Document:

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                                                                  EXHIBIT 10.1

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                          HINES REIT PROPERTIES, L.P.

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                               TABLE OF CONTENTS

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                                                                                                                 PAGE
<S>               <C>                                                                                            <C>
ARTICLE I PARTNERSHIP..............................................................................................1
         1.1      CREATION OF PARTNERSHIP: PARTNERSHIP INTERESTS...................................................1
         1.2      NAME.............................................................................................2
         1.3      APPROVAL OF ASSIGNMENT TO, AND ADMISSION OF, HREH................................................2

ARTICLE II DEFINITIONS.............................................................................................2
         2.1      DEFINITIONS......................................................................................2

ARTICLE III CAPITALIZATION.........................................................................................12
         3.1      INITIAL CAPITAL..................................................................................12
         3.2      ISSUANCE AND REDEMPTION OF PARTNERSHIP INTERESTS.................................................12
         3.3      ADDITIONAL FUNDS.................................................................................19
         3.4      CAPITAL ACCOUNTS.................................................................................20
         3.5      INTEREST ON AND RETURN OF CAPITAL................................................................21
         3.6      NEGATIVE CAPITAL ACCOUNTS........................................................................21
         3.7      LIMIT ON CONTRIBUTIONS AND OBLIGATIONS OF PARTNERS...............................................21
         3.8      REDEMPTION AND REPURCHASE OF UNITS...............................................................21
         3.9      REDEMPTION AND REPURCHASE OF INTERESTS OWNED BY HINES CONTROLLED
                  ENTITIES.........................................................................................22

ARTICLE IV OFFICE AND REGISTERED AGENT.............................................................................22

ARTICLE V PURPOSES AND POWERS OF PARTNERSHIP.......................................................................22
         5.1      PURPOSES OF THE PARTNERSHIP......................................................................22
         5.2      POWERS...........................................................................................22
         5.3      REIT REQUIREMENTS................................................................................22

ARTICLE VI TERM....................................................................................................23

ARTICLE VII ALLOCATIONS............................................................................................23
         7.1      PROFITS..........................................................................................23
         7.2      LOSSES...........................................................................................24
         7.3      SPECIAL ALLOCATIONS..............................................................................25
         7.4      CURATIVE ALLOCATIONS.............................................................................26
         7.5      TAX ALLOCATIONS: CODE SECTION 704(C).............................................................27

ARTICLE VIII CASH AVAILABLE FOR DISTRIBUTION.......................................................................28
         8.1      DEFINITION OF AVAILABLE CASH.....................................................................28
         8.2      TIMING AND PRIORITY OF DISTRIBUTIONS OF AVAILABLE CASH...........................................28
         8.3      CONSENT TO ALLOCATIONS AND DISTRIBUTIONS.........................................................28
         8.4      RIGHT TO LIMIT DISTRIBUTIONS.....................................................................28
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<S>               <C>                                                                                            <C>
ARTICLE IX MANAGEMENT OF PARTNERSHIP...............................................................................28
         9.1      GENERAL PARTNER..................................................................................28
         9.2      LIMITATIONS ON POWER AND AUTHORITY OF PARTNERS...................................................30
         9.3      LIMITED PARTNERS.................................................................................30
         9.4      LIABILITY OF GENERAL PARTNER.....................................................................30
         9.5      INDEMNITY........................................................................................30
         9.6      OTHER ACTIVITIES OF PARTNERS AND AGREEMENTS WITH RELATED PARTIES.................................31
         9.7      OTHER MATTERS CONCERNING THE GENERAL PARTNER.....................................................31
         9.8      PARTNER EXCULPATION..............................................................................32
         9.9      GENERAL PARTNER EXPENSES AND LIABILITIES.........................................................32

ARTICLE X BANKING..................................................................................................33

ARTICLE XI ACCOUNTING..............................................................................................33
         11.1     FISCAL YEAR......................................................................................33
         11.2     BOOKS OF ACCOUNT.................................................................................33
         11.3     METHOD OF ACCOUNTING.............................................................................33
         11.4     TAX MATTERS......................................................................................33

ARTICLE XII TRANSFERS OF PARTNERSHIP INTERESTS.....................................................................34
         12.1     GENERAL PARTNER..................................................................................34
         12.2     LIMITED PARTNER..................................................................................34
         12.3     ADMISSION ADJUSTMENTS............................................................................36
         12.4     TRANSFERS TO LENDERS.............................................................................36

ARTICLE XIII ADMISSION OF NEW PARTNERS.............................................................................37

ARTICLE XIV TERMINATION, LIQUIDATION AND DISSOLUTION OF PARTNERSHIP................................................37
         14.1     TERMINATION EVENTS...............................................................................37
         14.2     METHOD OF LIQUIDATION............................................................................37
         14.3     DATE OF TERMINATION..............................................................................38
         14.4     RECONSTITUTION UPON BANKRUPTCY...................................................................38
         14.5     DEATH, LEGAL INCOMPETENCY, ETC. OF A LIMITED PARTNER.............................................39

ARTICLE XV POWER OF ATTORNEY.......................................................................................39

ARTICLE XVI AMENDMENT OF AGREEMENT.................................................................................40

ARTICLE XVII MISCELLANEOUS.........................................................................................40
         17.1     NOTICES..........................................................................................40
         17.2     MODIFICATIONS....................................................................................41
         17.3     SUCCESSORS AND ASSIGNS...........................................................................41
         17.4     DUPLICATE ORIGINALS..............................................................................41
         17.5     CONSTRUCTION.....................................................................................41
         17.6     GOVERNING LAW....................................................................................41
         17.7     OTHER INSTRUMENTS................................................................................41
         17.8     GENERAL PARTNER WITH INTEREST AS LIMITED PARTNER.................................................41
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<S>               <C>                                                                                            <C>
         17.9     LEGAL CONSTRUCTION...............................................................................41
         17.10    GENDER...........................................................................................42
         17.11    PRIOR AGREEMENTS SUPERSEDED......................................................................42
         17.12    NO THIRD PARTY BENEFICIARY.......................................................................42
         17.13    PURCHASE FOR INVESTMENT..........................................................................42
         17.14    WAIVER...........................................................................................42
         17.15    COUNTERPARTS.....................................................................................42
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Schedule A - Partners, Capital Accounts and Partnership Interests

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                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                          HINES REIT PROPERTIES, L.P.

         THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") has been executed and delivered effective as of the ___ day of
_______________, 2004 (the "Effective Date"), by Hines Real Estate Investment
Trust, Inc., a Maryland corporation (the "General Partner" or the "Company"),
and those persons and entities identified as "Limited Partners" in Schedule A
(the "Limited Partners"), (the General Partner and each Limited Partner being a
"Partner" and collectively, the "Partners").

                                    RECITALS

         WHEREAS, effective as of August 20, 2003, the General Partner and HALP
Associates Limited Partnership entered into that certain Agreement of Limited
Partnership (the "Original Agreement") of Hines REIT Properties, L.P. in
accordance with the Delaware Revised Uniform Limited Partnership Act as amended
(the "Act").

         WHEREAS, as of August 27, 2003, the Original Agreement was amended
pursuant to the First Amendment to Agreement of Limited Partnership for Hines
REIT Properties, L.P. (the "First Amendment").

         WHEREAS, the Partners deem it to be in their best interest to amend
and restate the Original Agreement, as amended by the First Amendment, in
accordance with the Act and this Agreement.

         THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:

                                   ARTICLE I
                                  PARTNERSHIP

         1.1 CREATION OF PARTNERSHIP: PARTNERSHIP INTERESTS. The General
Partner is the sole general partner and the Limited Partners are the sole
limited partners of the Partnership. All Partnership profits, losses, and
distributive shares of tax items accruing prior to the date of this Agreement
shall be allocated in accordance with, and the respective rights and
obligations of the Partners with respect to the period prior to the date of
this Agreement shall be governed by, the Agreement of Limited Partnership of
the Partnership that existed prior to this Agreement. No Partner has any
interest in any Partnership property solely as a result of being a Partner and
the interests of all Partners in the Partnership are, for all purposes,
personal property.

                                       1

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         1.2 NAME. The Partnership name shall be "Hines REIT Properties, L.P.,"
but the General Partner may from time to time change the name of the
Partnership or may adopt such trade or fictitious names as it may determine.

         1.3 APPROVAL OF ASSIGNMENT TO, AND ADMISSION OF, HREH. Effective as of
the date hereof, HALP has made an assignment of 21,739.13 OP Units
(representing all of the OP Units owned by HALP) to HREH. Such assignment is
hereby approved and HREH is hereby admitted as a limited partner of the
Partnership.

                                   ARTICLE II
                                  DEFINITIONS

         2.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth respectively after each:

         "Act" shall mean the Delaware Revised Uniform Limited Partnership Act,
as amended from time to time, and any successor statute.

         "Adjusted Capital Account" shall mean, 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 or is deemed obligated to restore under any
         provision of this Agreement or 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" shall mean, with respect to any
Partner, the deficit balance, if any, in that Partner's Adjusted Capital
Account.

         "Affiliate" means (i) any Person directly or indirectly owning,
controlling, or holding, with power to vote ten percent or more of the
outstanding voting securities of such other Person, (ii) any Person ten percent
or more of whose outstanding voting securities are directly or indirectly
owned, controlled, or held, with the power to vote, by such other Persons,
(iii) any Person directly or indirectly controlling, controlled by, or under
common control with such other Person, (iv) any executive officer, director,
trustee or general partner of such other person, or (v) any legal entity for
which such Person acts as an executive officer, director, trustee or general
partner.

         "Agreement" shall mean this Agreement of Limited Partnership, as it
may be amended from time to time.

         "Articles of Incorporation" means the Articles of Incorporation of the
Company.

                                       2

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              "Available Cash" shall have the meaning provided in Section 8.1.

         "Bankruptcy" of a Partner shall mean (a) the filing by a Partner of a
voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States
Code (or corresponding provisions of future laws) or any other federal or state
insolvency law, or a Partner's filing an answer consenting to or acquiescing in
any such petition, (b) the making by a Partner of any assignment for the
benefit of its creditors or the admission by a Partner in writing of its
inability to pay its debts as they mature, or (c) the expiration of sixty (60)
days after the filing of any involuntary petition under Title 11 of the United
States Code (or corresponding provisions of future laws), seeking liquidation,
reorganization, arrangement or readjustment of its debts under any other
Federal or state insolvency law, provided that the same shall not have been
vacated, set aside or stayed within such 60-day period.

         "Board of Directors" means the Board of Directors of the Company.

         "Business Day" means any day other than Saturday or Sunday during
which national banks located in Houston, Texas are customarily open for
business.

         "Capital Account" shall mean the capital account maintained by the
Partnership for each Partner as described in Section 3.4 below.

         "Capital Contribution" shall mean, when used in respect of a Partner,
if applicable, the initial capital contribution of such Partner as set forth in
Section 3.1 below, and any other amounts of money and/or the Gross Asset Value
of other property contributed by such Partner to the capital of the Partnership
with respect to the Partner's interest in the Partnership, including the
Capital Contribution made by any predecessor holder of the Partnership Interest
of such Partner.

         "Capital Transaction Gain or Loss" shall mean any Profits or Losses
described in paragraphs (iii), (iv) and (vi) of the definition of Profits and
Losses contained in this Article 2.

         "Cash Amount" means an amount of cash equal to the value of the REIT
Shares Amount, which shall be based upon Net Asset Value on the date of receipt
by the General Partner of a Notice of Redemption.

         "Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time, and any successor statute.

         "Common Share" means a share of common stock, $.001 par value per
share, of the Company.

         "Company" means Hines Real Estate Investment Trust, Inc., a Maryland
corporation and the General Partner of the Partnership.

         "Contributing Partner" shall have the meaning provided in Section
3.2(B)(v).

                                       3

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         "Depreciation" shall mean 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 General Partner.

         "Effective Date" shall have the meaning provided in the introductory
paragraph of this Agreement.

         "Exchange Date" shall have the meaning provided in Section 3.2(G).

         "General Partner" means Hines Real Estate Investment Trust, Inc., a
Maryland corporation, sometimes also referred to in this Agreement as the
"Company."

         "Gross Asset Value" means, 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 agreed to by the General Partner and the Contributing
         Partner;

                  (ii) The Gross Asset Value of all Partnership assets shall be
         adjusted to equal their respective gross fair market values, which
         shall be determined in a manner consistent with the determination of
         Net Asset Value, 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 an adjustment to Gross Asset
         Value is permitted under the Regulations; provided, however, that
         adjustments pursuant to clauses (a), (b) and (d) above shall be made
         only if the General Partner reasonably determines that such
         adjustments are necessary or appropriate to reflect the relative
         economic interests of the Partners in the Partnership;

                  (iii) The Gross Asset Value of any Partnership asset
         distributed to any Partner shall be adjusted to equal the gross fair
         market value of such asset on the date of distribution, which shall be
         determined in a manner consistent with the determination of Net Asset
         Value; and

                                       4

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

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

         "HALP" shall mean HALP Associates Limited Partnership.

         "Hines Controlled Entity" shall mean any partnership, limited
liability company, corporation, trust or other entity which is, directly or
indirectly, controlled by (a) Hines Interests Limited Partnership, and/or (b)
Jeffrey C. Hines and/or Gerald D. Hines or, in the event of the death or
disability of Jeffrey C. Hines and/or Gerald D. Hines, the heirs, legal
representatives or estates of either or both of them.

         "HREH" shall mean Hines Real Estate Holdings Limited Partnership.

         "Issuance Date" means with respect to OP Units or the Participation
Interest owned by a Partner, the date upon which such OP Units or the
Participation Interest are issued to such Partner (and with respect to
Preference Units, shall have the meaning set forth in the applicable Preference
Unit Term Sheet).

         "Limited Partner" shall mean any Person (i) whose name is set forth as
a Limited Partner on Schedule A attached hereto or who has become a Limited
Partner pursuant to the terms and conditions of this Agreement, and (ii) who
holds a partnership interest. "Limited Partners" means all such persons.

         "Listing Date" shall mean the date on which the Common Shares are
first listed on a national securities exchange or included for quotation on a
national market system.

         "Majority-in-Interest of the Limited Partners" shall mean, as of any
given time, Limited Partners who own more than fifty percent (50%) of the
Percentage Interests in the Partnership held by Limited Partners.

         "Market Price" means, with respect to any Specified Redemption Date:
(a) the last reported sales price per share of the Common Shares at the close
of trading (whether or not the last reported sale occurred on such date) as
reported in the Wall Street Journal on the first Business Day of the calendar
quarter immediately preceding the date of receipt by the General

                                       5

<PAGE>

Partner of the Notice of Redemption, or (b) if the Common Shares are not traded
on a national exchange, the Net Asset Value per Common Share as of the date of
receipt by the General Partner of the Notice of Redemption.

         "Net Asset Value" as of a particular date means the net fair market
value of the Partnership's equity as of such date, as approved by the Board of
Directors, which shall generally equal the net proceeds that would be available
for distribution by the Partnership if all properties owned directly or
indirectly (through one or more special purpose entities) by the Partnership
were sold at their fair market value in an all cash sale as of such date, and
all 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) were paid, and all liabilities were repaid, out of such
proceeds.

         "Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(c).

         "Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).

         "Notice of Redemption" means a written notice delivered by a Redeeming
Partner to the Partnership (with a copy to the General Partner) under Section
3.2(C), pursuant to which the Redeeming Partner exercises the Redemption Right
with respect to all or a portion of its OP Units or Participation Interest in
accordance with the provisions of Section 3.2(C).

         "OP Units" are units of Partnership Interest more particularly
described in Section 3.2.

         "OP Unit Value" shall mean, as of any given time, the number of OP
Units into which a Preference Unit is convertible (whether or not the
conversion can then be effected), or the value of the Preference Unit expressed
in OP Units if the Preference Unit is not convertible into OP Units, as
provided for in the applicable Preference Unit Term Sheet.

         "Other Securities" shall have the meaning set forth in Section
3.2(B)(iv).

         "Participation Interest" shall have the meaning set forth in Section
3.2(A).

         "Participation Interest Unit Equivalents" shall mean, as of any
Specified Redemption Date with respect to part or all of the Participation
Interest, the lesser of (i) the number of outstanding OP Units of the
Partnership, multiplied by a fraction whose numerator is the Percentage
Interest attributable to the Participation Interest as of such date and whose
denominator is 100% minus the Percentage Interest attributable to the
Participation Interest as of such date or (ii) the number of outstanding OP
Units of the Partnership, multiplied by a fraction (a) whose numerator is the
aggregate amount that would be distributed in respect of the Participation
Interest if an amount equal to Net Asset Value as of such date were distributed
among the Partners in accordance with Section 14.2(C) hereof and (b) whose
denominator equals (x) the aggregate amount that would be distributed to all
Partners if an amount equal to Net Asset Value as of such date were distributed
among the Partners in accordance with Section 14.2(C), minus (y) the amount
determined under clause (a).

                                       6

<PAGE>

         "Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

         "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i)(3).

         "Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2).

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

         "Partnership Interest" shall mean 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" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d).

         "Percentage Interest" shall mean a percentage that is determined for
each Partner in the following manner:

                  (i) End of Quarter Month Calculation of Percentage Interest
         Attributable to Participation Interests. As of the end of each
         calendar month, the holder of the Participation Interest shall have a
         Percentage Interest in respect of its Participation Interest equal to
         the sum of (a) the Percentage Interest of the holder of the
         Participation Interest as of the end of the immediately preceding
         month (which shall be 0% in the case of each calendar month beginning
         prior to the Effective Date), adjusted as provided in clause (iii)
         below for OP Units issued or redeemed during the calendar month just
         ended, and further adjusted for any redemptions of such Participation
         Interest during the calendar month just ended, plus (b) 0.0625% of the
         net equity invested in those real estate investments reflected on the
         balance sheet of the Partnership as of the end of such month, divided
         by the Net Asset Value (as defined below) of the Partnership as of
         the end of the current month, plus (c) 0.5% of the Gross Real Estate
         Investments (as defined below) made by the Partnership during the
         current month, divided by the Net Asset Value of the Partnership as
         of the end of the current month.

                                       7

<PAGE>

                o "Gross Real Estate Investments" of the Partnership shall
                  generally mean the gross amount invested by the Partnership
                  in any real estate investments (either directly or indirectly
                  through one or more partnerships, limited liability
                  companies, or special purpose entities and including any real
                  estate investments contributed to the Partnership in exchange
                  for Units), including any debt attributable to such
                  investments; provided, however, that in the case of amounts
                  invested by the Partnership in any entity that is not
                  wholly-owned by the Partnership, "Gross Real Estate
                  Investments" shall mean the Partnership's allocable share of
                  the Gross Real Estate Investments of such entity.

               o  "Outstanding OP Unit Equivalents" as of the end of a
                  particular month shall mean a number equal to the number of
                  OP Units outstanding as of the end of such month, divided by
                  the difference between 100% and Percentage Interest
                  attributable to the Participation Interest as of the end of
                  such month.

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

              (iii) Adjustment of Percentage Interests Attributable to
         Participation Interest Following Issuance or Redemption of OP Units.
         Immediately after the issuance or redemption by the Partnership of any
         OP Units, the Percentage Interest attributable to the Participation
         Interest shall be adjusted so that it equals (a) the Percentage
         Interest attributable to the Participation Interest immediately prior
         to the issuance or redemption of such OP Units, multiplied by (b) a
         fraction whose numerator is (1) the number of OP Units outstanding
         immediately prior to the issuance or redemption of such OP Units and
         whose denominator equals (2) the number of OP Units outstanding
         immediately after the issuance or redemption of such OP Units.

              (iv) Calculation of Percentage Interests of Partners' Holding OP
         Units. The Percentage Interest as of a particular time for each
         Partner holding OP Units shall equal (a) 100% minus the Percentage
         Interest attributable to the Participation Interest, multiplied by (b)
         the sum of the OP Unit Value of any Preference Units held by that
         Partner and the number of OP Units held by that Partner, divided by
         (c) the sum of the OP Unit Value of all Preference Units issued and
         outstanding at the time and the total number of OP Units issued and
         outstanding at the time.

         The respective Percentage Interests of the Partners as of the date of
this Agreement are set forth in Schedule A attached to this Agreement.

                                       8

<PAGE>

         "Person" means an individual, corporation, partnership, estate, trust,
a portion of a trust set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation within
the meaning of Section 509(a) of the Code, joint stock company or other entity
and also includes a group as that term is used for purposes of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended.

         "Preference Units" are units of Partnership Interest more particularly
described in Section 3.2(A)(ii).

         "Preference Unit Term Sheet" shall have the meaning provided in
Section 3.2(B)(1).

         "Private Placement PTP Exemption" shall mean the exemption from
publicly traded partnership status provided in Regulations 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" shall mean:

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

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

              (iii) transfers between members of a family;

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

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

              (vi) the transfer by a Partner and any related persons (within
         the meaning of Code Section 267(b) or 707(b)(1)) in one or more
         transactions during any 30 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 Regulations Section 1.7704-1(d)(2) (i.e., transfers in
         cases where the Partnership neither admits the transferee as a partner
         nor recognizes any rights of the transferee as a partner).

                                       9

<PAGE>

         "Profits" and "Losses" shall mean for each fiscal year or portion
thereof, an amount equal to the Partnership's items of taxable income or loss
for such year or period, determined by the General Partner in accordance with
Code Section 703(a) with the following adjustments:

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

              (ii) any expenditures of the Partnership described in Code
         Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
         expenditures under Regulations Section 1.704-1(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 2, 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 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, 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 7.3 or
         Section 7.4 shall not be considered in determining Profits or Losses.

         "Recapitalization" shall have the meaning provided in Section 3.2(F).

         "Record Date" shall have the meaning provided in Section 9.1.

                                      10

<PAGE>

         "Redeeming Partner" shall have the meaning provided in Section 3.2(C).

         "Redemption Amount" means either the Cash Amount or the REIT Shares
Amount as determined pursuant to Section 3.2 hereof.

         "Redemption Right" shall have the meaning provided in Section 3.2(C).

         "Regulations" shall mean 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).

         "REIT" shall have the meaning provided in Section 5.3.

         "REIT Requirements" shall have the meaning provided in Section 5.3.

         "REIT Shares Amount" means a number of Common Shares equal to (i) in
the case of a Partner redeeming OP Units, the number of OP Units offered for
redemption by a Redeeming Partner, as adjusted pursuant to Sections 3.2(F) and
(G) and (ii) in the case of Partner redeeming part or all of the Participation
Interest, the number of Participation Interest Unit Equivalents, as adjusted
pursuant to Section 3.2(a).

         "Rights" shall have the meaning provided in Section 3.2(G).

         "Shareholder" means a holder of the Common Shares.

         "Specified Redemption Date" means with respect to a Redeeming Partner,
the date that is ten Business Days after receipt by the General Partner of the
Notice of Redemption from such Partner.

         "TMP" shall have the meaning provided in Section 11.4.

         "Transfer" shall mean any sale, transfer, gift, exchange, assignment,
devise or other disposition, any pledge or collateral assignment, and any other
event that causes any Person to acquire beneficial ownership, or any agreement
to take any such actions or cause any such events, with respect to Units or
Partnership Interests, or the right to vote or receive distributions with
respect to Units or 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 Units or
Partnership Interests or any interest in Units or 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
Units or Partnership Interests; in each case, whether voluntary or involuntary,
whether owned of record or beneficially owned, and whether by operation of law
or otherwise; provided, however, neither the conversion of a Preference Unit
into one or more OP Units nor the redemption of an OP Unit or Participation
Interest in accordance with Section 3.2 constitutes a Transfer. The terms
"Transferor," "Transferee," "Transferred" and "Transferring" have correlative
meanings.

         "Units" has the meaning set forth in Section 3.2(A).

                                      11

<PAGE>

                                  ARTICLE III
                                 CAPITALIZATION

         3.1 INITIAL CAPITAL. As of the effective date hereof, the Partners
have made or will make contributions of cash and/or property to the
Partnership, and the amount of such cash contributions and the Gross Asset
Value of such in-kind Capital Contributions are reflected in the Capital
Account balance of each such Partner as set forth opposite such Partner's name
on the attached Schedule A, as amended from time to time, under the heading
"Agreed Capital Account".

         3.2 ISSUANCE AND REDEMPTION OF PARTNERSHIP INTERESTS.

         A. The interest of a Partner in the Partnership that has been received
in exchange for Capital Contributions is referred to as being evidenced by one
or more "Units." Units may be either "OP Units" or "Preference Units":

              (i) An "OP Unit" is a unit of Partnership Interest that has been
         received in exchange for Capital Contributions and that, as more
         particularly provided for below in Section 3.2(C), may be redeemed for
         the Redemption Amount. The General Partner may create separate classes
         or series of OP Units having privileges, variations, and designations
         as may be determined by the General Partner in its sole and absolute
         discretion.

              (ii) A "Preference Unit" is a unit of Partnership Interest having
         such rights, preferences and other privileges, variations and
         designations as may be determined by the General Partner in its sole
         and absolute discretion (but not in violation of the provisions of
         Section 3.2(B) or the terms of any other Preference Unit(s) Term
         Sheets). There may be more than one series or class of Preference
         Units having differing terms and conditions, but all Preference Units
         within a given series or class shall have the same rights, preferences
         and other privileges, variations and designations. With respect to
         each series or class of Preference Units, the General Partner may
         also, in its discretion, determine and fix, among other terms and
         conditions, any of the following: (a) the series to which such
         Preference Units shall belong, (b) the distribution rate therefor, (c)
         the price at and the terms and conditions on which such Preference
         Units may be redeemed, (d) the amount payable in respect of such
         Preference Units in the event of involuntary or voluntary liquidation,
         (e) the terms and conditions on which such Preference Units may be
         converted and the securities into which such Preference Units may be
         converted (and/or the valuation of such Preference Units as measured
         in OP Units), if such Preference Units are issued with the privilege
         of conversion, and (f) the number of such Preference Units to be
         issued as a part of such series. Once determined and fixed as herein
         provided, however, the terms and conditions of a particular series or
         class of Preference Units may not be changed without the written
         consent of the holders of at least 67% of the Preference Units within
         the

                                      12

<PAGE>

         class or series (or such greater percentage as may be provided
         for in any the applicable Preference Unit Term Sheet).

The aggregate total of all Units outstanding as of the date of this Agreement
is 21,958.69, all of which consist of OP Units. As of the date of this
Agreement, each Partner is deemed to hold Units as shown on Schedule A.

         Effective as of the date hereof, the Partnership is issuing to HALP a
limited partnership interest denominated as a "Participation Interest." The
Participation Interest is in addition to, and distinct from, the Units
described above and any references to "Units" or OP Units shall not be deemed
to include the Participation Interest. 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.

              B. From time to time hereafter, subject to and in accordance with
         the provisions of this Section 3.2(B), the General Partner shall cause
         the Partnership to issue additional Units as follows:

                 (i) OP Units to the Company upon the issuance by the Company
              of additional Common Shares (other than in exchange for OP Units)
              and the contribution of the net proceeds thereof as a Capital
              Contribution to the Partnership as provided for in Section 3.3(B)
              below, it being understood, however, that the Company may issue
              Common Shares in connection with share option plans, dividend
              reinvestment plans, restricted share plans or other benefit or
              compensation plans without receiving any proceeds and that the
              issuance of such Common Shares shall nonetheless entitle the
              Company to receive additional OP Units pursuant to this clause
              (i);

                 (ii) OP Units to Partners (including the General Partner) that
              hold Preference Units that are convertible into OP Units, upon
              the exercise of such conversion in accordance with the terms and
              conditions of the Preference Unit Term Sheet applicable thereto;

                 (iii) OP Units to Partners holding OP Units (including the
              General Partner) if and to the extent of each such Partner's
              participation in any reinvestment program contemplated by Section
              3.3(C) below;

                 (iv) Preference Units to the Company upon the issuance by the
              Company of securities other than Common Shares whether debt or
              equity securities ("Other Securities") and the contribution of
              the net proceeds thereof as a Capital Contribution to the
              Partnership as provided for in Section 3.3(B) below; and

                 (v) in all other cases, OP Units and/or Preference Units, as
              determined by the General Partner, in its discretion, to existing
              or newly-admitted Partners (including the General Partner), in
              exchange for the contribution by a Partner (the "Contributing
              Partner") of Capital Contributions to the Partnership.

                                      13

<PAGE>

         Issuance of OP Units as aforesaid shall be in accordance with the
following:

         (a) the number of OP Units issued to the Company under clause (i) of
this Section 3.2(B) shall be equal to the number of Common Shares issued;

         (b) the number of OP Units issued to a Partner under clause (ii) of
this Section 3.2(B) shall be as provided for in the Preference Unit Term Sheet
pursuant to which the Preference Units being converted exist;

         (c) the number of OP Units issued to a Limited Partner under clause
(iii) of this Section 3.2(B) shall be as provided for in the applicable
reinvestment program; and

         (d) the number of OP Units issued to a Contributing Partner under
clause (v) of this Section 3.2(B) shall be equal to the quotient (rounded to
the nearest whole number) arrived at by dividing (x) the initial Gross Asset
Value of the property contributed as additional Capital Contributions (net of
any debt to which such property is subject or assumed by the Partnership in
connection with such contribution) by (y) the Net Asset Value attributable to
each OP Unit.

         Issuance of Preference Units as aforesaid shall be in accordance with
the following:

         (1) Preference Units issued pursuant to clause (v) of this Section
3.2(B) shall have the terms and conditions specified in an agreement (a
"Preference Unit Term Sheet") executed by and between the Partnership (at the
direction or in the discretion of the General Partner) and the Contributing
Partner. The number of Preference Units issued to a Contributing Partner under
clause (v) of this Section 3.2(B) shall be equal to the quotient (rounded to
the nearest whole number) arrived at by dividing (x) the net fair market value
of any property or assets contributed as additional capital contributions by
(y) price per Preference Unit provided for in the Preference Unit Term Sheet;
and

         (2) Preference Units issued pursuant to clause (iv) of this Section
3.2(B) shall have economic terms substantially identical to those of the
applicable Other Securities.

Units may also be issued to some or all of the Partners holding Preference
Units if and to the extent of such Partner's participation in any reinvestment
program contemplated by Section 3.3(C). Upon the issuance of additional OP
Units and/or Preference Units in accordance with the provisions of this Section
3.2(B), each recipient of such Units shall either execute this Agreement or a
joinder to this Agreement (which joinder, as to Preference Units, may be a part
of any applicable Preference Unit Term Sheet) and, as applicable, the
Percentage Interest of all of the Partners shall thereupon be appropriately
adjusted by the General Partner.

              C. Subject to the provisions of Sections 3.2(D) and (F), on or
         after the later of (i) the date which is one year after the Issuance
         Date or (ii) upon the completion of an initial public offering of the
         Common Shares of the Company pursuant to a registration statement
         filed with the Securities and Exchange Commission, each Limited

                                      14

<PAGE>

Partner shall have the right (the "Redemption Right") to require the
Partnership to redeem on a Specified Redemption Date all or a portion of the OP
Units or Participation Interest held by such Limited Partner at a redemption
price equal to and in the form of the Redemption Amount. The Redemption Right
shall be exercised pursuant to a Notice of Redemption delivered to the
Partnership (with a copy to the General Partner) by the Limited Partner who is
exercising the Redemption Right (the "Redeeming Partner"); provided, however,
that the Partnership shall not be obligated to satisfy such Redemption Right if
the Company elects to purchase the OP Units or Participation Interest subject
to the Notice of Redemption pursuant to Section 3.2(E). Notwithstanding the
foregoing provisions of this Section 3.2(C), the Company agrees to use its best
efforts to cause the closing of the acquisition of redeemed Partnership
Interests hereunder to occur as quickly as reasonably possible. The Redeeming
Partner shall have no right, with respect to any OP Units or Participation
Interest so redeemed, to receive any distribution paid with respect to such OP
Units or Participation Interest if the Record Date for such distribution is on
or after the Specified Redemption Date. 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.

              D. In addition to other restrictions set forth on the Redemption
         Rights in any other provision of this Agreement, the following
         restrictions apply to Redemption Rights:

                 (i) Notwithstanding any other provision of this Article 3, but
              subject to the last sentence of clause (iii) below, a Limited
              Partner shall be entitled to exercise the Redemption Right only
              if (x) the redemption or purchase of the Limited Partner's OP
              Units or Participation Interest would constitute a Private
              Transfer or (y) the Percentage Interest attributable to the OP
              Units or Participation Interest to be purchased or redeemed, when
              aggregated with other 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.

                 (ii) The General Partner may establish such policies and
              procedures as it may deem necessary or desirable in its
              discretion to administer the 10% Percentage Interest limit set
              forth in subparagraph (i) above, including without limitation
              imposing further limitations on the OP Units or Participation
              Interest with respect to which the Redemption Right may be
              exercised during any period of time shorter than a calendar year
              and establishing procedures to allocate the ability to exercise
              the Redemption Right among the Limited Partners.

                 (iii) The restrictions set forth in clauses (i) and (ii) above
              shall continue in effect until such time as the Partnership is no
              longer potentially subject to classification as a publicly traded
              partnership, as defined in Code Section 7704, in the absence of
              such restrictions, as determined by the General Partner in its
              discretion. The restrictions set forth in clauses (i) and (ii)
              above,

                                      15

<PAGE>

              together with the restrictions on the Transfer of Partnership
              Interests set forth in Section 12(B), 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
              Regulations Sections 1.7704-1(d), (e), (f) and (j) and shall be
              construed and administered in accordance therewith. The General
              Partner may modify the restrictions set forth in clauses (i) and
              (ii) above, and the provisions of Section 12(B), from time to
              time in its discretion to ensure that the Partnership complies
              and continues to comply with the Code and Regulations
              requirements described above. Notwithstanding anything herein to
              the contrary, the provisions of subparagraphs (i)-(iii) shall
              only apply if, and beginning with the first day of the first
              taxable year in which, the Partnership no longer qualifies for
              the Private Placement PTP Exemption.

                 (iv) A Limited Partner shall not be entitled to exercise
              either a Redemption Right or any right to convert a Preference
              Unit into an OP Unit if such exercise would (a) result in the
              total Common Shares and any other ownership or beneficial
              interests in the Company being owned by fewer than one hundred
              persons within the meaning of Code Section 856(a)(5); (b) result
              in such Limited Partner or any other person owning, directly or
              constructively under Code Section 856(d)(5), in excess of 9.9% of
              the total Common Shares (and any other ownership or beneficial
              interests) in the Company; (c) cause more than 50% of the value
              of the Company's Common Shares (and any other ownership or
              beneficial interests) to be held by five or fewer individuals and
              certain organizations under Code Section 856(h) and 542(a)(2);
              (d) cause the Company to own, directly or constructively, 10% or
              more of the ownership interests of any person that is a tenant
              with respect to any real property owned or constructively owned
              by the Company (so as to prevent the application of Code Section
              856(d)(2)); or (e) cause the acquisition of Common Shares (and
              any other ownership or beneficial interests) in the Company by
              such Limited Partner to be "integrated" with any other
              distribution of interests in the Company for purposes of
              complying with the registration provisions of the Securities Act
              of 1933. The General Partner may modify the restrictions set
              forth in this Section 3.2(D)(iv) from time to time in its
              discretion to ensure that the Partnership complies and continues
              to comply with Code Section 856. The General Partner may, in its
              sole discretion, waive the restrictions on redemption set forth
              in this Section 3.2(D)(iv); provided, however, that in the event
              a restriction is waived, the redeeming partner shall be paid the
              Cash Amount.

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

                                      16

<PAGE>

              Provided, however, that the General Partner may exempt a
              Limited Partner from the foregoing restrictions to the same
              extent, and under the same circumstances, that the General
              Partner may waive similar restrictions pursuant to its Articles
              of Incorporation.

              E. Notwithstanding the provisions of Section 3.2(C), a Limited
         Partner that exercises the Redemption Right shall be deemed to have
         offered to sell the OP Units or Participation Interest described in
         the Notice of Redemption to the Company, and the Company (or any
         designee thereof) may, in its sole and absolute discretion, elect to
         purchase directly and acquire such OP Units or Participation Interest
         by paying to the Redeeming Partner either the Cash Amount or the REIT
         Shares Amount, as elected by the Company or any designee thereof (each
         in its sole and absolute discretion), on the Specified Redemption
         Date, whereupon the Company or any designee thereof shall acquire the
         OP Units or Participation Interest offered for redemption by the
         Redeeming Partner and shall be treated for all purposes of this
         Agreement as the owner of such OP Units or Participation Interest. If
         the Company or any designee thereof shall elect to exercise its right
         to purchase OP Units or a Participation Interest under this Section
         3.2(E) with respect to a Notice of Redemption, it shall so notify the
         Redeeming Partner within five Business Days after the receipt by the
         General Partner of such Notice of Redemption. Unless the Company or
         any designee thereof (each in its sole and absolute discretion) shall
         exercise its right to purchase OP Units or a Participation Interest
         from the Redeeming Partner pursuant to this Section 3.2(E), neither
         the Company nor any designee thereof shall have any obligation to the
         Redeeming Partner or the Partnership with respect to such Redeeming
         Partner's exercise of such Redemption Right. In the event that the
         Company or any designee thereof shall exercise its right to purchase
         OP Units or a Participation Interest with respect to the exercise of a
         Redemption Right in the manner described in the first sentence of this
         Section 3.2(E), the Partnership shall have no obligation to pay any
         amount to the Redeeming Partner with respect to such Redeeming
         Partner's exercise of such Redemption Right, and each of the Redeeming
         Partner, the Partnership, and the Company or any designee thereof, as
         the case may be, shall treat the transaction between the Company or
         any designee thereof, as the case may be, and the Redeeming Partner
         for federal income tax purposes as a sale of the Redeeming Partner's
         OP Units or Participation Interest to the Company or any designee
         thereof. Each Redeeming Partner agrees to execute such documents as
         the General Partner may reasonably require in connection with the
         issuance of Common Shares upon exercise of the Redemption Right. Any
         OP Units or Participation Interest acquired by the General Partner
         pursuant to such Redemption Right shall, upon and after such
         acquisition, be treated as a general partner interest.

              F. The Company shall at all times reserve and keep available out
         of its authorized but unissued Common Shares, solely for the purpose
         of effecting the exchange of OP Units and the Participation Interest
         for Common Shares, such number of Common Shares as shall from time to
         time be sufficient to effect the redemption of the Participation
         Interest and all outstanding OP Units not owned by the Company, and
         any Preference Units not owned by the Company that are convertible
         into OP Units (whether or not the conversion can then be effected). No
         Limited Partner shall, by virtue of being the holder of the
         Participation Interest or one or more OP Units and/or Preference Units
         be deemed to be a shareholder of or have any other interest in the
         Company. In the event

                                      17

<PAGE>

         of any change in the outstanding Common Shares of the Company or
         its successor by reason of any share dividend, split,
         recapitalization, merger, consolidation, combination, exchange of
         shares or other similar corporate change other than the issuance of
         Rights, as further described in Section 3.2(G) (a "Recapitalization"),
         the number of OP Units held by each Partner shall be adjusted upward
         or downward to equal such number of Common Shares of the Company (or
         as applicable, the Common Shares or equivalent class of securities of
         the successor thereto) as would have been held by the Partner
         immediately following the Recapitalization if such Partner had held a
         number of Common Shares equal to such number of OP Units immediately
         prior to such Recapitalization. In the event the Company or any
         designee thereof acquires OP Units or a Participation Interest
         pursuant to such Section 3.2(E), the General Partner shall record the
         transfer on the books of the Partnership so that the Company or any
         designee thereof, as applicable, is thereupon the owner and holder of
         such OP Units or Participation Interest. As is more particularly
         described in Section 3.2(D)(iv), notwithstanding any other provisions
         of this Section 3.2, a Limited Partner shall not have the right to
         exercise a Redemption Right if, upon payment of the REIT Shares Amount
         to such Limited Partner, (i) the Company would, as a result thereof,
         no longer qualify (or it would be reasonably possible in the judgement
         of the General Partner that the Company no longer would qualify) as a
         real estate investment trust under the Code; or (ii) the payment of
         such REIT Shares Amount to the Limited Partner would constitute or be
         reasonably possible in the judgment of the General Partner to
         constitute a violation of applicable federal or state securities laws
         or would violate any applicable provisions of the organizational
         documents of the Company (including without limitation any
         restrictions on ownership of securities of the Company set forth in
         the Articles of Incorporation or Bylaws of the Company). In either
         such event, to the extent the consequences described in (i) or (ii)
         could be eliminated by reasonable action of the General Partner or the
         Company without any material detriment to the General Partner or the
         Company and at the expense of such Limited Partner(s) requesting such
         exchange, the Company or the General Partner shall take all such
         reasonable action to effect the exchange of OP Units or a
         Participation Interest for Common Shares by such Limited Partner(s) as
         herein provided.

              G. In the event that a Redeeming Partner exercises the Redemption
         Right, and the Company or any designee thereof elects to make the
         payment of the REIT Shares Amount to the Redeeming Partner referenced
         in accordance with the first sentence of Section 3.2(E), and in the
         event that the Company issues to all of its holders of Common Shares
         as of a certain record date rights, options, warrants or convertible
         or exchangeable securities entitling such shareholders to subscribe
         for or purchase Common Shares or any other securities or property
         (collectively, "Rights"), with the record date for such Rights
         issuance falling within the period starting on the date that the
         Company receives the Redemption Notice from the Redeeming Partner and
         ending on the day immediately preceding the date upon which the
         Company or its designee delivers the Common Shares to the Redeeming
         Partner in exchange for such Redeeming Partner's OP Units (the date
         upon which such exchange occurs being referred to herein as the
         "Exchange Date"), which Rights will not be distributed before the
         Exchange Date, then the amount payable by the Company or its designee
         to the Redeeming Partner in exchange for its OP Units or Participation
         Interest under this Section 3.2 shall also include such Rights that
         the Redeeming Partner would have received if it had been the

                                      18

<PAGE>

         owner of the Common Shares to be delivered by the Company to the
         Redeeming Partner prior to the record date for the issuance of the
         Rights (as the same may be expressed for any purpose hereunder in a
         number of OP Units or Common Shares as determined by the General
         Partner).

         3.3 ADDITIONAL FUNDS.

              A. No Partner shall be assessed or, except as otherwise provided
         in this Agreement, be required to contribute additional funds or other
         property to the Partnership. Any additional funds or other property
         required by the Partnership, as determined by the General Partner in
         its sole discretion, may, at the option of the General Partner and
         without an obligation to do so (except as provided for in Section
         3.3(B) below), be contributed by the General Partner or any other
         Partner (provided such other Partner is willing to do so and the
         General Partner consents thereto, each in its sole and absolute
         discretion) as additional Capital Contributions. If and as the General
         Partner or any other Partner makes additional Capital Contributions to
         the Partnership, each such Partner shall receive additional OP Units
         and/or Preference Units as provided for in Section 3.2(B) above. The
         General Partner shall also have the right (but not the obligation) to
         raise any additional funds required for the Partnership in accordance
         with the provisions of Section 9.7(E) below and/or by causing the
         Partnership to borrow the necessary funds from third parties on such
         terms and conditions as the General Partner shall deem appropriate in
         its sole discretion. If the General Partner elects to cause the
         Partnership to borrow the additional funds, or if the Partnership
         issues a guaranty, indemnity or similar undertaking in connection with
         the indebtedness of the Company as aforesaid, in any such case one or
         more of the Partnership's assets may be encumbered to secure the loan
         or undertaking. Except as provided for in Section 3.3(C) below, no
         Limited Partner shall have the right to make additional Capital
         Contributions to the Partnership without the prior written consent of
         the General Partner.

              B. Except for (i) the capitalization of any wholly-owned entity
         of the General Partner which is the general partner of a partnership
         having the Partnership as a limited partner, (ii) the net proceeds
         generated by the issuance of Other Securities that evidence debt (and
         are not equity securities) that are loaned by the Company to the
         Partnership, and (iii) where the Company determines that the net
         proceeds generated by the issuance of Common Shares or Other
         Securities (whether for debt or equity) are to be retained by the
         Company for a valid business reason consistent with the purposes of
         the Partnership and such retention does not materially adversely
         affect the Limited Partners, the net proceeds of any and all funds
         raised by or through the Company through the issuance of Common Shares
         or Other Securities shall be contributed to the Partnership as
         additional Capital Contributions, and in such event the Company shall
         be issued additional Units pursuant to Section 3.2(B) above.

              C. If the General Partner creates and administers a reinvestment
         program in substantial conformance with a dividend reinvestment
         program which may be available from time to time to holders of the
         Common Shares, each Limited Partner holding OP Units shall have the
         right to reinvest any or all cash distributions payable to it from
         time to time pursuant to this Agreement (subject to the restrictions
         described in

                                      19

<PAGE>

         Article 12), by having some or all (as the Limited Partner
         elects) of such distributions contributed to the Partnership as
         additional Capital Contributions, and in such event the Partnership
         shall issue to each such Limited Partner additional OP Units pursuant
         to Section 3.2(B)(iii) above, or the General Partner, in its sole
         discretion, may elect to cause distributions with respect to which a
         Limited Partner has elected reinvestment to be contributed to the
         Company in exchange for the issuance of Common Shares. At the option
         of the General Partner, such a program may also be made available with
         respect to Preference Units.

         3.4 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 the
         amount of cash and the Gross Asset Value of any property contributed
         by such Partner to the Partnership pursuant to any provision of this
         Agreement, such Partner's distributive share of Profits and any items
         in the nature of income or gain which are specially allocated pursuant
         to Section 7.3, Section 7.4 or Section 14.2(C) hereof, and the amount
         of any Partnership liabilities assumed by such Partner or which are
         secured by any Partnership property distributed to such Partner.

              B. 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 7.3, Section 7.4 or Section 14.2(C) hereof, and
         the amount of any liabilities of such Partner assumed by the
         Partnership or which are secured by any property contributed by such
         Partner to the Partnership.

              C. In the event all or a portion of a Partnership Interest is
         transferred in accordance with the terms of this Agreement (including
         a transfer of OP Units or a Participation Interest in exchange for
         Common Shares, pursuant to Section 3.2(E)), 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 3.4(A) and 3.4(B) above, there shall be taken into account
         Code Section 752(c) and any other applicable provisions of the Code
         and Regulations.

              E. This Section 3.4 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
         General Partner shall determine that it is prudent to modify the
         manner in which the Capital Accounts, or any debits or credits thereto
         (including, without limitation, debits or credits relating to
         liabilities which are secured by contributed or distributed property
         or which are assumed by the Partnership, or the Partners) are computed
         in order to comply with such Regulations, the General Partner may make
         such modification, provided that it is not likely to have a material
         effect on the amounts

                                      20

<PAGE>

         distributed to any Partner pursuant to Section 14.2 upon the
         liquidation of the Partnership. The General Partner also shall (i)
         make any adjustments that are necessary or appropriate to maintain
         equality between the Capital Accounts of the Partners and the amount
         of Partnership capital reflected on the Partnership's balance sheet,
         as computed for book purposes, in accordance with Regulations Section
         1.704-1(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).

         3.5 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.

         3.6 NEGATIVE CAPITAL ACCOUNTS. Upon the liquidation of the Partnership
or the liquidation of the Participation Interest, the holder of the
Participation Interest shall be required to pay to the Partnership any deficit
or negative balance which may exist in its Capital Account at such time
(determined after taking into account the allocations described in Article 7 or
Section 14.2(C) 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, or except as provided in the preceding sentence,
no Partner shall otherwise be required to pay to the Partnership any deficit or
negative balance which may exist in its Capital Account.

         3.7 LIMIT ON CONTRIBUTIONS AND OBLIGATIONS OF PARTNERS. Except as
provided in Sections 3.1, 3.2 and 3.3 (or the provisions of any guarantee or
other written agreement between a Partner and the Partnership), no Partner
shall be required to make any additional advances or contributions to or on
behalf of the Partnership or guarantee any obligations of the Partnership.

         3.8 REDEMPTION AND REPURCHASE OF UNITS. Notwithstanding any other
provision of this Agreement which may be contrary to this Section 3.8, in the
event of the proposed repurchase or redemption for cash by the Company of (i)
Common Shares or (ii) Other Securities with respect to which the Partnership
had previously issued Preference Units pursuant to Section 3.2(B)(iv) of this
Agreement, then, in such event, the Partnership shall provide cash to the
Company concurrently with such repurchase or redemption or for such purpose
equal to the proposed repurchase or redemption price, and one OP Unit owned by
the General Partner (or, in the case of redemption or repurchase by the Company
of Other Securities contemplated by clause (ii) above, one Preference Unit
owned by the General Partner which had been issued with respect to such Other
Securities) shall be canceled with respect to each Common Share (or share of
Other Securities) so repurchased or redeemed.

                                      21

<PAGE>

         3.9 REDEMPTION AND REPURCHASE OF INTERESTS OWNED BY HINES CONTROLLED
ENTITIES. Notwithstanding any other provision of this Agreement which may be
contrary to this Section 3.9, if at any time the General Partner is not
sponsored by a Hines Controlled Entity, HALP, HREH, and each other Hines
Controlled Entity may redeem all or a portion of the Participation Interest
and/or Units it owns at any time, or from time to time. The redemption price of
the portion of the Participation Interest and/or Units being redeemed will be
equal to the Cash Amount attributable to such Participation Interest or Units,
as the case may be. The holder may elect, at its option, to receive cash or
Common Shares (or a combination of same) in connection with such redemption.

                                   ARTICLE IV
                          OFFICE AND REGISTERED AGENT

         The address of the registered office of the Partnership in the State
of Delaware is located at 1209 Orange Street, City of Wilmington, County of New
Castle, State of Delaware 19801, and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
is the Corporation Trust Company. The principal office of the Partnership is
located at 2800 Post Oak Boulevard, Suite 5000, Houston, Texas 77056-6118 or
such other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner may deem advisable.

                                   ARTICLE V
                       PURPOSES AND POWERS OF PARTNERSHIP

         5.1 PURPOSES OF THE PARTNERSHIP. The objects and purposes of the
Partnership are to engage in any lawful business activities in which a
partnership formed under the Act may engage or participate, with its primary
objects and purposes being, either as a partner in a partnership or joint
venture or otherwise, to purchase, own, maintain, mortgage, encumber,
construct, develop, equip, manage, lease, finance, operate, dispose of or
otherwise deal with real property, interests in real property or mortgages
secured by real property.

         5.2 POWERS. The Partnership purposes may be accomplished by taking any
action which is not prohibited under the Act.

         5.3 REIT REQUIREMENTS. Each Limited Partner understands and
acknowledges that the General Partner intends to elect to be treated as a real
estate investment trust ("REIT") under Code Section 856. Each Limited Partner
further understands and acknowledges that in order to maintain its status as a
REIT, the General Partner must comply with numerous and complex rules and
regulations set forth in the Code and the Regulations, many of which are
applied on a quarterly and/or annual basis (the "REIT Requirements"), and that
the management and operation of the Partnership will have a material effect on
the ability of the General Partner to continue to maintain its status as a
REIT. Accordingly, notwithstanding any other provision of this Agreement or any
non-mandatory provision of the Act, the Partnership shall not take any action
which (or fail to take any action, the omission of which) (i) could adversely
affect the ability of the General Partner to qualify or continue to qualify as
a

                                      22

<PAGE>

REIT, (ii) could subject the General Partner to any additional taxes under Code
Section 857 or Code Section 4981 or other potentially adverse consequences
under the Code, or (iii) otherwise could cause the General Partner to violate
the REIT Requirements, specifically including, but not limited to, restrictions
on Redemption Rights in Section 3.2(D)(iv). In addition, notwithstanding any
other provision of this Agreement or any non-mandatory provision of the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the General Partner's business judgement that such action or
omission is necessary or advisable in order (i) to protect the ability of the
General Partner to continue to qualify as a REIT or (ii) to avoid the General
Partner incurring any taxes under Code Section 857 or Code Section 4981, is
expressly authorized under this Agreement and is approved by all of the Limited
Partners.

                                  ARTICLE VI
                                      TERM

         The term of the Partnership shall continue until the Partnership is
terminated upon the occurrence of an event described in Section 14.1 below.

                                  ARTICLE VII
                                  ALLOCATIONS

         7.1 PROFITS. A. After giving effect to the special allocations set
forth in Sections 7.3, 7.4, and 14.2(C), Profits for any fiscal year other than
Capital Transactions Gains shall be allocated as follows:

                 (i) first, gross profits shall be allocated to the holder of
              the Participation Interest, until the cumulative amount of
              Profits allocated to such holder pursuant to this Section 7.1(A)
              with respect to its Participation Interest equals the cumulative
              amount of distributions, other than distributions of proceeds
              from transactions resulting in Capital Transaction Gains or
              Losses, made to such holder pursuant to Section 8.2 hereof with
              respect to its Participation Interest; and

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

              B. After giving effect to the allocations set forth in Sections
         7.3, 7.4 and 14.2(C), Capital Transaction Gains shall be computed
         separately with respect to each property and shall be allocated among
         the Partners as follows:

                 (i) first, among the Partners in proportion to, and to the
              extent of, any deficit balance in each such Partner's Capital
              Account;

                 (ii) second, to the holder of the Participation Interest in
              the minimum amount needed so as to cause its Capital Account
              balance to equal the product of the Percentage Interest
              attributable to the Participation Interest and the aggregate

                                      23

<PAGE>

              Capital Account balances of all the Partners (after giving
              effect to the allocation in this clause (ii)); and

                 (iii) thereafter, among the Partners in proportion to their
              respective Percentage Interests.

              C. In the event that the Partnership issues additional Units to
         the General Partner or any Limited Partner pursuant to Section 3.2
         hereof, the General Partner shall make such revisions to this Section
         7.1 as it determines are necessary to reflect the terms of the
         issuance of such additional Units, including such revisions as are
         needed to ensure that such allocations (i) will comply with the terms
         of Regulations Sections 1.704-1 and -2 and Code Section 514(c)(9)(E),
         (ii) will properly reflect the varying interests of the Partners in
         the Partnership, and (iii) will cause the Capital Accounts of the
         Partners 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 8 hereof.

         7.2 LOSSES.

              A. After giving effect to the special allocations set forth in
         Sections 7.3, 7.4, and 14.2(C), all 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) first, among the Partners in proportion to the number of
              OP Units held by each such Partner, until the aggregate Capital
              Account balances of the Partners holding OP Units is reduced to
              an amount equal to the product of (a) 100% minus the Percentage
              Interest attributable to the Participation Interest and (b) the
              aggregate Capital Account balances of all the Partners (after
              giving effect to the allocation in this clause (i));

                 (ii) second, among the Partners in proportion to their
              respective positive Capital Account balances; and

                 (iii) thereafter, among the Partners in proportion to the
              number of OP Units held by each such Partner.

              B. The Losses allocated pursuant to Section 7.2(A) above shall
         not exceed the maximum amount of Losses that can be so allocated
         without causing any Limited Partner to have an Adjusted Capital
         Account Deficit at the end of any fiscal year. All Losses in excess of
         the limitations set forth in this Section 7.2(B) shall be allocated
         among the other Partners in proportion to the number of OP Units held
         by each such other Partner.

              C. In the event that the Partnership issues additional Units to
         the General Partner or any Limited Partner pursuant to Section 3.2
         hereof, the General Partner shall make such revisions to this Section
         7.2 as it determines are necessary to reflect the terms of the
         issuance of such additional Units, including such revisions as are

                                      24

<PAGE>

         needed to ensure that such allocations (i) will comply with the
         terms of Regulations Sections 1.704-1 and -2 and Code Section
         514(c)(9)(E), (ii) will properly reflect the varying interests of the
         Partners in the Partnership, and (iii) will cause the Capital Accounts
         of the Partners to be in the ratios in which the Partners are entitled
         to receive distributions with respect to their Partnership Interests
         pursuant to Article 8 hereof.

         7.3 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 7,
         if there is a net decrease in Partnership Minimum Gain during any
         fiscal year, each Partner shall be specially allocated items of
         Partnership income and gain for such fiscal year (and, if necessary,
         subsequent fiscal years) in an amount equal to such Partner's share of
         the net decrease in Partnership Minimum Gain, determined in accordance
         with Regulations Section 1.704-2(g). The items to be so allocated
         shall be determined in accordance with Regulations Sections
         1.704-2(f)(6) and 1.704-2(j)(2). This Section 7.3(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
         7, 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
         7.3(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 7.3(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 7 have been tentatively made, as if this
         Section 7.3(C) were not in this Agreement.

              D. In the event any Partner has a deficit Capital Account at the
         end of any Partnership fiscal year which is in excess of the sum of
         (i) the amount such Partner is

                                      25

<PAGE>

         obligated to restore pursuant to any provision of this Agreement,
         and (ii) the amount such Partner is deemed to be obligated to restore
         pursuant to the penultimate sentences of Regulations Sections
         1.704-2(g)(1) and 1.704-2(i)(5), 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 7.3(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 7 have been made as if
         Section 7.3(C) hereof and this Section 7.3(D) were not in the
         Agreement.

              E. If and to the extent Partners holding Preference Units receive
         preferred distributions from the Partnership (other than distributions
         pursuant to Section 14.2(C) in final liquidation of the Partnership),
         each such Partner shall be allocated Partnership gross income in an
         amount equal to the amount of preferred distributions received with
         respect to such Preference Units, prior to any allocations of Profit
         and Loss pursuant to Sections 7.1 and 7.2 above. For purposes of this
         Section 7.3(E), any payment with respect to a Preference Unit that,
         under the applicable Preference Unit Term Sheet, constitutes a payment
         in redemption of such Preference Unit (and a return of the Partner's
         Capital Contribution with respect to such Preference Unit) shall not
         result in a special allocation of gross income to the Partner
         receiving such payments under this Section 7.3(E), except to the
         extent such payment is specifically attributable to accrued and unpaid
         preferred distributions with respect to such Preference Unit provided
         for in such Preference Unit Term Sheet.

              F. Nonrecourse Deductions for any fiscal year shall be allocated
         among the Partners in accordance with their respective Percentage
         Interests.

              G. 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).

              H. 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.

7.4 CURATIVE ALLOCATIONS. The allocations set forth in Sections 7.2(C), 7.3(A),
7.3(B), 7.3(C), 7.3(D), 7.3(F), 7.3(G), and 7.3(H) above (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 7.4.
Therefore, notwithstanding any other provision of this Article 7 (other than
the Regulatory Allocations), the

                                      26

<PAGE>

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
7.1(A)(ii) and 7.2(A) (subject, however, to Section 7.3(E) above). In
exercising its discretion under this Section 7.4, the General Partner shall
take into account future Regulatory Allocations under Section 7.3(A) and 7.3(B)
that, although not yet made, are likely to offset other Regulatory Allocations
previously made under Sections 7.3(F) and 7.3(G).

         7.5 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, as determined in
         the sole discretion of the General Partner.

              B. In the event the Gross Asset Value of any Partnership asset is
         adjusted pursuant to the definition of "Gross Asset Value" contained
         in Article 2 above, 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. The portion of any gain recognized by the Partnership on the
         disposition of property which is classified as ordinary income under
         Sections 751, 1245 or 1250 of the Code, or which is classified as
         "unrecaptured section 1250 gain" under Section 1(h)(7) of the Code,
         shall be allocated among the Partners in the ratio in which the
         deductions giving rise to such ordinary income or unrecaptured section
         1250 gain were allocated; provided, however, that the amount of
         ordinary income or unrecaptured section 1250 gain so allocated shall
         not exceed the gain from such sale or disposition that is so allocable
         to the Partner.

              D. Any elections or other decisions relating to the allocations
         provided under this Section 7.5 shall be made by the General Partner
         using any permissible manner under the Code or the Regulations that
         the General Partner may elect in its sole discretion. Allocations
         pursuant to this Section 7.5 are solely for purposes of Federal,
         state, and local taxes and shall not affect, or in any way be taken
         into account in computing, any Partner's Capital Account or share of
         Profits, Losses, other items, or distributions pursuant to any
         provision in this Agreement.

                                      27

<PAGE>

                                 ARTICLE VIII
                        CASH AVAILABLE FOR DISTRIBUTION

         8.1 DEFINITION OF AVAILABLE CASH. As used in this Agreement,
"Available Cash" shall mean and be defined as all cash receipts of the
Partnership from whatever source during the 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, investments by the Partnership, amounts paid by the Partnership as
principal on debts and advances during such period, capital expenditures,
payments to any dealer manager, advisor or property manager under any dealer
manager, advisory and/or property management agreement, other fees and expense
reimbursements, funds used for redemptions, and any reserves (as determined by
the General Partner) established or increased during such period. In the
discretion of the General Partner, but subject to Section 5.3, reserves may
include cash held for future acquisitions.

         8.2 TIMING AND PRIORITY OF DISTRIBUTIONS OF AVAILABLE CASH. Available
Cash shall be distributed to or for the benefit of the Partners of record as of
the applicable Record Date not less frequently than monthly. All such
distributions shall, subject to the rights of any holder of Preference Units,
be distributed among the Partners holding OP Units and Participation Interests
in proportion to their respective Percentage Interests as of the applicable
Record Date.

         8.3 CONSENT TO ALLOCATIONS AND DISTRIBUTIONS. Each of the Partners
hereby consents to the allocations and distributions provided for in this
Agreement. 8.4 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 the terms of any agreement between such Partner and the
Partnership limiting, restricting or providing rights of set-off with respect
to such distributions.

                                  ARTICLE IX
                           MANAGEMENT OF PARTNERSHIP

         9.1 GENERAL PARTNER. The General Partner shall be the sole manager of
the Partnership business, and shall have the right and power to make all
decisions and take any and every action with respect to the property, the
business and affairs of the Partnership and shall have all the rights, power
and authority generally conferred by law, or necessary, advisable or consistent
with accomplishing the purposes of the Partnership. All such decisions or
actions made or taken by the General Partner hereunder shall be binding upon
all of the Partners and the Partnership. The powers of the General Partner to
manage the Partnership business shall include, without limitation, the power
and authority to, directly or indirectly:

                 (i) operate any business normal or customary for the owner of
              or investor in commercial property of the type held by the
              Partnership;

                 (ii) perform any and all acts necessary or appropriate to the
              operation of the Partnership's assets, including, but not limited
              to, preparing,

                                      28

<PAGE>

              negotiating, executing and delivering leases and rental
              agreements with regard to real and personal property owned by the
              Partnership, preparing applications for rezoning, preparing
              objections to rezoning of other property and establishing bank
              accounts in the name of the Partnership;

                 (iii) improve, renovate and/or perform construction activities
              with regard to the properties owned by the Partnership and to
              retain such contractors, subcontractors and other persons or
              entities as may be required in connection with such activities;

                 (iv) procure and maintain such insurance as may be available
              in such amounts and covering such risks as are deemed appropriate
              by the General Partner;

                 (v) take and hold all real, personal and mixed property of the
              Partnership in the name of the Partnership or in the name of a
              nominee;

                 (vi) negotiate, execute and deliver agreements on behalf of
              and in the name of the Partnership;

                 (vii) borrow money (whether on a secured or unsecured basis),
              finance and refinance the assets of the Partnership or any part
              thereof or interest therein, and in connection therewith, issue
              notes, bonds, securities and other undertakings and evidences of
              indebtedness and documents related thereto (including, without
              limitation, guaranties, indemnities and similar undertakings to
              support loans obtained or debt securities issued by the Company);

                 (viii) coordinate all accounting and clerical functions of the
              Partnership and employ such accountants, lawyers, property
              managers, leasing agents and other management or service
              personnel as may from time to time be required to carry on the
              business of the Partnership;

                 (ix) acquire any assets, and encumber, sell, assign, transfer,
              ground lease or otherwise dispose of any or all of the assets of
              the Partnership, or any part thereof or interest therein
              including, without limitation, by way of any Unit dividend,
              split, recapitalization, merger, consolidation, combination,
              exchange of Units or other similar Partnership organizational
              change;

                 (x) organize one or more partnerships, corporations, limited
              liability companies or other business entities which are
              controlled, directly or indirectly, by the Partnership and make
              any capital contributions (in cash or in kind) required pursuant
              to the organizational documents or subscription agreements
              relating to any such partnerships, corporations, limited
              liability companies or other business entities; and

                 (xi) establish the date (the "Record Date") for the purpose of
              making any proper determination in connection with, but not
              limited to, the following matters: (a) which Partners are
              entitled to receive distributions, (b)

                                      29

<PAGE>

              consent to any matter for which the consent of Partners is
              permitted or required under any provision hereof, or (c)
              otherwise when Partners are allocated rights hereunder.

         9.2 LIMITATIONS ON POWER AND AUTHORITY OF PARTNERS. Notwithstanding
the powers of the General Partner set forth in Section 9.1 above, the General
Partner shall not have the right or power to do any of the following unless any
such action is approved by a Majority-in-Interest of the Limited Partners:

              A. do any act in contravention of this Agreement, or any
         amendment hereto; or

              B. do any act which would make it impossible to carry on the
         ordinary business of the Partnership, except to the extent that such
         act is specifically permitted by the terms hereof (it being understood
         and agreed that a sale of any or all of the assets of the Partnership,
         for example, would be an ordinary part of the Partnership's business
         and affairs and is specifically permitted hereby).

         9.3 LIMITED PARTNERS. The Limited Partners shall have no right or
authority to act for or to bind the Partnership and no Limited Partner (other
than the General Partner if the General Partner is also a Limited Partner)
shall participate in the conduct or control of the Partnership's affairs or
business.

         9.4 LIABILITY OF GENERAL PARTNER. The General Partner shall not be
liable or accountable, in damages or otherwise, to the Partnership or to any
other Partner for any error of judgment or for any mistakes of fact or law or
for anything which it may do or refrain from doing hereafter in connection with
the business and affairs of the Partnership except (i) in the case of fraud,
willful misconduct (such as an intentional breach of fiduciary duty or an
intentional breach of this Agreement) or gross negligence, and (ii) for other
breaches of this Agreement, but the liability of the General Partner under this
clause (ii) shall be limited to its interest in the Partnership as more
particularly provided for in Section 9.8. The General Partner shall not have
any personal liability for the return of any Limited Partner's Capital
Contributions.

         9.5 INDEMNITY. The Partnership shall indemnify and shall hold the
General Partner (and the officers and directors thereof) harmless from any
liability, loss, cost or damage, including without limitation reasonable legal
fees and court costs, incurred by it by reason of anything it may do or refrain
from doing hereafter for and on behalf of the Partnership or in connection with
its business or affairs; provided, however, that the Partnership shall not be
required to indemnify (i) the General Partner for any liability, loss, cost or
damage which it might incur as a result of its fraud, willful misconduct or
gross negligence in the performance of its duties hereunder, (ii) any officer
or director (other than "Independent Directors", as such term is defined in the
Articles of Incorporation) of the General Partner for any liability, loss, cost
or damage which it might incur as a result of misconduct or negligence of such
person, and (iii) any Independent Directors of the General Partner for any
liability, loss, cost or damage which it might incur as a result of willful
misconduct or gross negligence of such person. In addition, the General Partner
shall be entitled to reimbursement from the Partnership for any amounts paid by
it in satisfaction of indemnification obligations owed by the General Partner
to present or former

                                      30

<PAGE>

officers or directors of the General Partner or its predecessors, as provided
for in or pursuant to the Articles of Incorporation and Bylaws of the General
Partner. The right of indemnification set forth in this Section 9.5 shall be in
addition to any rights to which the person or entity seeking indemnification
may otherwise be entitled and shall inure to the benefit of the successors and
assigns of any such person or entity. No Partner shall be personally liable
with respect to any claim for indemnification pursuant to this Section 9.5, but
such claim shall be satisfied solely out of assets of the Partnership.

         9.6 OTHER ACTIVITIES OF PARTNERS AND AGREEMENTS WITH RELATED PARTIES.
Except as may otherwise be agreed to in writing, each Limited Partner, and its
affiliates, shall be free to engage in, to conduct or to participate in any
business or activity whatsoever, including, without limitation, the
acquisition, development, management and exploitation of real and personal
property (other than property of the Partnership), without any accountability,
liability or obligation whatsoever to the Partnership or to any other Partner,
even if such business or activity competes with or is enhanced by the business
of the Partnership. The General Partner, in the exercise of its power and
authority under this Agreement, may contract and otherwise deal with or
otherwise obligate the Partnership to entities in which the General Partner or
any one or more of the officers, directors or shareholders of the General
Partner may have an ownership or other financial interest, whether direct or
indirect.

         9.7 OTHER MATTERS CONCERNING THE GENERAL PARTNER.

              A. The General Partner shall be protected in relying, acting or
         refraining from acting on any resolution, certificate, statement,
         instrument, opinion, report, notice, request, consent, order, bond,
         debenture, or other paper or document believed by it to be genuine and
         to have been executed or presented by the proper party or parties.

              B. The General Partner may exercise any of the powers granted or
         perform any of the duties imposed by this Agreement either directly or
         through agents. The General Partner may consult with legal counsel,
         accountants, appraisers, management consultants, investment bankers
         and other consultants selected by it, each of whom may serve as
         consultants for the Partnership. An opinion by any consultant on a
         matter which the General Partner believes to be within its
         professional or expert competence shall be full and complete
         protection as to any action taken or omitted by the General Partner
         based on the opinion and actions taken or omitted in accordance
         therewith. The General Partner shall not be responsible for the
         misconduct, negligence, acts or omissions of any consultant or
         contractor of the Partnership or of the General Partner, and shall
         assume no obligation other than to use due care in the selection of
         all consultants and contractors.

              C. No mortgagee, grantee, creditor or any other person dealing
         with the Partnership shall be required to investigate the authority of
         the General Partner or secure the approval of or confirmation by any
         Limited Partner of any act of the General Partner in connection with
         the conduct of any ordinary or extraordinary Partnership business.

                                      31

<PAGE>

              D. The General Partner may retain such persons or entities as it
         shall determine (including the General Partner or any entity in which
         the General Partner shall have an interest or with which it is
         affiliated) to provide services to or on behalf of the Partnership.
         The General Partner shall be entitled to reimbursement from the
         Partnership for its out-of-pocket expenses (including, without
         limitation, amounts paid or payable to the General Partner or any
         entity in which the General Partner shall have an interest or with
         which it is affiliated) incurred in connection with Partnership
         business. Such expenses shall be deemed to include without limitation
         those expenses required in connection with the administration of the
         Partnership such as the maintenance of Partnership books and records,
         management of the Partnership property and assets and preparation of
         information respecting the Partnership needed by the Partners in the
         preparation of their individual tax returns.

              E. The General Partner may loan to the Partnership the net
         proceeds of loans obtained or debt securities issued by the Company so
         long as the terms of such loan to the Partnership are substantially
         equivalent to the corresponding loan obtained or debt securities
         issued by the Company.

         9.8 PARTNER EXCULPATION. Except for fraud, willful misconduct and
gross negligence, no Partner shall have any personal liability whatsoever,
whether to the Partnership or to any other Partner, for the debts or
liabilities of the Partnership or its obligations hereunder, and the full
recourse of any Partner shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a final
judgment, order or decree of a court of competent jurisdiction or (ii) actual
receipt of an improper benefit or profit in money, property or services.
Without limitation of the foregoing, and except for fraud, willful misconduct
and gross negligence, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partners and arising out of, or in connection
with, this Agreement. No advisor, trustee, manager, trust manager, member,
director, officer, partner, employee, beneficiary, shareholder, participant or
agent of any Partner (or of any partner of a Partner) shall be personally
liable in any matter or to any extent under or in connection with this
Agreement, and the Partnership, each Partner and their respective successors
and assigns shall look solely to the interest of the other Partner in the
Partnership for the payment of any claim or for any performance hereunder.

         9.9 GENERAL PARTNER EXPENSES AND LIABILITIES. The Partnership will pay
or reimburse the General Partner for all ongoing accounting and administrative
expenses of the General Partner so that, absent extraordinary circumstances,
the General Partner will not bear any expenses beyond those borne by the
Partnership. 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,
the General Partner, and the General Partner and its Affiliates in connection
with the structuring and organization of the Partnership and the General
Partner and the offering and sale of Units and Common Shares and Other
Securities.

                                      32

<PAGE>

                                   ARTICLE X
                                    BANKING

         The funds of the Partnership shall be kept in accounts designated by
the General Partner and all withdrawals therefrom shall be made on such
signature or signatures as shall be designated by the General Partner.

                                    ARTICLE
                                 XI ACCOUNTING

         11.1 FISCAL YEAR. The fiscal year and taxable year of the Partnership
(the "fiscal year") shall end on the last day of December of each year, unless
another fiscal year end is selected by the General Partner.

         11.2 BOOKS OF ACCOUNT. The Partnership books of account shall be
maintained at the principal office designated in Article 4 or at such other
locations and by such person or persons as may be designated by the General
Partner. The Partnership shall pay the expense of maintaining its books of
account. Each Partner shall have, during reasonable business hours and upon
reasonable prior notice, access to the books of the Partnership and in
addition, at its expense, shall have the right to copy such books. The General
Partner, at the expense of the Partnership, shall cause to be prepared and
distributed to the Partners annual financial data sufficient to reflect the
status and operations of the Partnership and its assets and to enable each
Partner to file its federal income tax return.

         11.3 METHOD OF ACCOUNTING. The Partnership books of account shall be
maintained and kept, and its income, gains, losses and deductions shall be
accounted for, in accordance with generally accepted accounting principles
consistently applied, or such other method of accounting as may be adopted
hereafter by the General Partner.

         11.4 TAX MATTERS.

              A. The General Partner is hereby designated the Tax Matters
         Partner (hereinafter referred to as the "TMP") of the Partnership and
         shall have all rights and obligations of the TMP under the Code. The
         Partnership shall reimburse the TMP for any and all out-of-pocket
         costs and expenses (including attorneys' and accountants' fees)
         incurred or sustained by it in its capacity as TMP. The Partnership
         shall indemnify, defend and hold the TMP harmless from and against any
         loss, liability, damage, cost or expense (including attorneys' and
         accountants' fees) sustained or incurred as a result of any act or
         decision concerning the Partnership tax matters and within the scope
         of its responsibility as TMP. 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 TMP shall be authorized to act for, and its
         decision shall be final and binding upon, the Partnership and each
         Partner.

              B. The General Partner shall take such steps as are necessary to
         ensure that the Partnership is taxed as a partnership under the Code.
         Subject to the preceding

                                      33

<PAGE>

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

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

                                  ARTICLE XII
                       TRANSFERS OF PARTNERSHIP INTERESTS

12.1 GENERAL PARTNER. The General Partner may not Transfer its interest in the
Partnership without the consent of a Majority-in-Interest of the Limited
Partners unless (i) the Transfer of such interest is to a Hines Controlled
Entity or to an entity that is, directly or indirectly, wholly-owned by the
Company and/or a Hines Controlled Entity, or (ii) the Transfer of such interest
is pursuant to or in connection with a Recapitalization and either (a) the
Recapitalization has been approved by the consent of a Majority-in-Interest of
the Limited Partners, or (b) an appropriate adjustment to the number of OP
Units held by each Partner has been made in accordance with Section 3.2(F).

         12.2 LIMITED PARTNER.

              A. No Limited Partner or substituted Limited Partner may Transfer
         all or any part of its interest in the Partnership, unless each of the
         following conditions are met:

                           (i) The Limited Partner obtains the prior written
                  consent of the General Partner (which consent may be given or
                  withheld in the sole discretion of the General Partner),
                  except for (x) the exchange of OP Units or a Participation

                                      34

<PAGE>

                  Interest for Common Shares, pursuant to Section 3.2(C) above
                  or (y) the Transfer of Units or Participation Interests by
                  any Hines Controlled Entity to any other Hines Controlled
                  Entity.

                           (ii) Either (x) the Partnership qualifies for the
                  Private Placement PTP Exemption for the entire taxable year
                  of such Transfer and for all prior taxable years, (y) the
                  Transfer is a Private Transfer, or (z) the Partnership is no
                  longer potentially subject to classification as a publicly
                  traded partnership, as defined in Section 7704 of the Code,
                  as determined by the General Partner in its sole discretion.

                           (iii) Such Transfer is not limited or prohibited by,
                  and complies with, any restrictions on transferability
                  contained in the Articles of Incorporation and Bylaws of the
                  Company and/or any applicable agreement executed by the
                  transferor.

                           (iv)  Such Transfer would not violate the securities
                  laws of any jurisdiction applicable to the Partnership or the
                  Partnership Interest to be assigned or transferred;

                           (v)   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;

                           (vi)  Such Transfer would not cause (A) all or any
                  portion of the assets of the Partnership (1) to constitute
                  "plan assets" (under ERISA, the Code or the applicable
                  provisions of any similar law) of any existing or
                  contemplated investor, or (2) to be subject to the provisions
                  of ERISA, the Code or any applicable similar law, or (B) the
                  General Partner to become a fiduciary with respect to any
                  existing or contemplated investor, pursuant to ERISA or the
                  applicable provisions of any similar law, or otherwise.

                           (vii) Such Transfer would not cause a termination of
                  the Partnership under Code Section 708.

                           (viii) The Transferor delivers opinions of counsel
                  regarding the foregoing matters in form and substance
                  reasonably acceptable to the General Partner as a condition
                  to any such Transfer.

                           (ix) The Transfer would not, in the opinion of the
                  General Partner, (y) by treating the interest in the
                  Partnership so transferred as if it had been exchanged for
                  Common Shares in accordance with Section 3.2(C) above,
                  violate the limitations on ownership of Common Shares
                  contained in the Articles of Incorporation and/or Bylaws of
                  the Company, or (z) violate any State or Federal securities
                  laws.

                           (x) The Transferee shall have agreed to be bound by
                  the terms of this

                                      35

<PAGE>

                  Agreement and shall have executed a counterpart hereof or
                  joinder hereto.

              B. A Limited Partner shall notify the General Partner of any
         Transfer of beneficial interest or other interest which occurs without
         a transfer of record ownership, as well as any pledge or other
         collateral transfer.

              C. No part of the interest of a Limited Partner shall be subject
         to the claims of any creditor, any spouse for alimony or support, or
         to legal process, and may not be voluntarily or involuntarily
         alienated or encumbered except as may be specifically provided for in
         this Agreement. A Limited Partner shall not be permitted to retire or
         withdraw from the Partnership except as expressly permitted by this
         Agreement.

              D. Any Transferee of all or any portion of a Limited Partner's
         interest in the Partnership in accordance and compliance with the
         provisions of this Section 12.2 shall be entitled to receive Profits,
         Losses and distributions hereunder attributable to such interest
         acquired by reason of such Transfer, from and after the effective date
         of the Transfer of such interest; provided, however, anything in this
         Agreement to the contrary notwithstanding, (i) without the prior
         written consent of the General Partner, no Transferee shall be
         considered a substituted Limited Partner; (ii) the Partnership and the
         General Partner shall be entitled to treat the Transferor of such
         interest as the absolute owner thereof in all respects, and shall
         incur no liability for the allocation of Profits and Losses or
         distributions which are made to such Transferor until such time as the
         written instrument of Transfer has been received by the General
         Partner and the "effective date" of the Transfer has passed, and (c)
         the General Partner shall have the right to require any such
         Transferor to exchange such Partnership Interest for Common Shares or
         cash, pursuant to Section 3.2(C) above. The "effective date" of any
         Transfer shall be the last day of the month set forth on the written
         instrument of Transfer or such other date consented to in writing by
         the General Partner as the "effective date."

         12.3 ADMISSION ADJUSTMENTS. The General Partner shall, when necessary,
cause this Agreement to be amended from time to time (and shall cause Schedule
A to be revised), to reflect the admission or withdrawal of Partners, and the
issuance, conversion and redemption of any Preference Units and/or OP Units
(including the corresponding adjustment to Percentage Interests).

         12.4 TRANSFERS TO LENDERS. Notwithstanding any other provision of this
Agreement to the contrary, no transfer of any Units or Participation Interest
may be made to a lender to the Partnership or any person who is related (within
the meaning of Regulations Section 1.752-4(b)) to any lender to the Partnership
whose loan constitutes a Nonrecourse Liability, without the consent of the
General Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion, provided that as a condition to such
consent being granted the lender will be required to enter into an arrangement
with the Partnership and the General Partner to exchange or redeem for the Cash
Amount or the REIT Shares Amount any Units or Participation Interest in which a
security interest is held simultaneously with the time at which such lender
would be deemed to be a partner in the Partnership for purposes of allocating
liabilities to such lender under Code Section 752.

                                      36

<PAGE>

                                 ARTICLE XIII
                           ADMISSION OF NEW PARTNERS

                  The General Partner shall admit to the Partnership as limited
partners those persons and entities who are not already Partners and who
receive a Participation Interest, OP Units and/or Preference Units in
accordance with the provisions of this Agreement.

                                  ARTICLE XIV
            TERMINATION, LIQUIDATION AND DISSOLUTION OF PARTNERSHIP

         14.1 TERMINATION EVENTS. The Partnership shall be dissolved and its
affairs wound up in the manner hereinafter provided upon the earliest to occur
of the following events:

              A. the sale of all or substantially all of the assets of the
         Partnership; or

              B. subject to Section 14.4 below, the entry of a final judgment,
         order or decree of a court of competent jurisdiction adjudicating as
         bankrupt either the Partnership or the General Partner, and the
         expiration without appeal of the period, if any, allowed by applicable
         law to appeal therefrom.

         14.2 METHOD OF LIQUIDATION. Upon the happening of any of the events
specified in Section 14.1 above, the General Partner (or if there be no General
Partner, a liquidating trustee selected by a Majority-in-Interest of the
Limited Partners) shall immediately commence to wind up the Partnership's
affairs and shall liquidate the assets of the Partnership as promptly as
possible, unless the General Partner, or the liquidating trustee, shall
determine that an immediate sale of Partnership assets would cause undue loss
to the Partnership, in which event the liquidation may be deferred for a
reasonable time. The Partners shall continue to share distributions, Profits
and Losses during the period of liquidation in the same proportions as before
dissolution (subject to Section 14.2(C) below). The proceeds from liquidation
of the Partnership, including repayment of any debts of Partners to the
Partnership, shall be applied in the following order:

              A. Debts of the Partnership, including repayments of principal
         and interest on loans and advances made by the General Partner
         pursuant to Sections 3.3 and/or 9.7 above; then

              B. To the establishment of any reserves deemed necessary or
         appropriate by the General Partner, or by the person(s) winding up the
         affairs of the Partnership in the event there is no remaining General
         Partner of the Partnership, for any contingent or unforeseen
         liabilities or obligations of the Partnership. Such reserves
         established hereunder shall be held for the purpose of paying any such
         contingent or unforeseen liabilities or obligations and, at the
         expiration of such period as the General Partner, or such person(s)
         deems advisable, the balance of such reserves shall be distributed in
         the manner provided hereinafter in this Section 14.2 as though such
         reserves had been distributed contemporaneously with the other funds
         distributed hereunder; and then

                                      37

<PAGE>

              C. To the Partners in accordance with their respective positive
         Capital Account balances, after giving effect to all contributions,
         distributions and allocations for all periods. In connection
         therewith, income, gain and loss of the Partnership (and to the extent
         necessary to achieve the purposes hereof, items of gross income and
         deduction) with respect to the sale or other disposition of all or
         substantially all of the Partnership's assets and/or the Partnership's
         operations in connection therewith (whether or not attributable to the
         taxable year in which the distribution pursuant to this Section
         14.2(C) is to be made or a preceding taxable year) shall be allocated
         among the Partners so that each Partner's Capital Account shall equal,
         after taking into account the prior balance (positive or negative) in
         such Partner's Capital Account and the effect of such allocation, the
         amount that such Partner would be entitled to receive if the
         Partnership were to make a distribution to the Partners pursuant to
         the provisions of Section 8.2 hereof in an amount equal to the
         remaining liquidation proceeds to be distributed under this Section
         14.2(C).

         14.3 DATE OF TERMINATION. The Partnership shall be terminated when all
notes received in connection with any liquidating sales or other dispositions
have been paid or distributed and all of the cash or property available for
application and distribution under Section 14.2 above (including reserves)
shall have been applied and distributed in accordance therewith.

         14.4 RECONSTITUTION UPON BANKRUPTCY.

              A. Notwithstanding any dissolution of the Partnership under
         Section 14.1(D) above, if the Partnership is reconstituted as set
         forth in this Section 14.4, then the business of the Partnership shall
         be continued with the Partnership's property and the Partnership's
         assets shall not be liquidated.

              B. If the Partnership is dissolved by reason of the bankruptcy of
         the General Partner, a successor general partner may, in the
         discretion of the General Partner hereunder with the written consent
         of a Majority-in-Interest of the Limited Partners, be admitted within
         90 days after the dissolution, effective as of the date of
         dissolution. Upon the admission of such successor general partner,
         without any further consent or approval of any other Partner, the
         Partnership shall be reconstituted as a successor limited partnership.

              C. If the Partnership is dissolved by reason of the bankruptcy of
         the Partnership in a proceeding for the reorganization (and not the
         liquidation) of the Partnership, then, with the consent of the Company
         and a Majority-in-Interest of the Limited Partners, the Partnership
         may be reconstituted within 90 days after dissolution, effective as of
         the date of dissolution, whereupon the Partnership shall be
         reconstituted as a successor limited partnership.

         A. The successor limited partnership reconstituted in accordance with
the foregoing provisions of this Section 14.4 shall continue the business of
the Partnership with the Partnership's property. The Percentage Interests of
the Partners in the successor limited partnership shall be in proportion to
their respective Percentage Interests in the dissolved Partnership. Such
successor limited partnership shall be governed by the terms

                                      38

<PAGE>

and provisions of this Agreement and references in this Agreement to the
Partnership or to the Partners or their rights and obligations shall be
understood to comprehend such successor limited partnership and the Partners
thereof and their rights and obligations.

         14.5 DEATH, LEGAL INCOMPETENCY, ETC. OF A LIMITED PARTNER. The death,
legal incompetency, insolvency, dissolution or bankruptcy of a Limited Partner
shall not dissolve or terminate the Partnership. Upon the death or incapacity
of an individual Limited Partner, such individual Limited Partner's interest in
the Partnership shall be transferred either by will, the laws of intestacy or
otherwise to the legal representative or successor of such individual Limited
Partner.

                                  ARTICLE XV
                               POWER OF ATTORNEY

         Each Limited Partner hereby irrevocably constitutes and appoints the
General Partner, with full power of substitution, its true and lawful attorney,
for it and in its name, place and stead and for its use and benefit, to sign,
swear to, acknowledge, file and record:

              A. this Agreement, and subject to Article 16 below, amendments to
         this Agreement;

              B. any certificates, instruments and documents (including assumed
         and fictitious name certificates) as may be required by, or may be
         appropriate under, the laws of the State of Delaware, the State of
         Texas or any other State or jurisdiction in which the Partnership is
         doing or intends to do business, in order to discharge the purposes of
         the Partnership or otherwise in connection with the use of the name or
         names used by the Partnership;

              C. any other instrument which may be required to be filed or
         recorded by the Partnership on behalf of the Partners under the laws
         of any State or by any governmental agency in order for the
         Partnership to conduct its business;

              D. any documents which may be required to effect the continuation
         of the Partnership, the admission of a substitute or additional
         Partner, the dissolution and termination of the Partnership or the
         amendment and restatement of Schedule A, provided such continuation,
         admission, dissolution and termination or amendment and restatement of
         Schedule A, is not in violation of any provision of this Agreement;
         and

              E. any documents which may be required or desirable to have the
         General Partner appointed, and act as, the TMP.

The foregoing grant of authority is a special power of attorney coupled with an
interest, is irrevocable and shall survive the death or incapacity of any
individual Limited Partner, and shall survive the delivery of any assignment by
a Limited Partner of the whole or any portion of his interest in the
Partnership.

                                      39

<PAGE>

                                  ARTICLE XVI
                             AMENDMENT OF AGREEMENT

              A. Each Limited Partner, by his execution of or joinder in this
         Agreement, hereby irrevocably appoints the General Partner with power
         of substitution, as his true and lawful attorney coupled with an
         interest, in his name, place and stead to amend this Agreement in any
         respect other than:

                (i) to enlarge the obligation of any Partner to make
              contributions to the capital of the Partnership; or

                (ii) except as otherwise provided for in this Agreement or as
              required by law, to modify the allocation of Profits or Losses or
              distributions among the Partners as provided for in Articles 7
              and 8 above, respectively; or

                (iii) to amend Articles 1 or 12 or Section 9.2; or

                (iv) to amend this Article 16.

              B. With respect to amendments regarding Sections 16(A)(ii) or
         16(A)(iii), this Agreement may be amended with the written consent of
         the General Partner and those Limited Partners holding not less than
         67% of the aggregate of Percentage Interests held by all Limited
         Partners. Notwithstanding the foregoing, the terms and conditions of a
         particular series of Preference Units may not be changed without the
         written consent of the holders of at least 67% of the Preference Units
         within the class or series (or such greater percentage as may be
         provided for in the applicable Preference Unit Term Sheet).

              C. With respect to amendments regarding Section 16(A)(i), this
         Agreement may be amended only with the written consent of the General
         Partner and any Partner adversely affected by such amendment. With
         respect to amendments regarding Section 16(A)(iv) this Agreement may
         be amended only with the written consent of all Partners.

         In the event this Agreement shall be amended pursuant to this Article
16, the General Partner shall cause this Agreement to be amended to reflect the
amendment.

                                 ARTICLE XVII
                                 MISCELLANEOUS

         17.1 NOTICES. Any notice, election or other communication provided for
or required by this Agreement shall be in writing and shall be deemed to have
been given when delivered by hand or by telecopy or other facsimile
transmission, the first business day after sent by overnight courier (such as
Federal Express), or on the second business day after deposit in the United
States Mail, certified or registered, return receipt requested, postage
prepaid, properly addressed to the Partner to whom such notice is intended to
be given at the address for the Partner set forth on Schedule A of this
Agreement, or at such other address as such person may

                                      40

<PAGE>

have previously furnished in writing to the Partnership and each Partner with
copies to the General Partner at 2800 Post Oak Boulevard, Suite 5000, Houston,
Texas 77056-6118.

         17.2 MODIFICATIONS. Except as otherwise provided in this Agreement, no
change or modification of this Agreement, nor any waiver of any term or
condition in the future, shall be valid or binding upon a Partner unless such
change or modification shall be in writing and signed by such Partner.

         17.3 SUCCESSORS AND ASSIGNS. Any person acquiring or claiming an
interest in the Partnership, in any manner whatsoever, shall be subject to and
bound by all of the terms, conditions and obligations of this Agreement to
which his predecessor-in-interest was subject or bound, without regard to
whether such a person has executed a counterpart hereof or any other document
contemplated hereby. No person, including the legal representative, heir or
legatee of a deceased Partner, shall have any rights or obligations greater
than those set forth in this Agreement, and no person shall acquire an interest
in the Partnership or become a Partner thereof except as expressly permitted by
and pursuant to the terms of this Agreement. Subject to the foregoing, and the
provisions of Article 12 above, this Agreement shall be binding upon and inure
to the benefit of the Partners and their respective successors, assigns, heirs,
legal representatives, executors and administrators.

         17.4 DUPLICATE ORIGINALS. For the convenience of the Partners, any
number of counterparts hereof may be executed, and each such counterpart shall
be deemed to be an original instrument, and all of which taken together shall
constitute one agreement.

         17.5 CONSTRUCTION. The titles of the Articles, Sections and
subsections herein have been inserted as a matter of convenience of reference
only and shall not control or affect the meaning or construction of any terms
or provisions herein.

         17.6 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Delaware. Except to the extent the Act is inconsistent with the
provisions of this Agreement, the provisions of such Act shall apply to the
Partnership.

 17.7 OTHER INSTRUMENTS. The parties hereto covenant and

agree that they will execute such other and further instruments and documents
as, in opinion of the General Partner, are or may become necessary or desirable
to effectuate and carry out the Partnership as provided for by this Agreement.

         17.8 GENERAL PARTNER WITH INTEREST AS LIMITED PARTNER. If the General
Partner ever has an interest as a Limited Partner in the Partnership, the
General Partner shall, with respect to such interest, enjoy all of the rights
and be subject to all of the obligations and duties of a Limited Partner.

         17.9 LEGAL CONSTRUCTION. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein

                                      41

<PAGE>

         17.10 GENDER. Whenever the context shall so require, all words herein
in any gender shall be deemed to include the masculine, feminine or neuter
gender, all singular words shall include the plural, and all plural words shall
include the singular.

         17.11 PRIOR AGREEMENTS SUPERSEDED. This Agreement supersedes any prior
understandings or written or oral agreements among the Partners, or any of
them, respecting the within subject matter and contains the entire
understanding amongst the Partners with respect thereto.

         17.12 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are for the exclusive use and benefit of General Partner and the
Limited Partners and shall not inure to the benefit of any other person or
entity.

         17.13 PURCHASE FOR INVESTMENT. Each Partner represents, warrants and
agrees that it has acquired and will hold its interest in the Partnership for
its own account for investment only and not for the purpose of, or with a view
toward, the resale or distribution of all or any part thereof, nor with a view
toward selling or otherwise distributing such interest or any part thereof at
any particular time or under any predetermined circumstances. Each Partner
further represents and warrants that it is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for itself, particularly
real estate investments, and that it has a sufficiently high net worth that it
does not anticipate a need for the funds it has invested in the Partnership in
what it understands to be a highly speculative and illiquid investment.

         17.14 ACCESS TO RECORDS. Any Shareholder and any designated
representative thereof shall be permitted reasonable access to all the records
of the Partnership at and during reasonable times, and may inspect and copy any
of them for a reasonable charge.

         17.15 WAIVER. No consent or waiver, express or implied, by any Partner
to or of any breach or default by any other Partner in the performance by such
other Partner of its obligations hereunder shall be deemed or construed to be a
consent to or waiver of any other breach or default in the performance by such
other Partner of the same or any other obligations of such Partner hereunder.
Failure on the part of any Partner to complain of any act or failure to act on
the part of any other Partner or to declare any other Partner in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Partner of its rights hereunder.

         17.16 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which when taken together, shall constitute but one original.

                                      42

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed and sworn to as
of the day and year first above written by the General Partner and the
undersigned Limited Partners.

                                      GENERAL PARTNER:

                                      HINES REAL ESTATE INVESTMENT TRUST, INC.,
                                      a Maryland corporation

                                      By:
                                           ------------------------------------
                                           Name:
                                                  -----------------------------
                                           Title:
                                                  -----------------------------

                                      LIMITED PARTNERS:

                                      HINES REAL ESTATE HOLDINGS LIMITED
                                      PARTNERSHIP

                                      By:  JCH Investments, Inc.,
                                           its General Partner

                                      By:
                                           ------------------------------------
                                           Name:
                                                  -----------------------------
                                           Title:
                                                  -----------------------------

                                      HALP ASSOCIATES LIMITED PARTNERSHIP

                                      By:  Hines Interests Limited Partnership,
                                           its General Partner

                                           By:  Hines Holdings, Inc.,
                                                its General Partner

                                      By:
                                           ------------------------------------
                                           Name:
                                                  -----------------------------
                                           Title:
                                                  -----------------------------

                                      43

<PAGE>

                                   SCHEDULE A

              Partners, Capital Accounts and Partnership Interests

<TABLE>
<CAPTION>
                                                                                            AGREED
                                                                        PREFERENCE         CAPITAL          PERCENTAGE
          NAME AND ADDRESS OF PARTNERS                 OP UNITS           UNITS            ACCOUNT           INTEREST
          ----------------------------                 --------           -----            -------           --------
<S>                                                    <C>              <C>                <C>               <C>

General Partner:

         Hines Real Estate Investment Trust, Inc.       219.56                             $  2,020             1%

Limited Partners:

         Hines  Real  Estate   Holdings   Limited    21,739.13                             $200,000            99%
         Partnership

         HALP Associates Limited Partnership       Participation                           $      0             0%
                                                   Interest
</TABLE>

                                      44<PAGE>
                                                                    EXHIBIT 10.6
================================================================================

                          SECOND AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

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

                                 APRIL 1, 2004

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                             PAGE
                                                                                                                             ----
<S>                                                                                                                          <C>
ARTICLE I......................................................................................................................1

    SECTION 1.1 Definitions....................................................................................................1
    SECTION 1.2 Interpretation; Terms Generally...............................................................................15

ARTICLE II General Provisions.................................................................................................16

    SECTION 2.1 Formation and Continuation....................................................................................16
    SECTION 2.2 Name..........................................................................................................16
    SECTION 2.3 Organizational Certificates and Other Filings.................................................................16
    SECTION 2.4 Principal and Other Offices...................................................................................16
    SECTION 2.5 Registered Office; Registered Agent...........................................................................17
    SECTION 2.6 Purpose.......................................................................................................17
    SECTION 2.7 Powers........................................................................................................17
    SECTION 2.8 Fiscal Year...................................................................................................17
    SECTION 2.9 Term..........................................................................................................18
    SECTION 2.10 Feeder Entities..............................................................................................18
    SECTION 2.11 REIT Covenant................................................................................................18

ARTICLE III Partnership Capital...............................................................................................18

    SECTION 3.1 Initial Capital...............................................................................................18
    SECTION 3.2 Capital Commitments...........................................................................................18
    SECTION 3.3 Initial Offering Period.......................................................................................19
    SECTION 3.4 Initial Investment Period.....................................................................................20
    SECTION 3.5 Additional Capital............................................................................................21
    SECTION 3.6 Fund Indebtedness.............................................................................................21
    SECTION 3.7 Issuance of Units and Participation Interest..................................................................22
    SECTION 3.8 Redemption Rights.............................................................................................24
    SECTION 3.9 Priority Redemption Rights....................................................................................26
    SECTION 3.10 Hines Priority Redemption Right..............................................................................26
    SECTION 3.11 Hines Investment.............................................................................................26

ARTICLE IV General Partner....................................................................................................27

    SECTION 4.1 General Partner...............................................................................................27
    SECTION 4.2 Powers of the General Partner.................................................................................27
    SECTION 4.3 Time Commitment...............................................................................................29
    SECTION 4.4 Outside Investments...........................................................................................30
    SECTION 4.5 Transactions with Affiliates..................................................................................30
    SECTION 4.6 Strategic Investors...........................................................................................31
    SECTION 4.7 Other Activities not Restricted...............................................................................31

ARTICLE V Partnership Management..............................................................................................31

    SECTION 5.1 Fund Structure................................................................................................31
    SECTION 5.2 Investment Guidelines.........................................................................................32
    SECTION 5.3 Management Board..............................................................................................33
</Table>

                                       i

<PAGE>

<Table>
<S>                                                                                                                           <C>
    SECTION 5.4 Advisory Committee............................................................................................36
    SECTION 5.5 Management Team...............................................................................................38
    SECTION 5.6 Management Rights of Limited Partners.........................................................................38
    SECTION 5.7 Advisory Agreement............................................................................................38
    SECTION 5.8 Property Services Agreements..................................................................................39
    SECTION 5.9 Asset Valuations; Determination of Current Unit Value; Cancellation of Units..................................39
    SECTION 5.10 Management of Operating Companies............................................................................41
    SECTION 5.11 Non-Managing General Partner.................................................................................42

ARTICLE VI Exculpation and Indemnification....................................................................................42

    SECTION 6.1 Exculpation of the General Partner............................................................................42
    SECTION 6.2 Indemnification of General Partner............................................................................43
    SECTION 6.3 Treatment of Management Board, Advisory Committee, Et al......................................................44
    SECTION 6.4 Limited Liability of Limited Partners.........................................................................45
    SECTION 6.5 Other Activities of Limited Partners..........................................................................45

ARTICLE VII Expenses and Fees.................................................................................................45

    SECTION 7.1 General Partner Expenses......................................................................................45
    SECTION 7.2 Asset Management Fee..........................................................................................45
    SECTION 7.3 Acquisition Fees..............................................................................................46
    SECTION 7.4 Partnership Expenses..........................................................................................48
    SECTION 7.5 Operating Company Expenses....................................................................................48
    SECTION 7.6 Organization Expenses.........................................................................................49

ARTICLE VIII Capital Accounts; Allocations....................................................................................50

    SECTION 8.1 Capital Accounts..............................................................................................50
    SECTION 8.2 Interest on and Return of Capital.............................................................................51
    SECTION 8.3 Negative Capital Accounts.....................................................................................51
    SECTION 8.4 Allocation of Profits.........................................................................................51
    SECTION 8.5 Allocations of Losses.........................................................................................52
    SECTION 8.6 Special Allocations...........................................................................................53
    SECTION 8.7 Curative Allocations..........................................................................................54
    SECTION 8.8 Tax Allocations: Code Section 704(c)..........................................................................54

ARTICLE IX Distributions......................................................................................................55

    SECTION 9.1 Operating Cash Flow...........................................................................................55
    SECTION 9.2 Capital Cash Flow.............................................................................................55
    SECTION 9.3 Reinvestment of Capital Cash Flow.............................................................................56
    SECTION 9.4 Right to Limit Distributions..................................................................................56
    SECTION 9.5 Limitations on Distribution Rights............................................................................56

ARTICLE X Transfers; Withdrawals and Defaults.................................................................................57

    SECTION 10.1 Voluntary Transfer of General Partner Interest...............................................................57
    SECTION 10.2 Removal of General Partner...................................................................................57
    SECTION 10.3 Transfers of Partnership Interests by Hines Partners.........................................................58
    SECTION 10.4 Transfers of Units by Partners Other than Hines Partners.....................................................58
</Table>

                                       ii

<PAGE>

<Table>
<S>                                                                                                                           <C>
    SECTION 10.5 Conditions to Transfer.......................................................................................59
    SECTION 10.6 Admissions and Withdrawals Generally.........................................................................60
    SECTION 10.7 Required/Elective Withdrawals................................................................................60
    SECTION 10.8 Defaulting Partner...........................................................................................60

ARTICLE XI Partnership Administration.........................................................................................62

    SECTION 11.1 Books and Records............................................................................................62
    SECTION 11.2 Partnership Auditor..........................................................................................63
    SECTION 11.3 Filing of Tax Returns........................................................................................63
    SECTION 11.4 Tax Matters..................................................................................................63
    SECTION 11.5 Reports to Partners..........................................................................................64
    SECTION 11.6 Meetings of Partners.........................................................................................65
    SECTION 11.7 Meetings of Fund Investors...................................................................................67

ARTICLE XII Dissolution, Termination and Winding Up...........................................................................67

    SECTION 12.1 Dissolution..................................................................................................67
    SECTION 12.2 Termination of Partnership by Majority Fund Vote.............................................................68
    SECTION 12.3 Winding up...................................................................................................68
    SECTION 12.4 Liquidating Distributions....................................................................................68

ARTICLE XIII Miscellaneous....................................................................................................69

    SECTION 13.1 Waiver of Partition..........................................................................................69
    SECTION 13.2 Power of Attorney............................................................................................69
    SECTION 13.3 Amendments...................................................................................................70
    SECTION 13.4 Confidentiality..............................................................................................71
    SECTION 13.5 Entire Agreement.............................................................................................72
    SECTION 13.6 Severability.................................................................................................72
    SECTION 13.7 Notices......................................................................................................72
    SECTION 13.8 Governing Law................................................................................................73
    SECTION 13.9 Successors and Assigns.......................................................................................73
    SECTION 13.10 Headings....................................................................................................73
    SECTION 13.11 Counterparts................................................................................................73
    SECTION 13.12 Third Party Beneficiary.....................................................................................73
</Table>

                                      iii

<PAGE>

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
5.11       Non-Managing General Partner Provisions
9.1        Operating Cash Flow Distribution Example
9.2        Capital Cash Flow Distribution Example

LIST OF EXHIBITS:

Exhibit A  Property Services Agreement Form

                                       iv

<PAGE>

                           SECOND AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

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

         This SECOND 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 April
1, 2004, by and among Hines US Core Office Capital LLC, a Delaware limited
liability company, as the General Partner, and the Persons identified as Limited
Partners on the signature pages hereto, as Limited Partners.

                                    RECITALS

         WHEREAS, the 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"); and

         WHEREAS, the General Partner and the Limited Partners desire to amend
and restate the First Restated Agreement in its entirety as provided herein.

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

                                   ARTICLE I

         SECTION 1.1 Definitions. As used in this Agreement, 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.

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

<PAGE>

                  (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 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.

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

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

         "Agreement": This Second 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.

         "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).

         "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).

                                       2
<PAGE>

         "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" shall mean 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.

         "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.

         "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

                                       3
<PAGE>

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.

         "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).

         "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 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).

         "Fiscal Quarter": As defined in Section 2.8.

         "Fiscal Year": As defined in Section 2.8.

                                       4
<PAGE>

         "Fund": As defined in Section 5.1.

         "Fund Entity": As defined in Section 5.1.

         "Fund Investor": As defined in Section 5.1.

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

         "Funded Commitment": As defined in Section 3.2.

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

         "GECC": General Electric Capital Corporation, and its successors.

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

         "General Partner Expenses": As defined in Section 7.1.

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

                  (i) The initial Gross Asset Value of any asset contributed by
         a Partner to the Partnership shall be the gross fair market value of
         such asset, as determined by the General Partner and agreed to by the
         Contributing Partner;

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

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

                                       5
<PAGE>

                  (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 General Partner determines that an adjustment pursuant to
         paragraph (ii) above is necessary or appropriate in connection with a
         transaction that would otherwise result in an adjustment pursuant to
         this paragraph (iv).

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

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

         "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, and/or (b) Jeffrey C. Hines and/or Gerald D. Hines or, in the
event of the death or disability of Jeffrey C. Hines and/or Gerald D. Hines, the
heirs, legal representatives or estates of either or both of them.

         "Hines 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.

         "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, and (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; provided that "Indebtedness" with respect
to any Person shall not include obligations in respect of any accounts payable
that are

                                       6
<PAGE>

incurred in the ordinary course of such Person's business 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.

         "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 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.

         "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).

                                       7
<PAGE>

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

         "Management Fee Base": As defined in Section 7.2(b).

         "Management Team": As defined in Section 5.5.

         "Managing General Partner": As defined in Section 5.11.

         "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.

         "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 7.5.

         "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).

                                       8
<PAGE>

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

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

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

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

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

                  "Partnership": As defined in the Preamble to this Agreement.

                  "Partnership Auditor": As defined in Section 11.2.

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

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

                  "Partnership Minimum Gain": As defined in Regulations Sections
1.704-2(b)(2) and 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.

                  "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),

                                       9
<PAGE>
        adjusted as provided in clause (c) below for Partnership Units issued
        during the Fiscal Quarter just ended; plus

                (ii) its AM Sharing Percentage (as defined below) of a fraction
        (A) whose numerator is 0.03125% 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.

                o       "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.

                o       "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.

                o       "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.

                o       "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.

                                       10
<PAGE>

        (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 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:

                                       11
<PAGE>

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

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

                (iii) transfers between members of a family;

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

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

                (vi) the transfer by a Partner and any related persons (within
        the meaning of Code Section 267(b) or 707(b)(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 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;

                                       12
<PAGE>

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

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

                (vi) to the extent an adjustment to the adjusted tax basis of
        any Partnership asset pursuant to Code Section 734(b) or Code Section
        743(b) is required pursuant to Regulations Section
        1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
        Accounts as a result of a distribution other than in complete
        liquidation of a Partner's Partnership Interest, or is required pursuant
        to the last sentence of Regulations Section 1.704-1(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.

                                       13
<PAGE>

        "REIT Election Effective Date": As defined in Section 2.11.

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

        "S&P": Standard & Poor's, a division of The McGraw-Hill Companies, Inc.

        "Securities Act": The Securities Act of 1933, as amended.

        "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.

        "Strategic Investors": As defined in Section 4.6.

        "Subscription Agreement": As defined in Section 3.2.

        "Subsequent Closing": 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.

        "Transfer": As a noun, any sale, transfer, gift, exchange, assignment,
devise or other disposition, as well as any other event that causes any Person
to acquire beneficial ownership, or any agreement to take any such actions or
cause any such events, with respect to Partnership

                                       14
<PAGE>

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 General Partner.

        "Unfunded Commitment": As defined in Section 3.2.

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

        "Withdrawn General Partner": As defined in Section 12.1.

        "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.

        "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

                                       15
<PAGE>

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 General Partner shall continue as the general
partner of the Partnership, and each Person admitted as a Limited Partner prior
to the date hereof shall continue as a limited partner of the Partnership.

        SECTION 2.2 Name. The name of the Partnership shall be "Hines-Sumisei
U.S. Core Office Fund, L.P." The 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 name of the Partnership or under such other name (including
any assumed name) as the General Partner may from time to time determine in its
sole discretion. Upon the dissolution and termination of the Partnership, the
General Partner shall retain all rights with respect to the name of the
Partnership and the use of such name.

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

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

                                       16
<PAGE>

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

        SECTION 2.6 Purpose. The purpose of the Partnership is to hold an
interest in NY Trust, NY Trust II and any other Operating Company that may
hereafter be organized, 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 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 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 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 General Partner may change the ending date of the Fiscal Year if the General
Partner determines in good faith that such change is necessary or appropriate.
The General Partner will change the taxable year of the Partnership if and to
the extent necessary to comply with Code Section 706 and the Regulations
thereunder. The General Partner will give prompt written notice of any such
change to the other Partners.

                                       17
<PAGE>
         SECTION 2.9 Term. The term of the Partnership (the "Term") commenced
upon the filing of the Certificate and shall continue until the Partnership is
dissolved and its affairs are wound up in accordance with Article XII.

         SECTION 2.10 Feeder Entities. In order to facilitate investment in the
Partnership by certain investors, the General Partner may establish or
facilitate the establishment of one or more collective investment vehicles or
other arrangements (each such vehicle or arrangement, a "Feeder Entity") through
which investors may invest in the Partnership by acquiring interests in such
Feeder Entity. Affiliates of the General Partner may hold interests in any such
Feeder Entity or in the general partner (or advisor or similar entity) of such
Feeder Entity. In case of a default by any such Feeder Entity, the General
Partner may treat one or more of such investors (rather than such Feeder Entity)
as a Defaulting 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 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
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 Initial 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.

        SECTION 3.2 Capital Commitments.

                (a) The Partnership may from time to time, in the discretion of
        the General Partner, issue additional Partnership Units and admit
        additional Limited Partners to the

                                       18
<PAGE>

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 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 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 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 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 General
Partner and one or more Partners, or if the 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 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

                                       19
<PAGE>

         Units at the Initial Offering Price; provided that any such
         Subscription Agreement may, in the discretion of the General Partner,
         provide for the issuance of Units at a price different from the Initial
         Offering Price in any Subscription Agreement entered into after the
         date of this Agreement if, in the reasonable determination of the
         General Partner in its sole discretion, such different price is
         appropriate based on any appreciation or depreciation of any
         Investments from the date of this Agreement to the effective date of
         such Subscription Agreement; provided further that no Subscription
         Agreement entered into during the Initial Offering Period shall provide
         for the issuance of 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 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 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 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 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 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 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 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
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

                                       20
<PAGE>

any such Subscription Agreement; provided that the foregoing shall not affect
(i) the right of the General Partner or the Partnership to pursue any remedies
available to it under this Agreement or at law in respect of any default in
respect of a Capital Call issued prior to the termination of the Initial
Investment Period, or (ii) the obligation of any Partner with respect to a
Capital Commitment attributable to a Subscription Agreement entered into after
the Initial Offering Period.

                  SECTION 3.5 Additional Capital. Except as specifically
provided in this Agreement or any Subscription Agreement, no Partner (including
the General Partner) shall be required to, and no Limited Partner shall have the
right to, contribute additional funds or other property to the Partnership. The
Partnership may from time to time incur Indebtedness in accordance with Section
3.6 and issue additional Units in accordance with Section 3.7.

                  SECTION 3.6 Fund Indebtedness.

                  (a) The 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 General Partner may cause the Partnership to
                  consent to the Fund incurring Indebtedness in excess of the
                  Aggregate Debt Limit, if the 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 General
                  Partner makes a reasonable determination that Fund

                                       21
<PAGE>

                  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 General Partner shall have the right, in its
         discretion, to pledge to the lender the right of the General Partner to
         issue Capital Calls in respect of the Unfunded Commitments of the
         Partners, and to enforce the obligations of the 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 General Partner, for the benefit of one or more lenders or other
         Persons extending credit to the Partnership, (A) acknowledge its
         obligations pursuant to this Agreement and its Subscription Agreement
         to make Capital Contributions (which may, as determined by the General
         Partner, include an acknowledgment that the General Partner, or the
         lender on behalf of the General Partner (in accordance with the
         agreements between such lender and the Partnership and/or the General
         Partner), may call such Capital Contributions in accordance with this
         Agreement and such 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 General Partner may perfect and assign for the
         benefit of a lender as determined by the General Partner in its sole
         discretion. For purposes of determining whether the Fund's Indebtedness
         is within the Aggregate Debt Limit, Indebtedness secured by a pledge of
         the General Partner's right to make Capital Calls in respect of the
         Partners' Unfunded Commitments (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
         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
         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.

                  (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

                                       22
<PAGE>

         consideration for services rendered by Hines and SLR as Investment
         Advisors to the 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 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 General
         Partner. In such event, the General Partner shall amend this Agreement
         and the Advisory Agreement (in a manner reasonably acceptable to SLR)
         as necessary to provide for (A) only Hines having a Percentage Interest
         calculated by reference to a Participation Interest, and (B) the
         payment to the General Partner for the benefit of SLR of additional
         cash amounts in respect of Asset Management Fees and Acquisition Fees
         to which SLR would be entitled under the Advisory Agreement if the
         Partnership continued to pay such fees after the Initial Investment
         Period in the manner that such fees are required to be paid under this
         Agreement during the Initial Investment Period.

                                       23
<PAGE>

         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 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 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 first sentence of this Section 3.8 (a "Liquidating
Redemption"), the 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 General Partner
         determines in good faith that such redemption would be

                                       24
<PAGE>

         inconsistent with the best interests of the Partnership or any
         Operating Entity, or (ii) 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 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 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 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 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 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

                                       25
<PAGE>

         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 General Partner may require an opinion of counsel,
         which counsel and opinion shall be satisfactory to the General Partner,
         to the effect that such redemption will not cause adverse tax
         consequences to the non-redeeming Partners, and such Limited Partner
         exercising the Redemption Right shall be responsible for paying said
         counsel's fee for such opinion.

                  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 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 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 Priority Redemption Right. Notwithstanding
any other provision of this Agreement, the General Partner and the Hines Limited
Partner shall have a Priority Redemption Right to require that the proceeds of
all Capital Contributions made to the Partnership from and after the date hereof
be applied to the redemption of all Units held by the General Partner and the
Hines Limited Partner which represent Funded Commitments in excess of the Hines
Capital Requirement. Such redemption shall be for cash in an amount per Unit
equal to the Initial Offering Price. To the extent the General Partner or the
Hines Limited Partner elect to exercise such Priority Redemption Right, the
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 and
the General Partner 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.

                  SECTION 3.11 Hines Investment. The General Partner, the Hines
Limited Partner and/or such other Affiliates of Hines as the General Partner may
determine from time to time, shall maintain Committed Capital to the Fund in an
aggregate amount of not less than the lesser of (i) 1% of the Committed Capital
of all Fund Investors, or (ii) $25 million (the "Hines Capital Requirement"). 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

                                       26
<PAGE>

any Operating Company or otherwise, the General Partner shall, or shall cause an
Affiliate of the 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 General Partner and its Affiliates for purposes of complying with
the Hines Capital Requirement, (A) the General Partner, the Hines Limited
Partner or any other Affiliate of Hines may, at any time, at the discretion of
the 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 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 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 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 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

                                 GENERAL PARTNER

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

                  SECTION 4.2 Powers of the General Partner.

                  (a) Subject to 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 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.

                                       27
<PAGE>

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

                           (i) make all decisions concerning the 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
                  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;

                           (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;

                                       28
<PAGE>

                           (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 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 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;

                           (xiii) delegate any powers or responsibilities of the
                  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 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 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 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 General Partner
         and other Affiliates of Hines and their respective employees, officers
         and agents may also engage in activities

                                       29
<PAGE>

         unrelated to the Fund and may provide services to Persons other than
         the Partnership, the Operating Companies or any of their Affiliates.

                  (b) The General Partner shall cause the Management Team to
         devote such time as the 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, neither the General Partner nor any other
Affiliate of Hines will make any equity investment which satisfies the
Investment Guidelines (other than through an interest in the Fund); provided
that such restriction shall not apply to the following:

                  (a) any investment which the General Partner has decided not
         to make or pursue based on a good faith determination that such
         investment is inappropriate or inadvisable for the Fund, whether due to
         capacity, diversification, rate of return objectives or other
         considerations; provided that to the extent the General Partner
         determines in good faith that it is desirable for the Fund to make some
         but not all of a particular investment, then the Fund may make such
         investment to such extent and the General Partner or another Affiliate
         of Hines (alone or with other Strategic Investors) may co-invest with
         the 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;

                  (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 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 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 the transaction are on terms which are no
less favorable to the Partnership or such Fund Entity than would be obtained

                                       30
<PAGE>

in a transaction with an unaffiliated party; provided that the terms of any
transaction approved by the Advisory Committee shall be conclusively deemed to
be made on such a basis. The General Partner shall disclose to the Advisory
Committee the terms of all such material transactions between the General
Partner or any of its Affiliates on the one hand and the Partnership or any Fund
Entity on the other.

                  SECTION 4.6 Strategic Investors. The General Partner may
consent, on behalf of the Partnership, to an Operating Company permitting one or
more strategic investors, including Affiliates of the General Partner
("Strategic Investors") investing in Properties in which the Fund invests if the
General Partner determines that such investment would be beneficial to the Fund;
for example, in diversifying the investments made or to be made by the Fund, in
successful operation of the Property, or in disposing of the Property or
otherwise adding value to the Property. If such Strategic Investor is a Partner
or Fund Investor, any such co-investment may be made through an investment
vehicle in which such Strategic Investor has an interest separate from its
interest in the Fund, and if the General Partner and/or its Affiliates are the
Strategic Investor, such co-investment shall have economic terms that are
materially no more favorable to the General Partner and/or its Affiliates, as
applicable, than the terms of this Agreement or the terms contemplated by any
Approved Agreement.

                  SECTION 4.7 Other Activities not Restricted. Except as
provided in Section 4.2(c), Sections 4.3 through 4.6 and Article V, this
Agreement shall not be construed in any manner that precludes the General
Partner or any 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 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 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
         acquires or subscribes for an equity interest in any Operating Company
         or other Fund Entity or which makes an equity

                                       31
<PAGE>

         investment in any Property in which any Operating Company invests, and
         which is designated as such by the General Partner, shall be deemed a
         "Fund Investor". The 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 and NY Trust II
         and the subsidiary of NY Trust II. It is the present intention of the
         General Partner to cause the Partnership to acquire an interest in US
         Core Trust, and to cause US Core Trust to acquire an interest in US
         Core Properties, prior to or in connection with the first investment by
         US Core Properties, directly or indirectly, in a Property. In such
         event, the organizational structure of the Fund shall be as set forth
         on Schedule 5.1.

                  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, over an assumed ten
         year holding period, by investing in and funding Operating Companies
         which adhere to the following guidelines (the "Investment Guidelines"):

                           (i) Each Operating Company will invest in existing
                  office properties that the 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

                                       32
<PAGE>

                  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 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.

                  (a) The General Partner shall be subject to the oversight of a
         management board (the "Management Board"). The Management Board will
         initially have seven members. The 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 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
         General Partner and SLR.

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

                                       33
<PAGE>

                           (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 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,

                           (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 General Partner, the President or by any member of the
         Management Board on five Business

                                       34
<PAGE>

         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 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,

                           (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.

                                       35
<PAGE>

                  (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 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 General Partner; provided that no member of
         the Advisory Committee shall be an Affiliate of the General Partner (or
         a designee or representative thereof). The 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 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 General Partner or the Management
         Board, except that approval of the Advisory Committee shall be required
         for:

                           (i) any transaction between the Partnership or any
                  Fund Entity, on the one hand, and Hines or any Affiliate of
                  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 held by Affiliates of Hines pursuant
                  to the terms of this Agreement, (E) the execution, delivery or
                  performance of any Approved Agreement, (F) any other
                  transaction specifically permitted by this Agreement, and (G)
                  any transaction which is on terms no less favorable to the
                  Partnership or such Fund Entity than would be obtained from an
                  unaffiliated third party.

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

                                       36
<PAGE>

                           (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 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 General Partner, and
         shall be deemed removed if the Limited Partner that the member
         represents requests such removal in writing to the 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.

                                       37
<PAGE>

                  (h) The 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 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 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 General Partner containing such
         restrictions on the use and disclosure of confidential information and
         other matters as the General Partner may reasonably request.

                  SECTION 5.5 Management Team. The 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 General Partner may deem appropriate, with
the establishment of any office and the appointment of any person to fill such
office by the 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 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 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 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 General Partner shall remain liable to the Partnership for the
performance of its obligations under this Agreement notwithstanding the
delegation of any such obligations to the Investment Advisors pursuant to the
Advisory Agreement. The General Partner shall bear the costs of all services
provided by the Investment Advisors under the Advisory Agreement; provided that
the

                                       38
<PAGE>

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 General Partner or
the applicable Operating Company deems necessary or appropriate to accommodate
the particular circumstances of each Property; provided that the General Partner
shall not authorize any increase in the Property Services Fees payable to the
Property Manager or any material increase in the risks or obligations to be
borne by the Owner under any Property Services Agreement over those provided for
in or contemplated by the Property Services Agreement Form, without the consent
of the Advisory Committee 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 (or, if such Appraiser is not
         available, such other Appraiser as the 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 General
         Partner, subject to the approval of the Advisory Committee pursuant to
         Section 5.4 hereof. The 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 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

                                       39
<PAGE>

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 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 General
         Partner, were distributed by each Fund Entity to its owners.

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

                  (iv) The "Current Unit Value" of any 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

                                       40
<PAGE>

         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 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

                                       41
<PAGE>

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 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
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. Notwithstanding anything to
the contrary contained in this Agreement, the General Partner may, in its
discretion at any time and without the prior consent of the Limited Partners or
the Advisory Committee, admit Hines REIT Properties, L.P., a Delaware limited
partnership whose general partner is Hines Real Estate Investment Trust, Inc., a
Maryland corporation, as a non-managing general partner of the Partnership (the
"Non-Managing General Partner"). In such event, (i) the Non-Managing General
Partner shall be deemed to be a general partner of the Partnership for all
purposes under the Act, but shall have only those rights, privileges, powers and
obligations set forth on Schedule 5.11, (ii) the General Partner shall
automatically be deemed to be the managing general partner of the Partnership
(the "Managing General Partner") and, as such, shall have all rights,
privileges, powers and obligations as the General Partner has under this
Agreement, and (iii) this Agreement shall be amended by the Managing General
Partner, without the consent of any other Partners, in the manner set forth on
Schedule 5.11.

                                   ARTICLE VI

                         EXCULPATION AND INDEMNIFICATION

         SECTION 6.1 Exculpation of the General Partner. The General Partner and
its Affiliates, and the direct or indirect members, managers, partners,
shareholders, officers, directors, employees, agents and legal representatives
of the General Partner and any such Affiliate, including any officer 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 failure to act constitutes gross negligence, recklessness,
willful misconduct or bad faith on the part of the Indemnified Person, a knowing
violation of law by the Indemnified Person or a material breach by the
Indemnified Person of its obligations under this Agreement. The General Partner
may exercise any of the powers granted to it hereunder and perform any of the
duties imposed upon it hereunder either directly or by or through agents and
shall not be responsible for any misconduct or negligence on the part of any
such agent selected with reasonable care. The General Partner may rely, and
shall be protected in acting or refraining from acting, and shall be deemed to
have acted in good faith and without gross negligence or willful misconduct,
upon any consent, approval or any other action taken by the Limited Partners or
the Advisory Committee, and upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
or other paper or document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties. The General
Partner may consult with legal counsel, accountants, appraisers, management
consultants, investment

                                       42
<PAGE>

bankers, architects, engineers, environmental consultants and other professional
consultants and advisers selected by it with reasonable care, and shall be fully
protected and justified and shall be deemed to have acted in good faith and
without gross negligence or willful misconduct, in any action or inaction which
is taken or omitted to be taken in reasonable reliance upon the advice or
opinion of such Persons as to matters within such Persons' professional or
expert competence. The General Partner shall not be liable to the Partnership or
the Partners for the failure to perform any obligation that the General Partner
cannot perform because the Partnership has insufficient funds to pay the cost
and expense relative to such obligation.

                  SECTION 6.2 Indemnification of General Partner.

                  (a) The Partnership, to the fullest extent permitted by law,
         shall indemnify and hold harmless each Indemnified Person from and
         against any loss, liability, expense, judgment, settlement cost, fees
         and related expenses (including reasonable attorneys' fees and
         expenses), costs or damages arising out of or in connection with any
         act taken or omitted to be taken in respect of the affairs of the
         Partnership or of any Operating Company, unless such act or omission
         constitutes (i) following the admission of the Non-Managing General
         Partner to the Partnership, 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) prior to such admission, and after
         such admission 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.

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

                                       43
<PAGE>

         likely that such Indemnified Person is entitled to the benefits of the
         exculpatory provisions set forth in Section 6.1. Notwithstanding
         anything to the contrary contained in this Section 6.2, neither the
         General Partner nor any other Indemnified Person shall be entitled to
         indemnification for, or be indemnified by the Partnership against, any
         claim in any action (either direct or derivative) brought against such
         Indemnified Person by any Limited Partner if it is established, by a
         final non-appealable judgment, that such claim was one as to which such
         Indemnified Person is not entitled to the benefits of the exculpatory
         provisions set forth in Section 6.1.

                  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 Management
Board, the Management Team or the Advisory Committee 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 General Partner solely by reason of such appointment. In the
absence of fraud or willful misconduct on the part of a member of the Management
Board, the Management Team or the Advisory Committee, the Partnership shall, to
the fullest extent permitted by law, indemnify and hold harmless each such
member of the Management Board, the Management Team and Advisory Committee, and
each Limited Partner 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, the Management Team 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 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 Management Board, the Management
Team or the Advisory Committee, or any Limited Partner represented by any such
person, reasonable attorneys' fees and other costs and

                                       44
<PAGE>

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
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 General Partner Expenses. The Partnership shall
not have any salaried personnel. The 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 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 General Partner is obligated or elects to pay under this Section 7.1 are
collectively referred to herein as the "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 General Partner
Expenses.

                  SECTION 7.2 Asset Management Fee.

                  (a) The Partnership shall pay a periodic management fee (the
         "Asset Management Fee") to the General Partner; provided that, to the
         extent the General Partner assigns the right to receive the Asset
         Management Fee to the Investment Advisors pursuant to the Advisory
         Agreement, the Partnership shall pay such fee to the Investment
         Advisors as provided in the Advisory Agreement. The Asset Management
         Fee shall accrue quarterly

                                       45
<PAGE>
         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 General Partner (or, if applicable, to the
         Investment Advisors) shall be deferred, without interest, to the extent
         of such excess until such time as additional amounts are otherwise
         available for distribution to such Unaffiliated Limited Partner. All
         amounts deducted from amounts otherwise distributable to an
         Unaffiliated Limited Partner and paid to the General Partner (or the
         Investment Advisors) pursuant to this Section 7.2 shall be deemed to
         have been distributed to such Unaffiliated Limited Partner for all
         purposes under this Agreement.

                  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 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

                                       46
<PAGE>

         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 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 General Partner (or, if applicable, to the
         Investment Advisors) shall be deferred, without interest, to the extent
         of such excess until such time as additional amounts are otherwise
         available for distribution to such Unaffiliated Limited Partner. All
         amounts deducted from amounts otherwise distributable to an
         Unaffiliated Limited Partner and paid to the General Partner (or the
         Investment Advisors) pursuant to this Section 7.3 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).

                                       47
<PAGE>

                  SECTION 7.4 Partnership Expenses

                  (a) The Partnership shall bear and be charged with the
         following costs and expenses of the Partnership (and shall promptly
         reimburse the General Partner or its Affiliates, as the case may be, to
         the extent that any of such costs and expenses are paid 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
         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.

                  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 (and shall
         promptly reimburse the General Partner or its Affiliates, as the case
         may be, to the extent that any of such costs and expenses are paid
         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);

                                       48
<PAGE>

                           (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 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.

                  (d) The General Partner may withhold on a pro rata basis from
         any distributions amounts necessary to create, in its sole discretion,
         appropriate reserves for expenses (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 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 and US Core Properties, including expenses (other than
placement fees) incurred in connection with the solicitation of Capital
Commitments through and including all Subsequent

                                       49
<PAGE>

Closings and the negotiation, execution and delivery of this Agreement and all
other documents entered into in connection herewith (any such amounts, the
"Organizational Expenses").

                                  ARTICLE VIII

                          CAPITAL ACCOUNTS; ALLOCATIONS

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

                  (a) To each Partner's Capital Account there shall be added
         such Partner's Capital Contributions, such Partner's distributive share
         of Profits and any items in the nature of income or gain which are
         specially allocated pursuant to Section 8.6 or Section 8.7, and the
         amount of any Partnership liabilities assumed by such Partner or which
         are secured by any Partnership property distributed to such Partner.

                  (b) From each Partner's Capital Account there shall be
         subtracted the amount of cash and the Gross Asset Value of any
         Partnership property distributed to such Partner pursuant to any
         provision of this Agreement, such Partner's distributive share of
         Losses and any items in the nature of expenses or losses which are
         specially allocated pursuant to Section 8.6 or Section 8.7, and the
         amount of any liabilities of such Partner assumed by the Partnership or
         which are secured by any property contributed by such Partner to the
         Partnership.

                  (c) In the event all or a portion of a Partnership Interest is
         Transferred in accordance with the terms of this Agreement, 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 General Partner shall determine that it is prudent to modify the
         manner in which the Capital Accounts, or any debits or credits thereto
         (including debits or credits relating to liabilities which are secured
         by contributed or distributed property or which are assumed by the
         Partnership, or the Partners) are computed in order to comply with such
         Regulations, the General Partner may make such modification, provided
         that it is not likely to have a material effect on the amounts
         distributed to any Partner pursuant to Section 12.4 upon the
         liquidation of the Partnership. The General Partner also shall (i) make
         any adjustments that are necessary or appropriate to maintain equality
         between the Capital Accounts of the Partners and the amount of
         Partnership capital reflected on the Partnership's balance sheet, as
         computed for book purposes, in accordance with Regulations Section
         1.704-1(b)(2)(iv)(g), and (ii) make any appropriate modifications in

                                       50
<PAGE>

         the event unanticipated events might otherwise cause this Agreement not
         to comply with Regulations Section 1.704-1(b).

                  SECTION 8.2 Interest on and Return of Capital.

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

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

                  SECTION 8.3 Negative Capital Accounts. Upon the liquidation of
the Partnership or the liquidation of the Participation Interest, the holder of
the Participation Interest shall be required to pay to the Partnership any
deficit or negative balance which may exist in its Capital Account at such time
(determined after taking into account the allocations described in Article VIII
or Section 12.4(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 shall be allocated among
         the Partners as follows:

                           (i) first, among the Partners in proportion to, and
                  to the extent of, any deficit balance in each such Partner's
                  Capital Account;

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<PAGE>

                           (ii) second, among the Partners in proportion to, and
                  until each Partner has been allocated Profits pursuant to this
                  clause (ii) in an amount equal to, the minimum amounts
                  necessary to cause the Capital Account balances of the
                  Partners to be in proportion to the Percentage Interests of
                  the Partners; and

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

                  SECTION 8.5 Allocations of Losses.

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

                           (i) first, among the Partners in proportion to, and
                  until each Partner has been allocated Losses pursuant to this
                  clause (i) in an amount equal to, the minimum amount necessary
                  to cause the Capital Account balances of the Partners to be in
                  proportion to the Percentage Interests of the Partners;

                           (ii) second, among the Partners in proportion to
                  their respective positive Capital Account balances, until the
                  Partners' Capital Accounts are equal to zero; and

                           (iii) thereafter, among the Partners in proportion to
                  the number of Partnership Units owned by each such Partner.

                  (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 General
         Partner shall make such revisions to the method of allocating Losses in
         this Section 8.5 as it determines are necessary to reflect

                                       52
<PAGE>

         the terms of the issuance or redemption of Partnership Interests,
         including such revisions as are needed to ensure that such allocations
         (i) will comply with the terms of Regulation Section 1.704-1 and -2,
         (ii) will properly reflect the varying interests of the Partners in the
         Partnership and (iii) will cause the Capital Accounts of the Partners
         in respect of Partnership Interests held by them to be in the ratios in
         which the Partners are entitled to receive distributions with respect
         to their Partnership Interests pursuant to Article IX hereof.

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

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

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

                                       53
<PAGE>

                  (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).

                  (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 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 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

                                       54
<PAGE>

         Value in accordance with any permissible method or methods under Code
         Section 704(c) and the Regulations thereunder.

                  (b) In the event the Gross Asset Value of any Partnership
         asset is adjusted pursuant to the definition of "Gross Asset Value",
         subsequent allocations of income, gain, loss and deduction with respect
         to such asset shall take account of any variation between the adjusted
         basis of such asset for federal income tax purposes and its Gross Asset
         Value in the same manner or manners permitted under Code Section 704(c)
         and the Regulations thereunder.

                  (c) Any elections or other decisions relating to the
         allocations provided under this Article VIII shall be made by the
         General Partner using any permissible manner under the Code or the
         Regulations that the General Partner may elect in its sole discretion.
         Allocations pursuant to this Section 8.8 are solely for purposes of
         federal, state, and local taxes and shall not affect, or in any way be
         taken into account in computing, any Partner's Capital Account or share
         of Profits, Losses, other items, or distributions pursuant to any
         provision in this Agreement.

                                   ARTICLE IX

                                  DISTRIBUTIONS

                  SECTION 9.1 Operating Cash Flow. As used in this Agreement,
"Operating Cash Flow" shall mean and be defined, for any fiscal period, as all
cash receipts of the Partnership from whatever source (but excluding Capital
Cash Flow and excluding the proceeds of any Capital Contributions to the
Partnership) during such period in question in excess of all items of
Partnership expense (other than non-cash expenses such as depreciation) and
other cash needs of the Partnership, including, without limitation, amounts paid
by the Partnership as principal on debts and advances, during such period,
capital expenditures and any reserves (as determined by the General Partner)
established or increased during such period. Operating Cash Flow shall be
distributed to or for the benefit of the Partners of record as of the applicable
record date not less frequently than quarterly, and shall be allocated among the
Partners as follows:

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

                  (b) The remaining portion of such distribution shall be
         distributed among the Partners in proportion to the number of
         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

                                       55
<PAGE>

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 General Partner, and which may include cash held
for future acquisitions), and (d) other expenses of the Partnership then due and
owing. Subject to Section 9.3, Capital Cash Flow shall be distributed to or for
the benefit of the Partners of record as of the applicable record date not less
frequently than quarterly and, subject to Section 12.4(b), shall be allocated
among the Partners as follows:

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

                  (b) The remaining portion of such distribution shall be
         distributed among the Partners in proportion to the number of
         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 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 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.

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<PAGE>

                                   ARTICLE X

                       TRANSFERS; WITHDRAWALS AND DEFAULTS

                  SECTION 10.1 Voluntary Transfer of General Partner Interest.
Without the consent of the Fund Investors by a Super Majority Fund Vote, the
General Partner shall not have the right to assign or otherwise transfer its
interest as the general partner of the Partnership (but may pledge its interest
in connection with any Partnership borrowing) other than to another Hines
Controlled Entity, and the General Partner shall not have the right to withdraw
from the Partnership; provided that without the consent of the Limited Partners
or any other Fund Investors, the General Partner may be reconstituted as or
converted into a corporation, limited partnership or other form of entity (any
such reconstituted or converted entity being deemed to be the General Partner
for all purposes hereof) by merger, consolidation or otherwise, so long as (i)
the 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 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 General Partner's interest as a general partner
of the Partnership shall be effective until its assignee or transferee has been
substituted in its place as general partner of the Partnership. Any such
substitute general partner shall be admitted as a general partner of the
Partnership upon its execution and delivery of this Agreement as General
Partner, and immediately thereafter the replaced general partner shall withdraw
as a general partner of the Partnership.

                  SECTION 10.2 Removal of General Partner.

                  (a) The 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 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 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
         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 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 General

                                       57
<PAGE>

         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
         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 General 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 General Partner and its Affiliates
         (including the Hines Limited Partner).

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

                  SECTION 10.3 Transfers of Partnership Interests by Hines
Partners.

                  (a) Subject to Sections 10.1 and 10.2, each of the 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, and (ii) except for the
         admission of Hines REIT Properties L.P. as Non-Managing General Partner
         pursuant to section 5.11, any Transferee 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 to the extent a Transfer of a general partner interest has been
         approved in accordance with Section 10.1.

                  (b) Unless otherwise approved by Fund Investors by a Super
         Majority Fund Vote, the General Partner shall ensure that the 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 General
         Partner.

                  SECTION 10.4 Transfers of Units by Partners Other than Hines
Partners. Any Partner other than the 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 General Partner in connection with such
Transfer.

                                       58
<PAGE>

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

                           (i) such Transfer would not violate the Securities
                  Act or any state securities or "Blue Sky" laws or the
                  securities laws of any other jurisdiction applicable to the
                  Partnership or the 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 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.

                                       59
<PAGE>

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

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

                  SECTION 10.6 Admissions and Withdrawals Generally. Except as
expressly provided in this Agreement, no Partner shall have the right to
withdraw from the Partnership or to withdraw any part of its Capital Account and
no additional Partner may be admitted to the Partnership. Each new Partner shall
be admitted as a Partner upon the execution by or on behalf of it of an
agreement pursuant to which it becomes bound by the terms of this Agreement and
acceptance thereof by the General Partner. The names and addresses of all
Persons admitted as Partners and their status as General Partner or a Limited
Partner shall be maintained in the records of the Partnership.

                  SECTION 10.7 Required/Elective Withdrawals. The General
Partner may require a Limited Partner to withdraw from the Partnership if (i) in
the reasonable judgment of the General Partner based upon an opinion of counsel
to the Partnership, by virtue of that Limited Partner's Partnership Interest,
the Partnership or any Partner is reasonably likely to be subject to any
requirement to register under the Investment Company Act, or (ii) in the
reasonable judgment of the General Partner, a significant delay, extraordinary
expense or material adverse effect on the Partnership or any of its Affiliates,
any Fund Entity or any 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 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

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         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 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 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 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.

                  (e) In the event that a Partner defaults in making all or any
         portion of a Capital Contribution to the Partnership, the General
         Partner may require all of the non-defaulting Partners to increase
         their Capital Contributions by an aggregate amount equal to the Capital
         Contribution of the Defaulting 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 General
         Partner elects to require such increase, the General Partner shall
         deliver to each non-defaulting Partner written notice of such default
         as promptly as practicable after its occurrence and, thereafter, with
         respect to each Investment, the General Partner shall as promptly as
         practicable deliver to each such non-defaulting Partner a Capital Call
         Notice in respect of the Capital Contribution which the Defaulting
         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 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

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         10.8(e), the 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 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 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
         General Partner and the Partnership may have no adequate remedy at law
         for a breach of such agreements and that damages resulting from a
         breach of such agreements may be impossible to ascertain at the time
         hereof or of such breach.

                  (h) For purposes of this Section 10.8, if any Defaulting
         Partner is any Entity the equity owners of which consist of two or more
         unaffiliated investors, the General Partner may, in its sole
         discretion, treat the owner of such entity that was responsible for
         such default (and not such entity or any general partner, managing
         member or other controlling person of such entity) as the Defaulting
         Partner and may invoke the rights, powers and remedies specified herein
         separately with respect to such owner, and hold such owner solely
         responsible for such default.

                                   ARTICLE XI

                           PARTNERSHIP ADMINISTRATION

                  SECTION 11.1 Books and Records. The General Partner shall keep
or cause to be kept complete and appropriate records and books of account for
the Partnership. Except as otherwise expressly provided herein, such books and
records shall be maintained on a basis which allows the proper preparation of
the Partnership's financial statements and tax returns. The books and records
shall be maintained at the principal office of the Partnership. Any 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

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confidentiality restrictions established by the General Partner at any
reasonable time during normal business hours.

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

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

                  SECTION 11.4 Tax Matters.

                  (a) The General Partner shall be designated on the
         Partnership's annual U.S. federal information tax return as the "tax
         matters partner" of the Partnership (the "Tax Matters Partner") as
         provided in Section 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.

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

                  (c) The General Partner shall take all such actions as are
         reasonably necessary for the Partnership to comply with any withholding
         or comparable requirements under federal, state, local and foreign law
         and shall remit any amounts withheld to, and file required forms with,
         the applicable taxing jurisdictions. All amounts withheld from
         distributions shall be treated as having been distributed to the
         Partner with respect to whom the withholding was made. Any amounts that
         are required to be withheld by the Partnership with respect to a
         Partner which are in excess or in advance of distributions to such
         Partnership shall be paid over by such Partner to the Partnership and
         shall not

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reduce the Unfunded Commitment or increase the Funded Commitment of such
Partner. Each Partner agrees to furnish the Partnership with such
representations and forms as the General Partner shall reasonably request to
assist in complying with the Partnership's withholding obligations. A Partner
subject to withholding shall pay to or reimburse the Partnership for taxes,
related interest and penalties, and all other costs and expenses incurred by the
Partnership in connection with such withholding obligation, except for interest,
penalties or costs (but not taxes) that are incurred as a result of the gross
negligence or willful misconduct of the Partnership or the General Partner.

                  SECTION 11.5 Reports to Partners.

                  (a) 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 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 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
                  General Partner shall reasonably determine, and the 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 General Partner shall send to each Person who was
         a Partner during such period a statement of cash flows of the
         Partnership.

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

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

                  SECTION 11.6 Meetings of Partners.

                  (a) The 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 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 General Partner 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 the General Partner and 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 General
         Partner. A Person designated by the General Partner shall keep written
         minutes of all of the proceedings and votes of any such meeting.

                  (f) The 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 General Partner sets
         the record date for any action by written consent. If the General
         Partner does not set a record date, the record date for a meeting of
         Partners shall be the date of such meeting, and the record

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         date for a written consent of Partners shall be the date of the notice
         to the Partners by which the 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 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
         all Limited Partners. A "Partner Vote" is a vote taken among all
         Partners. A "Fund Vote" is a vote taken among all Fund Investors. A
         "Majority LP Vote" means the affirmative vote of Limited Partners
         holding Partnership Interests representing more than fifty percent
         (50%) of the Percentage Interests in the Partnership on the record date
         set for an LP Vote. A "Super Majority LP Vote" means the affirmative
         vote of Limited Partners holding Partnership Interests representing
         sixty-six and two-thirds percent (66 2/3%) or more of the Percentage
         Interests in the Partnership on the record date set for an LP Vote. A
         "75% Majority LP Vote" means the affirmative vote of Limited Partners
         holding Partnership Interests representing seventy-five percent (75%)
         or more of the Percentage Interests in the Partnership on the record
         date set for an LP Vote. A "Majority Partner Vote" means the
         affirmative vote of Partners holding Partnership Interests representing
         more than fifty percent (50%) of the Percentage Interests in the
         Partnership on the record date set for a Partner Vote. A "Super
         Majority Partner Vote" means the affirmative vote of Partners holding
         Partnership Interests representing sixty-six and two-thirds percent
         (66 2/3%) or more of the Percentage Interests in the Partnership on the
         record date set for a Partner Vote. A "75% Majority Partner Vote" means
         the affirmative vote of Partners holding Partnership Interests
         representing seventy-five percent (75%) or more of the Percentage
         Interests in the Partnership on the record date set for a Partner Vote.

                  (h) Each Partner entitled to vote on any matter which under
         the terms of this Agreement requires an LP Vote or Partner Vote shall
         have a voting percentage equal to the Percentage Interest attributable
         to all Partnership 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. Any
         Feeder Entity may vote for and/or against any matter presented to the
         Partners for a vote in such manner and proportions as may be provided
         for in the constituent documents of such Feeder Entity, as applicable.
         The General Partner and any Partner that is an Affiliate of the General
         Partner (including the Hines Limited Partner) shall be deemed to have
         voted and/or abstained with respect to any matter put to a vote of
         Partners in the same manner and proportions as the Partnership
         Interests of the other Partners are voted and/or abstained on such
         matter.

                  (i) The General Partner may, in its discretion, grant to any
         Fund Investor which is not a Partner the right to have a non-voting
         observer attend each meeting of the Partners. The General Partner shall
         provide to any such observer notice of the time and place of any
         meeting of the Partners, and of any written consent being solicited
         from the Partner,

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         in the same manner and at the same time as notice is sent to the
         Partners. The General Partner shall also provide to any such observer
         copies of all notices, reports, minutes, consents and other documents
         at the time and in the manner as they are provided to the Partners. Any
         observer who attends any meetings of the Partners shall execute and
         comply with an agreement with the Partnership and the General Partner
         containing such restrictions on the use and disclosure of confidential
         information and other matters as the General Partner may reasonably
         request.

                  SECTION 11.7 Meetings of Fund Investors. 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 Fund Investor at such meeting, in person or by proxy,
that is not an Affiliate of the General Partner shall be entitled to vote at
such meeting on the matters specified in the notice by which such meeting was
called. A "Majority Fund Vote" means the affirmative vote of Fund Investors that
are not Affiliates of the 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 Fund Investors that
are not Affiliates of the General Partner in such Properties. A "Super Majority
Fund Vote" means the affirmative vote of Fund Investors that are not Affiliates
of the 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 2/3%) or more of all equity interests held directly or indirectly by all
Fund Investors that are not Affiliates of the General Partner in such
Properties. A "75% Majority Fund Vote" means the affirmative vote of Fund
Investors that are not Affiliates of the 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 Fund Investors that are not Affiliates of the General Partner
in such Properties. For purposes of this Section 11.7, 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 Partnership Interests held by such Partner.

                                  ARTICLE XII

                     DISSOLUTION, TERMINATION AND WINDING UP

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

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

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

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

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

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

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

                  SECTION 12.2 Termination of Partnership by Majority Fund Vote.
After the Initial Investment Period, any Limited Partner may propose that the
Partnership be terminated and its affairs wound up in accordance with this
Article 12 by delivering a written notice to the General Partner proposing that
such action be taken and setting forth the reasons for such proposal. Following
receipt of any such notice, the 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
General Partner's receipt of the notice from the Limited 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 General Partner, or if there is no general
partner, a liquidator appointed by a Majority LP Vote, shall be the liquidator
to wind up the affairs of the Partnership and to manage the Partnership's assets
during the winding up. Following a Liquidating Event resulting from a Majority
Fund Vote to terminate the Partnership pursuant to Section 12.2, the 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 the extent
         otherwise permitted by law, either by the payment thereof or the making
         of reasonable provision therefor (including the establishment of
         reserves, in amounts established by the General Partner or, if
         applicable, the liquidator); and

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<PAGE>

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

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

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

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<PAGE>

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

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

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

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

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

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

                  SECTION 13.3 Amendments.

                  (a) Except as required by law, this Agreement (including the
         Exhibits and Schedules hereto) may be amended or supplemented by
         written consent of the 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

                                       70
<PAGE>

         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.
         Notwithstanding the foregoing, this Agreement may be amended by the
         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.

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

                  (c) The General Partner shall have the right to amend this
         Agreement as provided in Schedule 5.11 without the approval of any
         other Partner in connection with the admission of a Non-Managing
         General Partner.

                  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

                                       71
<PAGE>

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

                  SECTION 13.5 Entire Agreement. This Agreement and the other
agreements referred to herein constitute the entire agreement among the Partners
with respect to the subject matter hereof and supersede any prior agreement or
understanding among or between them with respect to such subject matter;
provided that the Partnership or the General Partner, without any further act,
approval or vote of any Partner, may (subject to Section 13.3) enter into side
letters or other writings with individual 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 General Partner at the General
Partner's address, or to the General Partner's facsimile number, set forth on
Schedule 2.1, or to such other person or address as any Partner shall have last
designated by notice to the Partnership, and in the case of a change in address
by the General Partner, by notice to the Limited Partners. Any notice shall be
deemed to have been duly given if personally delivered or sent by the mails or
courier or by electronic mail or facsimile confirmed by letter and will be
deemed received, unless earlier received, (i) if sent by certified or registered
mail, return receipt requested, when actually received, (ii) if sent by
overnight mail or courier, when actually received, and (iii) if delivered by
hand, on the date of receipt.

                                       72
<PAGE>

                  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]

                                       73
<PAGE>

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

                                       GENERAL PARTNER:

                                       HINES US CORE OFFICE CAPITAL LLC

                                       By: Hines Interests Limited Partnership

                                           By: Hines Holdings, Inc.

                                               By:
                                                  ----------------------------
                                                  Name:
                                                  Title:

<PAGE>

                                      LIMITED PARTNERS:

                                      HINES US CORE OFFICE CAPITAL
                                      ASSOCIATES II LIMITED PARTNERSHIP

                                        By: Hines Interests Limited Partnership

                                            By: Hines Holdings, Inc.

                                                By:
                                                   ----------------------------
                                                   Name:
                                                   Title:

                                      HINES INTERESTS LIMITED PARTNERSHIP

                                      By: Hines Holdings, Inc.

                                      By:
                                         --------------------------------
                                         Name:
                                         Title:

<PAGE>

                                       SUMITOMO LIFE REALTY (N.Y.), INC.

                                       By:
                                          ------------------------------
                                          Name:
                                          Title:

<PAGE>

                                  SCHEDULE 2.1

                          PARTNERS NAMES AND ADDRESSES

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

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

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

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

<PAGE>

                                  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.

<PAGE>

10.      Letter Agreement, substantially in the form of the draft dated April 1,
         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.      Amended and Restated Agreement of Limited Partnership of Hines-Sumisei
         US Core Office Properties LP, substantially in the form of the draft
         dated April 1, 2004.

<PAGE>

                                  SCHEDULE 3.1

                    PARTNERSHIP UNITS AND FUNDED COMMITMENTS

<Table>
<Caption>
       PARTNER               PARTNERSHIP UNITS (#)     FUNDED COMMITMENT ($)
       -------               ---------------------     ---------------------
<S>                          <C>                       <C>
General Partner(1)                 85.401                      85,401
Hines Limited Partner(2)         60,315.247                  60,315,247
SLR(3)                             25,000                    25,000,000
Hines(4)                             0                            0
</Table>

----------
(1) Funded Commitment represents cash contributed to the Partnership prior to
    the date hereof.

(2) Funded Commitment represents cash contributed to the Partnership prior to
    the date hereof.

(3) Funded Commitment represents property contributed to the Partnership prior
    to the date hereof.

(4) Only Partnership Interest held is Participation Interest.

<PAGE>

                                  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.

<PAGE>

                        SCHEDULE 5.1 CORE FUND STRUCTURE

                                    (CHART)

<Table>
<S>                                                                                     <C>
                                                          ----------    -----
                                                          Hines REIT    Hines
                                                          ----------      LP
                                                                        -----

                                                                GP
                                                                             ----------------
                -----     ------           ---          ----------------           Other
                Hines      Hines           SLR            Hines REIT         Domestic/Foreign
                 LP         GP             ---          Properties, L.P.         Investors
                -----     ------                        ----------------     ----------------

            GP(1)                                           A  GP(2)
                                                                                           ----------------
                                           -----------------------------------------         U.S. Pension
                     ----                  Hines-Sumisei U.S. Core Office Fund, L.P.       Plans Subject to
                      GM                              ("Fund Partnership")                      ERISA
   --------          ----                  -----------------------------------------       ----------------
     Hines   67.15%              32.33%
   Investor    0.52%     67.15%                                    B
   --------                                32.33%
    0.52%
--------------     ---------------                        ----------------    -----------------     ------------
Hines-Sumisei       Hines-Sumisei              ------      Hines-Sumisei      Investors willing       Investors
NY Core Office      NY Core Office              Hines     U.S. Core Office      to invest only       exchanging
    Trust              Trust II                  LP            Trust              through a         property for
--------------      --------------             ------     ----------------       partnership          OP Units
                                                                GP            -----------------     ------------
   --------
    Mezz Co                                                --------------
   --------                                                Hines-Sumisei
                                                           US Core Office
                    -------------                          Properties LP
---------------     600 Lexington                          --------------
Initial Three            SPE
SLR Assets SPEs     -------------                         ------------------
---------------                                           Future Assets SPEs
                                                          ------------------

1. Managing General Partners          A. Interest to be acquired in connection with initial closing of Hines REIT.
2. Non-Managing General Partner       B. This part of structure expected to be implemented prior to or in
                                         connection with acquisition of first asset to be acquired through this structure.
</Table>
<PAGE>

                                  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.

<PAGE>

                                  SCHEDULE 5.11

                     NON-MANAGING GENERAL PARTNER PROVISIONS

If a Non-Managing General Partner is admitted as a general partner of the
Partnership as provided in Section 5.11, then the General Partner shall become
the Managing General Partner and shall amend this Agreement as follows:

1.       All references in this Agreement to the "General Partner" shall be
         revised to be references to the "Managing General Partner."

2.       The approval of both the Managing General Partner and the Non-Managing
         General Partner shall be required to:

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

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

         (c)      select any Appraiser;

         (d)      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;

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

         (f)      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;

         (g)      acquire any Investment that does not meet the requirements of
                  Section 5.2;

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

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

         (j)      remove and appoint any Investment Advisor that is an Affiliate
                  of Hines, and 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;

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

         (l)      merge or consolidate the Partnership with any Affiliate of
                  Hines.

<PAGE>

3.       The Non-Managing General Partner and its Affiliates, and the direct or
         indirect members, managers, partners, shareholders, officers,
         directors, employees, agents and legal representatives of the
         Non-Managing General Partner and any such Affiliate shall be
         Indemnified Persons entitled to the benefits under Sections 6.1
         (Exculpation of the General Partner) and 6.2 (Indemnification of the
         General Partner) to the same extent, and subject to the same conditions
         and limitations, as all other Indemnified Persons.

4.       The Non-Managing General Partner shall be entitled to call meetings of
         Partners to the same extent as the Managing General Partner.

5.       The Non-Managing General Partner and Affiliates of the Non-Managing
         General Partner shall be deemed not to be Affiliates of the General
         Partner, Hines or the Partnership, and the 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.

6.       The Non-Managing General Partner shall be deemed not to be a Fund
         Investor for purposes of calculating the Hines Capital Requirement.

7.       The Non-Managing General Partner shall be entitled to Transfer any
         Units held by it to the same extent as any Unaffiliated Limited
         Partner; provided that any Transferee of Units from the Non-Managing
         General Partner shall take such Units only in respect of a limited
         partner interest in the Partnership and not as a general partner.

<PAGE>

                                  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.

<PAGE>

                                  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.

<PAGE>

                                    EXHIBIT A

                        PROPERTY SERVICES AGREEMENT FORM

                                   (ATTACHED)

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