Document:

exv10w2

 

EXHIBIT 10.2

AMENDMENT NO. 4 dated
as of February 15, 2005 to the Amended and Restated
Credit, Security, Guaranty and Pledge Agreement dated as of December
15, 2003 among Lions Gate Entertainment Corp. and Lions
Gate Entertainment Inc. (together, the “Borrowers”), the Guarantors
named therein, the Lenders referred to therein, JPMorgan Chase
Bank, National Association (formerly known as JPMorgan
Chase Bank), as Administrative Agent and as Issuing Bank for the
Lenders (the “Agent”), JPMorgan Chase Bank, National Association
Toronto Branch (formerly known as JPMorgan Chase Bank, Toronto
Branch) as Canadian Agent, Fleet National Bank, as Co-Syndication
Agent and BIW Paribas, as Co-Syndication Agent (as the same may be
amended, supplemented or otherwise modified, the “Credit Agreement”).

INTRODUCTORY STATEMENT

     The Lenders have made available to the Borrowers a credit facility pursuant to the terms of
the Credit Agreement.

     The Lenders and the Agent have agreed to amend the Credit Agreement, all on the terms and
subject to the conditions herein set forth.

     Therefore, the parties hereto hereby agree as follows:

     Section 1. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall
have the meaning given them in the Credit Agreement.

     Section 2. Amendments to the Credit Agreement. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Credit Agreement is hereby amended as of
the Effective Date (as hereinafter defined) as follows:

     (A) The definition of “2005 Convertible Subordinated Notes” appearing in Article 1 of the
Credit Agreement is hereby amended by adding the clause “provided that the principal amount of the
notes may be increased to $175,000,000 in the event the notes are over-subscribed” after the words
“$150,000,000 in the aggregate” appearing therein.

 

 

     (B) Section 6.4 of the Credit Agreement is hereby amended by (a) deleting the proviso
appearing in clause (xv) thereof and (b) adding a new clause (xix) at the end thereof that reads as
follows: “(xix) the purchase of call options to hedge the Borrowers’ exposure in connection with
the issuance of the 2005 Convertible Subordinated Notes which call options are to be
settled on a net basis”.

     (C) Section 6.5 of the Credit Agreement is hereby amended by replacing clause (vii) thereof in
its entirety with a new clause (vii) that reads as follows:

“(vii) stock buy-backs in an aggregate amount of $25,000,000 which
amount shall be increased after the issuance of the 2005 Convertible Subordinated Notes
to the lesser of (a) $75,000,000 and (b) 50% of the cash proceeds from the
issuance of the 2005 Convertible Subordinated Notes net of all costs of the issuance and
any associated costs of hedging arrangements provided that, (x)
no Default or Event of Default shall be continuing after giving effect
on a pro forma basis to such stock buy-backs and (y) to the extent that some
or all of the stock buy-backs occur more than six months after the issuance of the 2005
Convertible Subordinated Notes, at the time of each such stock buy-back there must be
Borrowing Base, as shown on the most recently delivered Borrowing Base
Certificate, in excess of the Total Revolving Credit Commitments in an
amount equal to or greater than the aggregate amount of all stock buy-backs
occurring more than six months after the issuance of the 2005 Convertible
Subordinated Notes.

     (D) Section 6.5 of the Credit Agreement is hereby further amended by adding a new clause (xii)
at the end thereof that reads as follows: “(xii) payments for the purchase of call options to hedge
the Borrowers’ exposure in connection with the issuance of the 2005
Convertible Subordinated Notes which call options are to be settled on a net
basis”.

     (E) Section 6.7(b) of the Credit Agreement is hereby amended by deleting the proviso appearing
at the end of clause (ii) thereof.

     Section 3. Conditions to Effectiveness. The effectiveness of this Amendment is subject to the
satisfaction of all of the following conditions precedent (the date on which all such conditions
have been satisfied being herein called the “Effective Date”):

     (A) the receipt by the Agent of counterparts of this Amendment which, when taken together,
bear the signatures of the Borrowers, each Guarantor, the Agent and the Required Lenders;

     (B) the payment of all fees and expenses (including, without limitation, fees and
disbursements of counsel and consultants retained by the Agent) due and payable by any Credit Party
to the Agent and/or the Lenders; and

     (C) all legal matters incident to this Amendment shall be satisfactory to Morgan, Lewis
& Bockius LLP, counsel for the Agent.

     Section 4. Representations and Warranties. Each Credit Party represents and
warrants that:

2

 

     (A) after giving effect to this Amendment, the representations and warranties contained in the
Credit Agreement are true and correct in all material respects on and as of the date
hereof as if such representations and warranties had been made on and as of the date hereof (except
to the extent that any such representations and warranties specifically relate to an earlier date);

     (B) the receipt by the Agent of all fees as set forth in Section 5 of this Amendment; and

     (C) after giving effect to this Amendment, no Event of Default or Default will
have occurred and be continuing on and as of the date hereof.

     Section 5. Fees. The Borrowers agree to pay the Agent for the account of each of
the Lenders who executes this Agreement by February 15, 2005, a fee equal to .25%
of the Commitment of each such Lender under the Credit Agreement.

     Section 6. Further Assurances. At any time and from time to time, upon the Agent’s
request and at the sole expense of the Credit Parties, each Credit Party will promptly and duly
execute and deliver any and all further instruments and documents and take such further action as
the Agent reasonably deems necessary to effect the purposes of this Amendment.

     Section 7. Fundamental Documents. This Amendment is designated a Fundamental Document by the
Agent.

     Section 8. Full Force and Effect. Except as expressly amended hereby, the Credit
Agreement and the other Fundamental Documents shall continue in full force and effect in accordance
with the provisions thereof on the date hereof As used in the Credit Agreement, the terms
“Agreement”, “this Agreement”,
“herein”, “hereafter”, “hereto”, “hereof ”, and words of
similar import, shall, unless the context otherwise requires, mean the Credit Agreement as amended
by this Amendment.

     Section 9. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     Section 10. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when taken together
shall constitute but one instrument.

     Section 11. Expenses. The Borrowers agree to pay all out-of-pocket expenses incurred by the
Agent in connection with the preparation, execution and delivery of this Amendment, including, but
not limited to, the reasonable fees and disbursements of counsel for the Agent.

     Section 12. Headings. The headings of this Amendment are for the purposes of reference only
and shall not affect the construction of or be taken into consideration in interpreting this
Amendment.

3

 

     
IN WITNESS WHEREOF, the parties hereby have caused this
Amendment to be duly executed as of the date first written above:

		
	 	
    BORROWERS:
	 
	 	
    LIONS GATE ENTERTAINMENT CORP.

			
	 	By 	
    /s/ Wayne Levin
    

		
	 	
     

	 	
    Name: WAYNE LEVIN
	 	
    Title:   EXEC. VP & GENERAL COUNSEL
	 	
                BUSINESS &
    LEGAL AFFAIRS
	 
	 	
    LIONS GATE ENTERTAINMENT INC.

			
	 	By 	
    /s/ Wayne Levin
    

		
	 	
     

	 	
    Name: WAYNE LEVIN
	 	
    Title:   EXEC. VP & GENERAL COUNSEL
	 	
                BUSINESS &
    LEGAL AFFAIRS
	 
	 	
    GUARANTORS:
	 
	 	
    408376 B.C. LIMITED
	 	
    AM PSYCHO PRODUCTIONS, INC.
	 	
    ATTRACTION PRODUCTIONS LLC
	 	
    BLUE PRODUCTIONS INC.
	 	
    CINEPIX ANIMATION INC./ANIMATION
	 	
              CINEPIX
    INC.
	 	
    CINEPIX FILMS INC./FILMS CINEPIX INC.
	 	
    CONFIDENCE PRODUCTIONS, INC.
	 	
    COVEN PRODUCTIONS CORP.
	 	
    CUBE FORWARD PRODUCTIONS CORP.
	 	
    CUT PRODUCTIONS INC.
	 	
    DEAD ZONE PRODUCTION CORP.
	 	
    DEVILS REJECTS, INC.
	 	
    FINAL CUT PRODUCTIONS CORP.
	 	
    FIVE DAYS PRODUCTIONS CORP.
	 	
    FRAILTY PRODUCTIONS, INC.
	 	
    HIGH CONCEPT PRODUCTIONS INC.
	 	
    HYPERCUBE PRODUCTIONS CORP.
	 	
    KING OF THE WORLD PRODUCTIONS LLC
	 	
    LG PICTURES INC.
	 	
    LIONS GATE FILMS CORP.
	 	
    LIONS GATE FILMS DEVELOPMENT CORP.
	 	
    LIONS GATE FILMS INC.
	 	
    LIONS GATE FILMS PRODUCTIONS
	 	
              CORP./PRODUCTIONS
    FILMS LIONS
	 	
              GATE
    S.A.R.F.
	 	
    LIONS GATE MUSIC CORP.

4

 

		
	 	
    LIONS GATE RECORDS, INC. 

     LIONS GATE STUDIO MANAGEMENT LTD. 

     LIONS GATE TELEVISION CORP. 

     LIONS GATE TELEVISION (ONTARIO) CORP. 

     LIONS GATE TELEVISION 

                    DEVELOPMENT
    LLC 

     LIONS GATE TELEVISION INC. 

     LUCKY 7 PRODUCTIONS CORP. 

     MISSING PRODUCTIONS CORP. 

     MISSING PRODUCTIONS I CORP. 

     MISSING PRODUCTIONS II CORP. 

     MOTHER PRODUCTIONS CORP. 

     M WAYS PRODUCTIONS CORP. 

     M WAYS II PRODUCTIONS CORP. 

     PLANETARY PRODUCTIONS, LLC 

     PRESSURE PRODUCTIONS CORP. 

     PRISONER OF LOVE PRODUCTIONS CORP. 

     PROFILER PRODUCTIONS CORP. 

     PSYCHO PRODUCTIONS SERVICES CORP. 

     SHUTTERSPEED PRODUCTIONS CORP. 

     TERRESTRIAL PRODUCTIONS CORP. 

     VOID PRODUCTIONS CORP. 

     WEEDS PRODUCTIONS INC. 

     WIDOW PRODUCTIONS CORP. 

     WILDFIRE PRODUCTIONS INC. 

     WRITERS ON THE WAVE 

     3F SERVICES, INC. 

     ARIMA INC. 

     ARTISAN ENTERTAINMENT INC. 

     ARTISAN FILMED PRODUCTIONS, INC. 

     ARTISAN HOME ENTERTAINMENT INC. 

     ARTISAN MUSIC INC. 

     ARTISAN PICTURES INC. 

     ARTISAN RELEASING INC. 

     ARTISAN TELEVISION INC. 

     BD OPTICAL MEDIA, INC. 

     BL DISTRIBUTION CORP. 

     CAVE PRODUCTIONS, INC. 

     FHCL, LLC 

     FILM HOLDINGS CO. 

     FUSION PRODUCTIONS, INC. 

     LANDSCAPE ENTERTAINMENT CORP. 

     POST PRODUCTION, INC. 

     PUNISHER PRODUCTIONS, INC. 

     SCREENING ROOM, INC. 

5

 

		
	 	
    SILENT DEVELOPMENT CORP.
	 	
    VESTRON INC.

			
	 	By: 	
    /s/ Wayne Levin
    

		
	 	
     

	 	
    Name: WAYNE LEVIN
	 	
    Title:   EXEC. VP & GENERAL COUNSEL
	 	
                BUSINESS &
    LEGAL AFFAIRS
	 
	 	
    BLAIR WITCH FILM PARTNERS LTD.
	 	
    By: Artisan Filmed Productions Inc.
	 	
    Its: General Partner

			
	 	By: 	
    /s/ Wayne Levin
    

		
	 	
     

	 	
    Name: WAYNE LEVIN
	 	
    Title:   EXEC. VP & GENERAL COUNSEL
	 	

            BUSINESS &
    LEGAL AFFAIRS
	 
	 	
    LENDERS:
	 
	 	
    JPMORGAN CHASE BANK, NATIONAL
	 	
    ASSOCIATION, (formerly known as JPMorgan
	 	
    Chase Bank), individually and as Administrative Agent

			
	 	By 	    /s/
Garrett J. Verdone
     

		
	 	
     

	 	
    Name:    Garrett J. Verdone
	 	
    Title:      Senior Vice President
	 	
    Address:     277 Park Avenue
	 	
                       16th
    Floor,
	 	
                       New
    York, NY 10172
	 	
    Attention:  Garrett Verdone
	 	
    Facsimile:  (212) 899-2893

6

 

	 	 	 	 	 	 	 
	 	 	BANK LEUMI USA
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Jacques Delvoye
	 	 	 	 	

	

	 	 	 	Name:
	 	Jacques Delvoye
	

	 	 	 	Title:
	 	Vice President
	

	 	 	 	Address:
	 	8383 Wilshire Blvd # 400
	

	 	 	 	Attention:
	 	J. Delvoye
	

	 	 	 	Facsimile:
	 	323 966 4250
	 
	 	 	 	 	 	 
	 	 	BNP PARIBAS
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Frederique Merhaut
	 	 	 	 	

	

	 	 	 	Name:
	 	Frederique Merhaut
	

	 	 	 	Title:
	 	Director
	

	 	 	 	Address:
	 	725 S. Figueroa St. #2090
	

	 	 	 	Attention:
	 	Los Angeles, CA 90017
	

	 	 	 	Facsimile:
	 	Attn: Frederique Merhaut
	

	 	 	 	 	 	Fax: 213-488-9602
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Clive Bettles
	 	 	 	 	

	

	 	 	 	Name:
	 	Clive Bettles
	

	 	 	 	Title:
	 	Managing Director
	

	 	 	 	Address:
	 	725 S. Figueroa St. #2090
	

	 	 	 	Attention:
	 	Los Angeles, CA 90017
	

	 	 	 	Facsimile:
	 	Attn: Clive Bettles
	

	 	 	 	 	 	Fax: 213-488-9602
	 
	 	 	 	 	 	 
	 	 	CITY NATIONAL BANK
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ ILLEGIBLE
	 	 	 	 	

	

	 	 	 	Name:
	 	ILLEGIBLE
	

	 	 	 	Title:
	 	Senior Vice President
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 

7

 

	 	 	 	 	 	 	 
	 	 	FLEET NATIONAL BANK
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Amy Peden
	 	 	 	 	

	

	 	 	 	Name:
	 	Amy Peden
	

	 	 	 	Title:
	 	Vice President
	

	 	 	 	Address:
	 	335 Madison Ave, NY, NY 10023
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:
	 	212-503-7173
	 
	 	 	 	 	 	 
	 	 	ISRAEL DISCOUNT BANK OF NEW YORK
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Alan B. Lefkowitz
	 	 	 	 	

	

	 	 	 	Name:
	 	Alan B. Lefkowitz
	

	 	 	 	Title:
	 	First Vice President
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Lucas Ramirez
	 	 	 	 	

	

	 	 	 	Name:
	 	Lucas Ramirez
	

	 	 	 	Title:
	 	Assistant Vice President
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	JP MORGAN CHASE BANK
N.A., TORONTO
	 	 	BRANCH, individually and as Canadian Agent
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Drew McDonald
	 	 	 	 	

	

	 	 	 	Name:
	 	Drew McDonald
	

	 	 	 	Title:
	 	Vice President
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 

8

 

	 	 	 	 	 	 	 
	 	 	MANUFACTURERS BANK
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Sandy Lee
	 	 	 	 	

	

	 	 	 	Name:
	 	Sandy Lee
	

	 	 	 	Title:
	 	Vice President
	

	 	 	 	Address:
	 	515 S. Figueroa St.
	

	 	 	 	 	 	Los Angeles, CA 90071
	

	 	 	 	Attention:
	 	Sandy Lee
	

	 	 	 	Facsimile:
	 	213-489-6028
	 
	 	 	 	 	 	 
	 	 	U.S. NATIONAL BANK ASSOCIATION
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Joan F. Stigliano
	 	 	 	 	

	

	 	 	 	Name:
	 	Joan F. Stigliano
	

	 	 	 	Title:
	 	Senior Vice President
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	SOCIETE GENERALE
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Mark Vigil
	 	 	 	 	

	

	 	 	 	Name:
	 	Mark Vigil
	

	 	 	 	Title:
	 	Managing Director
	

	 	 	 	Address:
	 	1221 Avenue of the Americas
	

	 	 	 	 	 	New York, NY 10020
	

	 	 	 	Attention:
	 	Mark Vigil
	

	 	 	 	Facsimile:
	 	(212) 278-6146
	 
	 	 	 	 	 	 
	 	 	THE LEWIS HORWITZ ORGANIZATION, a
	 	 	division of Imperial Capital Bank
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ ILLEGIBLE
	 	 	 	 	

	

	 	 	 	Name:
	 	ILLEGIBLE
	

	 	 	 	Title:	 	 
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 

9

 

	 	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A.
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Kin Cheng
	 	 	 	 	

	

	 	 	 	Name:
	 	Kin Cheng
	

	 	 	 	Title:
	 	AVP
	

	 	 	 	Address:
	 	445 S. Figueroa St., 16th Fl.
	

	 	 	 	 	 	Los Angeles, CA 90071
	

	 	 	 	Attention:
	 	Danny Mandel
	

	 	 	 	Facsimile:
	 	213-236-5852
	 
	 	 	 	 	 	 
	 	 	WESTLB AG (formerly Westdeutsche Landesbank
	 	 	Girozentrale), NEW YORK BRANCH
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Stephan Kloock
	 	 	 	 	

	

	 	 	 	Name:
	 	Stephan Kloock
	

	 	 	 	Title:
	 	Managing Director
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Bryan Rolfe
	 	 	 	 	

	

	 	 	 	Name:
	 	Bryan Rolfe
	

	 	 	 	Title:
	 	Managing Director
	

	 	 	 	Address:	 	 
	

	 	 	 	Attention:	 	 
	

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC
	 
	 	 	 	 	 	 
	 	 	By 	 	/s/ Alexander Stewart Brown
	 	 	 	 	

	

	 	 	 	Name:
	 	Alexander Stewart Brown
	

	 	 	 	Title:
	 	As authorised signatory for The Royal Bank of Scotland PLC
	

	 	 	 	Address:
	 	135 Bishopsgate, London EC2M
	

	 	 	 	 	 	3UR, England
	

	 	 	 	Attention:
	 	Jacqueline Baer O’Mahony
	

	 	 	 	Facsimile:
	 	00 44 20 7085 3931

10exv10w6

 

Exhibit 10.6

FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

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

November 23, 2004

 

 

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	 

i

 

	 	 	 	 	 
	 	 	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	 

ii

 

	 	 	 	 	 
	 	 	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	 

iii

 

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

iv

 

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 ___, 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.

 

 

          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).

2

 

          “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

 

          “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).

4

 

          “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.

5

 

          “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

6

 

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

 

          “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.

8

 

          “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).

9

 

          “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

10

 

     (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

11

 

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;

12

 

     (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

13

 

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

15

 

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

17

 

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

18

 

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

19

 

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

20

 

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

21

 

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

22

 

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

23

 

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;

32

 

     (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;

33

 

     (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

35

 

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”):

36

 

     (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,

38

 

     (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,

39

 

     (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:

40

 

     (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

41

 

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

42

 

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

43

 

(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

79

 

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]

80

 

          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	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	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	 	 

 

 

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

 

 

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

 

 

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

 

 

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.

 

 

	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.

 

 

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
	 	 	 	 	 	 	 	 

	1	 	Only Partnership Interest held is Participation Interest.

 

 

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.

 

 

Scheule 5.1 — Core Fund Structure

 

 

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.

 

 

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.

 

 

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.

 

 

EXHIBIT A

Property Services Agreement Form

(attached)

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