may delegate to them from time to time. Any Officer may be
removed and replaced at any time by the General Partner with or without cause.
Officers will receive no compensation from the Partnership for their service as
such. The General Partner shall remain obligated for the performance of its
obligations under this Agreement notwithstanding the delegation of any of them
to an Officer.

          SECTION 5.4 Management Rights of Limited Partners. Except as expressly
provided in this Agreement, no Limited Partner shall have the right or power to
participate in the management or affairs of the Partnership, nor shall any
Limited Partner have the power to sign for or bind the Partnership. The exercise
by any Limited Partner of any right conferred on Limited Partners by this
Agreement shall not be construed to constitute participation by such Limited
Partner in the control of the business of the Partnership so as to make such
Limited Partner liable as a general partner for the debts and obligations of the
Partnership for purposes of the Act.

          SECTION 5.5 Advisory Agreement. The General Partner shall remain
liable to the Partnership for the performance of its obligations under this
Agreement, notwithstanding the delegation of any such obligations to the
Investment Advisors pursuant to the Advisory Agreement. The General Partner
shall bear the costs of all services provided by the Investment Advisors under
the Advisory Agreement; provided that the Investment Advisors shall be entitled
to receive Asset Management Fees and Acquisition Fees as provided in the
Advisory Agreement and Sections 7.2 and 7.3 of this Agreement.

          SECTION 5.6 Property Services Agreements. For each Property acquired
by the Partnership, the Partnership or the Operating Entity through which the
Partnership owns such Property shall enter into a property services agreement (a
“Property Services Agreement”) with Hines or an Affiliate of Hines (a “Property
Manager”) substantially in the form of the Property Services Agreement Form
pursuant to which the Property Manager will provide property management,
redevelopment and leasing services for such Property. By executing this
Agreement, each Limited Partner approves the provisions of the Property Services
Agreement Form and consents to the execution, delivery and performance by the
Partnership and/or each Operating Entity holding an interest in a Property of a
Property Services Agreement substantially in such form with respect to each
Property in which the Partnership invests. The General Partner may make such
changes to the Property Services Agreement as it deems necessary or appropriate
to accommodate the particular circumstances of each Property; provided that the
General Partner shall not authorize any increase in the Property Services Fees
payable to the Property Manager or any material increase in the risks or
obligations to be borne by the Owner under any Property Services Agreement over
those provided for in or contemplated by the Property Services Agreement Form,
without the consent of the Advisory Committee. The Partnership will be liable
for its proportionate share of all obligations to the Property Manager of Owner
under all Property Services Agreements. Each Property Manager shall be a third
party beneficiary of this Agreement but only to the extent of the preceding
sentence.

          SECTION 5.7 REIT Requirements. Each Limited Partner acknowledges that
(i) at the Initial Date, the Trust intends to elect to be treated as a real
estate investment trust (“REIT”) under Code Section 856, (ii) in order to
maintain its status as a REIT after the Initial Date, the Trust must comply with
numerous and complex rules and regulations set forth in the

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Code and the Regulations, many of which are applied on a quarterly and/or annual
basis (the “REIT Requirements”), and (iii) the management and operation of the
Partnership will have a material effect on the ability of the Trust to continue
to maintain its status as a REIT. Notwithstanding any other provision of this
Agreement or any non-mandatory provision of the Act, after the Initial Date the
Partnership shall not take any action which (or fail to take any action, the
omission of which) (i) could adversely affect the ability of the Trust to
qualify or continue to qualify as a REIT, (ii) could subject the Trust to any
additional taxes under Code Section 857 or Code Section 4981 or other
potentially adverse consequences under the Code, or (iii) otherwise could cause
the Trust to violate the REIT Requirements, specifically including the
restrictions on Redemption Rights in Section 3.8(b)(iv). In addition, after the
Initial Date and notwithstanding any other provision of this Agreement or any
non-mandatory provision of the Act, any action of the General Partner on behalf
of the Partnership or any decision of the General Partner to refrain from acting
on behalf of the Partnership, in either case undertaken in the General Partner’s
business judgment that such action or omission is necessary or advisable in
order (A) to protect the ability of the Trust to continue to qualify as a REIT
or (B) to avoid the Trust incurring any taxes under Code Section 857 or Code
Section 4981, is expressly authorized under this Agreement and is deemed
approved by all of the Limited Partners.

          SECTION 5.8 Consideration of All Investors. In considering the
advisability of any proposed Investment or disposition of an Investment, or any
issuance if OP Units or equity interests of any subsidiary of the Partnership,
the General Partner shall consider the interests of all investors in the Fund
Partnership, the Trust, and the Partnership, as a group.

          SECTION 5.9 Asset Valuations; Determination of Current Unit Value;
Cancellations of OP Units.

     (a) All Properties shall be periodically appraised as provided in
Section 5.9 of the Fund Partnership Agreement.

     (b) Each calendar quarter the General Partner shall establish the Current
Market Value of each Property, the Current Total Equity Value, the Current
Participation Interest Value, and the Current Unit Value derived from the
Current Market Values, as so established, of all Properties. A hypothetical
example calculation of Percentage Interests and OP Unit cancellations as
contemplated by this Section 5.9 and the definition of Percentage Interest is
provided at Schedule 5.9 of the Fund Partnership Agreement.

     (i) The “Current Market Value” of a Property shall be as determined
pursuant to Section 5.9(c)(i) of the Fund Partnership Agreement.

     (ii) The “Current Total Equity Value” as of any date shall equal the net
distributions that would be received by the Partnership if all Properties were
sold at their Current Market Value in an all cash sale as of such date, and the
net proceeds of such sale and all other cash and cash equivalents of each Fund
Entity, determined after taking into account expected transaction costs
(including all closing costs customarily borne by a seller in the market where
each Property is located and estimated legal fees and expenses) and the
repayment of all debts of

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each Fund Entity, as reasonably determined by the General Partner, were
distributed by each Fund Entity to its owners.

     (iii) The “Current Participation Interest Value” for the entire
Participation Interest as of any date shall equal the lesser of (a) the product
of (i) the Percentage Interest attributable to the Participation Interest as of
such date, multiplied by (ii) the Current Total Equity Value as of such date or
(b) the aggregate amount that would be distributed in respect of the
Participation Interest in accordance with Section 12.4(b) if the Partnership
were to distribute an amount equal to the Current Total Equity Value among its
Partners in accordance with Section 12.4(b) on such date. The Current
Participation Interest Value of any portion of a Participation Interest shall be
proportionate to the Current Participation Interest Value of the entire
Participation Interest (e.g., 20% of the Participation Interest shall have a
Current Participation Interest Value equal to 20% of the Current Participation
Interest Value of the entire Participation Interest).

     (iv) The “Current Unit Value” of any OP Unit as of any date shall be the
amount determined by dividing (x) the difference between the Current Total
Equity Value and the Current Participation Interest Value of the entire
Participation Interest as of such date, by (y) the total number of OP Units
outstanding as of such date (including, if applicable, any other securities that
are convertible into or exchangeable for OP Units as of such date).

     (c) At the end of each Fiscal Quarter ending after termination of the
Initial Investment Period, a number of OP Units held by each Unaffiliated
Limited Partner shall automatically, without any action by any party, be
canceled, with the number of OP Units so cancelled being equal to (i) such
Unaffiliated Limited Partner’s Applicable Percentage (as defined below) of the
aggregate Unrecovered Capital of such Unaffiliated Limited Partner as of the end
of such Fiscal Quarter, divided by the Current Unit Value as of the end of such
Fiscal Quarter; plus (ii) (A) 0.5% of the Gross Real Estate Investments made by
the Partnership during such Fiscal Quarter, multiplied by (B) the Percentage
Interest of such Limited Partner in respect of its OP Units only as of the end
of such Fiscal Quarter, divided by (C) the Current Unit Value as of the end of
the Fiscal Quarter just ended.

     (i) The “Applicable Percentage” of each Unaffiliated Limited Partner shall
be (i) as to each Class A Major Investor, 0.09375%, (ii) as to each Class B
Major Investor, 0.10625%, (iii) as to each Class C Major Investor, 0.1125%,
(iv) as to each Class D Major Investor, 0.11875%, and (v) as to each other
Unaffiliated Limited Partner, 0.125%.

     (ii) For purposes of effecting the computations set forth in this
Section 5.9(c) for a particular Fiscal Quarter, (A) the Percentage Interest of a
Limited Partner, and the Current Unit Value, as of the end of the Fiscal Quarter
just ended shall be determined immediately prior to the cancellation of OP Units
pursuant to this Section 5.9(c); and (B) the Current Unit Value as of the end of
the Fiscal

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Quarter just ended shall be determined without taking into account any reduction
therein which occurs as a result of the adjustment to Percentage Interests which
occurs as of the end of such Fiscal Quarter pursuant to clauses (a) and (b) of
the definition of Percentage Interest set forth in Section 1.1 hereof.

     (iii) The cancellation of OP Units pursuant to this Section 5.9(c) shall be
determined and taken into account immediately after (A) the adjustments to
Percentage Interests that occur pursuant to clauses (a) and (b) of the
definition of Percentage Interest set forth in Section 1.1 hereof and (B) the
calculations of Asset Management Fees and Acquisition Fees that occur pursuant
to Sections 7.2 and 7.3, have been effected.

     (iv) The cancellation of OP Units pursuant to this Section 5.9(c) as of the
end of any Fiscal Quarter shall become effective as of the beginning of the
immediately following Fiscal Quarter.

ARTICLE VI

Exculpation and Indemnification

             SECTION 6.1 Exculpation of the General Partner. The General Partner
and its Affiliates, and the direct or indirect members, managers, partners,
shareholders, officers, directors, employees, agents and legal representatives
of the General Partner and any such Affiliate, including any Officer and any
Investment Advisor (in each case, an “Indemnified Person”) shall not be liable
to any Partner or the Partnership for any act or failure to act on behalf of the
Partnership, except to the extent such act or failure to act constitutes gross
negligence, recklessness, willful misconduct or bad faith on the part of the
Indemnified Person, a knowing violation of law by the Indemnified Person or a
material breach by the Indemnified Person of its obligations under this
Agreement. The General Partner may exercise any of the powers granted to it
hereunder and perform any of the duties imposed upon it hereunder either
directly or by or through agents and shall not be responsible for any misconduct
or negligence on the part of any such agent selected with reasonable care. The
General Partner may rely, and shall be protected in acting or refraining from
acting, and shall be deemed to have acted in good faith and without gross
negligence or willful misconduct, upon any consent, approval or any other action
taken by the Limited Partners or the Advisory Committee, and upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, or other paper or document believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers, architects,
engineers, environmental consultants and other professional consultants and
advisers selected by it with reasonable care, and shall be fully protected and
justified and shall be deemed to have acted in good faith and without gross
negligence or willful misconduct, in any action or inaction which is taken or
omitted to be taken in reasonable reliance upon the advice or opinion of such
Persons as to matters within such Persons’ professional or expert competence.
The General Partner shall not be liable to the Partnership or the Partners for
the failure to perform any obligation that the General Partner cannot perform
because the Partnership has insufficient funds to pay the cost and expense
relative to such obligation.

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          SECTION 6.2 Indemnification of General Partner.

     (a) The Partnership, to the fullest extent permitted by law, shall
indemnify and hold harmless each Indemnified Person from and against any loss,
liability, expense, judgment, settlement cost, fees and related expenses
(including reasonable attorneys’ fees and expenses), costs or damages arising
out of or in connection with any act taken or omitted to be taken in respect of
the affairs of the Partnership, unless such act or omission constitutes
(i) following the admission of the Non-Managing General Partner to the Fund
Partnership, as long as the Non-Managing General Partner has a partnership
interest in the Fund Partnership, in the case of the General Partner and any
other Indemnified Person that is an Affiliate of Hines or an officer or director
of Hines or an Affiliate of Hines (other than an “independent director” of the
general partner of the Non-Managing General Partner as defined in the Articles
of Incorporation of the general partner of the Non-Managing General Partner),
the misconduct or negligence of such person, or (ii) at all other times, and at
all times in the case of any other Indemnified Person, the gross negligence,
recklessness, willful misconduct or bad faith on the part of the Indemnified
Person, a knowing violation of law by the Indemnified Person or a material
breach by the Indemnified Person of its obligations under this Agreement. The
termination of any action, suit or proceeding by settlement shall not, of
itself, create a presumption that an Indemnified Person did not act in good
faith or in a manner that was reasonably believed to be in, or not opposed to,
the best interests of the Partnership or was guilty of gross negligence, willful
misconduct, bad faith or a knowing violation of law.

     (b) The Partnership, in the discretion of the General Partner, may advance
to any Indemnified Person reasonable attorneys’ fees and other costs and
expenses incurred in connection with the defense of any action or proceeding
which arises out of conduct which is the subject of the indemnification provided
hereunder; provided, however, that (i) the General Partner hereby agrees, and
each other Indemnified Person shall agree as a condition to receiving any such
advance, that in the event an Indemnified Person receives any advance, the
Indemnified Person shall reimburse the Partnership for the advance to the extent
that it is judicially determined, in a final, non-appealable judgment or binding
arbitration, that the Indemnified Person was not entitled to indemnification
under this Section 6.2 and (ii) neither the General Partner nor any other
Indemnified Person shall be entitled to any advance of costs and expenses in any
action (either direct or derivative) brought against such Indemnified Person by
Limited Partners pursuant to a Majority LP Vote, except to the extent that a
court of competent jurisdiction issues a ruling (whether preliminary or final)
substantially to the effect that the claim is one as to which it is likely that
such Indemnified Person is entitled to the benefits of the exculpatory
provisions set forth in Section 6.1. Notwithstanding anything to the contrary
contained in this Section 6.2, neither the General Partner nor any other
Indemnified Person shall be entitled to indemnification for, or be indemnified
by the Partnership against, any claim in any action (either direct or
derivative) brought against such Indemnified Person by any Limited Partner if it
is established, by a final non-appealable judgment, that such claim was one as
to which such Indemnified Person is not entitled to the benefits of the
exculpatory provisions set forth in Section 6.1.

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          SECTION 6.3 Treatment of Management Board, Advisory Committee, Board
of Trustees, Et. al. No member of the Management Board, the Advisory Committee,
the Board of Trustees or any officer of the Partnership or the Trust (and no
Limited Partner represented by any such person) shall be a fiduciary of the
Partnership or of any Partner. No member of the Advisory Committee or the Board
of Trustees and no SLR Designee shall be liable to any Partner or the
Partnership for any reason (other than fraud or willful misconduct on the part
of such person) including for any mistake in judgment, any action or inaction
taken or omitted to be taken, or for any loss due to any mistake, action or
inaction, and no Limited Partner represented by any such person shall be liable
to the Partnership or any Partner for the acts or omissions of such person in
such capacity (other than as a result of fraud or willful misconduct). The
participation by a person on the Management Board, the Advisory Committee or the
Board of Trustees or as an Officer shall not be construed to constitute
participation by such person in the control of the business of the Partnership
so as to make such person liable as a general partner for the debts and
obligations of the Partnership for purposes of the Act. The participation by the
representative of any Limited Partner on the Management Board, the Advisory
Committee or the Board of Trustees in the activities of the Management Board,
Advisory Committee or the Board of Trustees shall not be construed to constitute
participation by such Limited Partner in the control of the business of the
Partnership so as to make such Limited Partner liable as a general partner for
the debts and obligations of the Partnership for purposes of the Act. No Limited
Partner who has appointed a member of the Management Board, Advisory Committee
or the Board of Trustees shall be deemed to be an Affiliate of the Partnership
or the General Partner solely by reason of such appointment.

          SECTION 6.4 Limited Liability of Limited Partners. Except as provided
by the Act or other applicable law and subject to the obligations to make
Capital Contributions in accordance with this Agreement and its Subscription
Agreement and to pay taxes to the extent provided in Section 11.4(c), no Limited
Partner (including the Hines Limited Partner, Hines and SLR) shall have any
personal liability whatsoever in its capacity as a Limited Partner, whether to
the Partnership, to any of the Partners, or to the creditors of the Partnership,
for the debts, liabilities, contracts, or other obligations of the Partnership
or for any losses of the Partnership.

          SECTION 6.5 Other Activities of Limited Partners. Subject to
Section 4.4 with respect to each Limited Partner that is an Affiliate of the
General Partner or Hines, each Limited Partner shall be entitled to and may have
business interests and engage in activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership and the entities in which the Partnership invests and may
engage in transactions with, and provide services to, the Partnership or any
such entity. Neither the Partnership, any other Partner nor any other Person
shall have any rights by virtue of this Agreement in any business ventures of
any Limited Partner.

ARTICLE VII

Expenses and Fees

          SECTION 7.1 General Partner Expenses. The Partnership shall not have
any salaried personnel. Neither the Partnership nor any Limited Partner, shall
bear or be charged with any of the following costs and expenses of the
Partnership’s activities: (a) any costs and

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expenses of providing to any Officer the office space, facilities, supplies, and
necessary ongoing overhead support services for the Partnership’s operations or
(b) the compensation of any Officer or any employee of the General Partner or an
Investment Advisor.

          SECTION 7.2 Asset Management Fee.

     (a) The Partnership shall pay a periodic management fee (the “Asset
Management Fee”) to the General Partner; provided that, to the extent the
General Partner assigns the right to receive the Asset Management Fee to the
Investment Advisors pursuant to the Advisory Agreement, the Partnership shall
pay such fee to the Investment Advisors as provided in the Advisory Agreement.
The Asset Management Fee shall accrue quarterly in arrears and shall be payable,
subject to the penultimate sentence of Section 7.2(b), on each Quarterly Payment
Date. A portion of the Asset Management Fee accrued as of each Quarterly Payment
Date shall be charged to each Unaffiliated Limited Partner in an amount equal to
the product of (i) the Asset Management Fee Base of such Limited Partner on the
first day of the Fiscal Quarter just ended, multiplied by (ii) (A) in the case
of any Fiscal Quarter occurring during the Initial Investment Period, 25%, or
(B) in the case of any Fiscal Quarter occurring after the termination of the
Initial Investment Period, 12.5%, multiplied by (iii) (A) for each Class A Major
Investor, 0.75%, (B) for each Class B Major Investor, 0.85%, (C) for each
Class C Major Investor, 0.90%, (D) for each Class D Major Investor, 0.95%, or
(E) for each Unaffiliated Limited Partner that is not a Major Investor, 1.00%.
The “Asset Management Fee Base” for any Unaffiliated Limited Partner shall be
(A) prior to the termination of the Initial Investment Period, the Unrecovered
Capital of such Unaffiliated Limited Partner plus such Unaffiliated Limited
Partner’s Unfunded Commitment, and (B) after the termination of the Initial
Investment Period, the Unrecovered Capital of such Unaffiliated Limited Partner.
The Asset Management Fee shall be prorated for any partial quarter and for the
quarter in which the termination of the Initial Investment Period occurs based
on the number of days in such quarter or the number of days in such quarter
before and after such termination occurs, as applicable.

     (b) The total Asset Management Fee accrued as of any Quarterly Payment Date
shall be the sum of the amounts chargeable to each Unaffiliated Limited Partner
as of such Quarterly Payment Date pursuant to Section 7.2(a). The Partnership
shall deduct the amount chargeable to each Unaffiliated Limited Partner in
respect of the Asset Management Fee from any amounts otherwise distributable to
such Unaffiliated Limited Partner on or after the Quarterly Payment Date as of
which the Asset Management Fee has accrued. If the amount accrued in respect of
the Asset Management Fee and chargeable to an Unaffiliated Limited Partner as of
any Quarterly Payment Date exceeds any amount otherwise distributable to such
Unaffiliated Limited Partner, then payment of the Asset Management Fee to the
General Partner (or, if applicable, to the Investment Advisors) shall be
deferred, without interest, to the extent of such excess until such time as
additional amounts are otherwise available for distribution to such Unaffiliated
Limited Partner. All amounts deducted from amounts otherwise distributable to an
Unaffiliated Limited Partner and paid to the General Partner (or the Investment
Advisors) pursuant to this Section 7.2 shall be deemed to have been distributed
to such Unaffiliated Limited Partner for all purposes under this Agreement.

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          SECTION 7.3 Acquisition Fees.

     (a) For each Property in which the Partnership makes an investment (either
directly, or indirectly through an Operating Entity), other than any Property
acquired from SLR or any of its Affiliates, the Partnership shall, subject to
penultimate sentence of Section 7.3(b), pay to the General Partner a fee (an
“Acquisition Fee”) in an amount equal to (i) in the case of any Investment that
closes on or prior to the termination of the Initial Investment Period, 1%, or
in the case of any Investment that closes after the termination of the Initial
Investment Period, 0.5%, multiplied by (ii) the value of the total consideration
(including any assumed Indebtedness) paid in respect of such Property,
multiplied by (iii) a fraction whose numerator equals the total equity capital
contributed to the acquisition of such Property by the Partnership and whose
denominator is the total equity capital contributed to the acquisition of such
Property from all sources, multiplied by (iv) the aggregate Percentage Interest
of the Unaffiliated Limited Partners in respect of their OP Units only
immediately following the closing of the Partnership’s investment in such
Property. Notwithstanding the foregoing, if the General Partner has assigned the
right to receive Acquisition Fees to the Investment Advisors pursuant to the
Advisory Agreement, the Partnership shall pay such Acquisition Fees to the
Investment Advisors to the extent provided therein.

     (b) Each Unaffiliated Limited Partner shall be charged for a portion of any
Acquisition Fee payable by the Partnership in an amount equal to the product of
(x) the total amount of such Acquisition Fee payable by the Partnership,
multiplied by (y) a fraction whose numerator is the Percentage Interest of such
Unaffiliated Limited Partner in respect of its OP Units only and whose
denominator is the aggregate Percentage Interest of all Unaffiliated Limited
Partners in respect of their OP Units only. The Partnership shall deduct the
amount chargeable to each Unaffiliated Limited Partner in respect of an
Acquisition Fee from any amounts otherwise distributable to such Unaffiliated
Limited Partner on or after the closing date of the Investment giving rise to
such Acquisition Fee. For the avoidance of doubt, if there are no Unaffiliated
Limited Partners at the time the Partnership invests in a Property, then no
Acquisition Fee shall be payable by the Partnership in respect of such Property.
If the amount payable in respect of an Acquisition Fee and chargeable to an
Unaffiliated Limited Partner exceeds any amount otherwise distributable to such
Unaffiliated Limited Partner, then payment of such Acquisition Fee to the
General Partner (or, if applicable, the Investment Advisors) shall be deferred,
without interest, to the extent of such excess until such time as additional
amounts are otherwise available for distribution to such Unaffiliated Limited
Partner. All amounts deducted from amounts otherwise distributable to an
Unaffiliated Limited Partner and paid to the General Partner (or the Investment
Advisors) pursuant to this Section 7.3 shall be deemed to have been distributed
to such Unaffiliated Limited Partner for all purposes under this Agreement.

     (c) If any Unaffiliated Limited Partner is admitted to the Partnership or
increases its Capital Commitment after March 31, 2004, and on or before the last
day of the Initial Offering Period, then (i) the Acquisition Fee shall be
recomputed for each Property in which the Partnership made an investment during
such period as if such admission or increase had occurred on March 31, 2004, and
(ii) the additional amount of

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the Acquisition Fees from prior periods resulting from such recomputation shall
be charged against future distributions otherwise payable to such Unaffiliated
Limited Partners as provided in Section 7.3(b).

          SECTION 7.4 Partnership Expenses.

(a) The Partnership shall bear and be charged with the following costs and
expenses of the Partnership paid or payable to third parties (and shall promptly
reimburse the General Partner or its Affiliates, as the case may be, to the
extent that any of such costs and expenses are paid to third parties directly by
such entities) (the “Partnership Expenses”):

     (i) fees and expenses for attorneys and accountants;

     (ii) all out-of-pocket costs and expenses, if any, incurred in
investigating, negotiating and structuring Investments or potential Investments
(whether or not consummated), and in acquiring, developing, owning, operating,
improving and disposing of Investments, including without limitation any
financing, legal, accounting, advisory, travel and entertainment, and consulting
expenses (to the extent not subject to any reimbursement of such costs and
expenses by entities in which the Partnership invests or third parties);

     (iii) brokerage commissions, custodial expenses and other investment costs
actually incurred in connection with actual Investments;

     (iv) interest on and fees and expenses arising out of all borrowings made
by the Partnership, including, but not limited to, the arranging thereof;

     (v) the costs of any litigation, D&O liability or other insurance and
indemnification or extraordinary expense or liability relating to the affairs of
the Partnership;

     (vi) expenses of liquidating the Partnership;

     (vii) any taxes, fees or other governmental charges levied against the
Partnership and all expenses incurred in connection with any tax audit,
investigation, settlement or review of the Partnership;

     (viii) the out-of-pocket expenses of the members of the Advisory Committee
reimbursable under Section 5.4(f) of the Fund Partnership Agreement

     (ix) a reasonably allocable portion, as determined by the Fund General
Partner and the General Partner, of any Organizational Expenses (as defined in
the Fund Partnership Agreement) payable by the Fund Partnership pursuant to the
Fund Partnership Agreement.

 (b) Partnership Expenses may be allocated among the Partnership’s Investments
in a manner reasonably determined by the General Partner. Partners may be

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required to make Capital Contributions to the extent of their Unfunded
Commitments for the payment of such Partnership Expenses to the extent the
Partnership does not have sufficient funds to pay such expenses.

     (c) Any amounts paid by the Partnership for or resulting from any
instrument or other arrangement designed to hedge or reduce one or more risks
associated with an Investment shall be considered a Partnership Expense relating
to such Investment. Any distributions resulting from any such arrangements shall
be treated as Operating Cash Flow from such Investment.

     (d) The General Partner may withhold on a pro rata basis from any
distributions amounts necessary to create, in its sole discretion, appropriate
reserves for expenses and liabilities, contingent or otherwise, of the
Partnership.

             SECTION 7.5 Trust Expenses. The Partnership will fund or reimburse
the Trust for all ongoing accounting and administrative expenses of the Trust so
that, absent extraordinary circumstances, the Trust will not bear any expenses
beyond those borne by the Partnership.

ARTICLE VIII

Capital Accounts; Allocations

             SECTION 8.1 Capital Accounts. A separate capital account (“Capital
Account”) shall be maintained for each Partner.

     (a) To each Partner’s Capital Account there shall be added 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
Section 8.6 or Section 8.7, and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any Partnership property
distributed to such Partner.

     (b) From each Partner’s Capital Account there shall be subtracted 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 Section 8.6 or Section 8.7, 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) In the event all or a portion of a Partnership Interest is Transferred
in accordance with the terms of this Agreement (including a Transfer of
Partnership Interests in exchange for Shares, pursuant to Section 3.8(c)), the
Transferee shall succeed to the Capital Account of the Transferor to the extent
it relates to the Transferred Partnership Interest.

     (d) In determining the amount of any liability for purposes of
Sections 8.1(a) and (b), there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and Regulations.

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     (e) This Section 8.1 and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-l(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including debits or credits relating to liabilities which are
secured by contributed or distributed property or which are assumed by the
Partnership, or the Partners) are computed in order to comply with such
Regulations, the General Partner may make such modification, provided that it is
not likely to have a material effect on the amounts distributed to any Partner
pursuant to Section 12.4 upon the liquidation of the Partnership. The General
Partner also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership’s balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-l(b)(2)(iv)(g),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations
Section 1.704-1 (b).

          SECTION 8.2 Interest on and Return of Capital.

     (a) No Partner shall be entitled to any interest on its Capital Account or
on its Capital Contributions to the Partnership.

     (b) Except as expressly provided for in this Agreement, no Partner shall
have the right to demand or to receive the return of all or any part of its
Capital Contributions to the Partnership and there shall be no priority of one
Partner over another Partner as to the return of Capital Contributions or
withdrawals or distributions of Profits and Losses. No Partner shall have the
right to demand or receive property other than cash in return for the
contributions of such Partner to the Partnership.

          SECTION 8.3 Negative Capital Accounts. Upon the liquidation of the
Partnership or the liquidation of the Participation Interest, the holder of the
Participation Interest shall be required to pay to the Partnership any deficit
or negative balance which may exist in its Capital Account at such time
(determined after taking into account the allocations described in Article VIII
or Section 12.4 for the year in which such liquidation or redemption occurs).
Subject to the provisions of any guarantee or other written agreement between a
Partner and the Partnership, no Partner shall be otherwise required to pay to
the Partnership any deficit or negative balance which may exist in its Capital
Account.

          SECTION 8.4 Allocation of Profits.

     (a) After giving effect to the allocations set forth in Sections 8.6 and
8.7, Profits for any fiscal year other than Capital Transactions Gains shall be
allocated as follows:

     (i) first, Profits and, if necessary, items of gross profit and income,
shall be allocated to the holder of the Participation Interest, until the
cumulative amount of Profits and items of gross profit and income allocated to
such holder

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pursuant to this Section 8.4(a) with respect to its Participation Interest
equals the cumulative amount of distributions made to such holder pursuant to
Section 9.1 hereof with respect to its Participation Interest; and

     (ii) thereafter, Profits shall be allocated among the Partners in
proportion to the number of OP Units held by each such Partner.

     (b) After giving effect to the allocations set forth in Sections 8.6 and
8.7, Capital Transaction Gains shall be computed separately with respect to each
property and each such Capital Transaction Gain shall be allocated among the
Partners as follows:

     (i) Each Partner that is not an Unaffiliated Limited Partner shall be
allocated Capital Transaction Gain in an amount equal to the Percentage Interest
attributable to such Partner’s OP Units, multiplied by the total amount of such
Capital Transaction Gain.

     (ii) The remaining amount of such Capital Transaction Gain shall be
allocated among the holders of the Participation Interests and the Unaffiliated
Limited Partners (A) first, in proportion to, and until each such Partner has
been allocated Capital Transaction Gains pursuant to this clause (A) in an
amount equal to, the minimum amounts necessary to cause the Capital Account
balances of such Partners to be in proportion to the Percentage Interests of
such Partners and (B) thereafter, among such Partners in proportion to their
respective Percentage Interests.

     (c) hi the event that the Partnership issues or redeems Partnership
Interests pursuant to Article III hereof, the General Partner shall make such
revisions to the method of allocating Profits in this Section 8.4 as it
determines are necessary to reflect the terms of the issuance or redemption of
Partnership Interests, including such revisions as are needed to ensure that
such allocations (i) will comply with the terms of Regulation Sections 1.704-1
and -2, (ii) will properly reflect the varying interests of the Partners in the
Partnership, and (iii) will cause the Capital Accounts of the Partners in
respect of Partnership Interests held by them to be in the ratios in which the
Partners are entitled to receive distributions with respect to their Partnership
Interests pursuant to Article IX hereof.

          SECTION 8.5 Allocations of Losses.

     (a) After giving effect to the special allocations set forth in
Sections 8.6 and 8.7, Losses (including Capital Transaction Losses, which shall
be computed and allocated separately with respect to each property) shall be
allocated among the Partners as follows:

     (i) Each Partner that is not an Unaffiliated Limited Partner shall be
allocated Losses in an amount equal to the Percentage Interest attributable to
such Partner’s OP Units, multiplied by the total amount of such Losses.

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     (ii) The remaining portion of such Losses shall be allocated among the
holders of the Participation Interests and the Unaffiliated Limited Partners
(A) first, in proportion to, and until each such Partner has been allocated
Losses pursuant to this clause (A) in an amount equal to, the minimum amounts
necessary to cause the Capital Account balances of such Partners to be in
proportion to the Percentage Interests of such Partners and (B) thereafter,
among such Partners in proportion to their respective Percentage Interests.

     (b) The Losses allocated pursuant to Section 8.5(a) shall not exceed the
maximum amount of Losses that can be so allocated without causing any Partner to
have an Adjusted Capital Account Deficit at the end of any Fiscal Year. Subject
to the limitations in the preceding sentence, all Losses in excess of the
limitations set forth in this Section 8.5(b) shall be allocated pro rata to the
other Partners in proportion to the number of OP Units held by each Partner.

     (c) In the event that the Partnership issues or redeems Partnership
Interests pursuant to Article III hereof, the General Partner shall make such
revisions to the method of allocating Losses in this Section 8.5 as it
determines are necessary to reflect the terms of the issuance or redemption of
Partnership Interests, including such revisions as are needed to ensure that
such allocations (i) will comply with the terms of Regulation Section 1.704-1
and -2, (ii) will properly reflect the varying interests of the Partners in the
Partnership and (iii) will cause the Capital Accounts of the Partners in respect
of Partnership Interests held by them to be in the ratios in which the Partners
are entitled to receive distributions with respect to their Partnership
interests pursuant to Article IX hereof.

          SECTION 8.6 Special Allocations. The following special allocations
shall be made in the following order:

     (a) Except as otherwise provided in Regulations Section 1.704-2(f), and
notwithstanding any other provision of this Article VIII, if there is a net
decrease in Partnership Minimum Gain during any Fiscal Year, each Partner shall
be specially allocated items of Partnership income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) in an amount equal to such
Partner’s share of the net decrease in Partnership Minimum Gain, determined in
accordance with Regulations Section 1.704- 2(g). The items to be so allocated
shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section 8.6(a) is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith.

     (b) Except as otherwise provided in Regulations Section 1.704-2(i)(4), and
notwithstanding any other provision of this Article VIII, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Partnership Fiscal Year, each Partner who has a
share of the Partner Nonrecourse Debt Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Partnership income
and gain for such Fiscal Year (and, if necessary,

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subsequent Fiscal Years) in an amount equal to such Partner’s share of the net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). The items to be so allocated shall be determined in
accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(i)(2). This
Section 8.6(b) is intended to comply with the minimum gain chargeback
requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.

     (c) In the event any Partner unexpectedly receives any adjustments,
allocations, or distributions described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5), or 1.704-1 (b)(2)(ii)(d)(6),
items of Partnership income and gain shall be specially allocated to each such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the Adjusted Capital Account Deficit of such Partner as
quickly as possible, provided that an allocation pursuant to this Section 8.6(c)
shall be made only if and to the extent that such Partner would have an Adjusted
Capital Account Deficit after all other allocations provided for in this
Article VIII have been tentatively made, as if this Section 8.6(c) were not in
this Agreement.

     (d) In the event any Partner has an Adjusted Capital Account Deficit at the
end of any Partnership Fiscal Year, each such Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section 8.6(d)
shall be made only if and to the extent that such Partner would have a deficit
Capital Account after all other allocations provided for in this Article VIII
have been made as if Section 8.6(c) hereof and this Section 8.6(d) were not in
this Agreement.

     (e) Partner Nonrecourse Deductions for any Fiscal Year shall be allocated
pro rata among the Partners in proportion to their respective Percentage
Interests.

     (f) Any Partner Nonrecourse Deductions for any Fiscal Year shall be
specially allocated to the Partner who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable, in accordance with Regulations
Section 1.704-2(i)(l).

     (g) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) is required, pursuant to
Regulations Section 1.704- l(b)(2)(iv)(m)(2), to be taken into account in
determining Capital Accounts as the result of a distribution to a Partner in
complete liquidation of its interest in the Partnership, the amount of such
adjustment to 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 specifically allocated to
the Partner to whom such distribution was made.

          SECTION 8.7 Curative Allocations. The allocations set forth in
Section 8.5(b) and Sections 8.6(a), (b), (c), (d), (e) and (f) (the “Regulatory
Allocations”) are intended to comply with certain requirements of the
Regulations under Code Section 704(b). It is the intent of the Partners that, to
the extent possible, all Regulatory Allocations shall be offset either with

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other Regulatory Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to this Section 8.7.
Therefore, notwithstanding any other provision of this Article VIII (other than
the Regulatory Allocations), the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss, or deduction in whatever
manner it determines appropriate so that, after such offsetting allocations are
made, each Partner’s Capital Account balance is, to the extent possible, equal
to the Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all Partnership items were
allocated pursuant to Section 8.4(a)(ii) and 8.5(a). hi exercising its
discretion under this Section 8.7, the General Partner shall take into account
future Regulatory Allocations under Sections 8.6(a) and (b) that, although not
yet made, are likely to offset other Regulatory Allocations previously made
under Sections 8.6(e) and (f).

          SECTION 8.8 Tax Allocations: Code Section 704(c).

     (a) 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 of any variation between the
adjusted basis of such property to the Partnership for federal income tax
purposes and its initial Gross Asset Value in accordance with any permissible
method or methods under Code Section 704(c) and the Regulations thereunder.

     (b) In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to the definition of “Gross Asset Value”, 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 or manners permitted under
Code Section 704(c) and the Regulations thereunder.

     (c) Any elections or other decisions relating to the allocations provided
under this Article VIII shall be made by the General Partner using any
permissible manner under the Code or the Regulations that the General Partner
may elect in its sole discretion. Allocations pursuant to this Section 8.8 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 Partner’s Capital Account or
share of Profits, Losses, other items, or distributions pursuant to any
provision in this Agreement.

ARTICLE IX

Distributions

          SECTION 9.1 Operating Cash Flow. As used in this Agreement, “Operating
Cash Flow” shall mean and be defined, for any fiscal period, as all cash
receipts of the Partnership from whatever source (but excluding Capital Cash
Flow and excluding the proceeds of any Capital Contributions to the Partnership)
during such period in question in excess of all items of Partnership expense
(other than non-cash expenses such as depreciation) and other cash needs of the
Partnership, including, without limitation, amounts paid by the Partnership as
principal on debts and advances, during such period, capital expenditures and
any reserves (as

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determined by the General Partner) established or increased during such period.
Operating Cash Flow shall be distributed to or for the benefit of the Partners
of record as of the applicable record date not less frequently than quarterly,
and shall be allocated among the Partners as follows:

     (a) A portion of such distribution, equal to the sum of the Percentage
Interests attributable to the Participation Interests multiplied by the total
amount of such distribution, shall be distributed to the holders of the
Participation Interests in proportion to their respective Percentage Interests.

     (b) The remaining portion of such distribution shall be distributed among
the Partners in proportion to the number of OP Units held by each such Partner.

A hypothetical example calculation of Operating Cash Flow distributions to
holders of OP Units and Participation Interests based on certain stated
assumptions is set forth on Schedule 9.1 of the Fund Partnership Agreement.

          SECTION 9.2 Capital Cash Flow. As used in this Agreement, “Capital
Cash Flow” shall mean and be defined as collectively (a) gross proceeds realized
in connection with the sale of any assets of the Partnership, (b) gross
financing or refinancing proceeds, (c) gross condemnation proceeds (excluding
condemnation proceeds applied to restoration of remaining property) and (d)
gross insurance proceeds (excluding rental insurance proceeds or insurance
proceeds applied to restoration of property), less (a) closing costs, (b) the
cost to discharge any Partnership financing encumbering or otherwise associated
with the asset(s) in question, (c) the establishment of reserves (as determined
by the General Partner, and which may include cash held for future
acquisitions), and (d) other expenses of the Partnership then due and owing.
Subject to Section 9.3, Capital Cash Flow shall be distributed to or for the
benefit of the Partners of record as of the applicable record date not less
frequently than quarterly and, subject to Section 12.4(b), shall be allocated
among the Partners as follows:

     (a) A portion of such distribution, equal to the sum of the Percentage
Interests attributable to the Participation Interests multiplied by the total
amount of such distribution, shall be distributed to the holders of the
Participation Interests in proportion to their respective Percentage Interests.

     (b) The remaining portion of such distribution shall be distributed among
the Partners in proportion to the number of OP Units held by each such Partner.

A hypothetical example calculation of Capital Cash Flow distributions to holders
of OP Units and Participation Interests based on certain stated assumptions is
set forth on Schedule 9.2 of the Fund Partnership Agreement.

          SECTION 9.3 Reinvestment of Capital Cash Flow. The General Partner
may, in its discretion, subject to Section 5.7, apply all or part of Capital
Cash Flow to make new Investments, make additional investments in existing
Investments, repay Indebtedness or to fund the redemption of interests in the
Partnership in accordance with this Agreement.

          SECTION 9.4 Right to Limit Distributions. The right of any Partner to
receive distributions of any nature pursuant to the terms of this Agreement
shall be subject to Sections

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7.2, 7.3 and 9.3 and other applicable provisions of this Agreement and the terms
of any agreement between such Partner and the Partnership limiting, restricting
or providing rights of set-off with respect to such distributions.

          SECTION 9.5 Limitations on Distribution Rights. Notwithstanding any
provision to the contrary contained in this Agreement, the Partnership, and the
General Partner on behalf of the Partnership, shall not be required to make a
distribution to a Partner on account of its interest in the Partnership if such
distribution would violate the Act or any other applicable law. The Partnership
will not make any distribution to Limited Partners in kind without the approval
of the Limited Partners by a Majority LP Vote, except for distributions of
publicly-traded securities made with the Advisory Committee’s approval.

          SECTION 9.6 Special Distributions for REIT Requirements.
Notwithstanding anything to the contrary in this Article IX, if the General
Partner determines that the Trust’s pro rata share of distributions to be made
by the Partnership will not be sufficient to enable the Trust to pay shareholder
dividends that will (i) allow it to achieve and maintain qualification as a
REIT, and (ii) avoid the imposition of any additional taxes under Section 857 or
Section 4981 of the Code ((i) and (ii) together, the “REIT Distribution
Objectives”), the General Partner may cause the Partnership to distribute
additional amounts to the Trust as needed to enable the Trust to satisfy the
REIT Distribution Objectives. Any such additional distributions in excess of the
Trust’s pro rata share of total Partnership distributions shall be treated as an
advance against, and shall offset and reduce future distributions to the Trust.
Such offset and reduction shall occur as soon as funds are available to effect
it without causing the Trust to fail to satisfy the REIT Distribution
Objectives.

          SECTION 9.7 Tax Distributions. Subject to the availability of cash
following any distributions made by the Partnership pursuant to Section 9.6, the
General Partner shall use its best efforts to cause the Partnership to make
distributions of Operating Cash Flow and Capital Cash Flow to the Partners
pursuant to this Article DC for each taxable year in an amount that is not less
than the product of the maximum marginal U.S. federal income tax rate applicable
to corporations for such taxable year, multiplied by the Partnership’s net
taxable income and gain for such taxable year.

ARTICLE X

Transfers; Withdrawals and Defaults

          SECTION 10.1 Voluntary Transfer of General Partner Interest. Without
the consent of the Limited Partners by a Super Majority LP Vote, the General
Partner shall not have the right to assign or otherwise transfer its interest as
the general partner of the Partnership (but may pledge its interest in
connection with any Partnership borrowing) other than to another Hines
Controlled Entity, and the General Partner shall not have the right to withdraw
from the Partnership. No such assignment or other transfer of all of the General
Partner’s interest as a general partner of the Partnership shall be effective
until its assignee or transferee has been substituted in its place as general
partner of the Partnership. Any such substitute general partner shall be
admitted as a general partner of the Partnership upon its execution and delivery
of this

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Agreement as General Partner, and immediately thereafter the replaced general
partner shall withdraw as a general partner of the Partnership.

          SECTION 10.2 Transfers of OP Units by Limited Partners. Any Limited
Partner may Transfer any OP Units or Participation interests held by it at any
time, subject only to the provisions of Section 10.3. Any Limited Partner that
Transfers all or any part of the OP Units or Participation Interest held by it
shall pay all reasonable expenses, including attorneys’ fees, incurred by the
Partnership or the General Partner in connection with such Transfer.

          SECTION 10.3 Conditions to Transfer.

     (a) No Transfer of any OP Units or Participation Interests shall be made
unless in the opinion of responsible counsel (which may be counsel for the
Partnership), which opinion of counsel shall be reasonably satisfactory to the
General Partner and which opinion may be waived, in whole or in part, in the
sole and absolute discretion of the General Partner:

     (i) such Transfer would not violate the Securities Act or any state
securities or “Blue Sky” laws or the securities laws of any other jurisdiction
applicable to the Partnership or the OP Units to be assigned or transferred;

     (ii) such Transfer would not cause the Partnership to lose its status as a
partnership for U.S. federal income tax purposes or cause the Partnership to
become subject to the Investment Company Act;

     (iii) such Transfer would not cause the Partnership to be treated as a
“publicly traded partnership” within the meaning of Section 7704 of the Code and
the Regulations promulgated thereunder;

     (iv) such Transfer would not cause (A) all or any portion of the assets of
the Partnership (1) to constitute “plan assets” (under ERISA, the Code or the
applicable provisions of any Similar Law) of any existing or contemplated
investor, or (2) to be subject to the provisions of ERISA, the Code or any
applicable Similar Law, or (B) the General Partner to become a fiduciary with
respect to any existing or contemplated investor, pursuant to ERISA or the
applicable provisions of any Similar Law, or otherwise;

     (v) such Transfer would not cause a termination of the Partnership under
Code Section 708;

     (vi) such Transfer would not result in any natural person being a Partner;
and

     (vii) such Transfer would not result in there being more than 30 Partners.

     (b) No Transfer of a Partnership Interest, in whole or in part, may be made
if, in the opinion of legal counsel to the Partnership,

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     (i) such Transfer would adversely affect the ability of the Trust to
continue to qualify as a REIT or subject the Trust to any additional taxes under
Section 857 or Section 4981 of the Code;

     (ii) such Transfer would result in the Partnership’s being treated as an
association taxable as a corporation (other than as a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code); or

     (iii) such Transfer would result in the Partnership no longer qualifying
for the Private Placement FTP Exemption.

     (c) If, and beginning with the first day of the first taxable year in
which, the Partnership no longer qualifies for the Private Placement PTP
Exemption, no Transfer of a Partnership Interest, in whole or in part, may be
made unless such Transfer constitutes a Private Transfer.

     (d) Any purported Transfer attempted in contravention of any of the
provisions of this Section 10.3 shall be void ab initio and ineffectual and
shall not be binding upon, or recognized by, the General Partner or the
Partnership. Prior to the consummation of any Transfer by a Limited Partner,
such Limited Partner shall deliver to the General Partner such legal opinions,
certificates and other documents as the General Partner shall reasonably request
in connection with such Transfer.

     (e) Redemptions of Partnership Interests pursuant to Sections 3.8, 3.9,
3.10 or 3.12 and purchases of Partnership Interests by the Trust pursuant to
Section 3.8(c) shall not be considered Transfers for purposes of this
Section 10.3.

          SECTION 10.4 Admissions and Withdrawals Generally. Except as expressly
provided in this Agreement, no Partner shall have the right to withdraw from the
Partnership or to withdraw any part of its Capital Account and no additional
Partner may be admitted to the Partnership. Each new Partner shall be admitted
as a Partner upon the execution by or on behalf of it of an agreement pursuant
to which it becomes bound by the terms of this Agreement and acceptance thereof
by the General Partner on behalf of the Partnership. The names and addresses of
all Persons admitted as Partners and their status as General Partner or a
Limited Partner shall be maintained in the records of the Partnership. No Person
shall be admitted as a Partner or issued OP Units if such admission or issuance
would result (i) in any natural person being a Partner or (ii) there being more
than 30 Partners.

          SECTION 10.5 Required/Elective Withdrawals. The General Partner may
require a Limited Partner to withdraw from the Partnership if (i) in the
reasonable judgment of the General Partner based upon an opinion of counsel to
the Partnership, by virtue of that Limited Partner’s Partnership Interest, the
Partnership or any Partner is reasonably likely to be subject to any requirement
to register under the Investment Company Act, (ii) in the reasonable judgment of
the General Partner, a significant delay, extraordinary expense or material
adverse effect on the Partnership or any of its Affiliates or any prospective
investment is likely to result from the retention by such Limited Partner of a
Partnership Interest or (iii) in the reasonable judgment of the General Partner
based upon an opinion of counsel to the Partnership, by virtue

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of that Limited Partner’s Partnership Interest, the Partnership or the Trust is
reasonably likely to fail to meet the REIT Requirements. Notice of any such
withdrawal shall be given to the affected Limited Partner as well as a copy of
the opinion of counsel referred to above in the case of a withdrawal pursuant to
clause (i) or (iii) above. Withdrawals pursuant to this Section 10.5 will be
effected by the Partnership’s redeeming the OP Units held by such Limited
Partner at the Current Unit Value, with the redemption price being payable by a
promissory note having a term of not more than three years and bearing interest
at the Prime Rate.

          SECTION 10.6 Defaulting Limited Partner.

     (a) Any Limited Partner that fails to make, when due, any portion of the
Capital Contributions required to be made by such Limited Partner pursuant to
this Agreement and the Subscription Agreement to which such Limited Partner is a
party may, in the discretion of the General Partner, be charged an additional
amount on the unpaid balance of any such Capital Contribution at the Default
Rate from the date such balance was due and payable through the date full
payment for such balance is actually made, and to the extent such additional
amount is not otherwise paid such additional amount may be deducted from any
distribution otherwise payable to such Limited Partner.

     (b) If any Limited Partner fails to make, when due, any portion of the
Capital Contribution required to be contributed by such Limited Partner pursuant
to this Agreement and the Subscription Agreement to which such Limited Partner
is a party, then the Partnership shall promptly provide written notice of such
failure to such Limited Partner. If such Limited Partner fails to make such
Capital Contribution within five Business Days after receipt of such notice,
then (i) such Limited Partner shall be deemed a “Defaulting Limited Partner” and
the following Sections 10.6(c) through (h) shall apply.

     (c) The General Partner shall have the right to determine, in its sole
discretion, that whenever the vote, consent or decision of a Limited Partner or
of the Partners is required or permitted pursuant to this Agreement, except as
required by the Act, any Defaulting Limited Partner shall not be entitled to
participate in such vote or consent, or to make such decision, and such vote,
consent or decision shall be tabulated or made as if such Defaulting Limited
Partner were not a Partner.

     (d) The General Partner shall have the right in its sole discretion to
either (i)(A) determine that a Defaulting Limited Partner shall forfeit to the
non-defaulting Partners as recompense for damages suffered, and the Partnership
shall withhold (for the account of such other Partners), all distributions of
Operating Cash Flow and Capital Cash Flow and liquidating distributions that
such Defaulting Limited Partner would otherwise receive, and (B) effect a
forfeiture by such Limited Partner of 20% of its aggregate Partnership Interest
(including 20% of its Capital Account balance); or (ii) upon delivery of written
notice to the Defaulting Limited Partner, cause the Defaulting Limited Partner
to transfer all of its interest in the Partnership to one or more other Partners
(or any other Person or Persons to the extent not purchased by any Partner)
selected by the General Partner in its sole discretion, which have agreed to
purchase such

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interest at a transfer price equal to at least 80% of such Defaulting Limited
Partner’s Capital Account balance.

     (e) In the event that a Limited Partner defaults in making all or any
portion of a Capital Contribution to the Partnership, the General Partner may
require all of the non- defaulting Partners to increase their Capital
Contributions by an aggregate amount equal to the Capital Contribution of the
Defaulting Limited Partner on which it defaulted; provided that no Limited
Partner will be required to contribute any amounts in excess of its Unfunded
Commitment without such Limited Partner’s consent. If the General Partner elects
to require such increase, the General Partner shall deliver to each
non-defaulting Partner written notice of such default as promptly as practicable
after its occurrence and, thereafter, with respect to each Investment, the
General Partner shall as promptly as practicable deliver to each such
non-defaulting Partner a Capital Call Notice in respect of the Capital
Contribution which the Defaulting Limited Partner failed to make.

Subject to the provisos set forth above in this Section 10.6(e), such Capital
Call Notice shall (i) call for a Capital Contribution by each such
non-defaulting Partner in an amount equal to the amount of such non-defaulting
Partner’s pro rata share of such additional Capital Contribution, based on the
Unfunded Commitments of the Limited Partners, and (ii) specify a Payment Date
for such Capital Contribution, which date shall be at least ten calendar days
from the date of delivery of such Capital Call Notice by the General Partner. If
any Limited Partner is not required to make a Capital Contribution in accordance
with this Section 10.6(e) because such Capital Contribution would be in excess
of such Limited Partner’s Unfunded Commitment, then, subject to the provisos set
forth in this Section 10.6(e), the General Partner shall send to each other
Limited Partner which is not subject to such constraint a Capital Call Notice
providing the amount of any additional Capital Contribution which such other
Limited Partner shall be required to make as a result of such excess not being
funded by the Limited Partner which is subject to such constraint, which amount
shall bear the same ratio to the aggregate of the additional amounts payable by
all such other non-defaulting Limited Partners as such other Limited Partner’s
Unfunded Commitment bears to the Unfunded Commitments of all such other
non-defaulting Limited Partners. The provisions of this Section 10.6(e) shall
operate successively until either all Limited Partners are subject to such
constraint or the full amount of the defaulted Capital Contribution of the
Defaulting Limited Partner has been provided for.

     (f) No right, power or remedy conferred upon the General Partner in this
Section 10.6 shall be exclusive, and each such right, power or remedy shall be
cumulative and in addition to every other right, power or remedy whether
conferred in this Section 10.6 or now or hereafter available at law or in equity
or by statute or otherwise. No course of dealing between the General Partner and
any Defaulting Limited Partner and no delay in exercising any right, power or
remedy conferred in this Section 10.6 or now or hereafter existing at law or in
equity or by statute or otherwise shall operate as a waiver or otherwise
prejudice any such right, power or remedy.

     (g) Each Limited Partner acknowledges by its execution hereof that it has
been admitted to the Partnership in reliance upon its agreements under this
Agreement

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and in its Subscription Agreement, that the General Partner and the Partnership
may have no adequate remedy at law for a breach of such agreements and that
damages resulting from a breach of such agreements may be impossible to
ascertain at the time hereof or of such breach.

     (h) For purposes of this Section 10.6, if any Defaulting Limited Partner is
a Feeder Entity or another entity the equity owners of which consist of two or
more unaffiliated investors, the General Partner may, in its sole discretion,
treat the owner of such entity that was responsible for such default (and not
such entity or any general partner, managing member or other controlling person
of such entity) as the Defaulting Limited Partner and may invoke the rights,
powers and remedies specified herein separately with respect to such owner, and
hold such owner solely responsible for such default.

ARTICLE XI

Partnership Administration

          SECTION 11.1 Books and Records. The General Partner shall keep or
cause to be kept complete and appropriate records and books of account for the
Partnership. Except as otherwise expressly provided herein, such books and
records shall be maintained on a basis which allows the proper preparation of
the Partnership’s financial statements and tax returns. The books and records
shall be maintained at the principal office of the Partnership. Any Limited
Partner or its duly authorized representatives shall be permitted to inspect the
books and records of the Partnership for any proper purpose and make copies
thereof consistent with reasonable confidentiality restrictions established by
the General Partner at any reasonable time during normal business hours.

          SECTION 11.2 Partnership Auditor. The General Partner shall cause the
books and records of the Partnership to be audited as of the end of each Fiscal
Year by an independent certified public accounting firm of national or
international standing and reputation equivalent to the existing “big four”
firms selected by the General Partner (the firm so selected, the “Partnership
Auditor”). As of the date of this Agreement, the Partnership Auditor is Deloitte
& Touche LLP.

          SECTION 11.3 Filing of Tax Returns. The General Partner shall prepare
and file, or cause the accountants of the Partnership to prepare and file, a
U.S. federal information tax return in compliance with Section 6031 of the Code
and any required state, local and foreign income tax and information returns for
each tax year of the Partnership.

          SECTION 11.4 Tax Matters.

     (a) The General Partner shall be designated on the Partnership’s annual
U.S. federal information tax return as the “tax matters partner” of the
Partnership (the “Tax Matters Partner”) as provided in Section 623 l(a)(7) of
the Code. If the Partnership is the subject of an income tax audit by any
federal, state, local or foreign authority, then to the extent the Partnership
is treated as an entity for purposes of the audit, including

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administrative settlement and judicial review, the Tax Matters Partner shall be
authorized to act for, and its decision shall be final and binding upon, the
Partnership and each Partner. All expenses incurred in connection with any
audit, investigation, settlement or review shall be borne by the Partnership.

     (b) The General Partner shall take such steps as are necessary to ensure
that the Partnership is taxed as a partnership under the Code. Subject to the
preceding sentence, the General Partner shall have the exclusive right to make
any determination whether the Partnership shall make available elections
(including any election pursuant to Code Section 754 to adjust the tax basis of
Partnership assets) for federal, state, or local tax purposes, and the General
Partner shall be absolved from all liability and other consequences from its
making or failing to make any such election. All decisions and other matters
concerning the computation and allocation or tax items and attributes which are
not otherwise specifically provided for by the terms of this Agreement shall be
determined by the General Partner, and the General Partner shall be absolved
from all liability and other consequences from any such decisions which are made
in good faith.

     (c) The General Partner shall take all such actions as are reasonably
necessary for the Partnership to comply with any withholding or comparable
requirements under federal, state, local and foreign law and shall remit any
amounts withheld to, and file required forms with, the applicable taxing
jurisdictions. All amounts withheld from distributions shall be treated as
having been distributed to the Partner with respect to whom the withholding was
made. Any amounts that are required to be withheld by the Partnership with
respect to a Partner which are in excess or in advance of distributions to such
Partnership shall be paid over by such Partner to the Partnership and shall not
reduce the Unfunded Commitment or increase the Funded Commitment of such
Partner. Each Partner agrees to furnish the Partnership with such
representations and forms as the General Partner shall reasonably request to
assist in complying with the Partnership’s withholding obligations. A Partner
subject to withholding shall pay to or reimburse the Partnership for taxes,
related interest and penalties, and all other costs and expenses incurred by the
Partnership in connection with such withholding obligation, except for interest,
penalties or costs (but not taxes) that are incurred as a result of the gross
negligence or willful misconduct of the Partnership or the General Partner.

          SECTION 11.5 Reports to Partners.

     (a) After the end of each Fiscal Year, the General Partner shall have
prepared (i) financial statements of the Partnership as of the close of the
Fiscal Year in accordance with GAAP, including a balance sheet, a statement of
income or loss, a statement of cash flows and a statement of changes in
partners’ capital, which shall be audited by the Partnership Auditor, (ii) an
unaudited current value balance sheet for the Partnership, and (iii) a schedule
and summary description of each Investment owned by the Partnership as of the
end of such Fiscal Year. Copies of such financial statements and schedule and
summary description shall be furnished to each Person who was a Partner in the
Partnership at the end of such Fiscal Year not later than ninety days after the
end of the Fiscal Year, together with an opinion of the Partnership Auditor on
the audited financial statements based on its audit of such financial
statements.

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     (b) Within forty-five days after the end of each Fiscal Quarter (excluding
the fourth Fiscal Quarter), the General Partner shall send to each Partner
(i) an unaudited balance sheet as of the end of the Fiscal Quarter and related
unaudited statements of income or loss and changes in partners’ capital for the
Fiscal Quarter just ended, (ii) an unaudited current value balance sheet, and
(iii) a status report relating to the Partnership’s investments, activities and
asset valuations, which shall include a schedule and summary description of each
Investment owned by the Partnership as of the end of such Fiscal Quarter.

     (c) Concurrently with the delivery of the audited financial statements for
each Fiscal Year pursuant to Section 11.5(a), the General Partner shall prepare
and mail, or cause the Partnership’s accountants to prepare and mail, to each
Partner and, to the extent necessary, to each former Partner (or such Partner’s
designated representatives), a report setting forth in sufficient detail such
information relating to the Partnership and its activities as shall enable such
Partner or former Partner (or such Partner’s designated representatives) to
prepare its respective federal, state, local and foreign income tax returns in
accordance with the laws, rules and regulations then prevailing.

     (d) With reasonable promptness, the General Partner will deliver such other
information available to the General Partner, including financial statements and
computations, as any Limited Partner may from time to time reasonably request in
order to comply with regulatory requirements, including reporting requirements,
to which such Limited Partner is subject.

          SECTION 11.6 Meetings of Partners

     (a) The General Partner may call a meeting of the Partnership by giving at
least ten days notice of the time and place of such meeting to each Limited
Partner, which notice shall set out the agenda for such meeting.

     (b) Any action required to be, or which may be, taken at any meeting of the
Partners may be taken in writing without a meeting if consents thereto are given
by the General Partner and Limited Partners owning Partnership Interests having
an aggregate Percentage Interest not less than the amount that would be
necessary to take such action at a meeting.

     (c) A Limited Partner may vote at any meeting either in person or by a
proxy which such Limited Partner has duly executed in writing.

     (d) The chairman of any special meeting shall be the President or another
Person affiliated with and designated by the General Partner. A Person
designated by the General Partner shall keep written minutes of all of the
proceedings and votes of any such meeting.

     (e) The General Partner may set in advance a record date for determining
the Limited Partners entitled to notice of and to vote at any meeting or
entitled to express consent to any action in writing without a meeting. No
record date shall be less than ten nor more than sixty days prior to the date of
any meeting to which such record date

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relates nor more than ten days after the date on which the General Partner sets
the record date for any action by written consent. If the General Partner does
not set a record date, the record date for a meeting of Limited Partners shall
be the date of such meeting, and the record date for a written consent of
Limited Partners shall be the date of the notice to the Limited Partners by
which the General Partner requests such written consent.

     (f) A quorum shall be present at any meeting of Limited Partners with
respect to any matter to be voted on at such meeting, if Limited Partners
holding voting power at least equal to that required to take action with respect
to such matter are present at such meeting. Except as otherwise required by the
Act, the Limited Partners may not require the Partnership to take any action,
and the consent of the Limited Partners shall not be required for the
Partnership to take any action, except to the extent this Agreement requires the
taking of an action approved by, or prohibits the taking of any action unless
approved by, a specified vote or consent of Limited Partners, which may be a
Majority LP Vote, a Super Majority LP Vote or a 75% Majority LP Vote. A
“Majority LP Vote” means the affirmative vote or consent of Limited Partners
owning Partnership Interests having an aggregate Percentage Interest of more
than fifty percent (50%) on the record date set for a vote of the Limited
Partners. A “Super Majority LP Vote” means the affirmative vote or consent of
Limited Partners owning Partnership Interests having an aggregate Percentage
Interest of sixty-six and two-thirds percent (66 2/3%) or more on the record
date set for a vote of the Limited Partners. A “75% Majority LP Vote” means the
affirmative vote or consent of Limited Partners owning Partnership Interests
having an aggregate Percentage Interest of seventy-five percent (75%) or more on
the record date set for a vote of the Limited Partners. Where any vote of
Limited Partners is required under this Agreement but the Percentage Interest
required to act is not specifically stated, such action shall be approved by
Majority LP Vote.

     (g) Each Limited Partner shall have a voting percentage equal to the
Percentage Interest attributable to all Partnership Interests owned by such
Limited Partner on the record date set for the meeting or consent at or by which
a vote is to be held. Any Feeder Entity may vote Partnership Interests held by
it for and/or against any matter presented to the Limited Partners for a vote in
such manner and proportions as may be provided for in the constituent documents
of such Feeder Entity. At any time there are any Unaffiliated Limited Partners,
any Limited Partner that is an Affiliate of the General Partner (including the
Hines Limited Partner) shall be deemed to have voted and/or abstained with
respect to any matter put to a vote of Limited Partners in the same manner and
proportions as the Partnership Interests of the Unaffiliated Limited Partners
are voted and/or abstained on such matter.

     (h) The General Partner may, in its discretion, grant to any Fund Investor
which is not a Partner the right to have a non-voting observer attend each
meeting of the Partners. The General Partner shall provide to any such observer
notice of the time and place of any meeting of the Partners, and of any written
consent being solicited from the Partner, in the same manner and at the same
time as notice is sent to the Partners. The General Partner shall also provide
to any such observer copies of all notices, reports, minutes, consents and other
documents at the time and in the manner as they are provided to the Partners.
Any observer who attends any meetings of the Partners shall execute

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and comply with an agreement with the Partnership and the General Partner
containing such restrictions on the use and disclosure of confidential
information and other matters as the General Partner may reasonably request.

          SECTION 11.7 Meetings of Fund Investors. Each Unaffiliated Limited
Partner shall be deemed a Fund Investor and shall be entitled to participate in
any meeting or vote of Fund Investors called in accordance with Section 11.7 of
the Fund Partnership Agreement.

ARTICLE XII

Dissolution, Termination and Winding Up

          SECTION 12.1 Dissolution. The Partnership shall dissolve and its
affairs shall be wound up upon the earliest to occur of the following events
(each, a “Liquidating Event”):

     (a) an event of withdrawal as defined in Section 17-402 of the Act (such
event, an “Event of Withdrawal”):

     (b) there ceasing to be any Limited Partners, as set forth in
Section 17-801(4) of the Act (subject to the provisions thereof);

     (c) the entry of a decree of judicial dissolution under Section 17-802 of
the Act;

     (d) the election of the General Partner, at any time after the date on
which all or substantially all of the assets of the Partnership have been sold
or otherwise disposed of; and

     (e) after the Initial Investment Period, the Fund Investors vote to
terminate the Partnership in accordance with the provisions of Section 12.2;

provided, however, that upon the occurrence of an Event of Withdrawal with
respect to the General Partner (the “Withdrawn General Partner”), the
Partnership may continue its operations if within ninety days after such Event
of Withdrawal the Limited Partners elect by Super Majority LP Vote to continue
the business of the Partnership and elect a new General Partner, effective as of
the date of withdrawal, before or within ninety days after the Event of
Withdrawal (in which event a Liquidating Event shall not be deemed to have
occurred).

          SECTION 12.2 Termination by Majority Fund Vote. After the Initial
Investment Period, any Partner may propose that the Partnership be terminated
and its affairs wound up in accordance with this Article 12 by delivering a
written notice to the General Partner proposing that such action be taken and
setting forth the reasons for such proposal, which notice shall immediately be
delivered by the General Partner to the Fund General Partner. Following receipt
of any such notice, the Fund General Partner shall call a special meeting of the
Fund Investors in accordance with the provisions of Section 11.7 of the Fund
Partnership Agreement, such meeting to be held on a date not later than the
ninetieth day following the General Partner’s receipt of the notice from the
Partner proposing such action. A Majority Fund Vote to terminate the Partnership
at a special meeting called and held in accordance with the provisions of
Section

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11.7 of the Fund Partnership Agreement and this Section 12.2 shall be deemed a
Liquidating Event, following which the Partnership shall be wound up in
accordance with Section 12.3.

          SECTION 12.3 Winding up. Upon the occurrence of a Liquidating Event,
the Partnership shall proceed to wind up its affairs and liquidate its property
and assets as promptly as practicable, but in an orderly manner so as not to
involve undue sacrifice. The General Partner, or if there is no general partner,
a liquidator appointed by a Majority LP Vote, shall be the liquidator to wind up
the affairs of the Partnership and to manage the Partnership’s assets during the
winding up.

          SECTION 12.4 Liquidating Distributions. Proceeds from the sales of the
Partnership’s assets pursuant to Section 12.3 shall be distributed in one or
more installments in the following order of priority:

     (a) Such proceeds shall first be applied to the satisfaction all creditors
of the Partnership (including the payment of expenses of the winding-up,
liquidation and dissolution of the Partnership), including Partners who are
creditors of the Partnership, to the extent otherwise permitted by law, either
by the payment thereof or the making of reasonable provision therefor (including
the establishment of reserves, in amounts established by the General Partner or,
if applicable, the liquidator); and

     (b) The remaining proceeds, if any, plus any remaining assets of the
Partnership, shall be applied and distributed to the Partners in accordance with
the positive balances of the Partners’ Capital Accounts, as determined after
taking into account all adjustments to Capital Accounts for the Partnership
taxable year during which the liquidation occurs, by the end of such taxable
year or, if later, within ninety days after the date of such liquidation. For
purposes of the application of this Section 12.4 and determining Capital
Accounts on liquidation, all unrealized gains, losses and accrued income and
deductions of the Partnership shall be treated as realized and recognized
immediately before the date of distribution. If a Limited Partner shall, upon
the advice of counsel, determine that there is a reasonable likelihood that any
distribution in kind of an asset would cause such Limited Partner to be in
violation of any law, regulation or governmental order, such Limited Partner and
the General Partner or the liquidator shall each use its best efforts to make
alternative arrangements for the sale or transfer into an escrow account of any
such distribution on mutually agreeable terms.

     (c) The parties to this Agreement intend that the allocation provisions
contained herein shall produce final Capital Account balances of the Partners
that will permit liquidating distributions to be made to the Partners pursuant
to this Section 12.4 in accordance with their Percentage Interests. To the
extent that the allocation provisions contained in this Agreement fail to
produce such final adjusted Capital Account balances, (i) such provisions shall
be amended if and to the extent necessary to produce such result, (ii) Profits
and Losses of the Partnership (or items of gross income and deduction of the
Partnership) shall be allocated by the Partnership among the Partners for
current and future years if and to the extent necessary to produce such result,
and (iii) the provisions of this sentence shall control notwithstanding any
reallocation or adjustment of Profits or Losses (or items thereof) by the
Internal Revenue Service or other taxing authority.

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ARTICLE XIII

Miscellaneous

          SECTION 13.1 Waiver of Partition. Except as may be otherwise required
by law, each Partner hereby irrevocably waives any and all rights that it may
have to maintain an action for partition or similar action of any of the
Partnership’s property.

          SECTION 13.2 Power of Attorney. Each Limited Partner hereby
irrevocably constitutes and appoints the General Partner, with full power of
substitution, the true and lawful attorney-in-fact and agent of such Limited
Partner, to execute, acknowledge, verify, swear to, deliver, record and file, in
its or its assignee’s name, place and stead, all in accordance with the terms of
this Agreement, all instruments, documents and certificates which may from time
to time be required by the laws of the United States of America, the State of
Delaware, any other jurisdiction in which the Partnership conducts or plans to
conduct its affairs, or any political subdivision or agency thereof to
effectuate, implement and continue the valid existence and affairs of the
Partnership, including, without limitation, the power and authority to verify,
swear to, acknowledge, deliver, record and file:

     (a) all certificates and other instruments, including any amendments to
this Agreement or to the Certificate, which the General Partner deems
appropriate to form, qualify or continue the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and all other jurisdictions in which the
Partnership conducts or plans to conduct its affairs,

     (b) any amendments to this Agreement or any other agreement or instrument
which the General Partner deems appropriate to (i) effect the addition,
substitution or removal of any Limited Partner or General Partner pursuant to
this Agreement or (ii) effect any other amendment or modification to this
Agreement, but only if such amendment or modification is duly adopted in
accordance with the terms hereof,

     (c) all conveyances and other instruments which the General Partner deems
appropriate to reflect the dissolution and termination of the Partnership
pursuant to the terms hereof, including the writing required by the Act to
cancel the Certificate,

     (d) all instruments relating to transfers of Partnership Interests of
Limited Partners or to the admission of any substitute Limited Partner, and

     (e) certificates of assumed name and such other certificates and
instruments as may be necessary under the fictitious or assumed name statutes
from time to time in effect in the State of Delaware and all other jurisdictions
in which the Partnership conducts or plans to conduct its affairs, but only if
such names are duly approved in accordance with the terms of this Agreement.

Such attorney-in-fact and agent shall not, however, have the right, power or
authority to amend or modify this Agreement when acting in such capacities,
except to the extent authorized herein. This power of attorney shall not
terminate upon the bankruptcy, dissolution, disability or incompetence of the
General Partner. To the fullest extent permitted by law, the power of

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attorney granted herein shall be deemed to be coupled with an interest, shall be
irrevocable, shall survive and not be affected by the dissolution, bankruptcy or
legal disability of the Limited Partner and shall extend to its successors and
assigns; and may be exercisable by such attorney-in-fact and agent for all
Limited Partners (or any of them) by listing all (or any) of such Limited
Partners required to execute any such instrument, and executing such instrument
acting as attorney-in-fact. Any Person dealing with the Partnership may
conclusively presume and rely upon the fact that any instrument referred to
above, executed by such attorney-in-fact and agent, is authorized, regular and
binding, without further inquiry. If required, each Limited Partner shall
execute and deliver to the General Partner within five days after the receipt of
a request therefor, such further designations, powers of attorney or other
instruments as the General Partner shall reasonably deem necessary for the
purposes hereof.

          SECTION 13.3 Amendments.

     (a) Except as required by law, this Agreement (including the Exhibits and
Schedules hereto) may be amended or supplemented by the General Partner without
the consent of the Limited Partners; provided that no such amendment shall (i)
increase any Limited Partner’s Capital Commitment, reduce its share of the
Partnership’s distributions, income and gains or materially and adversely affect
the rights granted to or liabilities of such Limited Partner hereunder, without
the written consent of each Limited Partner so affected, (ii) change the vote of
Limited Partners (the “Required Vote”) necessary for any consent required
hereunder to the taking of an action unless such amendment is approved by
Limited Partners who then own Partnership Interests having a combined voting
power equal to or in excess of the Required Vote for the subject of such
proposed amendment, or (iii) amend this Section 13.3 or the Investment
Guidelines without the consent of each Limited Partner.

     (b) The General Partner shall have the right to amend this Agreement
without the approval of any other Partner to the extent the General Partner
reasonably determines, based upon written advice of tax counsel to the
Partnership, that the amendment is necessary to provide assurance that the
Partnership will not be treated as a “publicly traded partnership,” because it
is entitled to “safe harbor” treatment under Section 7704 of the Code and the
regulations promulgated thereunder; provided that (i) such amendment shall not
change the relative economic interests of the Partners, reduce any Partner’s
share of distributions, or increase any Partner’s Capital Commitment or its
liability hereunder, (ii) the General Partner provides a copy of such written
advice and amendment to the Limited Partners at least twenty Business Days prior
to the effective date of any such amendment and the Limited Partners shall not
have made a reasonable objection to such amendment prior to the effective date
of such amendment by a Majority LP Vote.

          SECTION 13.4 Confidentiality. Each Limited Partner agrees to keep
confidential, and not to make 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 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 employees, agents, advisors, or
representatives responsible

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for matters relating to the Partnership), including any information contained in
any Capital Call or any report distributed pursuant to Section 11.5; provided
that a Limited Partner may disclose any such information to the extent that
(i) such information is or becomes generally available to the public through no
act or omission of such Limited Partner, (ii) such information otherwise is or
becomes known to such Limited Partner other than by disclosure by the
Partnership or the General Partner, provided that the source of such information
is not bound by a confidentiality agreement or other contractual, legal or
fiduciary obligation of confidentiality, or (iii) such Limited Partner is
required by law to disclose such information. Each Limited Partner shall cause
its employees, agents, advisors, or representatives to comply with the
provisions of this Section 13.4, and shall be liable to the Partnership and the
General Partner for any breach of this Section 13.4 by any such Person.

          SECTION 13.5 Entire Agreement. This Agreement and the other agreements
referred to herein constitute the entire agreement among the Partners with
respect to the subject matter hereof and supersede any prior agreement or
understanding among or between them with respect to such subject matter;
provided that the Partnership or the General Partner, without any further act,
approval or vote of any Partner, may (subject to Section 13.3) enter into side
letters or other writings with individual Limited Partners which have the effect
of establishing rights under, or altering or supplementing, the terms of, this
Agreement. Any rights established, or any terms of this Agreement altered or
supplemented, in a side letter with a Limited Partner shall govern with respect
to such Limited Partner notwithstanding any other provision of this Agreement.
The representations and warranties of the Limited Partners in, and the other
provisions of, the Subscription Agreements shall survive the execution and
delivery of this Agreement.

          SECTION 13.6 Severability. Each provision of this Agreement shall be
considered severable and if for any reason any provision which is not essential
to the effectuation of the basic purposes of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable and contrary to
the Act or existing or future applicable law, such invalidity shall not impair
the operation of or affect those provisions of this Agreement which are valid,
In that case, this Agreement shall be construed so as to limit any term or
provision so as to make it enforceable or valid within the requirements of any
applicable law, and in the event such term or provision cannot be so limited,
this Agreement shall be construed to omit such invalid or unenforceable
provisions.

          SECTION 13.7 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) mailed, registered mail, first-class postage paid, (ii) sent
by overnight mail or courier, or (iii) delivered by hand, if to any Partner, at
such Partner’s address, or to such Partner’s facsimile number, set forth on
Schedule 2.1 or in such Partner’s Subscription Agreement, and if to the
Partnership, to the General Partner at the General Partner’s address, or to the
General Partner’s facsimile number, set forth on Schedule 2.1, or to such other
person or address as any Partner shall have last designated by notice to the
Partnership, and in the case of a change in address by the General Partner, by
notice to the Limited Partners. Any notice shall be deemed to have been duly
given if personally delivered or sent by the mails or courier or by electronic
mail or facsimile confirmed by letter and will be deemed received, unless
earlier received, (i) if sent by certified or registered mail, return receipt
requested, when actually received, (ii) if sent by

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overnight mail or courier, when actually received, and (iii) if delivered by
hand, on the date of receipt.

          SECTION 13.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. In particular,
the Partnership is formed pursuant to the Act, and the rights and liabilities of
the Partners shall be as provided therein, except as herein otherwise expressly
provided.

          SECTION 13.9 Successors and Assigns. Except with respect to the rights
of Indemnified Parties hereunder, none of the provisions of this Agreement shall
be for the benefit of or enforceable by the creditors (other than a lender
pursuant to the terms of any agreement governing or securing Indebtedness to
which such lender and the Partnership are parties) of the Partnership and this
Agreement shall be binding upon and inure to the benefit of the Partners and
their legal representatives, heirs, successors and permitted assigns.

          SECTION 13.10 Headings. The Article and Section headings in this
Agreement are for convenience of reference only, and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof.

          SECTION 13.11 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which,
when taken together, shall constitute one and the same instrument.

          SECTION 13.12 Third Party Beneficiary. If SLR ceases to be a Limited
Partner, then, subject to Section 5.3(h) of the Fund Partnership Agreement, SLR
shall be a third party beneficiary under this Agreement as to all rights granted
to SLR hereunder. The rights granted to SLR in this Agreement were a material
inducement to Sumitomo in its agreement to convey the Initial Asset Group (as
defined in the Fund Partnership Agreement) to the Fund, SLR is relying upon such
rights, and SLR shall have the right, without limitation of any other rights it
may have as a third party beneficiary of this Agreement, to seek enforcement of
such rights in its own name in accordance with the terms of this Agreement and
the Act.

[Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first set forth above.

            GENERAL PARTNER:

HINES-SUMISEI U.S. CORE OFFICE TRUST
      By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen        
Title:   President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

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LIMITED PARTNERS:
 
   

HINES US CORE OFFICE CAPITAL
ASSOCIATES LIMITED PARTNERSHIP
 
   

By:  Hines Interests Limited Partnership
 
   

  By: Hines Holdings, Inc.

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen  
      Title:   Senior Vice President     

     
 
  HINES INTERESTS LIMITED PARTNERSHIP

By: Hines Holdings, Inc.

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen  
      Title:   Senior Vice President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

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SUMITOMO LIFE REALTY (N.Y.), INC.  
 
By:  Hines-Sumisei U.S. Core Office Trust, as attorney in fact

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen  
      Title:   President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

--------------------------------------------------------------------------------

 

     
 
By:  Hines-Sumisei U.S. Core Office Trust, as attorney in fact

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen   
    Title:   President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

--------------------------------------------------------------------------------

 

     
 
By:  Hines-Sumisei U.S. Core Office Trust, as attorney in fact

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen  
      Title:   President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

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IK US PORTFOLIO INVEST GMBH & CO. KG  
 
By:  Hines-Sumisei U.S. Core Office Trust, as attorney in fact

                  By:   /s/ Charles N. Hazen         Name:   Charles N. Hazen   
    Title:   President     

Signature Page to Second Amended and Restated Agreement of Limited Partnership
of Hines-Sumisei US Core Office Properties LP

 

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Schedule 2.1

[Schedule Amended October 4, 2004]

Names and Addresses

GENERAL PARTNER

Hines-Sumisei U.S. Core Office Trust

     
Notice Address:
  c/o Hines Interests Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 77056
Attention: Charles N. Hazen

LIMITED PARTNERS

Hines US Core Office Capital Associates Limited Partnership

     
Notice Address:
  c/o Hines Interests Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 77056
Attention: Charles M. Baughn

Hines Interests Limited Partnership

     
Notice Address:
  c/o Hines Interests Limited Partnership

  2800 Post Oak Boulevard, Suite 5000

  Houston, Texas 77056

  Attention: Charles M. Baughn

     Sumitomo Life Realty (N.Y.), Inc.

     
Notice Address:
  101 East 52nd Street, 2nd Floor
New York, New York 10022

  Attention: Norio Morimoto

     [REDACTED]

     
Notice Address:
  [REDACTED]

  [REDACTED]

  [REDACTED]

[REDACTED]

     
Notice Address:
  [REDACTED]

  [REDACTED]

  [REDACTED]

 

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IK US Portfolio Invest GmbH & Co. KG

     
Notice Address:
  c/o Ideenkapital Financial Engineering AG
Berliner Allee 27-29

  D-40212 Dusseldorf

  Attention: Michael Liebe

 

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Schedule 3.1

[Schedule Amended October 4, 2004]

OP Units and Funded Commitments

                  Partner   OP Units (#)     Funded Commitment ($)  
 
               
General Partner
    178,957.235     $ 178,957,235.00  
 
               
Hines Limited Partner
    0.990     $ 990.00  
 
               
SLR1
    0.000       0.00  
 
               
Hines2
    0.000       0.00  
 
               
[REDACTED]
    5,000.000     $ 5,000,000.00  
 
               
[REDACTED]
    1,200.000     $ 1,200,000.00  
 
               
DC US Portfolio Invest GmbH & Co. KG
    20,000.000     $ 20,000,000.00  

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1   Only Partnership Interest held is Participation Interest.
  2   Only Partnership Interest held is Participation Interest.