Exhibit 10.6

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FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

HINES-SUMISEI U.S. CORE OFFICE FUND, L.P.

November 23, 2004

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TABLE OF CONTENTS

              Page  
ARTICLE I
    2  
 
       
SECTION 1.1 Definitions
    2  
SECTION 1.2 Interpretation; Terms Generally
    17  
 
       
ARTICLE II General Provisions
    17  
 
       
SECTION 2.1 Formation and Continuation
    17  
SECTION 2.2 Name
    17  
SECTION 2.3 Organizational Certificates and Other Filings
    18  
SECTION 2.4 Principal and Other Offices
    18  
SECTION 2.5 Registered Office; Registered Agent
    18  
SECTION 2.6 Purpose
    18  
SECTION 2.7 Powers
    18  
SECTION 2.8 Fiscal Year
    19  
SECTION 2.9 Term
    19  
SECTION 2.10 Feeder Entities
    19  
SECTION 2.11 REIT Covenant
    19  
 
       
ARTICLE III Partnership Capital
    20  
 
       
SECTION 3.1 Partnership Capital
    20  
SECTION 3.2 Capital Commitments
    20  
SECTION 3.3 Initial Offering Period
    21  
SECTION 3.4 Initial Investment Period
    22  
SECTION 3.5 Designation of Class N Units.
    22  
SECTION 3.6 Fund Indebtedness
    23  
SECTION 3.7 Issuance of Units and Participation Interest
    24  
SECTION 3.8 Redemption Rights
    26  
SECTION 3.9 Priority Redemption Rights
    29  
SECTION 3.10 Hines Bridge Equity and Priority Redemption Right
    29  
SECTION 3.11 Hines Investment
    30  
 
       
ARTICLE IV Managing General Partner
    30  
 
       
SECTION 4.1 Managing General Partner
    30  
SECTION 4.2 Powers of the Managing 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
    35  
 
       
ARTICLE V Partnership Management
    35  
 
       
SECTION 5.1 Fund Structure
    35  
SECTION 5.2 Investment Guidelines
    36  
SECTION 5.3 Management Board
    37  

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              Page  
SECTION 5.4 Advisory Committee
    40  
SECTION 5.5 Management Team
    42  
SECTION 5.6 Management Rights of Limited Partners
    42  
SECTION 5.7 Advisory Agreement
    43  
SECTION 5.8 Property Services Agreements
    43  
SECTION 5.9 Asset Valuations; Determination of Current Unit Value; Cancellation
of Units
    43  
SECTION 5.10 Management of Operating Companies
    46  
SECTION 5.11 Non-Managing General Partner
    46  
 
       
ARTICLE VI Exculpation and Indemnification
    47  
 
       
SECTION 6.1 Exculpation of the General Partners
    47  
SECTION 6.2 Indemnification of Managing General Partner
    48  
SECTION 6.3 Treatment of Management Board, Advisory Committee, Et al
    49  
SECTION 6.4 Limited Liability of Limited Partners
    50  
SECTION 6.5 Other Activities of Limited Partners
    50  
 
       
ARTICLE VII Expenses and Fees
    50  
 
       
SECTION 7.1 Managing General Partner Expenses
    50  
SECTION 7.2 Asset Management Fee
    51  
SECTION 7.3 Acquisition Fees
    52  
SECTION 7.4 Partnership Expenses
    53  
SECTION 7.5 Operating Company Expenses
    54  
SECTION 7.6 Organization Expenses
    55  
 
       
ARTICLE VIII Capital Accounts; Allocations
    55  
 
       
SECTION 8.1 Capital Accounts
    55  
SECTION 8.2 Interest on and Return of Capital
    56  
SECTION 8.3 Negative Capital Accounts
    56  
SECTION 8.4 Allocation of Profits
    57  
SECTION 8.5 Allocations of Losses
    58  
SECTION 8.6 Special Allocations
    58  
SECTION 8.7 Curative Allocations
    60  
SECTION 8.8 Tax Allocations: Code Section 704(c)
    60  
 
       
ARTICLE IX Distributions
    61  
 
       
SECTION 9.1 Operating Cash Flow
    61  
SECTION 9.2 Capital Cash Flow
    61  
SECTION 9.3 Reinvestment of Capital Cash Flow
    62  
SECTION 9.4 Right to Limit Distributions
    62  
SECTION 9.5 Limitations on Distribution Rights
    62  
SECTION 9.6 Tax Distributions
    62  
 
       
ARTICLE X Transfers; Withdrawals and Defaults
    62  
 
       
SECTION 10.1 Voluntary Transfer of Managing General Partner Interest
    62  
SECTION 10.2 Removal of Managing General Partner
    63  
SECTION 10.3 Transfers of Partnership Interests by Hines Partners
    64  

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              Page  
SECTION 10.4 Transfers of Units by Partners Other than Hines Partners
    64  
SECTION 10.5 Conditions to Transfer
    64  
SECTION 10.6 Admissions and Withdrawals Generally, Nature of Partnership
Interest
    66  
SECTION 10.7 Required/Elective Withdrawals
    66  
SECTION 10.8 Defaulting Partner
    67  
 
       
ARTICLE XI Partnership Administration
    69  
 
       
SECTION 11.1 Books and Records
    69  
SECTION 11.2 Partnership Auditor
    69  
SECTION 11.3 Filing of Tax Returns
    69  
SECTION 11.4 Tax Matters
    69  
SECTION 11.5 Reports to Partners
    70  
SECTION 11.6 Meetings of Partners
    72  
SECTION 11.7 Meetings of Fund Investors
    74  
 
       
ARTICLE XII Dissolution, Termination and Winding Up
    74  
 
       
SECTION 12.1 Dissolution
    74  
SECTION 12.2 Termination of Partnership by Majority Fund Vote
    75  
SECTION 12.3 Winding up
    75  
SECTION 12.4 Liquidating Distributions
    75  
 
       
ARTICLE XIII Miscellaneous
    76  
 
       
SECTION 13.1 Waiver of Partition
    76  
SECTION 13.2 Power of Attorney
    76  
SECTION 13.3 Amendments
    77  
SECTION 13.4 Confidentiality
    79  
SECTION 13.5 Entire Agreement
    79  
SECTION 13.6 Severability
    79  
SECTION 13.7 Notices
    79  
SECTION 13.8 Governing Law
    80  
SECTION 13.9 Successors and Assigns
    80  
SECTION 13.10 Headings
    80  
SECTION 13.11 Counterparts
    80  
SECTION 13.12 Third Party Beneficiary
    80  

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List of Schedules:

     
2.1
  Limited Partners
2.7
  Approved Agreements
3.1
  Partnership Units and Funded Commitments
4.4
  Hines Investment Allocation Procedure
5.1
  Fund Organization Chart
5.9
  Percentage Interest and Unit Cancellation Example
9.1
  Operating Cash Flow Distribution Example
9.2
  Capital Cash Flow Distribution Example

List of Exhibits:

Exhibit A          Property Services Agreement Form

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FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

HINES-SUMISEI U.S. CORE OFFICE FUND, L.P.

          This FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
HINES-SUMISEI U.S. CORE OFFICE FUND, L.P., a Delaware limited partnership
(together with its successors, the “Partnership”), is entered into as of
November 23, 2004, by and among Hines US Core Office Capital LLC, a Delaware
limited liability company, as the Managing General Partner, Hines REIT
Properties, L.P., a Delaware limited partnership, as the Non-Managing General
Partner, and the Persons identified as Limited Partners on Schedule 2.1, as
Limited Partners. Capitalized terms used and not defined in the following
recitals are used as defined in Section 1.1 below.

Recitals

          WHEREAS, the Managing General Partner and the Hines Limited Partner
entered into the Agreement of Limited Partnership of the Partnership on
August 19, 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 August 28, 2003 (the “First Restated Agreement”);

          WHEREAS, the First Restated Agreement was amended and restated as
provided in the Second Amended and Restated Agreement of Limited Partnership of
the Partnership, dated April 1, 2004 (the “Second Restated Agreement”);

          WHEREAS, the Second Restated Agreement was amended and restated as
provided in the Third Amended and Restated Agreement of Limited Partnership of
the Partnership, dated April 23, 2004 (the “Third Restated Agreement”);

          WHEREAS, the Third Restated Agreement was amended and restated as
provided in the Fourth Amended and Restated Agreement of Limited Partnership of
the Partnership, dated August 11, 2004 (the “Fourth Restated Agreement”);

          WHEREAS, as of the date hereof, Hines REIT Properties, L.P. is
acquiring Partnership Units from the Hines Limited Partner, and the Managing
General Partner desires to amend and restate the Fourth Restated Agreement and
admit Hines REIT Properties, L.P. as the Non-Managing General Partner in
accordance with Sections 5.11 and 13.3(c) of the Fourth Restated Agreement.

 

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          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 Fourth Restated Agreement is hereby
amended and restated in its entirety as follows:

ARTICLE I

SECTION 1.1 Definitions. As used in this Agreement, 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)(1) 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 1.704-1(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 Managing General
Partner, SLR and such other Fund Entities as may become party thereto as
contemplated by Section 5.7.

          “Advisory Committee”: As defined in Section 5.4(a).

          “Affiliate”: With respect to any Person, a Person which, directly or
indirectly, Controls, is Controlled by or is under common Control with such
Person. Notwithstanding the foregoing, the Non-Managing General Partner and
Affiliates of the Non-Managing General Partner that are Controlled by the
Non-Managing General Partner or its general partner shall be deemed not to be
Affiliates of the Managing General Partner, Hines or the Partnership, and the
Managing General Partner, Hines and their respective Affiliates shall be deemed
not to be Affiliates of the Non-Managing General Partner or any of its
Affiliates that are Controlled by the Non-Managing General Partner or it general
partner.

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

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

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

          “Appraiser”: As defined in Section 5.9(b).

          “Approved Agreements”: The agreements listed on Schedule 2.7 and any
agreement that the Partnership is obligated or permitted to enter into pursuant
to any such agreement.

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

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

          “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 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) funds required to be
contributed by the Partnership to any Fund Entity for the purpose of acquiring
Investments or paying costs and expenses related thereto, (ii) Organizational
Expenses and any other Partnership Expenses, and (iii) the cost of redeeming
Partnership Interests in accordance with this Agreement.

          “CBD”: As defined in Section 5.2(b)(i).

          “Certificate”: As defined in Section 2.1.

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

3

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

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

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

          “Class N Partnership Units”: As defined in Section 3.5(a).

          “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 Units held by such Partner and the denominator
of which is the total number of Units outstanding plus, prior to the termination
of the Investment Period, (B) the Unfunded Commitment of such Partner, (ii) as
to any Fund Investor, the Fund’s total equity capital multiplied by the
percentage of the Fund’s total equity capital attributed to the equity interests
held by such Fund Investor in the Partnership and any Operating Company plus the
amount of any additional capital that such Fund Investor is obligated to
contribute, but has not yet contributed, to the Partnership or any Operating
Company, (iii) as to the Partnership, the aggregate of the Committed Capital of
all Partners and (iv) as to the Fund, the aggregate of the Committed Capital of
all Fund Investors.

          “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(a).

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

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

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

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

          “Defaulting Partner”: As defined in Section 10.8(b).

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          “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 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 Managing 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).

          “Fees”: Asset Management Fees and Acquisition Fees.

          “Feeder Entity”: As defined in Section 2.10.

          “Finding of Cause”: As defined in Section 10.2(a).

          “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 Section 5.1(a).

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

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

          “Fund Vote”: As defined in Section 11.6(g).

          “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.

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          “GM Investor Rights Agreement”: The Amended and Restated Investor
Rights Agreement, dated as of December 23, 2003, among Hines, the 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 Managing 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 Managing
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 Managing 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 Managing 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 1.704-1(b)(2)(iv)(m) and paragraph (vi) of the
definition of 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 Managing 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

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Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses.

          “Hines”: Hines Interests Limited Partnership, a Delaware limited
partnership, and its successors.

          “Hines Bridge Equity”: As defined in Section 3.10.

          “Hines Capital Requirement”: As defined in Section 3.11

          “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 (c) 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 Group”: (a) Jeffrey C. Hines and/or Gerald D. Hines, their
parents, brothers and sisters, and the respective spouses, children or
grandchildren of any of the foregoing (including children or grandchildren by
adoption), and (b) any current or former employee of Hines.

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

          “Hines Limited Partner”: Hines US Core Office Capital Associates II
Limited Partnership, a Texas limited partnership, and its successors.

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

          “HSOV”: Hines Suburban Office Venture, LLC, an entity formed by an
Affiliate of Hines and an Affiliate of GECC for the purpose of acquiring
suburban office buildings on a national basis.

          “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 Asset Group”: The three office properties acquired from
Sumitomo by NY Trust and 600 Lexington.

7

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          “Initial Investment Period”: As defined in Section 3.4.

          “Initial Offering Period”: As defined in Section 3.3(a).

          “Initial Offering Price”: $1,000.00 per Unit.

          “Investment Advisor”: An Affiliate of Hines or SLR that provides
advisory services to the Managing General Partner pursuant to the Advisory
Agreement as contemplated by Section 5.7.

          “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 5.2(b).

          “Investments”: As defined in Section 5.2(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 3.8 and, as the
context requires, as defined in the corresponding provisions of the Constituent
Documents of US Core Trust and US Core Properties.

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

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

          “Majority Fund Vote”: As defined in Section 11.7.

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

          “Majority Partner Vote”: As defined in Section 11.6(g).

          “Management Board”: As defined in Section 5.3(a).

          “Management Team”: As defined in Section 5.5.

          “Managing General Partner”: Hines US Core Office Capital LLC, a
Delaware limited liability company, and its successors, and any Person hereafter
admitted as a general partner designated the Managing General Partner of the
Partnership in accordance with the terms of this Agreement.

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          “Managing General Partner Expenses”: As defined in Section 7.1.

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

          “Non-Managing General Partner”: As defined in Section 5.11.

          “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 and, as the context
requires, as defined in the corresponding provisions of the Constituent
Documents of US Core Trust and US Core Properties.

          “NY Trust”: Hines-Sumisei NY Core Office Trust, a Maryland real estate
investment trust, and its successors.

          “NY Trust II”: Hines-Sumisei NY Core Office Trust II, a Maryland real
estate investment trust, and its successors.

          “NY Trust Mezzanine Loan”: The Mezzanine Loan Agreement, dated as of
August 19, 2003, among Hines NY Office Properties LLC, as borrower, and Bank of
America, N.A. and Connecticut General Life Insurance Company, as lenders.

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

          “Operating Company Expenses”: As defined in Section 7.5(a).

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

          “Organization Agreement”: The Amended and Restated Organization
Agreement, dated as of December 23, 2003, among General Motors Investment
Management Corporation, a New York corporation, certain institutional investors
advised thereby, Hines Interests Limited Partnership, a Delaware limited
partnership, Hines US Core Office Capital Associates III Limited Partnership, a
Texas limited partnership, Hines-Sumisei U.S. Core Office Fund, L.P., a Delaware
limited partnership and Hines-Sumisei NY Core Office Trust, a Maryland real
estate investment trust.

          “Organizational Expenses” As defined in Section 7.6.

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

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

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

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

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          “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).

          “Partner Vote”: As defined in Section 11.6(g).

          “Partners”: Collectively, the Managing General Partner, the
Non-Managing General Partner and the Limited Partners, and 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 1.704-2(d).

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

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

          “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 Partnership Units then owned by such
Partner, divided by the number of Partnership 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
Partnership Units issued during the Fiscal Quarter just ended; plus

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     (ii) its AM Sharing Percentage (as defined below) of a fraction (A) whose
numerator is 0.03125% of the Unrecovered Capital of SLR, plus 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 Partnership 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 Company (other than an Operating Company
which makes its investments indirectly through another Operating Company), other
than any Investment in a Property acquired by such Operating Company from SLR or
any of its Affiliates.     •   “Outstanding Unit Equivalents”: As of the end of
a Fiscal Quarter or other relevant time, a number equal to the number of
Partnership 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.

     (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 Partnership Units. Immediately
after the issuance or redemption by the Partnership of any Partnership Units,
the Percentage Interest attributable to the

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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 Partnership 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 Partnership 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
Partnership Units then being issued, or minus the number of Partnership Units
then being redeemed, as the case may be.

     (d) Calculation of Percentage Interests of Partners’ Holding Partnership
Units. As of each Quarterly Payment Date, each Partner holding Partnership Units
shall have a Percentage Interest in respect of such Partnership 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 Partnership Units
then owned by such Partner and whose denominator is the total number of
Partnership 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 Partnership 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.

          “President”: As defined in Section 5.5.

          “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 Redemptions”: As defined in Section 3.9.

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

          “Private Placement PTP Exemption”: The exemption from publicly traded
partnership status provided in Regulation Section 1.7704-1(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).

          “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;

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     (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)(1)) 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 1.7704-1(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 Managing 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 1.704-1(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;

     (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

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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 1.704-1(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 5.2(a).

          “Property Manager”: As defined in Section 5.8.

          “Property Services Agreement”: As defined in Section 5.8.

          “Property Services Agreement Form”: As defined in Section 5.8.

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

          “Redeeming Partner”: As defined in Section 3.8.

          “Redemption Right”: As defined in Section 3.8.

          “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).

          “Regulatory Allocations”: As defined in Section 8.7.

          “REIT”: A “real estate investment trust” as defined in Section 856 of
the Code and applicable Regulations.

          “REIT Election Effective Date”: As defined in Section 2.11.

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

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

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

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

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

          “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)(ii)(B).

          “SLR”: Sumitomo Life Realty (N.Y.), Inc., a New York corporation.

          “SLR Designee”: As defined in Section 5.3(a).

          “SLRI”: SLR Investments, Inc., a Delaware corporation.

          “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).

          “Sumitomo”: SLR and SLRI, collectively.

          “Super Majority Fund Vote”: As defined in Section 11.7.

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

          “Super Majority Partner Vote”: As defined in Section 11.6(g).

          “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.

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

          “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

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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.

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

          “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
Partnership Units or the distribution of Capital Cash Flow.

          “US Core Properties”: Hines-Sumisei US Core Office Properties LP, a
Delaware limited partnership, and its successors.

          “US Core Properties Partnership Agreement”: The Second Amended and
Restated Agreement of Limited Partnership, dated as of September 20, 2004, of US
Core Properties.

          “US Core Trust”: Hines-Sumisei US Core Office Trust, a Maryland real
estate investment trust, and its successors.

          “US Core Trust Declaration of Trust”: The Amended and Restated
Declaration of Trust of US Core Trust.

          “Voting Fund Investors”: All Fund Investors, including Partners
holding Voting Interests, other than Fund Investors whose only equity interest
in a Fund Entity or Property is specifically designated a non-voting interest
under the Constituent Documents of the issuer of such equity interest.

          “Voting Interests”: Voting Units and Participation Interests.

          “Voting Units”: All Partnership Units other than Class N Partnership
Units.

          “600 Lexington”: The office property having such name located at 600
Lexington Avenue/101 East 52nd Street in New York City.

          “75% Majority Fund Vote”: As defined in Section 11.7.

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

          “75% Majority Partner Vote”: As defined in Section 11.6(g).

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 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 August 8, 2003. The Managing General Partner shall continue as a
general partner of the Partnership, shall be a “general partner” for all
purposes under the Act, and shall have those rights and obligations provided for
the Managing General Partner under this Agreement. Each Person admitted as a
Limited Partner prior to the date hereof shall continue as a limited partner of
the Partnership. The Non-Managing General Partner is hereby admitted as a
general partner of the Partnership, shall be a “general partner” for all
purposes under the Act, and shall have those rights and obligations provided for
the Non-Managing General Partner under this Agreement. As of the date hereof,
each Person identified as a Limited Partner on Schedule 2.1 is a Limited
Partner. The Managing 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 U.S. Core
Office Fund, L.P.” The Managing General Partner shall, with the affirmative
written consent of SLR (which consent shall not be unreasonably withheld) and
upon notice to the other 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

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name of the Partnership or under such other name (including any assumed name) as
the Managing General Partner may from time to time determine in its sole
discretion. Upon the dissolution and termination of the Partnership, the
Managing 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
Managing General Partner, the Limited Partners will promptly execute all
certificates and other documents consistent with the terms of this Agreement
necessary for the Managing 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 Managing 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 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 Managing General Partner in its sole
discretion. The Managing 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
Managing 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 Managing 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 Managing General Partner in its sole
discretion.

SECTION 2.6 Purpose. The purpose of the Partnership is to hold an interest in NY
Trust, NY Trust II, US Core Trust and any other Operating Company that may
hereafter be organized for the purpose of making investments in accordance with
the Investment Guidelines, to make capital contributions to, and otherwise
provide for the financing of, such Operating Companies, to influence or exercise
control over the management and policies of such Operating Companies through the
ownership of voting securities, the power to appoint members to the board of
trustees or other governing body of such Operating Companies, by contract or
otherwise, and to engage in such other activities as are permitted under this
Agreement or are incidental or ancillary thereto as the Managing General Partner
deems necessary or advisable, all upon the terms and conditions set forth in
this Agreement.

SECTION 2.7 Powers.

     (a) 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

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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.

     (b) Without limiting the foregoing, and notwithstanding anything in this
Agreement to the contrary, the Partnership, and the Managing General Partner on
behalf of the Partnership, is authorized and empowered to enter into, deliver
and perform its obligations and exercise its rights under each of Approved
Agreements.

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 Managing
General Partner may change the ending date of the Fiscal Year if the Managing
General Partner determines in good faith that such change is necessary or
appropriate. The Managing 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 Managing General Partner will give prompt
written notice of any such change to the other Partners.

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 Managing 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 Managing 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
Managing General Partner may treat one or more of such investors (rather than
such Feeder Entity) as a Defaulting Partner as provided in Section 10.8. 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 Managing
General Partner shall amend this Agreement so that the benefit of any such
reduction inures to such Feeder Entity.

SECTION 2.11 REIT Covenant. It is the goal of the Partners that each Operating
Company that is a REIT shall at all times be a “domestically controlled REIT” as
defined in Section 897(h)(4) of the Code. The Partnership shall not take any
action or engage in any activities (including exercising operating control over
Operating Companies) on and after the date that the

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elections of NY Trust, NY Trust II or any other Operating Company under
Section 856 of the Code to be taxed as a real estate investment trust first
becomes effective (the “REIT Election Effective Date”) if both (i) such actions
or activities would cause the Partnership to be treated as engaged in a U.S.
trade or business for U.S. federal income tax purposes, or as owning U.S. real
property interests within the meaning of Section 897 of the Code, at any time on
and after the REIT Election Effective Date, and (ii) the Partnership is so
treated as engaged in a U.S. trade or business or as owning U.S. real property
interests other than because of the application and/or operation of Section
897(h) of the Code or because of the ownership of any interest in a real estate
investment trust that is treated as a U.S. real property corporation under
Section 897(c)(2) of the Code.

ARTICLE III

Partnership Capital

SECTION 3.1 Partnership Capital. As of the date of this Agreement, the Partners
have been issued Units and have Funded Commitments in the amounts set forth
opposite their names on Schedule 3.1. The Managing General Partner shall record
all issuances and redemptions of Units on the books of the Partnership. Except
as specifically provided in this Agreement or any Subscription Agreement, no
Partner (including the Managing General Partner and the Non-Managing 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 Units in accordance with Section 3.7.

SECTION 3.2 Capital Commitments.

     (a) The Partnership may from time to time, in the discretion of the
Managing General Partner, issue additional Partnership Units and admit
additional Limited Partners to the Partnership. Any Person that acquires
Partnership Units for cash (an “Investor”) will acquire such Units 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 Units in exchange for Capital
Contributions in cash at a specified price per 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 Managing General Partner on behalf of the Partnership. Units
issuable pursuant to a Subscription Agreement may be issuable in installments,
with each installment being issuable, and the Capital Contribution therefor
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 Units issuable pursuant thereto is
referred to as such Investor’s “Capital Commitment”. Each Investor which
acquires any Units pursuant to a Subscription Agreement shall be deemed to be
admitted to the Partnership as a Partner immediately upon the payment of the
purchase price for the first Units so issued to such Investor. The aggregate
amount of Capital Contributions made by a Partner (in cash or

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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 Units
thereto shall be referred to as the “Unfunded Commitment” of the Partner party
to such Subscription Agreement. Except as provided in Section 11.4(c), in no
event will any Partner be required to contribute any capital to the Partnership
in excess of such Partner’s Capital Commitment.

     (b) If at any time the Managing General Partner determines to raise capital
by issuing Capital Calls to Partners having Unfunded Commitments, it shall
generally issue such Capital Calls pro rata to each such Partner in proportion
to the number of Units issuable in respect of the Unfunded Commitment of each
such Partner. However, the Managing General Partner may, in its discretion,
issue Capital Calls other than pro rata to the extent required by the terms of
any Subscription Agreement or other agreement between the Partnership or the
Managing General Partner and one or more Partners, or if the Managing General
Partner otherwise deems it advisable to issue Capital Calls in some manner other
than pro rata (for example, to assist in achieving or maintaining the status of
any Operating Company as a “domestically controlled” REIT). Each Capital Call
Notice issued by the Managing 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) The period beginning on February 2, 2004, and ending on November 2,
2004, is referred to herein as the “Initial Offering Period”. All Subscription
Agreements entered into prior to the end of the Initial Offering Period shall
provide for the issuance of Units at the Initial Offering Price; provided that
any such Subscription Agreement may, in the discretion of the Managing General
Partner, provide for the issuance of 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 Managing 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 Units at a price per Unit less than the Initial
Offering Price without the consent of the Partners holding Units immediately
prior to the effective date of such Subscription Agreement by a Super Majority
Partner Vote.

     (b) If, following a closing of the issuance of Units during the Initial
Offering Period (any such closing, a “Subsequent Closing”), there remain any
Unfunded Commitments, then each Partner that was admitted or increased its
Capital Commitment at such Subsequent Closing (a “Subsequent Closing Partner”)
may, at the discretion of the Managing General Partner, be required to make a
Capital Contribution (and be issued Units in respect thereof) in an amount up to
its pro rata share (based on the Capital

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Commitments of all Partners immediately after such Subsequent Closing) of the
Funded Commitments of all Partners holding Units immediately prior to such
Subsequent Closing. The Managing General Partner may, in its discretion, use the
proceeds of any such Capital Contributions to redeem Units held by one or more
Partners (selected at the discretion of the Managing General Partner) holding
Units immediately prior to such Subsequent Closing (each, a “Selected Prior
Closing Partner”) at the same price per Unit at which such 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 Units redeemed pursuant
to the preceding sentence shall be reduced by the amount received by such
Partner for the Units redeemed, such Partner’s Unfunded Commitment shall be
increased by such amount, and such Partner shall remain obligated to purchase
additional 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. The three-year period beginning on
February 2, 2004, and ending on February 2, 2007, is referred to herein as the
“Initial Investment Period”; provided that the Managing General Partner may
extend the Initial Investment Period to end on the latest closing date of any
Investment with respect to which the Partnership, or the Managing General
Partner on behalf of the Partnership, entered into a binding agreement on or
prior to the last day of such initial three year period; provided further that
the Initial Investment Period shall in no event be extended beyond February 2,
2008. Upon the termination of the Initial Investment Period, as it may be
extended pursuant to the preceding sentence, 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 Managing General Partner shall have no further right to issue
Capital Calls, and Investors shall have no further right to purchase 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
Managing 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 Partner with respect to a Capital Commitment
attributable to a Subscription Agreement entered into after the Initial Offering
Period.

SECTION 3.5 Designation of Class N Units.

     (a) There is hereby designated a class of Partnership Units referred to as
“Class N Partnership Units”. Class N Partnership Units shall be identical in all
respects to Partnership Units generally, except that holders of Class N
Partnership Units shall have no right to participate in any LP Vote, Partner
Vote or Fund Vote and shall have no right to vote, consent or make any decision
on any matter with respect to which Partners are otherwise permitted to vote,
consent or make any decision on under the terms of this Agreement other than as
contemplated by clause (i) of the proviso of the first sentence of
Section 13.3(a). Each Partner holding Class N Partnership Units hereby further
irrevocably waives its corresponding right to vote for a successor general
partner under

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the Act with respect to such Class N Partnership Units, which waiver shall be
binding upon such Partner and any Person that succeeds to its interest.

     (b) The Managing General Partner may cause the Partnership to issue Class N
Partnership Units in the same manner and on the same terms as this Agreement
provides for the issuance of Partnership Units generally. Each Class N
Partnership Unit interest shall remain a non-voting interest at all times and
shall continue as a non-voting interest with respect to any assignee or other
transferee of such interest.

     (c) Except where the context otherwise requires, all references in this
Agreement to “Partnership Units” or “Units” shall be deemed to be references to
undesignated Partnership Units and Class N Partnership Units, collectively.

SECTION 3.6 Fund Indebtedness.

     (a) The Managing General Partner shall have the right, at its option, to
cause any Fund Entity other than the Partnership to incur or assume Indebtedness
from any Person to finance Investments made, directly or indirectly, and to
pledge or otherwise encumber assets of any such Fund Entity to secure any such
Indebtedness, subject to the following:

(i) Following repayment of the NY Trust Mezzanine Loan, the Partnership shall
not consent to NY Trust and its subsidiaries incurring any Indebtedness in
excess of 55% of the Current Market Value of the Investments held by NY Trust at
the time any such Indebtedness is incurred, and, the Partnership will not
consent to NY Trust II and its subsidiaries incurring any Indebtedness in excess
of 55% of the Current Market Value of 600 Lexington at the time any such
Indebtedness is incurred.

(ii) The Fund shall not incur any Indebtedness other than the Indebtedness
permitted under clause (i) of this Section 3.6(a) unless, after giving effect to
such incurrence,

     (A) the aggregate amount of such other Indebtedness is not more than 50% of
the Current Market Value of all Investments other than the Initial Asset Group
at the time any such other Indebtedness is incurred (the “Aggregate Debt
Limit”); and

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

     (iii) Notwithstanding clause (ii)(A) of this Section 3.6(a), the Managing
General Partner may cause the Partnership to consent to the Fund incurring
Indebtedness in excess of the Aggregate Debt Limit, if the Managing General
Partner determines that it is advisable to do so in connection with the
acquisition by any Operating Company of a new Investment; provided that, at the
time such excess Indebtedness is incurred, the Managing General Partner makes a

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reasonable determination that Fund Indebtedness will be within the Aggregate
Debt Limit within one year after the incurrence of such excess Indebtedness.

     (b) In connection with the incurrence of Indebtedness by any Fund Entity,
the Managing General Partner shall have the right, in its discretion, to pledge
to the lender the right of the Managing General Partner to issue Capital Calls
in respect of the Unfunded Commitments of the Partners, and to enforce the
obligations of the Partners to make Capital Contributions in respect thereof, in
accordance with the terms and conditions of this Agreement and the Subscription
Agreements. Each Partner having an Unfunded Commitment shall, upon the written
request of the Managing 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 Managing General Partner,
include an acknowledgment that the Managing General Partner, or the lender on
behalf of the Managing General Partner (in accordance with the agreements
between such lender and the Partnership and/or the Managing General Partner),
may call such Capital Contributions in accordance with this Agreement and such
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 Partners
to make Capital Contributions shall not be increased thereby and shall not
result in the loss of a 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 Partner’s obligations to make such Capital
Contributions, which the Managing General Partner may perfect and assign for the
benefit of a lender as determined by the Managing General Partner in its sole
discretion. For purposes of determining whether the Fund’s Indebtedness is
within the Aggregate Debt Limit, Indebtedness secured by a pledge of the
Managing General Partner’s right to make Capital Calls in respect of the
Partners’ Unfunded Commitments (or in respect of the unfunded commitments of any
investor in any Fund Entity) 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 Managing General Partner to issue
Capital Calls in respect of the Unfunded Commitments of the Partners and to
enforce the obligations of the Partners to make Capital Contributions in respect
thereof.

SECTION 3.7 Issuance of Units and Participation Interest.

     (a) The Partnership may issue Units, as determined by the Managing 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 one or more Operating
Companies; provided, that no Units may be issued pursuant to this Section 3.7 at
a price per 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 Units
without the consent of the Partners by a Super Majority Partner Vote. The
Managing General Partner will cause the Partnership not to consent to or, to the
extent the Partnership Controls the issuance of securities by any such Fund
Entity, permit NY Trust, NY Trust II or any other

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Fund Entity (other than US Core Trust) in which the Partnership has a direct
equity interest (or any subsidiary of any such Fund Entity) to issue equity
interests to third party investors at a valuation that reflects a valuation of
any Property in which any such 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 consent of the Partners by a Super
Majority Partner Vote. The Managing General Partner will cause the Partnership
not to consent to or, to the extent the Partnership Controls the issuance of
securities by any such Fund Entity, permit US Core Trust or any subsidiary of US
Core Trust (other than US Core Properties and subsidiaries of US Core
Properties) to issue equity interests to third party investors at a valuation
that reflects a valuation of any Property in which any such 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 Partnership and US Core Trust 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.
The Managing General Partner will take such action as is necessary to prevent US
Core Properties or any Fund Entity that US Core Properties Controls from issuing
equity interests to third party investors at a valuation that reflects a
valuation of any Property in which any such 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
Partnership, US Core Trust and US Core Properties 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.
This Section 3.7(a) is subject to Section 5.3(b)(iv).

     (b) (i) 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 Managing General Partner and the Partnership pursuant
to the Advisory Agreement. The Participation Interest is in addition to, and
distinct from, the Units described above, and any references to “Units” or
“Partnership 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 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.

          (ii) The formula for calculation of the Participation Interest is
included in the definition of Percentage Interest in Section 1.1, and
Schedule 5.9 provides an example of how the Percentage Interest for the holder
of a Participation Interest is calculated. The Participation Interest is
intended to provide each Investment Advisor

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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 Period and then invested half of such amounts
in the Partnership through the acquisition of additional Partnership Units.
(However, since the Participation Interest is a profits interest, this interest
will be substantially economically equivalent to the ownership of Partnership
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 Unit cancellation procedure described in
Section 5.9. (Schedule 5.9 provides an example of Unit cancellations as
contemplated by Section 5.9.)

          (iii) 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 Managing General Partner. In such event,
the Managing 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 Managing 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. Subject to and in accordance with the provisions
of this Section 3.8, each Partner shall have the right (a “Redemption Right”) to
request that the Partnership redeem for cash at the Current Unit Value in the
case of Units, or at the Current Participation Interest Value in the case of a
Participation Interest, all or a portion of the Units or Participation Interest
held by such Partner by delivering a notice (a “Notice of Redemption”) to the
Partnership and the Managing General Partner specifying the number of Units or
the portion of the Participation Interest held by such Partner (a “Redeeming
Partner”) that it requests to be redeemed at any time within the last 45 days of
any calendar year ending after the later of (i) the last day of the Initial
Investment Period and (ii) the first anniversary of the date such Partner
acquired the Units or such portion of its Participation Interest that it seeks
to redeem. 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, the Redemption Right shall comply with the requirements of
Regulations Section 1.7704-1(f) and shall be construed and administered in
accordance therewith. The Managing 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. If a
Partner requests a redemption pursuant to the

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first sentence of this Section 3.8 (a “Liquidating Redemption”), the Managing
General Partner shall use its reasonable best efforts to redeem the number of
Units or the portion of the Participation Interest specified in the Notice of
Redemption for cash at the Current Unit Value in the case of Units, or at the
Current Participation Interest Value in the case of a Participation Interest, 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) In no event shall the Partnership be required to redeem for cash in any
calendar year Partnership Units and Participation Interests which, when taken
together with all interests in US Core Trust and US Core Properties which Fund
Investors having interests therein are seeking to redeem pursuant to
corresponding redemption rights under the Constituent Documents of such
Entities, exceed, in the aggregate, 10% of the total equity capitalization of
the Partnership, US Core Trust and US Core Properties (calculated without
duplication of equity held directly or indirectly in any such Entity by any
other such Entity) as of the first day of such calendar year. If, for any
calendar year, Partners and such Fund Investors request such liquidating
redemptions in excess of such 10% limit, then each Partner entitled to
participate in such redemption shall be entitled to redeem its pro rata share of
the total equity in the Partnership, US Core Trust and US Core Properties
requested to be redeemed in such calendar year based on the amount of such
equity requested to be redeemed in each such Fund Investor’s Notice of
Redemption.

     (b) If more than one Fund Investor 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,
US Core Trust and/or US Core Properties subject to each such Fund Investor’s
Notice of Redemption, based on such Fund Investor’s share of the total equity in
such Entities.

     (c) In no event will any Units or Participation Interests (or interests in
US Core Trust or US Core Properties) be redeemed pursuant to a Liquidating
Redemption to the extent that (i) the Managing General Partner determines in
good faith that such redemption would be inconsistent with the best interests of
the Partnership or any Operating Entity, (ii) such redemption would result in
any REIT in which the Partnership has a direct or indirect interest ceasing to
be a “domestically controlled REIT” as defined in Section 897(h)(4) of the Code
or would violate or result in a violation of the Constituent Documents of any
Operating Company in which the Partnership has a direct or indirect interest, or
(iii) the Partnership is unable to raise or acquire sufficient funds to make
such Liquidating Redemption on terms acceptable to the Partnership, as
determined by the Managing General Partner in good faith.

     (d) 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:

     (i) A Partner shall be entitled to exercise the Redemption Right only if
(x) the redemption or purchase of the Partner’s Units and/or Participation
Interest would constitute a Private Transfer or (y) the Percentage Interest
attributable to the Units and Participation Interest to be redeemed, when
aggregated with other

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Transfers of Partnership Interests within the same taxable year of the
Partnership (but not including Private Transfers), would constitute a Percentage
Interest of ten percent (10%) or less in the Partnership.

     (ii) The Managing General Partner may establish such policies and
procedures as it may deem necessary or desirable in its discretion, including
imposing limitations on the number of 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 causing similar limitations to
be imposed with respect to redemptions of interests in US Core Trust and US Core
Properties) and establishing procedures to allocate the ability to exercise the
Redemption Right among the Partners (and causing similar procedures to be
established with respect to US Core Trust and US Core Properties).

     (iii) The restrictions set forth in subparagraphs (i) and (ii) of this
Section 3.8(d) 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 Managing 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 10.5(b)(ii), 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 1.7704-1(d), (e),
(f) and (j) and shall be construed and administered in accordance therewith. The
Managing General Partner may modify the restrictions set forth in such clauses
(i) and (ii), and the provisions of Section 10.5(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.

     (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
Partner (or other Fund Investor) will be entitled to participate in Liquidating
Redemptions in any given calendar year only to the extent of the Units and the
portion of the Participation Interest (or other interest in the Fund) subject to
a Notice of Redemption requesting a Liquidating Redemption within the last
forty-five days of the preceding calendar year.

     (f) 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 Managing General Partner may
require an opinion of counsel, which counsel and opinion shall be satisfactory
to the Managing 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.

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SECTION 3.9 Priority Redemption Rights. In connection with the issuance of Units
to a Contributing Partner, the Partnership may agree, subject to the terms of
any outstanding Priority Redemption Rights, in the sole discretion of the
Managing 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
Units issued to such Limited Partner in such issuance at a redemption price
equal to the Current Unit Value at the time of redemption 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 Managing
General Partner may apply any Capital Cash Flow and any funds received from
Capital Contributions of Partners that would otherwise be available for making
distributions to the Partners or redeeming 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 Hines Bridge Equity and Priority Redemption Right. Prior to the
date hereof, the Managing General Partner and the Hines Limited Partner have
collectively made Capital Contributions to the Partnership in excess of the
Hines Capital Requirement at a price per Unit equal to the Initial Offering
Price. Affiliates of Hines may from time to time in the future contribute equity
to the Partnership and/or one or more Operating Companies or other Fund Entities
which, taken together with other contributions by Affiliates of Hines, exceed
the Hines Capital Requirement if the Managing General Partner determines that
such contributions are necessary or advisable for the Fund to finance an
Investment, meet the domestic control requirements set forth in the Constituent
Documents of any Operating Company that is a REIT or for other purposes deemed
appropriate by the Managing General Partner. Any such future contributions shall
be at a price per Unit (or equivalent interest in another Fund Entity) equal to
(i) the Initial Offering Price, during the Initial Offering Period and (ii) the
Current Unit Value (or its equivalent), thereafter. All past contributions and
future contributions in excess of the Hines Capital Requirement by Affiliates of
Hines to the Partnership or any Operating Company or other Fund Entity are
referred to herein as “Hines Bridge Equity”. Notwithstanding any other provision
of this Agreement, the Managing General Partner shall cause the Partnership (or
applicable Operating Company) to apply the proceeds of all Capital Contributions
made to the Partnership or any Operating Company from and after the date hereof
to the redemption of any Hines Bridge Equity, to the extent that the Managing
General Partner reasonably determines that such Hines Bridge Equity is no longer
required. Such redemption shall be for cash in an amount per Unit (or equivalent
interest) equal to the price per Unit (or equivalent interest) paid by the
applicable Hines Affiliate for such interest. The right to have any Hines Bridge
Equity redeemed pursuant to this Section 3.10 shall be a Priority Redemption
Right of the Hines Affiliate that contributed such equity. To the extent the
Managing General Partner, the Hines Limited Partner or another Affiliate of
Hines elects to exercise such Priority Redemption Right, the Managing General
Partner may require all Partners whose Unfunded Commitments are greater than
zero to make Capital Contributions in accordance with Section 3.2 up to the full
amount of such Unfunded Commitments to the extent necessary to fund such
redemption. Notwithstanding the foregoing, each of the Hines Limited Partner,
the Managing General Partner and any other Affiliate of Hines that contributes
Hines Bridge Equity may, in its sole and absolute discretion, waive or defer, in
whole or in part, the exercise of the Priority Redemption Right granted to it
pursuant to this Section 3.10. Each Affiliate of Hines that contributes or has
contributed Hines

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Bridge Equity to the Partnership or any other Fund Entity shall be a third party
beneficiary of this Section 3.10.

SECTION 3.11 Hines Investment. The Managing General Partner, the Hines Limited
Partner and/or such other Affiliates of Hines as the Managing General Partner
may determine from time to time, shall maintain Committed Capital to the Fund in
an aggregate amount of not less than the greater of (i) 1% of the Committed
Capital of all Fund Investors, or (ii) $25 million (the “Hines Capital
Requirement”); provided that, for purposes of determining whether the Hines
Capital Requirement is met, (1) any amounts invested or committed to be invested
by Hines or any Affiliate of Hines in Hines Real Estate Investment Trust, Inc.
or Hines REIT Properties, L.P., including, without limitation, any participation
or profits interests granted to Hines or any Affiliate of Hines in either such
Entity, shall be deemed to constitute Committed Capital to the Fund of Hines or
such Affiliate of Hines, and (2) the Non-Managing General Partner shall be
deemed not to be a Fund Investor. In connection with any increase of Committed
Capital of the Fund, whether through the acceptance of new or increased Capital
Commitments, the issuance of additional Partnership Units by the Partnership,
the issuance of additional equity securities by any Operating Company or
otherwise, the Managing General Partner shall, or shall cause an Affiliate of
the Managing General Partner to, increase its Capital Commitment or acquire
additional Partnership Units or equity securities of one or more Operating
Companies at the Current Unit Value to the extent necessary to comply with the
Hines Capital Requirement. In order to manage the equity interests in the Fund
held by the Managing General Partner and its Affiliates for purposes of
complying with the Hines Capital Requirement, (A) the Managing General Partner,
the Hines Limited Partner or any other Affiliate of Hines may, at any time, at
the discretion of the Managing General Partner, contribute interests such Person
holds in any Operating Company in which the Partnership has an interest to the
Partnership in exchange for Partnership Units at Current Unit Value; and (B) the
Managing General Partner may, at any time, in its discretion, cause the
Partnership to exchange, at Current Unit Value, interests in any Operating
Company held by the Partnership for interests in another Operating Company in
which the Partnership holds an interest, or for Partnership Units, held by the
Managing General Partner, the Hines Limited Partner or any other Affiliate of
Hines; provided that, in any such case, such exchange does not result in the
recognition of material amounts of taxable income or gain by the Partnership or
any Fund Entity. Neither the Managing General Partner nor any other Affiliate of
Hines shall be in breach of this Agreement if at any time the Hines Capital
Requirement is not met as a result of dilution following the issuance of
Partnership Units or interests in any Fund Entity so long as the Managing
General Partner takes, or causes any Affiliate to take, such action as is
necessary to cause the Hines Capital Requirement to be met as promptly as
practicable following any such issuance.

ARTICLE IV

Managing General Partner

SECTION 4.1 Managing General Partner. Subject to Section 5.11 and the other
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 Managing 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

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under the Act. The Managing 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 Managing General Partner or the Partnership as it may
from time to time deem appropriate. Any authority delegated by the Managing
General Partner to any other Person shall be subject to the limitations on the
rights and powers of the Managing General Partner specifically set forth in this
Agreement.

SECTION 4.2 Powers of the Managing General Partner.

     (a) Subject to Section 5.11 and the other 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 Managing 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 Managing
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 Partnership’s interest in any
Operating Company, including with respect to the voting of securities of such
Operating Company, the appointment, removal and replacement of trustees,
managers or directors of such Operating Company and the exercise of any rights
and compliance with any obligations of the Partnership under any agreements with
such Operating Company or to which such Operating Company is subject or with any
Person having an interest in such Operating Company.

     (ii) make all decisions concerning, and enter into Advisory Agreements with
Investment Advisors under which such Investment Advisors provide advice and
recommendations to the Managing General Partner or the Partnership with respect
to, the financing or operation of the Partnership, and the structuring,
organization, formation, capitalization or financing of any Operating Company;

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

     (iv) sell, exchange, or otherwise dispose of all or any portion of the
Partnership’s interest in any Operating Company and, in connection therewith,
accept, collect, hold, sell, exchange, or otherwise dispose of evidences of
Indebtedness or other property received pursuant thereto;

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     (v) cause or consent to a merger, combination, recombination or
consolidation of any Operating Company or other Fund Entity with any unrelated
Entity or between or among two or more Operating Companies or other Fund
Entities; or cause or consent to a transfer or exchange of Properties, interests
in Fund Entities or other assets of or between one or more Operating Companies
or other Fund Entities;

     (vi) consent to any amendment to or restatement of the Constituent
Documents of any Operating Company;

     (vii) 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;

     (viii) 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, and authorize
any such agent to act for and on behalf of the Partnership;

     (ix) 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 interests in Operating Companies which may
include such representations, warranties, covenants, indemnities and guaranties
as the Managing General Partner deems necessary or advisable;

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

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

     (xii) 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;

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

     (c) Notwithstanding subsections (a) and (b) of this Section 4.2, the
Managing General Partner shall not take any action in the name or on behalf of
the Partnership which under the terms of this Agreement requires the approval or
consent of the Management Board, the Advisory Committee, Partners other than the
Managing General Partner (including, if applicable, the Non-Managing General
Partner) or Fund Investors, unless the approval or consent required by this
Agreement has been obtained.

SECTION 4.3 Time Commitment.

     (a) The Managing General Partner shall, and shall cause its Affiliates and
their respective employees, officers and agents to, devote to the Partnership,
Operating Companies and Investments such time as shall be necessary to conduct
the business and affairs of the Partnership, Operating Companies and Investments
in an appropriate manner consistent with the terms of this Agreement and the
Constituent Documents of each Operating Company. The Partners acknowledge that
the Managing General Partner and other Affiliates of Hines and their respective
employees, officers and agents may also engage in activities unrelated to the
Fund and may provide services to Persons other than the Partnership, the
Operating Companies or any of their Affiliates.

     (b) The Managing General Partner shall cause the Management Team to devote
such time as the Managing General Partner reasonably determines is necessary to
manage and operate the business affairs of Fund in an appropriate manner
consistent with the terms of this Agreement.

SECTION 4.4 Outside Investments. So long as the Fund has the capacity to make
new Investments, the Managing 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 Fund) 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 Fund; provided that such restrictions
shall not apply to the following:

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

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     (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 Fund and which, in
the good faith judgment of the Managing General Partner, does not compete in any
material way for investments that would be suitable for the Fund;

     (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 non-brokered suburban office asset with a purchase price of
$65 million or less that was originated by GECC for HSOV;

     (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 or HSOV pursuant to an investment
opportunity allocated to NOP or HSOV in accordance with the Hines investment
allocation procedure described in Schedule 4.4.

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

SECTION 4.6 Co-Investment Opportunities. The Managing General Partner may
consent, on behalf of the Partnership, to an Operating Company permitting one or
more Persons, including Fund Investors and Affiliates of the Managing General
Partner, co-investing in Properties in which the Fund invests if the Managing
General Partner determines that it is not in the best interest of the Fund to
invest (or that the Fund 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 Managing 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 Managing General Partner and/or its
Affiliates, as applicable, than the terms of this Agreement or the terms
contemplated by any Approved Agreement. If the Managing General Partner, Hines
or any Affiliate of the Managing General Partner or Hines co-invests in a
Property with the Fund, then, unless otherwise approved by the Advisory
Committee, the Managing 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 Fund disposes of its interest in the Property

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on terms no more favorable to such Person than those received by the Fund. 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 Company 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 Managing General Partner or any
other Affiliate of Hines, or any of their respective officers, employees or
agents from engaging in any activity whatsoever permitted by applicable law.

ARTICLE V

Partnership Management

SECTION 5.1 Fund Structure.

     (a) The Partnership will invest in real estate properties in the United
States indirectly through Operating Companies in which the Partnership holds or
hereafter acquires a direct or indirect interest. The term “Operating Company”
means an Entity in which the Partnership holds a direct or indirect equity
interest and which may issue equity interests to one or more Persons which are
not Affiliates of the Partnership. The Partnership may from time to time
organize such Operating Companies as the Managing General Partner deems
necessary or advisable to accomplish the objectives of the Partnership, so long
as the Constituent Documents of any such Operating Company, together with any
other agreements entered into in connection with the organization of such
Operating Company, provide the Partnership, the Managing General Partner or
another Hines Controlled Entity, directly or indirectly, with Control of such
Operating Company. The Partnership, each Operating Company and any Entity in
which an Operating Company holds a direct or indirect interest is sometimes
referred to in this Agreement as a “Fund Entity”. The Partnership and all other
Fund Entities collectively are sometimes referred to herein as the “Fund”. Each
Partner, and each Person that holds an equity interest in any Operating Company
or other Fund Entity or which makes an equity investment in any Property in
which any Operating Company invests, and which is designated as such by the
Managing General Partner, shall be deemed a “Fund Investor”. The Managing
General Partner shall promptly notify each Partner of the identity and notice
address of any Person designated a Fund Investor.

     (b) As of the date of this Agreement, the Fund consists of the Partnership,
NY Trust and the subsidiaries of NY Trust, NY Trust II and the subsidiary of NY
Trust II and US Core Trust and the subsidiaries of US Core Trust, including US
Core Properties and the subsidiaries of US Core Properties, and the
organizational structure of the Fund is as set forth on Schedule 5.1. The
Partnership shall take such action as from time to time may be necessary to
ensure that the Partnership has the right, by virtue of share

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ownership, voting agreement or otherwise, to designate a majority of the Board
of Trustees of US Core Trust and to vote or direct the vote of a majority of the
voting securities of US Core Trust at anytime outstanding. The Partnership shall
not, without the consent of the Partners by a Majority Partner Vote, consent to
or take any action that results in (i) US Core Trust ceasing to be the general
partner of US Core Properties, or (ii) US Core Trust issuing any equity
securities having rights, privileges or preferences superior to those of the
securities of US Core Trust held by the Partnership (provided that, the
Partnership may, without any such consent, cause US Core Trust to issue
securities having preferential or modified redemption rights to the same extent
that the Partnership may grant Priority Redemption Rights as contemplated by
Section 3.9). Notwithstanding the foregoing, the Managing General Partner may,
without the consent of any other Partner, cause the Partnership to consent to
the issuance by US Core Trust, NY Trust, NY Trust II and any other REIT in which
the Partnership acquires a direct or indirect interest, for the purpose of
ensuring that such REIT obtains and maintains a sufficient number of
shareholders for such REIT to satisfy the “100 shareholder test” applicable to
REITs under the Code, of a preferred class of equity security having certain
rights, privileges or preferences superior to those of the securities of such
REIT held by the Partnership; provided, that (i) such issuance does not result
in the Partnership ceasing to Control such REIT, (ii) the Managing General
Partner determines that the terms of such securities and of their issuance by
such REIT are commercially reasonable, and (iii) such REIT does not issue more
than $200,000.00 face amount of such preferred securities in the aggregate.

     (c) The Partners acknowledge that an Affiliate of Hines holds an interest
in US Core Trust for the purpose of causing US Core Trust to be “domestically
controlled” as contemplated by the Constituent Documents of US Core Trust. Such
interest shall constitute Hines Bridge Equity, and such Affiliate of Hines shall
be entitled to the benefits of Section 3.10.

SECTION 5.2 Investment Guidelines.

     (a) Each Operating Company will invest, indirectly through one or more Fund
Entities, in real estate properties in the United States in accordance with the
Investment Guidelines. Any real estate property in which the Fund invests is
referred to herein as a “Property”. An Operating Company’s interests in
Properties and in any intermediate Entity through which such Operating Company
invests in a Property 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 Operating Companies, 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 Units and (B) generate an internal rate of return to Limited Partners
of 10% to 12% on their capital invested in respect of Units, net of Partnership
expenses, in each case over an assumed ten year holding period, by investing in
and funding Operating Companies which adhere to the following guidelines (the
“Investment Guidelines”):

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

     (ii) An Operating Company may invest in mixed-use Properties (i.e., some
part of value and/or operating income is attributable to non-office components),
so long as at least 70% of the projected net operating income of any such
Property is attributable to office components.

     (iii) An Operating Company 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, an
Operating Company shall not make an investment in raw land if such investment
would cause the value of the Fund’s total investment in raw land to exceed 2% of
the total value of all Investments of the Fund at the time the Operating Company
makes such investment.

     (iv) Subject to clause (v) below, an Operating Company 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 5.2(b), an
Operating Company 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 made as part of a transaction involving existing office
properties, and such Operating Company has a reasonable plan for disposing of
the 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 Partnership will not provide
funding to an Operating Company for investment in any single Investment in
excess of 25% of the Partnership’s Committed Capital; provided that the
Partnership may provide funding for an Investment by an Operating Company that
exceeds such 25% limit (but which does not in any event exceed 50% of the
Partnership’s Committed Capital), if such Operating Company has a reasonable
plan, in the judgment of the Managing General Partner, 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 5.3 Management Board.

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     (a) The Managing General Partner shall be subject to the oversight of a
management board (the “Management Board”). The Management Board will initially
have seven members. The Managing General Partner shall have the right to appoint
five members of the Management Board and SLR shall have the right to appoint two
members (each, an “SLR Designee”). The Managing General Partner shall promptly
notify each other Partner of the name of each member of the Management Board and
of the party that appointed such person and of any changes thereto. Each member
of the Management Board shall serve until the removal, resignation, death or
incapacity of such member. Any member of the Management Board may be removed or
replaced at any time by the party that appointed such member with or without
cause. Members of the Management Board shall not receive any compensation from
the Partnership for their services as such. The Management Board may require the
removal of any Partnership officer, and may increase or decrease the size of the
Management Board, at any time and from time to time, subject to the appointment
rights of the Managing General Partner and SLR.

     (b) The Managing General Partner shall not take any of the following
actions without the approval of the Management Board:

     (i) acquire an interest in, or advance funds to, an Operating Company;

     (ii) dispose of all or any material part of its interest in an Operating
Company;

     (iii) remove or appoint any officer of the Partnership,

     (iv) issue any Units pursuant to Section 3.7(a),

     (v) make any change to the number of persons comprising the Management
Board or the right of any Person to appoint representatives to the Management
Board,

     (vi) take any action contemplated by clause (v) or (vi) of Section 4.2(b),

     (vii) approve or modify any annual budget of the Partnership, or

     (viii) such other matters as are specified in this Agreement.

     (c) The Managing General Partner will not give its consent, on behalf of
the Partnership, for an Operating Company to take any of the following actions
without the approval of the Management Board:

     (i) acquire an Investment,

     (ii) dispose of all or any material part of an Investment,

     (iii) incur any Indebtedness for which such Operating Company is liable or
which is secured in whole or in part by any Investment,

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     (iv) remove or appoint any officer of such Operating Company,

     (v) issue any equity interest in such Operating Company,

     (vi) make any change to the fees payable by any Fund Entity in which such
Operating Company has an interest under any Property Services Agreement,

     (vii) make any change to the number of persons comprising the governing
body of such Operating Company or the right of any Person to appoint
representatives to such governing body,

     (viii) approve or modify any annual capital or operating budget of such
Operating Company, or

     (ix) such other matters as are specified in this Agreement.

     (d) Meetings of the Management Board may be called at any time by the
Managing General Partner, the President or by any member of the Management Board
on five Business Days’ written notice, which notice shall include a description
of the matters to be discussed at such meeting. Action may be taken by the
Management Board at any meeting at which a quorum is present, which quorum shall
consist of a majority (attending personally or represented by proxy) of the
persons then serving as members of the Management Board; provided that a quorum
shall not exist at any meeting unless at least one SLR Designee is present
(either personally or represented by proxy) at such meeting. Notwithstanding the
preceding sentence, if none of the SLR Designees, acting in good faith, is able
to attend a meeting of the Management Board on the meeting date specified in the
notice of such meeting or within two Business Days thereafter, the quorum for
such meeting shall consist of a majority (attending personally or represented by
proxy) of the persons then serving as members of the Management Board (other
than the SLR Designees). Members of the Management Board may participate in
meetings in person, including by telephone conference call at which all persons
participating can hear and be heard, and shall be also deemed to participate at
any meeting at which (and to the extent which) such member is represented by
proxy.

     (e) Any matter presented to the Management Board for its consideration at a
meeting duly called and held in accordance with this Section 5.3 at which a
quorum is present shall be deemed to have been approved and consented to by the
Management Board if a majority of the members of the Management Board who are
present at the meeting or represented by proxy vote in favor of such action;
provided that such majority must include at least one SLR Designee in the case
of any consent to be given by the Management Board with respect to any of the
following:

     (i) solicitation of Persons resident in Japan or East Asia as prospective
investors in the Partnership, and the acceptance by the Managing General
Partner, on behalf of the Partnership, of any subscription for Units by any such
Person,

     (ii) any change in the fees payable under the Property Services Agreement
in respect of Assets acquired from SLR,

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     (iii) any change in the members of the Management Board appointed by SLR;
or

     (iv) any change in the name of the Partnership.

     (f) Notwithstanding the provisions of paragraph (d) of this Section 5.3,
and subject to the provisions of paragraph (e) of this Section 5.3, any action
required or permitted to be taken at a meeting of the Management Board may be
taken without a meeting, without prior notice, and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
such members of the Management Board as would be necessary to approve such
action at a meeting of the Management Board at which all members were present.

     (g) Notwithstanding the provisions of this Section 5.3, no Investment will
be considered by the Management Board for its approval without endorsement of
such Investment by the President.

     (h) If SLR, after the date hereof and prior to December 31, 2005, ceases to
hold any Partnership Interest, then unless, on or before December 31, 2005, SLR
and/or Affiliates of SLR, (1) contribute at least $25 million to the capital of
the Fund in exchange for Partnership Units (or other units of Fund equity), or
(2) raise, on behalf of the Fund, as least $25 million in capital contributions
or capital commitments to the Fund; then the SLR Designees on the Management
Board and on any governing body of any Fund Entity shall cease to have any
voting rights on any such governing body but shall be observers to the meetings
of each such governing body; provided that if neither of the events described in
clauses (1) and (2) of this Section 5.3(h) has occurred on or before the fifth
anniversary of the date as of which SLR and its Affiliates cease to hold any
Partnership Units, then, on such date, all rights of SLR and the SLR Designees
under this Agreement shall cease, and the Managing General Partner shall,
without the consent of SLR or any other party, amend this Agreement to reflect
that such is the case.

SECTION 5.4 Advisory Committee.

     (a) The Partnership shall have a committee (the “Advisory Committee”)
consisting of Fund Investors or their representatives or designees selected by
the Managing General Partner; provided that no member of the Advisory Committee
shall be an Affiliate of the Managing General Partner (or a designee or
representative thereof). The Managing General Partner will meet with the
Advisory Committee at least semi-annually to consult on various matters
concerning the Partnership, including financial statements and appraisals, the
status of existing investments and such other matters as the Managing General
Partner may determine or any member of the Advisory Committee may reasonably
propose.

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

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     (i) any transaction between the Partnership or any Fund Entity, on the one
hand, and the Managing General Partner, Hines or any Affiliate of the Managing
General Partner or Hines, on the other hand, other than: (A) the provision of
services pursuant to any Property Services Agreement, (B) the leasing of a
limited amount of office space in a Property on market terms by Hines or any of
its Affiliates for conducting its operations, (C) the sale of Units or of any
equity securities (other than the Participation Interest) of any Fund Entity 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 Partners by a Super Majority Vote, (D) the redemption of Partnership
Interests or interests in other Fund Entities held by Affiliates of Hines
pursuant to the terms of this Agreement and/or the Constituent Documents of the
applicable Fund Entity, (E) the execution, delivery or performance of any
Approved Agreement, and (F) any other transaction specifically permitted by this
Agreement.

     (ii) the ratification of any Appraiser selected by the Managing General
Partner, pursuant to Section 5.9 hereof;

     (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.

     (c) Any action of, or approval required by, the Advisory Committee shall
require the vote of members of the Advisory Committee who account for at least a
majority of the aggregate Committed Capital collectively held by Fund Investors
represented on the Advisory Committee.

     (d) The quorum required for a meeting of the Advisory Committee shall be a
majority in interest of its members (determined by reference to the Committed
Capital of the Fund Investors represented by such members). Members of the
Advisory Committee may participate in a meeting of the Advisory Committee by
means of conference telephone or video conferencing by means of which all
persons participating in the meeting can hear and be heard. Any member of the
Advisory Committee who is unable to attend a meeting of the Advisory Committee
may grant in writing to another member of the Advisory Committee or any other
Person such member’s proxy to vote on any matter upon which action is to be
taken at such meeting. The Advisory Committee shall conduct its business by such
procedures as a majority of its members consider appropriate.

     (e) Any action required or permitted to be taken at a meeting of the
Advisory Committee may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by such

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members of Advisory Committee as would be necessary to approve such action at a
meeting of the Advisory Committee at which all members were present; provided,
that all members of the Advisory Committee received notice of the solicitation
of consent at least five (5) days prior to the effectiveness thereof.

     (f) No fees shall be paid by the Partnership or any Operating Company to
members of the Advisory Committee for their services as such, but the members of
the Advisory Committee shall be reimbursed by the Partnership for all reasonable
out-of-pocket expenses incurred in attending meetings of the Advisory Committee.

     (g) Any member of the Advisory Committee may resign upon delivery of
written notice from such member to the Managing General Partner, and shall be
deemed removed if the Limited Partner that the member represents requests such
removal in writing to the Managing General Partner or becomes a Defaulting
Partner. Any vacancy in the Advisory Committee created by the resignation or
death of a member or by the removal of a member at the request of the Limited
Partner represented by such member shall be filled by a representative of the
Limited Partner represented by such member.

     (h) The Managing General Partner may, in its discretion, grant to any Fund
Investor which does not have a representative on the Advisory Committee the
right to have a non-voting observer attend each meeting of the Advisory
Committee. The Managing General Partner shall provide to any such observer
notice of the time and place of any meeting of the Advisory Committee, and of
any written consent being solicited from the Advisory Committee, in the same
manner and at the same time as notice is sent to the members of the Advisory
Committee. The Managing 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 Advisory Committee. Any
observer who attends any meetings of the Advisory Committee shall execute and
comply with an agreement with the Partnership and the Managing General Partner
containing such restrictions on the use and disclosure of confidential
information and other matters as the Managing General Partner may reasonably
request.

SECTION 5.5 Management Team. The Managing General Partner shall, and hereby
does, delegate authority and responsibility for the day-to-day management of the
business of the Partnership to a President (the “President”), a Senior
Investment Manager and a Senior Asset Manager of the Partnership, and such other
officers of the Partnership as the Managing General Partner may deem
appropriate, with the establishment of any office and the appointment of any
person to fill such office by the Managing General Partner being subject to the
approval of the Management Board. Each officer of the Partnership shall be an
employee of Hines and shall, other than the President, report to the President.
The officers of the Partnership, together with such other employees of Hines as
may be assigned to conduct the business of the Partnership under the supervision
of such officers are collectively referred to as the “Management Team.” The
Managing General Partner shall promptly notify each other Partner of the
identity of the officers of the Partnership and their offices and any changes
thereto.

SECTION 5.6 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

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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 5.7 Advisory Agreement. The Managing General Partner may from time to
time cause additional Fund Entities to become party to the Advisory Agreement
for the provision of advice and recommendations with respect to (to the extent
applicable to such Fund Entity) the origination, investigation, structuring,
finance, acquisition, monitoring and/or disposition of Investments by, and/or
the structuring, organization, capitalization and/or financing of, such Fund
Entity (subject to the consent of the other parties to the Advisory Agreement).
The Managing 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 Managing 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 5.8 Property Services Agreements. For each Property in which an
Operating Company invests, a Fund Entity through which such Operating Company
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 attached hereto as Exhibit A (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 a Fund Entity of a Property Services Agreement substantially in such form
with respect to each Property in which any Operating Company invests. Changes
may be made to the Property Services Agreement as the Managing General Partner
or the applicable Operating Company deems necessary or appropriate to
accommodate the particular circumstances of each Property; provided that the
Managing General Partner (i) must obtain the approval of the Non-Managing
General Partner for any such changes, and (ii) 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 pursuant
to Section 5.4 hereof.

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

     (a) Commencing in the first full Fiscal Quarter following the termination
of the Initial Offering Period, all Properties shall be appraised by an
Appraiser on a rolling basis whereby approximately one-quarter of the Properties
are appraised each Fiscal Quarter and each Property is appraised not less
frequently than once in any twelve-month period. Each appraisal shall be updated
quarterly by the Appraiser that conducted the appraisal

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(or, if such Appraiser is not available, such other Appraiser as the Managing
General Partner may select), until the next full appraisal of such Property is
conducted.

     (b) Any Person selected to appraise a Property (an “Appraiser”) shall be a
Person qualified to appraise assets such as the Property in the market in which
the Property is located. At least two Appraisers will be retained for any
calendar year, with each Appraiser retained appraising approximately equal
portions of the Partnership’s portfolio of Properties. Appraisers will be
rotated or replaced so that no Property is appraised by the same Appraiser for
more than three consecutive years. Each Appraiser will be selected by the
Managing General Partner, subject to the approval of the Non-Managing General
Partner and of the Advisory Committee pursuant to Section 5.4 hereof. The
Managing General Partner may from time to time submit a list of Appraisers to
the Advisory Committee. Any Appraiser on such list will be deemed approved by
the Advisory Committee unless, within thirty days of the submission of such list
to the Advisory Committee, the Advisory Committee votes to disapprove such
Appraiser.

     (c) Each Fiscal Quarter the Managing 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 Values derived from
the Current Market Values, as so established, of all Properties. A hypothetical
example calculation of Percentage Interests and Unit cancellations as
contemplated by this Section 5.9 and the definition of Percentage Interest is
provided at Schedule 5.9.

     (i) The “Current Market Value” of a Property shall be (x) the value
established by the most recent appraisal of the Property conducted by an
Appraiser in accordance with Sections 5.9(a) and (b), (y) if such Property has
not been appraised since its acquisition by the Partnership, the value
attributed to such Property upon its acquisition by the Partnership, or (z) such
other value as the Managing General Partner determines is more appropriate than
the value provided in clause (x) or (y) based on changes in the condition of the
Property, the market in which it is located or other relevant factors since the
date such Property was appraised or acquired, as applicable.

     (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 each Fund Entity, as reasonably determined by the
Managing 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

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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 Partnership 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 Partnership
Units outstanding as of such date (including, if applicable, any other
securities that are convertible into or exchangeable for Units as of such date).

     (d) At the end of each Fiscal Quarter ending after termination of the
Initial Investment Period, a number of Partnership Units held by each
Unaffiliated Limited Partner shall automatically, without any action by any
party, be canceled, with the number of 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 Partnership 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 SLR, 0.03125%, (ii) as to each Class A Major Investor, 0.09375%,
(iii) as to each Class B Major Investor, 0.10625%, (iv) as to each Class C Major
Investor, 0.1125%, (v) as to each Class D Major Investor, 0.11875%, and (vi) as
to each other Unaffiliated Limited Partner, 0.125%.

     (ii) For purposes of effecting the computations set forth in this Section
5.9(d) 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 Partnership
Units pursuant to this Section 5.9(d); and (B) the Current Unit Value as of the
end of the Fiscal 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 Partnership Units pursuant to this Section 5.9(d)
shall be determined and taken into account immediately after (A) the

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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 Partnership Units pursuant to this Section 5.9(d)
as of the end of any Fiscal Quarter shall become effective as of the beginning
of the immediately following Fiscal Quarter.

SECTION 5.10 Management of Operating Companies. Each Operating Company shall be
governed by a board of trustees, board of directors, board of managers or
similar governing body whose membership includes all of the members of the
Management Board. The day to day operations of each Operating Company shall be
managed by a management team which is headed by the President and which includes
the other members of the Management Team. The Constituent Documents of each
Operating Company, together with any other agreements that may be entered into
in connection with the organization of such Operating Company, shall provide
(i) the governing body thereof with oversight and approval rights with respect
to the business and affairs of such Operating Company which are comparable to
the oversight and approval rights which this Agreement provides to the
Management Board with respect to the business and affairs of the Partnership,
and (ii) SLR Designees with rights to participate in the management of such
Operating Company which are comparable to the rights which this Agreement
provides to SLR Designees to participate in the management of the Partnership.
The Managing General Partner shall, or shall cause the Partnership to, take such
actions as may be permitted or required under the terms of the Constituent
Documents of each Operating Company, and under the terms of any agreement
entered into by the Partnership or the Managing General Partner in connection
with the organization of such Operating Company, to ensure that the requirements
of this Section 5.10 are met with respect to each Operating Company.

SECTION 5.11 Non-Managing General Partner.

     (a) Hines REIT Properties, L.P., a Delaware limited partnership whose
general partner is Hines Real Estate Investment Trust, Inc., a Maryland
corporation, is a general partner of the Partnership and is designated the
non-managing general partner of the Partnership (the “Non-Managing General
Partner”). The Non-Managing General Partner shall be a “general partner” for all
purposes under the Act, but shall have only those rights, duties, and
obligations accorded to it by this Agreement and shall have no power to bind the
Partnership or act on behalf of the Partnership independently of the Managing
General Partner.

     (b) Notwithstanding any other provision of this Agreement, the Managing
General Partner shall not take any of the following actions without the approval
of the Non-Managing General Partner:

     (i) declare distributions to Partners in accordance with this Agreement;

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     (ii) incur Indebtedness in the name of the Partnership or which is recourse
to the Partnership;

     (iii) select any Appraiser;

     (iv) make any decision concerning the sale, transfer or disposition of any
Investment in any third-party transaction; provided, that the value of such
Investments is greater than 20% of the Gross Asset Value of the Partnership’s
assets;

     (v) approve the merger or consolidation of the Partnership with an
unrelated third party;

     (vi) make any amendments, revisions or modifications to Section 5.2 hereof
or any other provisions of this Agreement with respect to investment policies or
procedures;

     (vii) make any amendment to this Agreement which, under the terms of this
Agreement, requires the consent of the Managing General Partner and of Limited
Partners by a Majority LP Vote or higher vote;

     (viii) remove or appoint any Property Manager or approve renewals,
amendments or modifications to any Property Services Agreement;

     (ix) remove or appoint any Investment Advisor that is an Affiliate of
Hines, or approve renewals, amendments or modifications to any Advisory
Agreement between the Partnership or any Operating Company, on the one hand, and
any Investment Advisor that is an Affiliate of Hines, on the other;

     (x) sell Investments to Hines or any Affiliate of Hines or acquire
Investments from Hines or any Affiliate of Hines;

     (xi) merge or consolidate the Partnership with any Affiliate of Hines; or

     (xii) any other matters as is specified in this Agreement.

ARTICLE VI

Exculpation and Indemnification

SECTION 6.1 Exculpation of the General Partners. The Managing General Partner,
the Non-Managing General Partner and their respective Affiliates, and the direct
or indirect members, managers, partners, shareholders, officers, directors,
employees, agents and legal representatives of the Managing General Partner, the
Non-Managing General Partner and any such Affiliate, including any officer of
the Partnership 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 or of any Operating Company, except
to the extent such act or

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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. Each of the Managing General Partner and the
Non-Managing 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. Each
of the Managing General Partner and the Non-Managing 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. Each of the
Managing General Partner and the Non-Managing 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. Neither the Managing General Partner nor the Non-Managing
General Partner shall be liable to the Partnership or the Partners for the
failure to perform any obligation that it cannot perform because the Partnership
has insufficient funds to pay the cost and expense relative to such obligation.

 SECTION 6.2 Indemnification of Managing 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 or of any Operating Company, unless such act or
omission constitutes (i) for as long as the Non-Managing General Partner holds a
Partnership Interest, in the case of the Managing 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 such Operating Company or was guilty of
gross negligence, willful misconduct, bad faith or a knowing violation of law.

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     (b) The Partnership, in the discretion of the Managing 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 Managing 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 Managing 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 Managing
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.

 SECTION 6.3 Treatment of Management Board, Advisory Committee, Et al. No member
of the Management Board, the Management Team or the Advisory Committee (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 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 (or than as a result
of fraud or willful misconduct). The participation by a person on the Management
Board, the Management Team or the Advisory Committee 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 or the
Advisory Committee in the activities of the Management Board or Advisory
Committee 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 or Advisory Committee shall be deemed to be an
Affiliate of the Partnership or the Managing General Partner solely by reason of
such appointment. In the absence of fraud or willful misconduct on the part of a
member of the Advisory Committee or an SLR Designee, the Partnership shall, to
the fullest extent permitted by law, indemnify and hold harmless each such
member of the Advisory Committee and each SLR Designee, and each Limited Partner

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represented by any such person, with respect to the Partnership (and their
respective heirs and legal and personal representatives) who was or is a party,
or is threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of the Partnership or any
of the Partners), by reason of any actions or omissions or alleged acts or
omissions arising out of such Person’s activities in connection with serving on
the Management Board or the Advisory Committee against losses, damages or
expenses (including reasonable attorney’s fees, judgments, fines and amounts
paid in settlement) actually incurred by such person in connection with such
actions, suit or proceedings; provided that any person entitled to
indemnification from the Partnership hereunder shall obtain the written consent
of the Managing General Partner (which consent shall not be unreasonably
withheld) prior to entering into any compromise or settlement which would result
in an obligation of the Partnership to indemnify such person. The Partnership
shall advance to any member of the Advisory Committee, any SLR Designee or any
Limited Partner represented by any such 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 each such Person
must agree, as a condition to receiving any such advance, that in the event such
person receives any advance, such 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 such person was not
entitled to indemnification under this Section 6.3.

 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 any Limited Partner that is an Affiliate of Hines or of 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 Managing General
Partner, 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 Managing General Partner Expenses. The Partnership shall not have
any salaried personnel. The Managing General Partner and its Affiliates, but not
the Partnership or any Limited Partner, shall bear and be charged with the
following costs and expenses of the Partnership’s activities: (a) any costs and
expenses of providing to the Management Team the

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office space, facilities, supplies, and necessary ongoing overhead support
services for the Partnership’s operations and (b) the compensation of the
Management Team. The expenses that the Managing General Partner is obligated or
elects to pay under this Section 7.1 are collectively referred to herein as the
“Managing General Partner Expenses”. Notwithstanding anything herein to the
contrary, no costs or expenses payable by the Owner of any Property under the
terms of the Property Services Agreement entered into with respect to such
Property shall be deemed Managing General Partner Expenses.

 SECTION 7.2 Asset Management Fee.

     (a) The Partnership shall pay a periodic management fee (the “Asset
Management Fee”) to the Managing General Partner; provided that, to the extent
the Managing 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 SLR, 0.25%, (B) for each Class A Major Investor,
0.75%, (C) for each Class B Major Investor, 0.85%, (D) for each Class C Major
Investor, 0.90%, (E) for each Class D Major Investor, 0.95%, or (F) 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
Managing 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

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Unaffiliated Limited Partner. All amounts deducted from amounts otherwise
distributable to an Unaffiliated Limited Partner and paid to the Managing
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.

 SECTION 7.3 Acquisition Fees

     (a) For each Investment in a Property made by an Operating Company (other
than an Operating Company which makes its investments indirectly through another
Operating Company), other than any Investment in a Property acquired by such
Operating Company from SLR or any of its Affiliates, the Partnership shall,
subject to penultimate sentence of Section 7.3(b), pay to the Managing General
Partner a fee (an “Acquisition Fee”) in an amount equal to (1) in the case of
any Acquisition Fees payable in respect of an Investment that closes on or prior
to the termination of the Initial Investment Period, 1%, or in the case of any
Acquisition Fees payable in respect of an Investment that closes after the
termination of the Initial Investment Period, 0.5%, multiplied by (2) the value
of the total consideration (including any assumed Indebtedness) paid in respect
of such Property, multiplied by (3) a fraction whose numerator equals the total
equity capital contributed to the acquisition of such Property by such Operating
Company and whose denominator is the total equity capital contributed to the
acquisition of such Property by all sources, multiplied by (4) a fraction whose
numerator is the total outstanding equity capital of such Operating Company
held, directly or indirectly, by the Partnership and whose denominator equals
the total outstanding equity capital of such Operating Company, multiplied by
(5) the aggregate Percentage Interest of the Unaffiliated Limited Partners in
respect of their Partnership Units only immediately following the closing of the
Fund’s investment in such Property. Notwithstanding the foregoing, if the
Managing 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 Partnership Units only and whose
denominator is the aggregate Percentage Interest of all Unaffiliated Limited
Partners in respect of their Partnership 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. 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 Managing 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 Managing General Partner (or the Investment

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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 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 Managing 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 by the
Partnership in developing, negotiating, structuring and organizing any Operating
Company;

     (iii) 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;

     (iv) expenses of liquidating the Partnership;

     (v) 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; and

     (vi) the out-of-pocket expenses of the members of the Advisory Committee
reimbursable under Section 5.4(f) to the extent such expenses are not reimbursed
by an Operating Company.

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

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 SECTION 7.5 Operating Company Expenses.

     (a) Each Operating Company shall bear and be charged with the following
costs and expenses of such Operating Company paid or payable to third parties
(and shall promptly reimburse the Managing 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 “Operating Company Expenses”):

     (i) fees and expenses for attorneys and accountants;

     (ii) all out-of-pocket costs and expenses, if any, incurred by such
Operating Company in acquiring, developing, negotiating, structuring, improving,
and disposing of actual Investments, including any financing, legal, accounting,
advisory and consulting expenses in connection therewith (to the extent not
subject to any reimbursement of such costs and expenses by entities in which the
Partnership invests or other third parties);

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

     (iv) the costs of any litigation, D&O liability or other insurance and
indemnification or extraordinary expense or liability relating to the affairs of
such Operating Company (or, to the extent such expenses are paid by the
Partnership pursuant to clause (iii) of Section 7.4(a), an allocable share of
such expenses shall be charged to such Operating Company by the Partnership);

     (v) expenses of liquidating such Operating Company;

     (vi) any taxes, fees or other governmental charges levied against such
Operating Company and all expenses incurred in connection with any tax audit,
investigation, settlement or review of such Operating Company; and

     (vii) a reasonably allocable share (as determined by the Managing General
Partner) of the out-of-pocket expenses of the members of the Advisory Committee
paid by the Partnership pursuant to clause (vi) of Section 7.4(a).

     (b) Operating Company Expenses may be allocated among an Operating
Company’s Investments in a manner reasonably determined by such Operating
Company. Partners may be required to make Capital Contributions to the extent of
their Unfunded Commitments to enable the Partnership to provide funds to any
Operating Company to pay Operating Company Expenses to the extent that such
Operating Company 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.

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     (d) The Managing General Partner may withhold on a pro rata basis from any
distributions amounts necessary to create, in its sole discretion, appropriate
reserves for expenses (including Acquisition Fees) and liabilities, contingent
or otherwise, of the Partnership, and may withhold from distributions otherwise
payable to any Limited Partner amounts necessary to pay any unpaid amounts of
any Asset Management Fee payable by such Limited Partner (in which case any such
withheld distributions shall be deemed to have been made to such Limited Partner
for all purposes under this Agreement).

 SECTION 7.6 Organization Expenses. The Partnership shall pay all out-of-pocket
costs and expenses (including legal, accounting, tax, consulting and other
professional fees and expenses and travel and entertainment expenses) incurred
by the Partnership and the Managing General Partner and its Affiliates in
connection with the structuring and organization of the Partnership, NY Trust,
NY Trust II, US Core Trust and US Core Properties and the offering and sale of
Partnership Units and, if applicable, securities issued by NY Trust, NY Trust
II, US Core Trust, US Core Properties or any other Fund Entity, including
expenses (other than placement fees) incurred in connection with the
solicitation of Capital Commitments and the negotiation, execution and delivery
of this Agreement and all other documents entered into in connection herewith
(any such amounts, the “Organizational Expenses”). Notwithstanding the
foregoing, the Partnership shall not be responsible for any Organizational
Expenses incurred during the Initial Offering Period in excess of $2.5 million;
any Organizational Expenses in excess of such amount incurred during the Initial
Offering period shall be the responsibility of the Managing General Partner and
its Affiliates.

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.

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     (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, 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.

     (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 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the Managing 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 Managing 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 Managing 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 1.704-1(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

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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(b) 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 otherwise be 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 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 Partnership 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 Partnership 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) In the event that the Partnership issues or redeems Partnership
Interests pursuant to Article III hereof, the Managing 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

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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 Partnership Units, multiplied by the total amount of such Losses.

     (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 Units held by each Partner.

     (c) In the event that the Partnership issues or redeems Partnership
Interests pursuant to Article III hereof, the Managing 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,

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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, 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 1.704-1(b)(2)(ii)(d)(4), 1.704-1(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) Partnership Nonrecourse Deductions for any Fiscal Year shall be
allocated 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)(1).

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     (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 1.704-1(b)(2)(iv)(m)(4), 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 (g) (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 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 8 (other than the Regulatory
Allocations), the Managing 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). In exercising its
discretion under this Section 8.7, the Managing 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 Managing General Partner using any
permissible manner under the Code or the Regulations that the Managing 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

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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 determined by the Managing 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 Partnership Units held by each such
Partner.

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

 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), (d) gross insurance
proceeds (excluding rental insurance proceeds or insurance proceeds applied to
restoration of property), (e) return from an Operating Company of capital
contributed or advanced to such Operating Company by the Partnership, and
(f) distributions by an Operating Company of capital contributed or advanced to
such Operating Company, 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 Managing
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

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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 Partnership Units held by each such
Partner.

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

 SECTION 9.3 Reinvestment of Capital Cash Flow. The Managing General Partner
may, in its discretion, apply all or part of Capital Cash Flow to provide funds
to Operating Companies to make new Investments or repay Indebtedness, make
additional investments in existing Investments or to fund the redemption of
interests in the Fund pursuant to the terms of this Agreement or the Constituent
Documents of any Fund Entity.

 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 7.2, 7.3 and 9.3, any 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 Managing
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 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 pursuant to Section 5.4
hereof.

 SECTION 9.6 Tax Distributions. The Managing General Partner and the
Non-Managing General Partner shall use their best efforts to cause the
Partnership to make distributions of Operating Cash Flow and Capital Cash Flow
to the Partners pursuant to this Article IX 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 Managing General Partner Interest. Without
the consent of the Fund Investors by a Super Majority Fund Vote, the Managing
General Partner shall not have the right to assign or otherwise transfer its
interest as a general partner of the Partnership designated the Managing General
Partner (but may pledge its interest in connection with any Partnership
borrowing) other than to another Hines Controlled Entity, and the Managing
General Partner shall not have the right to withdraw from the Partnership;
provided that without the consent of the Limited Partners or any other Fund
Investors, the Managing General Partner may be reconstituted as or converted
into a corporation, limited partnership or

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other form of entity (any such reconstituted or converted entity being deemed to
be the Managing General Partner for all purposes hereof) by merger,
consolidation or otherwise, so long as (i) the Managing General Partner
continues to be a Hines Controlled Entity; (ii) such reconstitution, conversion
or transfer does not have adverse tax or legal consequences for the Limited
Partners or the Partnership; (iii) the Managing General Partner has notified the
Limited Partners of such transaction at least thirty days prior to the effective
date of such transaction; and (iv) the Limited Partners shall not have made a
reasonable objection to such transaction prior to the effective date of such
transaction by a Majority LP Vote. No such assignment or other transfer of all
of the Managing 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 a general partner of the Partnership designated the
Managing General Partner. Any such substitute general partner shall be admitted
as a general partner of the Partnership designated the Managing General Partner
upon its execution and delivery of this Agreement as Managing General Partner,
and immediately thereafter the replaced general partner shall withdraw as a
general partner of the Partnership.

 SECTION 10.2 Removal of Managing General Partner.

     (a) The Managing General Partner may be removed by a Majority Fund Vote if
a Finding of Cause shall have been made and shall have become effective and
shall not have been withdrawn or rescinded in accordance with the provisions of
this Section 10.2(a). For purposes of this Agreement, the term “Finding of
Cause” means a written determination by Fund Investors by a Majority Fund Vote
that the Managing General Partner has committed willful malfeasance in the
performance of any of its material duties under this Agreement or has committed
gross negligence, willful misconduct or fraud which is the primary cause of a
material adverse effect on the Partnership and has continued without being
substantially cured for a period of at least thirty Business Days after the date
upon which written notice shall have been given to the Managing General Partner
by Fund Investors pursuant to a Majority Fund Vote stating that they believe
such willful malfeasance, gross negligence, willful misconduct or fraud has
occurred and identifying with reasonable particularity the actions constituting
or resulting in such willful malfeasance, gross negligence, willful misconduct
or fraud; provided, however, that the Managing General Partner shall have the
right to dispute any determination that such willful malfeasance, gross
negligence, willful misconduct or fraud has occurred or is continuing or that
such willful malfeasance, gross negligence, willful misconduct or fraud is the
primary cause of a material adverse effect on the Partnership and, if the
Managing General Partner does so, a Finding of Cause shall not become effective
until the date upon which the dispute with respect to such determination has
been resolved (whether by agreement between the Managing General Partner and
Fund Investors by a Majority Fund Vote or as a result of a judgment or award in
any judicial proceeding). Any determination of or by the Fund Investors, and the
effectiveness, of any Finding of Cause may be rescinded or withdrawn at any time
by the Fund Investors by a Majority Fund Vote.

     (b) At any time after the Initial Investment Period, the Managing General
Partner may be removed by a 75% Majority Fund Vote with or without a Finding of
Cause by causing the Partnership to redeem all Partnership Interests held by the
Managing General

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Partner and its Affiliates (including the Hines Limited Partner) by issuance of
a promissory note with a term of not more than three years, bearing interest at
the Prime Rate, and with a principal amount equal to the sum of the Current Unit
Value of all Units and the Current Participation Interest Value of the
Participation Interest held by the Managing General Partner and its Affiliates
(including the Hines Limited Partner).

     (c) No removal of the Managing General Partner pursuant to this
Section 10.2 shall be effective until a successor general partner designated the
Managing General Partner has been admitted to the Partnership in place of the
removed Managing General Partner. Upon such admittance to the Partnership, such
successor Managing General Partner will be entitled to appoint members of the
Management Board in substitution of those appointed by the Managing General
Partner immediately prior to such removal of the Managing General Partner.

 SECTION 10.3 Transfers of Partnership Interests by Hines Partners.

     (a) Subject to Sections 10.1 and 10.2, each of the Managing General Partner
and the Hines Limited Partner may Transfer part or all of the Partnership Units
and Participation Interests held by it in accordance with the provisions of this
Agreement; provided that, (i) unless otherwise approved by the Limited Partners
pursuant to a Super Majority LP Vote, no such Transfer shall be permitted that
would result in the Hines Capital Requirement failing to be met, (ii) if the
Non-Managing General Partner is the Transferee of such Partnership Units or
Participation Interests, it shall take them only in respect of its interest in
the Partnership as the Non-Managing General Partner, and (iii) any Transferee
other than the Non-Managing General Partner of any such Partnership Units or
Participation Interest shall take them only in respect of a limited partner
interest in the Partnership and not as a general partner, except, in the case of
clauses (ii) and (iii) above, to the extent the Transfer of a general partner
interest to a Transferee designated the Managing General Partner has been
approved in accordance with Section 10.1.

     (b) Unless otherwise approved by Fund Investors by a Super Majority Fund
Vote, the Managing General Partner shall ensure that the Managing General
Partner is at all times a Hines Controlled Entity and that Hines Controlled
Entities and the Hines Group, in the aggregate, own (directly or indirectly) a
majority of the equity in the Managing General Partner.

 SECTION 10.4 Transfers of Units by Partners Other than Hines Partners. Any
Partner other than the Managing General Partner and the Hines Limited Partner
may Transfer any Units and all or part of any Participation Interest held by it
at any time, subject only to the provisions of Section 10.5. Any such Partner
that Transfers all or any part of the Units or Participation Interest held by it
shall pay all reasonable expenses, including attorneys’ fees, incurred by the
Partnership or the Managing General Partner in connection with such Transfer.

 SECTION 10.5 Conditions to Transfer.

     (a) No Transfer of part or all of any Partnership Interest shall be made
unless in the opinion of responsible counsel (which may be counsel for the
Partnership), which

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opinion of counsel shall be reasonably satisfactory to the Managing General
Partner and which opinion may be waived, in whole or in part, in the sole and
absolute discretion of the Managing 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 Partnership Interests 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 Managing 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; and

     (vi) such Transfer would not violate or result in a violation of the
Constituent Documents of any Operating Company in which the Partnership has a
direct or indirect interest.

     (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,

     (i) such Transfer would result in the Partnership’s being treated as an
association taxable as a corporation; or

     (ii) such Transfer would result in the Partnership no longer qualifying for
the Private Placement PTP 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 10.5 shall be void ab initio and ineffectual and
shall not be binding upon, or

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recognized by, the Managing General Partner or the Partnership. Prior to the
consummation of any Transfer by any Partner, such Partner shall deliver to the
Managing General Partner such legal opinions, certificates and other documents
as the Managing General Partner shall reasonably request in connection with such
Transfer.

     (e) Redemptions of Partnership Interests pursuant to Sections 3.8, 3.9 or
3.10 shall not be considered Transfers for purposes of this Section 10.5.

SECTION 10.6 Admissions and Withdrawals Generally, Nature of Partnership
Interest.

     (a) 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.
The Non-Managing General Partner and any Limited Partner shall be deemed to have
withdrawn as a Partner of the Partnership at such time as such Person has
disposed of all Partnership Units and Participation Interests held by such
Person in a manner permitted by the terms of this Agreement. 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 Managing General Partner on behalf of the Partnership.
The names and addresses of all Persons admitted as Partners and their status as
Managing General Partner, Non-Managing General Partner or a Limited Partner
shall be maintained in the records of the Partnership.

     (b) The entire Partnership Interest of each of the Managing General Partner
and the Non-Managing General Partner is a general partner interest, and all
Partnership Units or Participation Interest held or hereafter acquired by either
such Partner, whether acquired from the Partnership or from any other Partner,
is and shall be held in respect of its general partner interest, with the
Managing General Partner having those rights and obligations provided to the
Managing General Partner by this Agreement and the Non-Managing General Partner
having those rights and obligations provided to the Non-Managing General Partner
by this Agreement. The entire Partnership Interest of each Limited Partner is a
limited partner interest, and all Partnership Units or Participation Interest
held or hereafter acquired by a Limited Partner, whether acquired from the
Partnership, the Managing General Partner, the Non-Managing General Partner, or
any other Limited Partner, shall be held in respect of its limited partner
interest, with such Limited Partner having the rights and obligations provided
to a Limited Partner under this Agreement. As provided in Section 5, any
Partnership Interest represented by a Class N Partnership Unit shall be a
non-voting interest regardless of who holds such Class N Partnership Unit.

 SECTION 10.7 Required/Elective Withdrawals. The Managing General Partner may
require a Limited Partner to withdraw from the Partnership if (i) in the
reasonable judgment of the Managing 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, or (ii) in the
reasonable judgment of the Managing General Partner, a significant delay,
extraordinary expense or material adverse effect on the Partnership or any of
its Affiliates, any Fund Entity or any

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prospective investment is likely to result from the retention by such Limited
Partner of a Partnership Interest. Notice of any such withdrawal shall be given
to all Limited Partners as well as a copy of the opinion of counsel referred to
above in the case of a withdrawal pursuant to clause (i) above. Withdrawals
pursuant to this Section 10.7 will be effected by the Partnership’s redeeming
the 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 10.8 Defaulting Partner.

     (a) Any Partner that fails to make, when due, any portion of the Capital
Contributions required to be made by such Partner pursuant to this Agreement and
the Subscription Agreement to which such Partner is a party may, in the
discretion of the Managing 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 Partner.

     (b) If any Partner fails to make, when due, any portion of the Capital
Contribution required to be contributed by such Partner pursuant to this
Agreement and the Subscription Agreement to which such Partner is a party, then
the Partnership shall promptly provide written notice of such failure to such
Partner. If such Partner fails to make such Capital Contribution within five
Business Days after receipt of such notice, then (i) such Partner shall be
deemed a “Defaulting Partner” and the following Sections 10.8(c) through
(h) shall apply.

     (c) The Managing General Partner shall have the right to determine, in its
sole discretion, that whenever the vote, consent or decision of a Partner or of
the Partners is required or permitted pursuant to this Agreement, except as
required by the Act, any Defaulting 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 Partner were not a
Partner.

     (d) The Managing General Partner shall have the right in its sole
discretion to either (i)(A) determine that a Defaulting 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 Partner would otherwise receive, and (B)
effect a forfeiture by such 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 Partner, cause the Defaulting 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
Managing General Partner in its sole discretion, which have agreed to purchase
such interest at a transfer price equal to at least 80% of such Defaulting
Partner’s Capital Account balance.

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     (e) In the event that a Partner defaults in making all or any portion of a
Capital Contribution to the Partnership, the Managing 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 Partner on which it defaulted; provided that no Partner will be
required to contribute any amounts in excess of its Unfunded Commitment without
such Partner’s consent. If the Managing General Partner elects to require such
increase, the Managing 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 Managing
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 Partner failed to make.

Subject to the provisos set forth above in this Section 10.8(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 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 Managing General Partner. If
any Partner is not required to make a Capital Contribution in accordance with
this Section 10.8(e) because such Capital Contribution would be in excess of
such Partner’s Unfunded Commitment, then, subject to the provisos set forth in
this Section 10.8(e), the Managing General Partner shall send to each other
Partner which is not subject to such constraint a Capital Call Notice providing
the amount of any additional Capital Contribution which such other Partner shall
be required to make as a result of such excess not being funded by the 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
Partners as such other Partner’s Unfunded Commitment bears to the Unfunded
Commitments of all such other non-defaulting Partners. The provisions of this
Section 10.8(e) shall operate successively until either all Partners are subject
to such constraint or the full amount of the defaulted Capital Contribution of
the Defaulting Partner has been provided for.

     (f) No right, power or remedy conferred upon the Managing General Partner
in this Section 10.8 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 10.8 or now or hereafter available at law or
in equity or by statute or otherwise. No course of dealing between the Managing
General Partner and any Defaulting Partner and no delay in exercising any right,
power or remedy conferred in this Section 10.8 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 Partner acknowledges by its execution hereof that it has been
admitted to the Partnership in reliance upon its agreements under this Agreement
and in its Subscription Agreement, that the Managing 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.

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     (h) For purposes of this Section 10.8, if any Defaulting Partner is any
Entity the equity owners of which consist of two or more unaffiliated investors,
the Managing 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 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 Managing 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 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
Managing General Partner at any reasonable time during normal business hours.

 SECTION 11.2 Partnership Auditor. The Managing 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 Managing 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 Managing 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 Managing 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 6231(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 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.

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     (b) The Managing 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 Managing 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
Managing 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 Managing General Partner, and the
Managing General Partner shall be absolved from all liability and other
consequences from any such decisions which are made in good faith.

     (c) The Managing 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 Managing 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 Managing
General Partner.

 SECTION 11.5 Reports to Partners.

     (a) Within forty-five days after the end of each Fiscal Quarter other than
the fourth Fiscal Quarter, and within ninety days after the end of each Fiscal
Year, the Managing General Partner shall send to each Person who was a Partner
in the Partnership at any time during the prior Fiscal Year:

     (i) the following financial statements for the Partnership prepared on an
accrual basis and in accordance with GAAP (provided that, for purposes of
preparing these statements, each Investment shall be valued at cost, unless
(1) if such Investment has been appraised since its acquisition in accordance
with Section 5.9, in which case the Investment will be valued at its Current
Market Value, or (2) if in the reasonable judgment of the Managing General
Partner, circumstances dictate that an Investment be valued on a different basis
than cost or Current Market Value, in which case the Investment shall be valued
on such basis as the Managing General Partner shall reasonably determine, and
the

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Managing General Partner shall include in such statements an explanation of the
reason for such determination and the basis for the valuation of such
Investment):

     (A) a balance sheet as of the end of such period,

     (B) a statement of income or loss and a statement of Partners’ capital for
such period, and

     (C) a statement of changes in Partners’ equity;

     (ii) a schedule of changes in Capital Account balances by Partner;

     (iii) a schedule and summary description of each Investment owned by the
Partnership as of the end of such period; and

     (iv) in the case of an annual report with respect to any Fiscal Year, an
opinion of the Partnership Auditor based upon its audit of the financial
statements referred to in clause (i) above.

     (b) Within ninety days after the end of each Fiscal Year of the
Partnership, the Managing General Partner shall send to each Person who was a
Partner during such period a statement of cash flows of the Partnership.

     (c) Concurrently with the delivery of the audited financial statements for
each Fiscal Year pursuant to Section 11.5(a), the Managing 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 Managing General Partner will deliver
such other information available to the Managing General Partner, including
financial statements and computations, as any Partner may from time to time
reasonably request in order to comply with regulatory requirements, including
reporting requirements, to which such Partner is subject.

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 SECTION 11.6 Meetings of Partners.

     (a) The Managing General Partner shall hold an annual meeting of Partners
beginning in the first full calendar year following the end of the Initial
Offering Period. The Managing General Partner shall give at least forty-five
days notice of the time and place of such meeting to each Partner, which notice
shall set out the agenda for such meeting.

     (b) The Managing General Partner and the Non-Managing General Partner,
together or independently, may call a special meeting of the Partnership by
giving at least ten days notice of the time and place of such meeting to each
Partner, which notice shall set out the agenda for such meeting.

     (c) 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 (i) the Managing General Partner, (ii) the Non-Managing General Partner (to
the extent such action requires the approval of the Non-Managing General Partner
by the terms of this Agreement), and (iii) 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; provided that a vote to terminate
the Partnership pursuant to Section 12.2 may be held only at a meeting duly
called, and not by written consent in lieu thereof.

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

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

     (f) The Managing General Partner may set in advance a record date for
determining the 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 relates nor more than ten days after the
date on which the Managing General Partner sets the record date for any action
by written consent. If the Managing General Partner does not set a record date,
the record date for a meeting of Partners shall be the date of such meeting, and
the record date for a written consent of Partners shall be the date of the
notice to the Partners by which the Managing General Partner requests such
written consent.

     (g) A quorum shall be present at any meeting of Partners with respect to
any matter to be voted on at such meeting, if 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

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requires the taking of an action approved by, or prohibits the taking of any
action unless approved by, a specified LP Vote, Partner Vote or Fund Vote. An
“LP Vote” is a vote taken among, or consent solicited from, all Limited Partners
holding Voting Interests. A “Partner Vote” is a vote taken among, or consent
solicited from, all Partners holding Voting Interests. A “Fund Vote” is a vote
taken among, or consent solicited from, all Partners holding Voting Interests
and all other Voting Fund Investors. A “Majority LP Vote” means the affirmative
vote or consent of Limited Partners holding Voting Interests representing more
than fifty percent (50%) of the Percentage Interests attributable to Voting
Interests held by the Limited Partners on the record date set for an LP Vote. A
“Super Majority LP Vote” means the affirmative vote or consent of Limited
Partners holding Voting Interests representing sixty-six and two-thirds percent
(66 2/3%) or more of the Percentage Interests attributable to Voting Interests
held by the Limited Partners on the record date set for an LP Vote. A “75%
Majority LP Vote” means the affirmative vote or consent of Limited Partners
holding Voting Interests representing seventy-five percent (75%) or more of the
Percentage Interests attributable to Voting Interests held by the Limited
Partners on the record date set for an LP Vote. A “Majority Partner Vote” means
the affirmative vote or consent of Partners holding Voting Interests
representing more than fifty percent (50%) of the Percentage Interests
attributable to Voting Interests held by the Partners on the record date set for
a Partner Vote. A “Super Majority Partner Vote” means the affirmative vote or
consent of Partners holding Voting Interests representing sixty-six and
two-thirds percent (66 2/3%) or more of the Percentage Interests attributable to
Voting Interests held by the Partners on the record date set for a Partner Vote.
A “75% Majority Partner Vote” means the affirmative vote or consent of Partners
holding Voting Interests representing seventy-five percent (75%) or more of the
Percentage Interests attributable to Voting Interests held by the Partners on
the record date set for a Partner Vote.

     (h) Each Partner entitled to vote or consent on any matter which under the
terms of this Agreement requires an LP Vote or Partner Vote shall have a voting
and consent percentage equal to the Percentage Interest attributable to the
Voting Interests held by such Partner on the record date set for the meeting or
consent at or by which a vote is to be held or a consent is to be taken. Any
Feeder Entity may vote or consent any Voting Interest held by it for and/or
against any matter presented to the Partners for a vote or consent in such
manner and proportions as may be provided for in the constituent documents of
such Feeder Entity, as applicable. The Managing General Partner and any Partner
that is an Affiliate of the Managing General Partner (including Hines and the
Hines Limited Partner) shall be deemed to have voted or granted their consent
with respect to any Voting Interests held by them on any matter put to an LP
Vote, Fund Vote or Partner Vote in the same manner and proportions as the Voting
Interests of the other Partners participating in such vote, were voted or
consented.

     (i) The Managing General Partner may, in its discretion, grant to any
Partner that holds no Voting Interests and any Fund Investor which is not a
Partner the right to have a non-voting observer attend each meeting of the
Partners. The Managing 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 Managing General Partner

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

 SECTION 11.7 Meetings of Fund Investors. If this Agreement requires any action
be taken by or with the consent of Fund Investors by a Fund Vote, such action
may be taken only at a meeting of Fund Investors pursuant to a written notice
authorized by a Majority LP Vote to all Fund Investors, which notice shall
specify the time and place of such meeting (which shall be not less than 30
Business Days after the date of such notice) and the purpose for which such
meeting is called. At any meeting of Fund Investors called pursuant to the
preceding sentence, each Voting Fund Investor at such meeting, in person or by
proxy, that is not an Affiliate of the Managing General Partner shall be
entitled to vote at such meeting on the matters specified in the notice by which
such meeting was called; provided, that each Partner shall be entitled to vote
on such matters only to the extent that such Partner holds Voting Interests. A
“Majority Fund Vote” means the affirmative vote of Voting Fund Investors that
are not Affiliates of the Managing General Partner holding direct or indirect
equity interests in Properties in which the Fund has an interest equal to more
than 50% of all equity interests held directly or indirectly by all Voting Fund
Investors that are not Affiliates of the Managing General Partner in such
Properties. A “Super Majority Fund Vote” means the affirmative vote of Voting
Fund Investors that are not Affiliates of the Managing General Partner holding
direct or indirect equity interests in Properties in which the Fund has an
interest equal to sixty-six and two-thirds percent (66 ?%) or more of all equity
interests held directly or indirectly by all Voting Fund Investors that are not
Affiliates of the Managing General Partner in such Properties. A “75% Majority
Fund Vote” means the affirmative vote of Voting Fund Investors that are not
Affiliates of the Managing General Partner holding direct or indirect equity
interests in Properties in which the Fund has an interest equal to seventy-five
percent (75%) or more of all equity interests held directly or indirectly by all
Voting Fund Investors that are not Affiliates of the Managing General Partner in
such Properties. For purposes of this Section 11.7, (i) each Partner shall be
deemed to hold an indirect equity interest in each Property in which the
Partnership has an indirect interest in an amount equal to the Partnership’s
indirect equity interest in such Property multiplied by the Percentage Interest
attributable to all Voting Interests held by such Partner, and (ii) equity
interests attributable to Class N Partnership Units, or to any other class of
equity interest in any Fund Entity or Property specifically designated as a
non-voting interest under the Constituent Documents of the issuer of such equity
interest, shall be disregarded.

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”);

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     (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 Managing 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 Managing 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 Managing 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 of Partnership 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 Managing General Partner proposing that such
action be taken and setting forth the reasons for such proposal. Following
receipt of any such notice, the Managing General Partner shall call a special
meeting of the Fund Investors in accordance with the provisions of Section 11.7,
such meeting to be held on a date not later than the ninetieth day following the
Managing 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 11.7 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 Managing General Partner, or if there is no Managing
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. Following a Liquidating Event
resulting from a Majority Fund Vote to terminate the Partnership pursuant to
Section 12.2, the Managing General Partner shall complete the winding up of the
Partnership no later than the second anniversary of the date of the special
meeting of Fund Investors at which such vote occurred.

 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

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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 Managing 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 Managing 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.

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 Managing 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

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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 Managing 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 Managing General Partner deems appropriate to (i) effect the addition,
substitution or removal of any Limited Partner or Managing 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 Managing 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
Managing General Partner. To the fullest extent permitted by law, the power of
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 Managing General Partner within five days after the
receipt of a request therefor, such further designations, powers of attorney or
other instruments as the Managing General Partner shall reasonably deem
necessary for the purposes hereof.

 SECTION 13.3 Amendments.

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     (a) Except as required by law, this Agreement (including the Exhibits and
Schedules hereto) may be amended or supplemented by written consent of the
Managing General Partner, the Non-Managing General Partner and the Limited
Partners by a Majority LP Vote; provided that no such amendment shall
(i) increase any 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 (including tax liabilities) of such Partner
hereunder, without the written consent of each Partner so affected, (ii) change
the LP Vote, Partner Vote or Fund Vote required hereunder (the “Required Vote”)
for the taking of an action unless such amendment is approved by the Required
Vote for the subject of such proposed amendment, (iii) amend this Section 13.3
or the Investment Guidelines without the consent of each Partner, (iv) amend the
definition of Percentage Interest, Section 3.7(b), subsection (a), (d), (e) or
(h) of Section 5.3 or Section 5.10 in a way that would materially and adversely
affect SLR without the consent of at least one SLR Designee or amend the first
or second sentence of Section 2.2 or this clause (iv) of this Section 13.3(a)
without the consent of SLR, or (v) amend Section 3.5 without the consent of
Partners holding at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding Class N Partnership Units. Notwithstanding the foregoing, but
subject to the next sentence, this Agreement may be amended by the Managing
General Partner without the consent of any other Partner to (a) cure any
ambiguity or correct or supplement any provision hereof which is incomplete or
inconsistent with any other provision hereof or correct any printing,
stenographic or clerical error or omissions, provided that such amendment does
not materially adversely affect the interests of the Partners, (b) amend
Sections 8.4 to 8.8 as provided therein, (c) in connection with a Subsequent
Closing, amend any provision of this Agreement, provided that such amendment
does not materially adversely affect the rights or obligations of the existing
Partners, and (d) make any amendment that is not objected to in writing by any
Partner within twenty Business Days after notice of such amendment is given to
all Partners. Notwithstanding the preceding sentence, the Managing General
Partner will obtain the approval of the Non-Managing General Partner for any
amendments, revisions or modifications to Section 5.2 or any other provisions of
this Agreement with respect to investment policies or procedures.

     (b) The Managing General Partner shall have the right to amend this
Agreement without the approval of any other Partner to the extent the Managing
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 Managing 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 Partners shall
not have made a reasonable objection to such amendment prior to the effective
date of such amendment by a Majority Partner Vote.

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 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
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 Managing 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
Managing 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 Managing 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 Partners which have the effect of establishing
rights under, or altering or supplementing, the terms of, this Agreement as to
such Partner. Any rights established, or any terms of this Agreement altered or
supplemented, in a side letter with a Partner shall govern with respect to such
Partner notwithstanding any other provision of this Agreement. The
representations and warranties of the 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, if applicable, or as set forth in such Partner’s Subscription
Agreement, and if to the Partnership, to the Managing General Partner at the
Managing General Partner’s address, or to the Managing General Partner’s
facsimile number, set forth on Schedule 2.1, or to such other

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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 Managing 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 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), 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 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.

                          MANAGING GENERAL PARTNER:  
 
                        HINES US CORE OFFICE CAPITAL LLC
 
                        By:   Hines Interests Limited Partnership    
 
                            By:   Hines Holdings, Inc.
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

                          NON-MANAGING GENERAL PARTNER:  
 
                        HINES REIT PROPERTIES, L.P.
 
                        By:   Hines Real Estate Investment Trust, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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

 

                          LIMITED PARTNERS:  
 
                        HINES US CORE OFFICE CAPITAL     ASSOCIATES II LIMITED
PARTNERSHIP
 
                        By:   Hines Interests Limited Partnership    
 
                            By:   Hines Holdings, Inc.
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

                          HINES INTERESTS LIMITED PARTNERSHIP  
 
                        By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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

 

                          SUMITOMO LIFE REALTY (N.Y.), INC.  
 
                        By:   Hines US Core Office Capital LLC, as attorney    
        in fact    
 
                            By:   Hines Interests Limited Partnership
 
                   

          By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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

 

                          REVERE HOLDINGS LIMITED  
 
                        By:   Hines US Core Office Capital LLC, as attorney    
        in fact    
 
                            By:   Hines Interests Limited Partnership
 
                   

          By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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                          STICHTING GEMEENSCHAPPELIJK BEHEER       EN
ADMINISTRATIE     BEROEPSPENSIOENFONDS ARTSEN
 
                        By:   Hines US Core Office Capital LLC, as attorney    
        in fact    
 
                            By:   Hines Interests Limited Partnership
 
                   

          By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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

 

                          THE NORINCHUKIN BANK  
 
                        By:   Hines US Core Office Capital LLC, as attorney    
        in fact    
 
                            By:   Hines Interests Limited Partnership
 
                   

          By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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

 

                          RICHARD W. SABO, BARRY L. ZUBROW AND       DAVID W.
BLOOD, AS TRUSTEES U/A/D     JANUARY 27, 2004
 
                        By:   Hines US Core Office Capital LLC, as attorney    
        in fact    
 
                            By:   Hines Interests Limited Partnership
 
                   

          By:   Hines Holdings, Inc.    
 
                   

          By:   /s/ Frank R. Apollo    

                   

              Name: Frank R. Apollo    

              Title:   Vice President    

 

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Schedule 2.1

Partners Names and Addresses

MANAGING GENERAL PARTNER

Hines US Core Office Capital LLC

     
Notice Address:
  c/o Hines Interests Limited Partnership

  2800 Post Oak Boulevard, Suite 5000

  Houston, Texas 77056

  Attention: Charles M. Baughn

NON-MANAGING GENERAL PARTNER

Hines REIT Properties, L.P.

     
Notice Address:
  c/o Hines Interests Limited Partnership

  2800 Post Oak Boulevard, Suite 5000

  Houston, Texas 77056

  Attention: Charles M. Baughn

 

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LIMITED PARTNERS

Hines US Core Office Capital Associates II 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:
  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

Revere Holdings Limited

     
Notice Address:
  Real Estate Department

  P.O. Box 3600

  Abu Dhabi, United Arab Emirates

  Attention: Mr. Omair Al Dhaheri

Stichting Gemeenschappelijk Beheer en Administratie Beroepspensioenfonds Artsen

     
Notice Address:
  PO Box 85344

  3508 AH Utrecht

  Newtonlaan 71-77

  The Netherlands

  Attention: Rodney Zimmerman

 

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Zurich American Insurance Company

     
Notice Address:
  105 East 17th Street

  New York, NY 10003

  Attention: Christian Halabi

The Norinchukin Bank

     
Notice Address:
  1-13-2 Yurakucho, Chivoda-Ku

  Tokyo. 100-8420, Japan

  Attention: Minoru Oishi

Richard W. Sabo, Barry L. Zubrow and David W. Blood, as Trustees u/a/d
January 27, 2004

     
Notice Address:
  c/o Ivan A. Sacks

  Withers Bergman, LLP

  430 Park Avenue, 10th Floor

  New York, NY 10022

  Attention: Richard W. Sabo

 

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Schedule 2.7

Approved Agreements

1.   Assignment and Assumption Agreement, dated as of August 19, 2003, by which
the Partnership assumed certain obligations under the Amended and Restated
Master Agreement, dated as of March 31, 2003, among HILP, Hines US Core Office
Properties LP and SLR for the creation of Hines U.S. Core Office Fund, as
modified by two letter agreements dated March 31, 2003, and an extension letter
agreement dated June 26, 2003, and as amended by the amendment thereto dated
July 22, 2003, as supplemented and amended by the letter agreement, dated as of
July 22, 2003, among HILP, Hines US Core Office Properties LP and SLR and by the
letter agreement dated as of August 19, 2003, among the parties thereto.

2.   Amended and Restated Organization Agreement, dated as of December 23, 2003,
among General Motors Investment Management Corporation, a New York corporation,
certain institutional investors advised thereby, Hines Interests Limited
Partnership, a Delaware limited partnership, Hines US Core Office Capital
Associates III Limited Partnership, a Texas limited partnership, Hines-Sumisei
U.S. Core Office Fund, L.P., a Delaware limited partnership and Hines-Sumisei NY
Core Office Trust, a Maryland real estate investment trust (the “Organization
Agreement”).

3. Shareholders Agreement (as defined in the Organization Agreement)

4. Investor Rights Agreement (as defined in the Organization Agreement)

5.   Subscription Agreement for Hines-Sumisei U.S. Core Office Fund, L.P., dated
February 2, 2004, by and between the Partnership and SLR.

6.   Subscription Agreement for Hines-Sumisei NY Core Office Trust and
Hines-Sumisei NY Core Office Trust II, dated February 2, 2004, by and among
General Motors Investment Management Corporation, a New York corporation,
certain institutional investors advised thereby, Hines-Sumisei U.S. Core Office
Fund, L.P., a Delaware limited partnership, Hines US Core Office Capital
Associates III Limited Partnership, a Texas limited partnership, Hines Interests
Limited Partnership, a Delaware limited partnership, Hines-Sumisei NY Core
Office Trust, a Maryland real estate investment trust, and Hines-Sumisei NY Core
Office Trust II, a Maryland real estate investment trust.

7.   Shareholders Agreement, dated February 2, 2004, by and among General Motors
Investment Management Corporation, a New York corporation, certain institutional
investors advised thereby, Hines-Sumisei U.S. Core Office Fund, L.P., a Delaware
limited partnership, Hines US Core Office Capital Associates III Limited
Partnership, a Texas limited partnership, and Hines-Sumisei NY Core Office Trust
II, a Maryland real estate investment trust.

8.   The Advisory Agreement.

9.   The Subscription Agreements of each Investor.

 

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10.   Letter Agreement, substantially in the form of the draft dated June 30,
2004, among the Partnership, Hines and Hines Real Estate Investment Trust Inc,
providing Hines Real Estate Investment Trust certain rights to acquire an
interest in the Partnership and make additional investments in the Partnership.

11.   Articles of Amendment and Restatement of Hines-Sumisei U.S. Core Office
Trust, substantially in the form of the draft dated April 14, 2004.

12.   Amended and Restated Agreement of Limited Partnership of Hines-Sumisei US
Core Office Properties LP, substantially in the form of the draft dated
April 14, 2004.

 

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Schedule 3.1

Partnership Units and Funded Commitments

                  Partner   Partnership Units (#)     Funded Commitment ($)  
Managing General Partner
    279.884       279,884  
 
               
Non-Managing General Partner
    35,000.000       35,000,000  
 
               
Hines Limited Partner
    9,604.184       9,604,184  
 
               
SLR
    25,000.000       25,000,000  
 
               
Hines1
    0.000       0  
 
               
Revere Holdings Limited
    50,000.000       50,000,000  
 
               
Stichting Gemeenschappelijk

    50,000.000       50,000,000  
Beheer en Administratie
Beroepspensioenfonds Artsen
               
 
               
Zurich American Insurance
    50,000.000       50,000,000  
Company
The Norinchukin Bank
    50,000.000       50,000,000  
 
               
Richard W. Sabo, Barry L.

    10,000.000       10,000,000  
Zubrow and David W. Blood, as
Trustees u/a/d January 27, 2004
               

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1   Only Partnership Interest held is Participation Interest.

 

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Schedule 4.4

Hines Investment Allocation Procedure

If Hines becomes aware of investment opportunities which are permitted
investments for the Partnership and are not covered by clauses (a) through
(d) of Section 4.4, and which one or both of the fund managers of NOP and HSOV
wishes to pursue on behalf of its respective fund, Hines shall cause such
investment opportunities to be allocated as follows: (A) if the investment
opportunity is a suburban office real estate property, the expected price of
which is less than or equal to $65 million, such investment opportunity shall be
allocated on a rotating basis among the Partnership, NOP and HSOV or (B) if the
investment opportunity either is not a suburban real estate property or the
expected price of such investment opportunity is greater than $65 million, such
investment opportunity shall be allocated on a rotating basis between the
Partnership and NOP, in each case based on the chronological order in which such
opportunities arose (as determined in good faith by the Hines Investment
Allocation Committee).

The “Hines Investment Allocation Committee” is a committee of Hines executives
and advisors that is responsible for implementing the investment allocation
procedure described above.

 

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Schedule 5.1 — Core Fund Structure

(FLOW CHART) [h22707q2264900.gif]

 

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Schedule 5.9

Percentage Interest and Unit Cancellation Example

(attached)

          The attached schedule illustrates, for the first two Fiscal Quarters
after the Initial Investment Period: (1) how the Percentage Interest of the
holder of a Participation Interest is calculated in each quarter (assuming that
Hines is the only Partner which acquires a Participation Interest during this
period), and (2) how the Units of the Unaffiliated Limited Partners are
automatically cancelled as the result of the grant of the Participation Interest
in each quarter. These calculations are based upon hypothetical investments by
various classes of Partners, assumed capital contributions, hypothetical equity
investments in new properties, and a Current Unit Value of $1,000.

 

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Schedule 9.1

Example Operating Cash Flow Distribution

(attached)

          The attached schedule provides an example of how distributions of
Operating Cash Flow are made in the first two Fiscal Quarters following the end
of the Initial Investment Period. The assumptions regarding the various classes
of Partners, the Partners’ capital and Percentage Interests are those set forth
in Schedule 5.9. This schedule also assumes that Operating Cash Flow in the
amount of $13,737,500 will be available for distribution in the first Fiscal
Quarter, and Operating Cash Flow in the amount of $18,007,500 will be available
for distribution at the end of the second Fiscal Quarter, after the end of the
Initial Investment Period.

 

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Schedule 9.2

Example Capital Cash Flow Distribution

(attached)

          The attached schedule provides an example of how distributions of
Capital Cash Flow could be made in the third quarter following the end of the
Initial Investment Period. The assumptions regarding the various classes of
Partners, the Partners’ capital and Percentage Interests are those set forth in
Schedule 5.9. This example also assumes that Capital Cash Flow in the amount of
$1,029,000,000 will be available for distribution.

 

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EXHIBIT A

Property Services Agreement Form

(attached)