<PAGE>

                                                                    EXHIBIT 10.1

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

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                         CT OPERATING PARTNERSHIP, L.P.

                       (A California Limited Partnership)


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


                          Dated as of March 23, 2000
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
<S>                                                                                <C>
ARTICLE 1. DEFINED TERMS..........................................................    1

ARTICLE 2. ORGANIZATIONAL MATTERS.................................................   13
    Section 2.1 Organization......................................................   13
    Section 2.2 Name..............................................................   13
    Section 2.3 Registered Office and Agent; Principal Office.....................   13
    Section 2.4 Power of Attorney.................................................   13
    Section 2.5 Term..............................................................   15

ARTICLE 3. PURPOSE................................................................   15
    Section 3.1 Purpose and Business..............................................   15
    Section 3.2 Powers............................................................   15
    Section 3.3 Partnership Only for Purposes Specified...........................   15
    Section 3.4 Representations and Warranties by the Parties.....................   16

ARTICLE 4. CAPITAL CONTRIBUTIONS..................................................   17
    Section 4.1 Capital Contributions of the Partners.............................   17
    Section 4.2 Loans by Third Parties............................................   18
    Section 4.3 Additional Funding and Capital Contributions......................   18
    Section 4.4 Stock Incentive Plan..............................................   20

ARTICLE 5. DISTRIBUTIONS..........................................................   20
    Section 5.1 Requirement and Characterization of Distributions.................   20
    Section 5.2 Distributions in Kind.............................................   20
    Section 5.3 Amounts Withheld..................................................   21
    Section 5.4 Distributions Upon Liquidation....................................   21

ARTICLE 6. ALLOCATIONS............................................................   21
    Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss.......   21
    Section 6.2 General Allocations...............................................   21
    Section 6.3 Additional Allocation Provisions..................................   21
    Section 6.4 Tax Allocations...................................................   23
    Section 6.5 Allocations Regarding Transfers, Contributions and Distributions..   24

ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS..................................   24
    Section 7.1 Management........................................................   24
    Section 7.2 Certificate of Limited Partnership................................   27
    Section 7.3 Restrictions on General Partner's Authority.......................   27
    Section 7.4 Reimbursement of the General Partner..............................   30
    Section 7.5 Outside Activities of the General Partner.........................   30
    Section 7.6 Contracts with Affiliates.........................................   31
    Section 7.7 Indemnification...................................................   31
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                                       i
<PAGE>

<TABLE>
<S>                                                                                  <C>
    Section 7.8  Liability of the General Partner.................................   33
    Section 7.9  Other Matters Concerning the General Partner.....................   34
    Section 7.10 Title to Partnership Assets......................................   34
    Section 7.11 Reliance by Third Parties........................................   34

ARTICLE 8.  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS............................   35
    Section 8.1  Limitation of Liability..........................................   35
    Section 8.2  Management of Business...........................................   35
    Section 8.3  Outside Activities of Limited Partners...........................   35
    Section 8.4  Return of Capital................................................   36
    Section 8.5  Rights of Limited Partners Relating to the Partnership...........   36
    Section 8.6  Exchange Rights..................................................   37

ARTICLE 9.  BOOKS, RECORDS, ACCOUNTING AND REPORTS................................   39
    Section 9.1  Records and Accounting...........................................   39
    Section 9.2  Fiscal Year......................................................   39
    Section 9.3  Reports..........................................................   39

ARTICLE 10. TAX MATTERS...........................................................   39
    Section 10.1 Preparation of Tax Returns.......................................   39
    Section 10.2 Tax Elections....................................................   40
    Section 10.3 Tax Matters Partner..............................................   40
    Section 10.4 Organizational Expenses..........................................   41
    Section 10.5 Withholding......................................................   41

ARTICLE 11. TRANSFERS AND WITHDRAWALS.............................................   42
    Section 11.1 Transfer.........................................................   42
    Section 11.2 Transfer of General Partner's Partnership Interest...............   42
    Section 11.3 Limited Partners' Rights to Transfer.............................   44
    Section 11.4 Substituted Limited Partners.....................................   45
    Section 11.5 Assignees........................................................   45
    Section 11.6 General Provisions...............................................   46

ARTICLE 12. ADMISSION OF PARTNERS.................................................   47
    Section 12.1 Admission of Successor General Partner...........................   47
    Section 12.2 Admission of Additional Limited Partners.........................   47
    Section 12.3 Amendment of Agreement and Certificate of Limited Partnership....   47
    Section 12.4 Limit on Number of Partners......................................   48

ARTICLE 13. DISSOLUTION AND LIQUIDATION...........................................   48
    Section 13.1 Dissolution......................................................   48
    Section 13.2 Winding Up.......................................................   48
    Section 13.3 Compliance with Timing Requirements of Regulations...............   49
    Section 13.4 Deemed Distribution and Recontribution...........................   50
    Section 13.5 Rights of Limited Partners.......................................   50
    Section 13.6 Notice of Dissolution............................................   50
    Section 13.7 Cancellation of Certificate of Limited Partnership...............   51
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                                 <C>
    Section 13.8   Reasonable Time for Winding-Up.................................   51

ARTICLE 14. PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS.......................   51
    Section 14.1   Procedures For Actions And Consents of Partners................   51

ARTICLE 15. GENERAL PROVISIONS....................................................   52
    Section 15.1   Addresses and Notice...........................................   52
    Section 15.2   Titles and Captions............................................   52
    Section 15.3   Pronouns and Plurals...........................................   52
    Section 15.4   Further Action.................................................   52
    Section 15.5   Binding Effect.................................................   52
    Section 15.6   Creditors......................................................   53
    Section 15.7   Waiver.........................................................   53
    Section 15.8   Counterparts...................................................   53
    Section 15.9   Applicable Law.................................................   53
    Section 15.10  Invalidity of Provisions.......................................   53
    Section 15.11  Maximum Amount Paid or Credited to General Partner.............   53
    Section 15.12  Partition......................................................   54
    Section 15.13  No Third-Party Rights Created Hereby...........................   54

EXHIBIT A  PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS......................  A-1

EXHIBIT B  NOTICE OF EXCHANGE.....................................................  B-1

EXHIBIT C  PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS......................  C-1

EXHIBIT D  DEFINITION OF "CONSTRUCTIVELY OWNS"....................................  D-1
</TABLE>

                                      iii
<PAGE>

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                         CT OPERATING PARTNERSHIP, L.P.

          THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as
of March 23, 2000, amends and restates in its entirety that certain Agreement
of Limited Partnership of CT Operating Partnership, L.P. (formerly Alexander
Haagen Properties Operating Partnership, L.P.), a California limited
partnership, dated as of December 27, 1993, as amended by the First Amendment to
Agreement of Limited Partnership, dated as of January 1, 1994, the Second
Amendment to Agreement of Limited Partnership, dated as of March, 1995, the
Third Amendment to Agreement of Limited Partnership, dated February 27, 1997,
the Fourth Amendment to Agreement of Limited Partnership, dated effective as of
November 19, 1996, the Fifth Amendment to Agreement of Limited Partnership,
dated as of May 1, 1998, and the Sixth Amendment to Agreement of Limited
Partnership, dated as of August 20, 1998, entered into by and among Center
Trust, Inc. (formerly Alexander Haagen Properties, Inc.), a Maryland corporation
(the "Company"), as the General Partner and the Persons whose names are set
forth on Exhibit A as attached hereto, as the Limited Partners, together with
any other Persons who become Partners in the Partnership as provided herein.

                                   ARTICLE 1.

                                 DEFINED TERMS

          The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

          "Act" means the California Revised Uniform Limited Partnership Act, as
           ---
it may be amended from time to time, and any successor to such statute.

          "Additional Funds" has the meaning set forth in Section 4.3.A.
           ----------------

          "Additional Limited Partner" means a Person admitted to the
           --------------------------
Partnership as a Limited Partner pursuant to Section 12.2 hereof and who is
shown as such on the books and records of the Partnership.

          "Adjusted Capital Account Deficit" means, with respect to any Partner,
           --------------------------------
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:

                (i)   decrease such deficit by any amounts which such Partner is
     obligated to restore pursuant to this Agreement or is deemed to be
     obligated to restore pursuant to Treasury Regulation Section 1.704-
     1(b)(2)(ii)(c) or the penultimate sentence of each of Treasury Regulation
     Sections 1.704-2(i)(5) and 1.704-2(g); and

                (ii)  increase such deficit by the items described in Treasury
     Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

                                       1
<PAGE>

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

          "Adjustment Date" has the meaning set forth in Section 4.3.F.
           ---------------

          "Affiliate" means, with respect to any Person, any Person directly or
           ---------
indirectly controlling, controlled by or under common control with such Person,
and when used in Sections 7.12 and 11.3, such Person's Immediate Family.

          "Agreed Value" means (i) in the case of any Contributed Property set
           ------------
forth in Exhibit A and as of the time of its contribution to the Partnership,
the Agreed Value of such property as set forth in Exhibit A; (ii) in the case of
any Contributed Property not set forth in Exhibit A and as of the time of its
contribution to the Partnership, the fair market value of such property as
determined by the General Partner, reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed; and (iii) in the case of any property distributed to a Partner by
the Partnership, the fair market value of such property as determined by the
General Partner at the time such property is distributed, reduced by any
indebtedness either assumed by such Partner upon such distribution or to which
such property is subject at the time of the distribution as determined under
Section 752 of the Code and the regulations thereunder.

          "Agreement" means this Agreement of Limited Partnership, as it may be
           ---------
amended, supplemented or restated from time to time.

          "Appraisal" means with respect to any assets, the opinion of an
           ---------
independent third party experienced in the valuation of similar assets, selected
by the General Partner in good faith.  Such opinion may be in the form of an
opinion by such independent third party that the value for such property or
asset as set by the General Partner is fair, from a financial point of view, to
the Partnership.

          "Assignee" means a Person to whom one or more Partnership Units have
           --------
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5.

          "Available Cash" means, with respect to any period for which such
           --------------
calculation is being made, (i) the sum, without duplication, of:

                       (a) the Partnership's Net Income or Net Loss (as the case
     may be) for such period,

                       (b) Depreciation and all other noncash charges deducted
     in determining Net Income or Net Loss for such period,

                       (c) the amount of any reduction in reserves of the
     Partnership referred to in clause (ii)(f) below (including, without
     limitation, reductions resulting because the General Partner determines
     such amounts are no longer necessary),

                       (d) the excess of the net proceeds from the sale,
     exchange, disposition or refinancing of Partnership property for such
     period over the gain (or loss,

                                       2
<PAGE>

     as the case may be) recognized from such sale, exchange, disposition or
     refinancing during such period (excluding Terminating Capital
     Transactions), and

                       (e) all other cash received by the Partnership for such
     period that was not included in determining Net Income or Net Loss for such
     period;

                  (ii) less the sum, without duplication, of:

                       (a) all principal debt payments made during such period
by the Partnership,

                       (b) capital expenditures made by the Partnership during
     such period,

                       (c) investments in any entity (including loans made
     thereto) to the extent that such investments are not otherwise described in
     the immediately preceding clauses (ii)(a) or (b),

                       (d) all other expenditures and payments not deducted in
     determining Net Income or Net Loss for such period,

                       (e) any amount included in determining Net Income or Net
     Loss for such period that was not received by the Partnership during such
     period, and

                       (f) the amount of any increase in reserves established
     during such period which the General Partner determines are necessary or
     appropriate in its sole and absolute discretion.

          Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or include any disbursements made or
reserves established, after commencement of the dissolution, liquidation and
winding up of the Partnership.

          "Board of Directors" means the Board of Directors of the General
           ------------------
Partner.

          "Burbank Notes" means those certain notes issued to the Haagen-Burbank
           -------------
Partnership by the Redevelopment Agency of the City of Burbank in connection
with the development of Media City Center.

          "Business Day" means any day except a Saturday, Sunday or other day on
           ------------
which commercial banks in Los Angeles, California or New York, New York are
authorized or required by law to be closed.

          "Capital Account" means, with respect to any Partner, the Capital
           ---------------
Account maintained for such Partner in accordance with the following provisions:

          (a) To each Partner's Capital Account, there shall be added such
Partner's Capital Contributions, such Partner's share of Net Income and any
items in the nature of income or gain which are specially allocated pursuant to
Section 6.3 hereof, and the amount of any Partnership liabilities assumed by
such Partner or which are secured by any property distributed to such Partner.

                                       3
<PAGE>

          (b) From each Partner's Capital Account, there shall be subtracted the
amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement, such Partner's distributive
share of Net Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Section 6.3 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 any interest in the Partnership is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
interest.

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

          (e) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2, 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, the
General Partner, or the Limited 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 distributable to any
Person pursuant to Article 13 of the Agreement upon the dissolution 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)(q), 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) or Section 1.704-2.

          "Capital Contribution" means, with respect to any Partner, the amount
           --------------------
of money and the initial Gross Asset Value of any property (other than money)
contributed to the Partnership by such Partner.

          "Certificate" means the Certificate of Limited Partnership of the
           -----------
Partnership filed in the office of the California Secretary of State, as amended
from time to time in accordance with the terms hereof and the Act.

          "Charter" means the Charter of the General Partner filed with the
           -------
Maryland State Department of Assessments and Taxation on September 20, 1993, as
amended or restated from time to time.

          "Code" means the Internal Revenue Code of 1986, as amended from time
           ----
to time or any successor statute thereto, as interpreted by the applicable
regulations thereunder.  Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.

          "Company" has the meaning set forth in the first paragraph of this
           -------
Agreement.

                                       4
<PAGE>

          "Consent" means the consent to, approval of, or vote on a proposed
           -------
action by a Partner given in accordance with Article 14 hereof.

          "Consent of the Limited Partners" means the Consent of a Majority In
           -------------------------------
Interest of the Limited Partners, which Consent shall be obtained prior to the
taking of any action for which it is required by this Agreement and may be given
or withheld by a Majority in Interest of the Limited Partners, unless otherwise
expressly provided herein, in their sole and absolute discretion.

          "Consent of the Partners" means the Consent of Partners holding
           -----------------------
Percentage Interests that in the aggregate are equal to or greater than 60% of
the aggregate Percentage Interests of all Partners, which Consent shall be
obtained prior to the taking of any action for which it is required by this
Agreement and may be given or withheld by such Partners, in their sole and
absolute discretion.

          "Constructively Own" means ownership under the constructive ownership
           ------------------
rules described in Exhibit D.

          "Contributed Properties" means each property or other asset, in such
           ----------------------
form as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Section 708 of the Code).

          "Convertible Debentures" means the 7 1/2 Convertible Subordinated
           ----------------------
Debentures due 2001, Series A and B of the General Partner.

          "Debt" means, as to any Person, as of any date of determination, (i)
           ----
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect to reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) any obligations of such Person
as lessee under any lease of property which, in accordance with generally
accepted accounting principles, is capitalized.

          "Deemed Partnership Interest Value" means, as of any date, the Deemed
           ---------------------------------
Value of the Partnership multiplied by the applicable Partner's Percentage
Interest.

          "Deemed Value of the Partnership" means, as of any date, (i) the total
           -------------------------------
number of REIT Shares issued and outstanding as of the close of business on such
date (excluding any treasury shares but including any Excess Shares) multiplied
by the Value of a REIT Share on such date; (ii) divided by the Percentage
                                                ------- --
Interest of the General Partner on such date.

          "Depreciation" means, for each fiscal year or other period, an amount
           ------------
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value

                                       5
<PAGE>

as the federal income tax depreciation, amortization or other cost recovery
deduction for such year or other period bears to such beginning adjusted tax
basis; provided, however, that if the federal income tax depreciation,
       --------  -------
amortization or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.

          "Development Properties" means the retail shopping centers known as
           ----------------------
Media City Center (Burbank, CA), Empire Center (Fontana, CA), Baldwin Hills
Crenshaw Plaza (Los Angeles, CA), Montebello Town Square (Montebello, CA) and
The City Center (San Francisco, CA).

          "Effective Date" means the date of closing of the sale of REIT Shares
           --------------
pursuant to that certain Underwriting Agreement between the General Partner and
NatWest Securities Limited et al., upon which the Agreement shall be declared
                           ------
effective under the Securities Act.

          "Exchange" has the meaning set forth in Section 8.6.A.
           --------

          "Exchange Act" means the Securities Exchange Act of 1934, as amended
           ------------
from time to time, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.

          "Exchangeable Debentures" means the 7 1/4 Exchangeable Subordinated
           -----------------------
Debentures due 2001 of the Partnership.

          "Funding Debt" means the incurrence of any Debt by on or behalf of the
           ------------
General Partner for the purpose of providing funds to the Partnership.

          "Funding Notice" has the meaning set forth in Section 4.3.B.
           --------------

          "General Partner" means the Company or its successors as general
           ---------------
partner of the Partnership.

          "General Partner Interest" means a Partnership Interest held by the
           ------------------------
General Partner that is a general partnership interest.  A General Partner
Interest may be expressed as a number of Partnership Units.

          "General Partner Loan" has the meaning set forth in Section 4.3.C.
           --------------------

          "General Partner Payment" has the meaning set forth in Section 15.11.
           -----------------------

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

          (a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the General Partner (as set forth
on Exhibit A attached hereto, as such Exhibit may be amended from time to time)
provided that, if the contributing Partner is the General Partner then, except
with respect to the General Partner's initial Capital Contribution or capital
contributions of cash or REIT Shares, the determination of the fair market value
of the contributed asset shall be determined by Appraisal.

                                       6
<PAGE>

          (b) The Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt; provided,
                                                                   --------
however, that for this purpose, the net value of all of the Partnership assets,
-------
in the aggregate, shall be equal to the Deemed Value of the Partnership,
regardless of the method of valuation adopted by the General Partner, as of the
following times:

              (i)        the acquisition of an additional interest in the
     Partnership by a new or existing Partner in exchange for more than a de
     minimis Capital Contribution, if the General Partner reasonably determines
     that such adjustment is necessary or appropriate to reflect the relative
     economic interests of the Partners in the Partnership;

              (ii)       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, if the General Partner reasonably
     determines that such adjustment is necessary or appropriate to reflect the
     relative economic interests of the Partners in the Partnership;

              (iii)      the liquidation of the Partnership within the meaning
     of Regulations Section 1.704-1(b)(2)(ii)(g); and

              (iv)       at such other times as the General Partner shall
     reasonably determine necessary or advisable in order to comply with
     Regulations Sections 1.704-1(b) and 1.704-2.

          (c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner provided
that, if the distributee is the General Partner, or if the distributee and the
General Partner cannot agree on such a determination, by Appraisal.

          (d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
                                                      --------  -------
Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to
the extent that the General Partner reasonably determines that an adjustment
pursuant to Paragraph subparagraph (b) is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment pursuant to this
subparagraph (d).

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

          "IRS" means the Internal Revenue Service, which administers the
           ---
internal revenue laws of the United States.

          "Immediate Family" means, with respect to any Person, such Person's
           ----------------
estate and heirs and current and former spouse(s), parents, parents-in-law,
children, children-in-law, siblings and grandchildren and any trust or estate,
all of the beneficiaries of which consist of such

                                       7
<PAGE>

Person or such Person's current or former spouse, parents, parents-in-law,
children, children-in-law, siblings or grandchildren.

          "Incapacity" or "Incapacitated" means, (i) as to any individual
           ----------      -------------
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his estate;
(ii) as to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership which is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy or such Partner.  For purposes of this
definition, bankruptcy of a Partner shall be deemed to have occurred when (a)
the Partner commences a voluntary proceeding seeking liquidation, reorganization
or other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a
final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the Partner, (c)
the Partner executes and delivers a general assignment for the benefit of the
Partner's creditors, (d) the Partner files an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within 120 days after the
commencement thereof, (g) the appointment without the Partner's consent or
acquiescence of a trustee, receiver of liquidator has not been vacated or stayed
within 90 days of such appointment, or (h) an appointment referred to in clause
(g) is not vacated within 90 days after the expiration of any such stay.

          "Indemnitee" means (i) any Person made a party to a proceeding by
           ----------
reason of his status as (A) the General Partner or (B) a director of the General
Partner or officer of the Partnership, or the General Partner, and (ii) such
other Persons (including Affiliates of the General Partner or the Partnership)
as the General Partner may designate from time to time, in its sole and absolute
discretion.

          "Limited Partner" means any Person named as a Limited Partner in
           ---------------
Exhibit A attached hereto, as such Exhibit may be amended from time to time, or
any Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.

          "Limited Partnership Interest" means a Partnership Interest of a
           ----------------------------
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement.  A Limited Partnership Interest may
be expressed as a number of Partnership Units.

          "Liquidating Events" has the meaning set forth in Section 13.1.
           ------------------

                                       8
<PAGE>

          "Liquidator" has the meaning set forth in Section 13.2.A.
           ----------

          "Majority in Interest of the Limited Partners" means those Limited
           --------------------------------------------
Partners (other than any Limited Partner 50% or more of whose equity is owned,
directly or indirectly, by the General Partner) holding in the aggregate
Percentage Interests that are greater than fifty percent (50%) of the aggregate
Percentage Interests of all Limited Partners (other than any Limited Partner 50%
or more of whose equity is owned, directly or indirectly, by the General
Partner).

          "Net Income" or "Net Loss" means for each fiscal year of the
           ----------      --------
Partnership, an amount equal to the Partnership's taxable income or loss for
such fiscal year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

          (a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income or Net Loss
pursuant to this definition of Net Income or Net Loss shall be added to such
taxable income or loss;

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

          (c) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (b) or subparagraph (c) of the definition of
Gross Asset Value, the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes of computing Net
Income or Net Loss;

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

          (e) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year;

          (f) 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 liquidation of a Partner's interest in the Partnership, 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 Net Income or Net Loss; and

          (g) Notwithstanding any other provision of this definition of Net
Income or Net Loss, any items which are specially allocated pursuant to Section
6.3 hereof shall not be taken into account in computing Net Income or Net Loss.
The amounts of the items of

                                       9
<PAGE>

Partnership income, gain, loss or deduction available to be specially allocated
pursuant to Section 6.3 hereof shall be determined by applying rules analogous
to those set forth in this definition of Net Income or Net Loss.

          "Nonrecourse Deductions" has the meaning set forth in Regulations
           ----------------------
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).

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

          "Notice of Exchange" means the Notice of Exchange substantially in the
           ------------------
form of Exhibit B to this Agreement.

          "Original Limited Partner" means a Limited Partner who is a Partner on
           ------------------------
the date of this Agreement.

          "Original Limited Partnership Unit" means a Partnership Unit held by
           ---------------------------------
an Original Limited Partner on the date of this Agreement.

          "Partner" means a General Partner or a Limited Partner, and "Partners"
           -------
means the General Partner and the Limited Partners.

          "Partner Minimum Gain" means an amount, with respect to each Partner
           --------------------
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).

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

          "Partner Nonrecourse Deductions" has the meaning set forth in
           ------------------------------
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section 1.704-
2(i)(2).

          "Partnership" means the limited partnership formed under the Act and
           -----------
pursuant to this Agreement, and any successor thereto.

          "Partnership Interest" means an ownership interest in the Partnership
           --------------------
of either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.  A Partnership Interest
may be expressed as a number of Partnership Units.

          "Partnership Minimum Gain" has the meaning set forth in Regulations
           ------------------------
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section 1.704-
2(d).

                                       10
<PAGE>

          "Partnership Record Date" means the record date established by the
           -----------------------
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof which record date shall be the same as the record date established by the
General Partner for a distribution to its stockholders of some or all of its
portion of such distribution.

          "Partnership Unit" means a fractional, undivided share of the
           ----------------
Partnership Interests of all Partners issued pursuant to Sections 4.1.  As of
the Effective Date, there shall be considered to be 925,200 Partnership Units
outstanding, with each Partnership Unit representing a 0.00010808 Percentage
Interest in the Partnership.  The ownership of Partnership Units is evidenced by
the form of certificate for units attached hereto as Exhibit C.

          "Partnership Year" means the fiscal year of the Partnership, which
           ----------------
shall be the calendar year.

          "Percentage Interest" means, as to a Partner, its interest in the
           -------------------
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time.

          "Person" means an individual or a corporation, partnership, trust,
           ------
unincorporated organization, association or other entity.

          "Properties" means such interests in real property and personal
           ----------
property, including without limitation, fee interests, interests in ground
leases, interests in joint ventures or partnerships, interests in mortgages, and
Debt instruments as the Partnership may hold from time to time.

          "Regulations" means the Income Tax Regulations promulgated under the
           -----------
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

          "Regulatory Allocations" has the meaning set forth in Section 6.3.A
           ----------------------
(viii).

          "REIT" means a real estate investment trust under Section 856 of the
           ----
Code.

          "REIT Requirements" has the meaning set forth in Section 5.1.
           -----------------

          "REIT Share" means a share of common stock of the General Partner, but
           ----------
shall not, for purposes of the definition of "Value" include any Excess Stock
(as defined in the Charter).

          "REIT Shares Amount" means, as of any date, an aggregate number of
           ------------------
REIT Shares equal to the number of Tendered Units, as adjusted for stock
dividends and distributions, stock splits and subdivisions, reverse stock splits
and combinations, distributions of rights, warrants or options, and
distributions of evidences of indebtedness or assets relating to assets not
received by the General Partner pursuant to a pro rata distribution by the
                                              --- ----
Partnership.

          "Securities Act" means the Securities Act of 1933, as amended, and the
           --------------
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

                                       11
<PAGE>

          "Specified Exchange Date" means the day of receipt by the General
           -----------------------
Partner of a Notice of Exchange.

          "Stock Option Plan" means the 1993 Stock Option and Incentive Plan for
           -----------------
Officers, Directors and Key Employees of Center Trust, Inc. and CT Operating
Partnership, L.P., such plan as amended or restated and any similar or successor
plans.

          "Subsidiary" means, with respect to any Person, any corporation or
           ----------
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.

          "Substituted Limited Partner" means a Person who is admitted as a
           ---------------------------
Limited Partner to the Partnership pursuant to Section 11.4.

          "Tax Items" has the meaning set forth in Section 6.4.A.
           ---------

          "Tenant" means any tenant from which the Company derives rent either
           ------
directly or indirectly through partnerships including the Partnership.

          "Tendered Units" has the meaning set forth in Section 8.6.A.
           --------------

          "Tendering Partner" has the meaning set forth in Section 8.6.A.
           -----------------

          "Terminating Capital Transaction" means any sale or other disposition
           -------------------------------
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

          "Value" means, with respect to a REIT Share, the average of the daily
           -----
market price for the ten (10) consecutive trading days immediately preceding the
date with respect to which "Value" must be determined hereunder, or, if such
date is not a Business Day, the immediately preceding Business Day.  The market
price for each such trading day shall be:  (i) if the REIT Shares are listed or
admitted to trading on any securities exchange or the NASDAQ-National Market
System, the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on such day,
(ii) if the REIT Shares are not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market System, the last reported sale price on
such day or, if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or (iii) if the REIT Shares are not listed or
admitted to trading on any securities exchange or the NASDAQ-National Market
System and no such last reported sale price or closing bid and asked prices are
available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the General
Partner, or if there shall be no bid and asked prices on such  day, the average
of the high bid and low asked prices, as so reported, on the most recent day
(not more than 10 days prior to the date in question) for which prices have been
so reported; provided that if there are no bid and asked prices reported during
             --------
the 10 days prior to the date in question, the Value of the REIT Shares shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. In the event the REIT Shares Amount includes rights that a holder
of REIT Shares would be entitled to receive, then the Value of such rights shall
be determined by the General Partner acting in good

                                       12
<PAGE>

faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate; and provided further that, in connection
                                          -------- -------
with determining the Deemed Value of the Partnership for purposes of determining
the number of additional Partnership Units issuable upon a Capital Contribution
funded by an underwritten public offering of REIT Shares, then the Value of the
REIT Shares shall be the public offering price per share of the REIT Shares
sold.

                                   ARTICLE 2.
                             ORGANIZATIONAL MATTERS

          Section 2.1  Organization
                       ------------

          The Partnership is a limited partnership formed pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement.  Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act.  The Partnership Interest of each
Partner shall be personal property for all purposes.

          Section 2.2  Name
                       ----

          The name of the Partnership is CT Operating Partnership, L.P.  The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof.  The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires.  The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Limited Partners of such change in the next regular communication to the
Limited Partners.

          Section 2.3  Registered Office and Agent; Principal Office
                       ---------------------------------------------

          The address of the registered office of the Partnership in the State
of California is located at 3500 Sepulveda Boulevard, Manhattan Beach,
California, and the registered agent for service of process on the Partnership
in the State of California at such registered office is Steven M. Jaffe.  The
principal office of the Partnership is 3500 Sepulveda Boulevard, Manhattan
Beach, California, 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 California
as the General Partner deems advisable.

          Section 2.4  Power of Attorney
                       -----------------

          A.   Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and each of those acting singly, in each
case with full power of substitution, as its true and lawful agent and attorney-
in-fact, with full power and authority in its name, place and stead to:

          (1)  execute, swear to, acknowledge, deliver, file and record in the
               appropriate public offices (a) all certificates, documents and
               other instruments (including, without limitation, this Agreement
               and the Certificate and all amendments or restatements thereof)
               that the General Partner or the

                                       13
<PAGE>

               Liquidator deems appropriate or necessary to form, qualify or
               continue the existence or qualification of the Partnership as a
               limited partnership (or a partnership in which the limited
               partners have limited liability) in the State of California and
               in all other jurisdictions in which the Partnership may conduct
               business or own property; (b) all instruments that the General
               Partner deems appropriate or necessary to reflect any amendment,
               change, modification or restatement of this Agreement in
               accordance with its terms; (c) all conveyances and other
               instruments or documents that the General Partner deems
               appropriate or necessary to reflect the dissolution and
               liquidation of the Partnership pursuant to the terms of this
               Agreement, including, without limitation, a certificate of
               cancellation; (d) all instruments relating to the admission,
               withdrawal, removal or substitution of any Partner pursuant to,
               or other events described in, Article 11, 12 or 13 hereof or the
               Capital Contribution of any Partner; and (e) all certificates,
               documents and other instruments relating to the determination of
               the rights, preferences and privileges of Partnership Interests;
               and

          (2)  execute, swear to, acknowledge and file all ballots, consents,
               approvals, waivers, certificates and other instruments
               appropriate or necessary, in the sole and absolute discretion of
               the General Partner, to make, evidence, give, confirm or ratify
               any vote, consent, approval, agreement or other action which is
               made or given by the Partners hereunder or is consistent with the
               terms of this Agreement or appropriate or necessary, in the sole
               discretion of the General Partner, to effectuate the terms or
               intent of this Agreement.

Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.

          B.   The foregoing power of attorney is hereby declared to be
irrevocable and a special power coupled with an interest, in recognition of the
fact that each of the Partners will be relying upon the power of the General
Partner to act as contemplated by this Agreement in any filing or other action
by it on behalf of the Partnership, and it shall survive and not be affected by
the subsequent Incapacity of any Limited Partner or Assignee and the transfer of
all or any portion of such Limited Partner's or Assignee's Partnership Units and
shall extend to such Limited Partner's or Assignee's heirs, successors, assigns
and personal representatives.  Each such Limited Partner or Assignee hereby
agrees to be bound by any representation made by the General Partner, acting in
good faith pursuant to such power of attorney; and each such Limited Partner or
Assignee hereby waives any and all defenses which may be available to contest,
engage or disaffirm the action of the General Partner, taken in good faith under
such power of attorney.  Each Limited Partner or Assignee shall execute and
deliver to the General Partner or the Liquidator, within 15 days after receipt
of the General Partner's request therefor, such further designation, powers of
attorney and other instruments as the General Partner or the Liquidator, as the
case may be, deems necessary to effectuate this Agreement and the purposes of
the Partnership.

                                       14
<PAGE>

          Section 2.5  Term
                       ----

          The term of the Partnership commenced on November 30, 1993, the date
the Certificate was filed in the office of the Secretary of State of California
in accordance with the Act and shall continue until December 31, 2092 unless the
Partnership is dissolved sooner pursuant to the provisions of Article 13 or as
otherwise provided by law.

                                   ARTICLE 3.
                                    PURPOSE

          Section 3.1  Purpose and Business
                       --------------------

          The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
                                                   --------  -------
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT for federal income tax
purposes, unless the General Partner has determined to cease to qualify as a
REIT, (ii) to enter into any partnership, joint venture or other similar
arrangement to engage in any of the foregoing or the ownership of interests in
any entity engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing.  The business of the Partnership shall at all times
be conducted in a manner substantially consistent with the policies set forth
under the caption "Policies and Objectives With Respect to Certain Activities"
in the final prospectus with respect to the initial public offering of REIT
Shares, unless otherwise consented to in writing by the General Partner and a
Majority in Interest of the Limited Partners.

          Section 3.2  Powers
                       ------

          The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership, provided that the Partnership
shall not take, or refrain from taking, any action which, in the judgment of the
General Partner, in its sole and absolute discretion, (i) could adversely affect
the ability of the General Partner to continue to qualify as a REIT, (ii) could
subject the General Partner to any additional taxes under Section 857 or Section
4981 of the Code or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the General Partner or its
securities, unless such action (or inaction) under (i), (ii) or (iii) shall have
been specifically consented to by the General Partner in writing.

          Section 3.3  Partnership Only for Purposes Specified
                       ---------------------------------------

          The Partnership shall be a partnership only for the purposes specified
in Section 3.1 hereof, and this Agreement shall not be deemed to create a
partnership among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.1 hereof.  Except as otherwise provided in this Agreement, no Partner
shall have any authority to act for, bind, commit or assume any obligation or
responsibility on behalf of the Partnership, its properties or any other
Partner.  No Partner, in its capacity as a Partner under this Agreement, shall
be responsible or liable for any indebtedness or obligation of another Partner,
nor shall the Partnership be responsible or liable for any indebtedness or
obligation of any Partner, incurred either before or after the execution and
delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities,

                                       15
<PAGE>

indebtedness or obligations incurred pursuant to and as limited by the terms of
this Agreement and the Act.

          Section 3.4  Representations and Warranties by the Parties
                       ---------------------------------------------

          A.   Each Partner that is an individual represents and warrants to
each other Partner that (i) he has the legal capacity to enter into this
Agreement and perform his obligations hereunder, (ii) the consummation of the
transactions contemplated by this Agreement to be performed by such Partner will
not result in a breach or violation of, or a default under, any agreement by
which such Partner or any of such Partner's property is or are bound, or any
statute, regulation, order or other law to which such Partner is subject, (iii)
such Partner is not a "foreign person" within the meaning of Section 1445(f) of
the Code nor a "foreign person" under Section 1446(e) of the Code, and (iv) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms.

          B.   Each Partner that is not an individual represents and warrants to
each other Partner that (i) all transactions contemplated by this Agreement to
be performed by it have been duly authorized by all necessary action, including
without limitation, that of its general partner(s), committee(s), trustee(s),
beneficiaries, directors and/or shareholder(s), as the case may be, as required,
(ii) the consummation of such transactions shall not result in a breach or
violation of, or a default under, its partnership agreement, trust agreement,
charter or by-laws, as the case may be, any agreement by which such Partner or
any of such Partner's properties or any of its partners, beneficiaries, trustees
or shareholders, as the case may be, is or are bound, or any statute,
regulation, order or other law to which such Partner or any of its partners,
trustees, beneficiaries or shareholders, as the case may be, is or are subject,
(iii) such Partner is neither a "foreign person" within the meaning of Section
1445(f) of the Code nor a "foreign partner" within the meaning of Section
1446(e) of the Code, and (iv) this Agreement is binding upon, and enforceable
against, such Partner in accordance with its terms.

          C.   Each Partner represents, warrants and agrees that it has acquired
and continues to 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.

          D.   Each Partner further represents, warrants and agrees as follows:

               (i)   Except as provided in Exhibit D, it does not and will not
directly own or Constructively Own (a) with respect to any Tenant that is a
corporation, stock of such Tenant, and (b) with respect to any Tenant that is
not a corporation, any interests in the assets or net profits of such Tenant.

               (ii)  It understands that if, for any reason, any of the
representations, warranties or agreements set forth in D.(i) above are violated,
then (a) some or all of the Partners' rights to exchange Partnership Units for
REIT Shares may become non-exercisable, and (b) some

                                       16
<PAGE>

or all of the REIT Shares owned by the Partners may be automatically converted
into Excess Stock.

          E.   The representations and warranties contained in Sections 3.4.A,
3.4.B, 3.4.C and 3.4.D hereof shall survive the execution and delivery of this
Agreement by each Partner and the dissolution and wind up of the Partnership.

          F.   Each Partner hereby acknowledges that no representations as to
potential profit, cash flows, funds from operations or yield, if any, in respect
of the Partnership or the General Partner have been made by any Partner or any
employee or representative or Affiliate of any Partner, and that projections and
any other information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.

                                   ARTICLE 4.
                             CAPITAL CONTRIBUTIONS

          Section 4.1  Capital Contributions of the Partners
                       -------------------------------------

          A.   At the time of the execution of this Agreement, the Partners
shall make Capital Contributions as set forth in Exhibit A to this Agreement.
The Partners shall own Partnership Units in the amounts set forth in Exhibit A
and shall have a Percentage Interest in the Partnership as set forth in Exhibit
A, which Percentage Interest shall be adjusted in Exhibit A from time to time by
the General Partner to the extent necessary to reflect accurately exchanges,
redemptions, Capital Contributions, the issuance of additional Partnership Units
or similar events having an effect on a Partner's Percentage Interest.  Except
as required by law or as otherwise provided in Sections 4.3 and 10.5, no Partner
shall be required or permitted to make any additional Capital Contributions or
loans to the Partnership.

          B.   It is difficult to ascertain the fair market value of the
Development Properties being contributed to the Partnership because such
properties are newly developed properties which have not been fully leased up.
Rather than attempt to reach a final conclusion as to the value of the
Development Properties today based on inadequate information, the Partners have
agreed that certain future events shall be taken into account in determining the
ultimate fair market value of the Development Properties.  Accordingly,
notwithstanding the provisions of Section 4.1.A, pursuant to the terms of that
certain Development Properties Agreement dated December 27, 1993 by and among
Haagen-Burbank Partnership, Haagen-Fontana Partnership, Baldwin Hills
Associates, Haagen-San Francisco Partnership and Montebello Commercial
Properties and the Partnership, each Limited Partner who made a Capital
Contribution set forth on Schedule A consisting of a Development Property or an
interest therein may be issued additional Partnership Units, from time to time,
in respect of the additional value of the Development Properties through certain
periods specified in the Development Properties Agreement.  In such event, each
Partner's Percentage Interest in the Partnership set forth on Schedule A shall
be correspondingly adjusted from time to time to reflect the issuance of such
additional Partnership Units.  Such adjustment shall be viewed as an additional
Capital Contribution of property by such Partners to the Partnership.

                                       17
<PAGE>

          Section 4.2  Loans by Third Parties
                       ----------------------

          The Partnership may incur Debt, or enter into other similar credit,
guarantee, financing or refinancing arrangements for any purpose (including,
without limitation, in connection with any further acquisition of Properties)
with any Person that is not the General Partner upon such terms as the General
Partner determines appropriate; provided that, the Partnership shall not incur
                                -------- ----
any Debt under which a breach, violation or default would be deemed to occur by
virtue of the transfer of any Limited Partnership Interest or General Partner
Interest, and any Debt which refinances Debt outstanding upon the closing of the
initial public offering, shall be non-recourse to the General Partner, except to
the extent otherwise approved by the Consent of the Limited Partners.

          Section 4.3  Additional Funding and Capital Contributions
                       --------------------------------------------

          A.   General.  The General Partner may, at any time and from time to
               -------
time determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition of additional Properties or for such other
Partnership purposes as the General Partner may determine.  Additional Funds may
be raised by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.3.  No
Person shall have any preemptive, preferential or similar right or rights to
subscribe for or acquire any Partnership Interest, except as set forth in this
Section 4.3.

          B.   Additional General Partner Capital Contributions.  Upon written
               ------------------------------------------------
notice (the "Funding Notice") to the Partners of the need for Additional Funds
and the anticipated source(s) thereof, the General Partner may, or, to the
extent the General Partner raises all or any portion of the Additional Funds
through the sale or other issuance of REIT Shares or other equity interests in
the General Partner, the General Partner shall, contribute the Additional Funds
to the capital of the Partnership in exchange for General Partner Interests.

          C.   General Partner Loans.  Upon delivery of a Funding Notice to the
               ---------------------
Partners, the General Partner may, or, to the extent the General Partner enters
into a Funding Debt, the General Partner shall, lend the Additional Funds to the
Partnership (a "General Partner Loan").  If the General Partner enters into such
a Funding Debt, the General Partner Loan will consist of the net proceeds from
such Funding Debt and will be on the same terms and conditions, including
interest rate, repayment schedule and costs and expenses, as shall be applicable
with respect to or incurred in connection with such Funding Debt.  Otherwise,
all General Partner Loans made pursuant to this Section 4.3 shall be on terms
and conditions no less favorable to the Partnership than would be available to
the Partnership from any third party.  In the event that a Funding Debt or debt
issued by the Partnership is comprised, in whole or in part, of Debt convertible
into or exchangeable for REIT Shares or other equity interests in the General
Partner and any portion of such debt is converted into or exchanged for REIT
Shares, the General Partner shall have the right, but not the obligation, to
contribute the equivalent amount of the General Partner Loan or such other debt
to the Partnership in exchange for additional General Partner Interests.

          D.   Conversion or Exchange of Outstanding Debentures.
               ------------------------------------------------
Notwithstanding any other provision of this Agreement, in the event that any
portion of the Exchangeable Debentures or Convertible Debentures is converted
into or exchanged for REIT Shares, the General Partner shall have the right, but
not the obligation, to contribute an equivalent amount of

                                       18
<PAGE>

the General Partner loan of the net proceeds of Convertible Debenture offering,
or in the case of the Exchangeable Debentures, contribute the equivalent amount
of Exchangeable Debentures, to the Partnership in exchange for 8,333,333
additional General Partner Interests, in the aggregate (subject to anti-dilution
adjustments) in the case of the Exchangeable Debentures, and 1,666,666
additional General Partner Interests, in the aggregate (subject to anti-dilution
adjustments) in the case of the Convertible Debentures.

          E.   Additional Capital Contributions.  Upon delivery of a Funding
               --------------------------------
Notice to the Partners, the General Partner on behalf of the Partnership may
raise all or any portion of the Additional Funds by accepting additional Capital
Contributions (i) in the case of cash, from the General Partner, or (ii) in the
case of property other than cash, from any Partner and/or third parties, and
either (A) in the case of Partners, increasing such Partner's Partnership
Interest, or (B) in the case of a third party, admitting such third party as an
Additional Limited Partner.  Subject to the terms of this Section 4.3, the
General Partner shall determine the amount, terms and conditions of such
additional Capital Contributions (including, without limitation, the Percentage
Interest that the General Partner so determines to be attributable to such
additional Capital Contributions, subject to agreement with the Contributing
Partner); provided, that, upon the contribution of property other than cash, the
          --------  ----
Percentage Interest related thereto shall be equal to a fraction, the numerator
of which is equal to the Agreed Value of the Property contributed as of the
Adjustment Date and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership (computed as of the Business Day immediately
preceding the Adjustment Date) and (ii) the Agreed Value of the property as of
the Adjustment Date, as reasonably determined by the General Partner.  The
Percentage Interests of each Partner not making such contribution shall be
reduced, as of the Adjustment Date, such that the Percentage Interest of each
such Partner shall be equal to a fraction, the numerator of which is equal to
the sum of (i) the Deemed Partnership Interest Value of such Partner (computed
as of the Business Day immediately preceding the Adjustment Date) and (ii) the
Agreed Value of the Property contributed, if any, by such Partner, as of the
adjustment date, and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership (computed as of the Business Day immediately
preceding the Adjustment Date and (ii) the Agreed Value of the Property
contributed by all Partners and/or third parties as of the Adjustment Date.

          F.   Percentage Interest Adjustments.  Upon the acceptance of
               -------------------------------
additional cash Capital Contributions pursuant to this Section 4.3, the
Percentage Interest related thereto shall be equal to a fraction, the numerator
of which is equal to the cash contributed as of the Business Day immediately
preceding the date on which the additional Capital Contributions are made (an
"Adjustment Date") and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership (computed as of the Business Day immediately
preceding the Adjustment Date) and (ii) the aggregate amount of additional
Capital Contributions contributed to the Partnership on such Adjustment Date.
The Percentage Interest of each other Partner not making a full pro rata
                                                                --- ----
Contribution shall be adjusted to equal to a fraction, the numerator of which is
equal to the sum of (i) the Deemed Partnership Interest Value of such Limited
Partner (computed as of the Adjustment Date) and (ii) the amount of additional
capital contributions made by such Partners to the Partnership as such
Adjustment Date, and the denominator of which is equal to the sum of (i) the
Deemed Value of the Partnership (computed as of the Business Day immediately
preceding the Adjustment Date), plus (ii) the aggregate amount of additional
                                ----
Capital Contributions contributed by all Partners and/or third parties to the
Partnership on such Adjustment Date.  Provided, however, solely for purposes of
calculating Partner's Percentage Interests pursuant to this Section 4.3.F, cash
Capital Contributions by the General Partner will be

                                       19
<PAGE>

deemed to equal the cash contributed by the General Partner plus, in the case of
cash contributions funded by an offering of REIT Shares, the offering costs
attributable to the cash contributed to the Partnership. The General Partner
shall promptly give each Partner written notice of its Percentage Interest, as
adjusted.

          Section 4.4  Stock Incentive Plan
                       --------------------

          If at any time or from time to time the General Partner issues or
sells REIT Shares pursuant to the Stock Option Plan, it may contribute the
proceeds therefrom to the Partnership as an additional Capital Contribution as
provided in Section 4.3.  In consideration for such contribution, the General
Partner's Capital Account shall be adjusted as provided in this Agreement and
the General Partner shall be issued a number of Partnership Units equal to the
number of REIT Shares so issued or sold.

                                   ARTICLE 5.
                                 DISTRIBUTIONS

          Section 5.1  Requirement and Characterization of Distributions
                       -------------------------------------------------

          A.   General.  Except as provided in Section 5.1.B, the General
               -------
Partner shall cause the Partnership to distribute quarterly all, or such portion
as the General Partner may in its discretion determine, of Available Cash
generated by the Partnership during such quarter to the Partners who are
Partners on the Partnership Record Date with respect to such quarter in
accordance with their respective Percentage Interests on such Partnership Record
Date.  The General Partner shall take such reasonable efforts, as determined by
it in its sole and absolute discretion and consistent with its qualification as
a REIT, to cause the Partnership to distribute sufficient amounts to enable the
General Partner to pay stockholder dividends that will (a) satisfy the
requirements for qualifying as a REIT under the Code and Regulations ("REIT
Requirements"), and (b) avoid any federal income or excise tax liability of the
General Partner.

          B.   Exceptions.  Notwithstanding the first sentence of Section 5.1.A,
               ----------
(a) the General Partner may apportion distributions of Available Cash among
existing and newly issued Partnership Units in the year such units are issued in
any other manner it deems reasonable with respect to (i) Partnership Units
issued to parties other than the General Partner, and (ii) Partnership Units
issued to the General Partner to the extent the General Partner did not issue an
equivalent number of REIT Shares in connection with the issuance of such units;
and (b) the General Partner may apportion distributions of Available Cash among
Partnership Units in the year a portion of the Partnership Units have been
redeemed or otherwise acquired by the Partnership in any other manner it deems
reasonable with respect to (i) Partnership Units acquired from parties other
than the General Partner, and (ii) Partnership Unites acquired from the General
Partner to the extent the General Partner did not acquire an equivalent number
of REIT Shares in connection with the Partnership's acquisition of such units.

          Section 5.2  Distributions in Kind
                       ---------------------

          A.   General.  No right is given to any Partner to demand and receive
               -------
property other than cash.  The General Partner may determine, in its sole and
absolute discretion, to make a distribution in kind to the Partners of
Partnership assets, and (except as provided in Section 5.2.B) such assets shall
be distributed in such a fashion as to ensure that the fair market value is
distributed and allocated in accordance with Articles 5, 6 and 10.  To the
extent the General

                                       20
<PAGE>

Partner makes a distribution pursuant to this Section 5.2.A which is not pro
rata to the Partners' Percentage Interests, the General Partner shall, in its
reasonable discretion, adjust the number of Partnership Units held by the
distributee Partners in a manner which is consistent with the provisions of
Section 4.3.E and 4.3.F.

          B.   Burbank Notes.  The Haagen-Burbank Partnership contributed the
               -------------
Burbank Notes to the Partnership in exchange for Partnership Units.  In the
event the General Partner determines that the Partnership's ownership of the
Burbank Notes could jeopardize the General Partner's status as a REIT under the
Code, the General Partner may, to the extent necessary to protect its REIT
status, cause the Partnership to distribute some or all of the Burbank Notes to
the Haagen-Burbank Partnership in exchange for Partnership Units.  The number of
Partnership Units exchanged will be equal to the number of Partnership Units
received by the Haagen-Burbank Partnership in exchange for the portion of the
Burbank Notes being distributed.

          Section 5.3  Amounts Withheld
                       ----------------

          All amounts withheld pursuant to the Code or any provisions of any
state or local tax law and Section 10.5 hereof with respect to any allocation,
payment or distribution to the General Partner, the Limited Partners or
Assignees shall be treated as amounts distributed to the General Partner,
Limited Partners, or Assignees, as the case may be, pursuant to Section 5.1 for
all purposes under this Agreement.

          Section 5.4  Distributions Upon Liquidation
                       ------------------------------

          Proceeds from a Terminating Capital Transaction shall be distributed
to the Partners in accordance with Section 13.2.

                                   ARTICLE 6.
                                  ALLOCATIONS

          Section 6.1  Timing and Amount of Allocations of Net Income and Net
                       ------------------------------------------------------
Loss
----

          Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each fiscal year of the Partnership as of the end of
each such year.  Subject to the other provisions of this Article 6, an
allocation to a Partner of a share of Net Income or Net Loss shall be treated as
an allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.

          Section 6.2  General Allocations
                       -------------------

          Except as otherwise provided in this Article 6, Net Income and Net
Loss shall be allocated to each of the Partners in accordance with their
respective Percentage Interest.

          Section 6.3  Additional Allocation Provisions
                       --------------------------------

          Notwithstanding the foregoing provisions of this Article 6:

          A.   Regulatory Allocations.
               ----------------------

                                       21
<PAGE>

               (i)    Minimum Gain Chargeback.  Except as otherwise provided in
                      -----------------------
Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2 of
the Agreement, or any other provision of this Article 6, 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 year (and,
if necessary, subsequent years) in an amount equal to such Partner's share of
the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g).  Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant thereto.  The items to be allocated shall be determined in accordance
with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2).  This Section
6.3(A)(i) is intended to qualify as a "minimum gain chargeback" within the
meaning of Regulation Section 1.704-2(f) which shall be controlling in the event
of a conflict between such Regulation and this Section 6.3(A)(i).

               (ii)   Partner Minimum Gain Chargeback.  Except as otherwise
                      -------------------------------
provided in Regulations Section 1.704-2(i)(4), and notwithstanding the
provisions of Section 6.2 of the Agreement or any other provision of this
Article 6 (except Section 6.3(A)(i)), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal year,
each Partner who has a share of the Partner 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 year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General
Partner and Limited Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-
2(j)(2). This Section 6.3(A)(ii) is intended to qualify as a "chargeback of
partner nonrecourse debt minimum gain" within the meaning of Regulation Section
1.704-2(i) which shall be controlling in the event of a conflict between such
Regulation and this Section 6.3(A)(ii).

               (iii)  Nonrecourse Deductions and Partner Nonrecourse Deductions.
                      ---------------------------------------------------------
Any Nonrecourse Deductions for any fiscal year shall be specially allocated to
the Partners in accordance with their Percentage Interests.  Any Partner
Nonrecourse Deductions for any fiscal year shall be specially allocated to the
Partner(s) 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).

               (iv)   Qualified Income Offset. If any Partner unexpectedly
                      -----------------------
receives an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations Section 1.704-
1(b)(2)(ii)(d), to the Partner in an amount and manner sufficient to eliminate,
to the extent required by such Regulations, the Adjusted Capital Account Deficit
of the Partner as quickly as possible provided that an allocation pursuant to
this Section 6.3(A)(iv) shall be made if and only to the extent that such
Partner would have an Adjusted Capital Account Deficit after all other
allocations provided in this Article 6 have been tentatively made as if this
Section 6.3(A)(iv) were not in the Agreement. It is intended that this Paragraph
6.3(A)(iv) qualify and be construed as a "qualified income offset" within the
meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the
event of a conflict between such Regulations and this Paragraph 6.3(A)(iv).

                                       22
<PAGE>

               (v)    Gross Income Allocation. In the event any Partner has a
                      -----------------------
deficit Capital Account at the end of any fiscal year which is in excess of the
sum of (1) the amount (if any) such Partner is obligated to restore to the
Partnership, and (2) the amount such Partner is deemed to be obligated to
restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or 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 6.3(A)(v) shall be made if and only to the extent that
such Partner would have a deficit Capital Account in excess of such sum after
all other allocations provided in this Article 6 have been tentatively made as
if this Section 6.3(A)(v) and Section 6.3(A)(iv) were not in the Agreement.

               (vi)   Limitation on Allocation of Net Loss. To the extent any
                      ------------------------------------
allocation of Net Loss would cause or increase an Adjusted Capital Account
Deficit as to any Partner, such allocation of Net Loss shall be reallocated
among the other Partners in accordance with their respective Percentage
Interests, subject to the limitations of this Paragraph 6.3(A)(vi).

               (vii)  Section 754 Adjustment. 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)(2) or 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 his interest in the Partnership, the amount
of such adjustment to the Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Partners in accordance with their interests in the Partnership in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom
such distribution was made in the event that Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.

               (viii) Curative Allocation. The allocations set forth in Sections
                      -------------------
6.3.(A)(i), (ii), (iii), (iv), (v), (vi) and (vii) (the "Regulatory
Allocations") are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 6.2, the Regulatory Allocations shall
be taken into account in allocating other items of income, gain, loss and
deduction among the Partners so that, to the extent possible, the net amount of
such allocations of other items and the Regulatory Allocations to each Partner
shall be equal to the net amount that would have been allocated to each such
Partner if the Regulatory Allocations had not occurred.

          B.   For purposes of determining a Partner's proportional share of the
"excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), each Partner's interest in Partnership
profits shall be such Partner's Percentage Interest.

          Section 6.4 Tax Allocations
                      ---------------

          A.   In General.  Except as otherwise provided in this Section 6.4,
               ----------
for income tax purposes each item of income, gain, loss and deduction
(collectively, "Tax Items") shall be allocated among the Partners in the same
manner as its correlative item of "book" income, gain, loss or deduction is
allocated pursuant to Section 6.2 and 6.3.

                                       23
<PAGE>

          B.   Allocations Respecting Section 704(c) Revaluations.
               --------------------------------------------------
Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property
that is contributed to the Partnership by a Partner shall be shared among the
Partners for income tax purposes pursuant to Regulations promulgated under
Section 704(c) of the Code, so as to take into account the variation, if any,
between the basis of the property to the Partnership and its initial Gross Asset
Value.  With respect to Partnership property that is initially contributed to
the Partnership upon its formation, such variation between basis and initial
Gross Asset Value shall be taken into account under the "traditional method" as
described in Proposed Treasury Regulation (S) 1.704-3(b) and Treasury Regulation
(S) 1.704-1(c)(2).  With respect to properties subsequently contributed to the
Partnership, the Partnership shall account for such variation under any method
approved under Section 704(c) of the Code and the applicable regulations as
chosen by the General Partner.  In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to subparagraph (b) of the definition of
Gross Asset Value (provided in Article 1 of the Agreement), subsequent
allocations of Tax Items with respect to such asset shall take account of the
variation, if any, between the adjusted basis of such asset and its Gross Asset
Value in the same manner as under Code Section 704(c) and the applicable
regulations consistent with the requirements of Treasury Regulations section
1.704-1(b)(2)(iv)(g) using any method approved under Section 704(c) of the Code
and the applicable regulations as chosen by the General Partner.

          Section 6.5  Allocations Regarding Transfers, Contributions and
                       --------------------------------------------------
Distributions
-------------

          If any Partnership Interest is transferred during the Partnership's
fiscal year in compliance with the provisions of Article 11 or transferred
pursuant to Section 8.6, Net Income, Net Loss, each item thereof and all other
items attributable to such interest for such fiscal year shall be divided and
allocated between the transferor Partner and the transferee Partner (or
Assignee) in any manner reasonably determined by the General Partner to take
into account their varying interests during the fiscal year in accordance with
Section 706(d) of the Code.  If new Partnership Units are issued during the
Partnership's fiscal year, Net Income, Net Loss, each item thereof and all other
times of the Partnership for the fiscal year shall be divided and allocated
between the existing and newly issued Partnership Units in any manner reasonably
determined by the General Partner to take into account the Partners' varying
interests during the fiscal year in accordance with Section 706(d) of the Code.
If a portion of the Partnership Units are redeemed or otherwise acquired by the
Partnership during the Partnership's fiscal year, Net Income, Net Loss, each
item thereof and all other items of the Partnership Units and remaining
Partnership Units in any manner reasonably determined by the General Partner to
take into account the Partners' varying interests during the fiscal year in
accordance with Section 706(d) of the Code.

                                   ARTICLE 7.
                     MANAGEMENT AND OPERATIONS OF BUSINESS

          Section 7.1  Management
                       ----------

          A.   Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are
exclusively vested in the General Partner, and no Limited Partner shall have any
right to participate in or exercise control or management power over the
business and affairs of the Partnership.  The General Partner may not be removed
by the Limited Partners with or without cause.  In addition to the powers now or

                                       24
<PAGE>

hereafter granted a general partner of a limited partnership under the Act or
which are granted to the General Partner under any other provision of this
Agreement, the General Partner, subject to the other provisions hereof, shall
have full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set forth
in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:

          (1)  the making of any expenditures, the lending of money, borrowing
               of money (including, without limitation, making prepayments on
               loans and borrowing money to permit the Partnership to make
               distributions to its Partners in such amounts as will permit the
               General Partner (so long as the General Partner has determined to
               qualify as a REIT) to avoid the payment of any federal income tax
               (including, for this purpose, any excise tax pursuant to Section
               4981 of the Code), to make distributions to its stockholders
               sufficient to permit the General Partner to maintain REIT
               status), the assumption or guarantee of, or other contracting
               for, indebtedness and other liabilities, the issuance of
               evidences of indebtedness (including the securing of same by
               mortgage, deed of trust or other lien or encumbrance on the
               Partnership's assets) and the incurring of any obligations it
               deems necessary for the conduct of the activities of the
               Partnership; provided, that all such borrowing, incurrence of
                            --------
               Debt and prepayments shall be subject to the limitations set
               forth in Sections 4.2 and 4.3;

          (2)  the making of tax, regulatory and other filings, or rendering of
               periodic or other reports to governmental or other agencies
               having jurisdiction over the business or assets of the
               Partnership;

          (3)  the acquisition, disposition, mortgage, pledge, encumbrance,
               hypothecation or exchange of any assets of the Partnership or the
               merger or other combination of the Partnership with or into
               another entity; provided that as long as the General Partner has
                               --------
               determined to continue to qualify as a REIT, the General Partner
               may not engage in any such acquisition, disposition, mortgage,
               pledge, encumbrance, hypothecation or exchange that would cause
               it to fail to qualify as a REIT

          (4)  the mortgage, pledge, encumbrance or hypothecation of any assets
               of the Partnership, and the use of the assets of the Partnership
               (including, without limitation, cash on hand) for any purpose
               consistent with the terms of this Agreement and on any terms it
               sees fit, including, without limitation, the financing of the
               conduct of the operations of the General Partner, the Partnership
               the lending of funds to other Persons and the repayment of
               obligations of the Partnership and any other Person in which it
               has an equity investment;

          (5)  the negotiation, execution and performance of any contracts,
               leases, deeds, conveyances or other instruments that the General
               Partner considers useful or necessary to the conduct of the
               Partnership's operations or the implementation of the General
               Partner's powers under this Agreement;

                                       25
<PAGE>

          (6)  the distribution of Partnership cash or other Partnership assets
               in accordance with this Agreement;

          (7)  the selection and dismissal of any employees of the Partnership
               (including, without limitation, employees having titles such as
               "president," "vice president," "secretary" and "treasurer"), and
               agents, outside attorneys, accountants, consultants and
               contractors of the Partnership and the determination of their
               compensation and other terms of employment or hiring;

          (8)  the selection and employment of third parties to perform services
               for and on behalf of the Partnership, including, but not limited
               to management, leasing and development services, and the General
               Partner may require that such third party service providers bill
               the Partnership directly for payment or reimbursement for such
               services;

          (9)  the maintenance of such insurance for the benefit of the
               Partnership and the Partners as it deems necessary or
               appropriate;

          (10) the formation of, or acquisition of an interest in, and the
               contribution of property to, any further limited or general
               partnerships, joint ventures or other relationships that it deems
               desirable (including, without limitation, the acquisition of
               interests in, and the contributions of property to, any Person in
               which it has an equity investment from time to time); provided
                                                                     --------
               that as long as the General Partner has determined to continue to
               qualify as a REIT, the General Partner may not engage in any such
               formation, acquisition or contribution that would cause it to
               fail to qualify as a REIT;

          (11) the control of any matters affecting the rights and obligations
               of the Partnership, including the conduct of litigation and the
               incurring of legal expense and the settlement of claims and
               litigation, and the indemnification of any Person against
               liabilities and contingencies to the extent permitted by law;

          (12) the undertaking of any action in connection with the
               Partnership's direct or indirect investment in any Person
               (including, without limitation, the contribution or loan of funds
               by the Partnership to such Persons);

          (13) the determination of the fair market value of any Partnership
               property distributed in kind using such reasonable method of
               valuation as it may adopt, provided that such methods are
               otherwise consistent with industry standards and the requirements
               of this Agreement; and

          (14) the enforcement of any rights against any Partner pursuant to
               representations, warranties, covenants and indemnities relating
               to such Partner's contribution of property or assets to the
               Partnership.

          B.   Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any

                                       26
<PAGE>

other provisions of this Agreement (except as provided in Section 7.3), the Act
or any applicable law, rule or regulation. The execution, delivery or
performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the Partnership
or the Limited Partners or any other Persons under this Agreement or of any duty
stated or implied by law or equity.

          C.   At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain (i) casualty, liability and
other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnities hereunder.

          D.   At all times from and after the date hereof, the General Partner
may cause the Partnership to establish and maintain working capital reserves in
such amounts as the General Partner, in it sole and absolute discretion, deems
appropriate and reasonable from time to time.

          E.   In exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action taken
by it.  The General Partner and the Partnership shall not have liability to a
Partner under any circumstances as a result of an income tax liability incurred
by such Partner as a result of an action (or inaction) by the General Partner
pursuant to its authority under this Agreement.

          Section 7.2  Certificate of Limited Partnership
                       ----------------------------------

          To the extent that such action is determined by the General Partner to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of
California and each other state, the District of Columbia or any other
jurisdiction, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not
be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner.  The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners limited liability)
in the State of California any other state, or the District of Columbia, in
which the Partnership may elect to do business or own property.

          Section 7.3  Restrictions on General Partner's Authority
                       -------------------------------------------

          A.   The General Partner may not take any action in contravention of
this Agreement, including, without limitation:

          (1)  take any action that would make it impossible to carry on the
               ordinary business of the Partnership, except as otherwise
               provided in this Agreement;

          (2)  possess Partnership property, or assign any rights in specific
               Partnership property, for other than a Partnership purpose except
               as otherwise provided in this Agreement;

                                       27
<PAGE>

          (3)  admit a Person as a Partner, except as otherwise provided in this
               Agreement;

          (4)  perform any act that would subject a Limited Partner to liability
               as a general partner in any jurisdiction or any other liability
               except as provided herein or under the Act; or

          (5)  enter into any contract, mortgage, loan or other agreement that
               prohibits or restricts, or has the effect of prohibiting, the
               ability of a Limited Partner to exercise its rights set forth
               herein to effect an Exchange in full, except with the written
               consent of such Limited Partner.

          B.   The General Partner shall not, without the prior Consent of the
Limited Partners, undertake, on behalf of the Partnership, any of the following
actions or enter into any transaction which would have the effect of such
transactions:

          (1)  Except as provided in Section 7.3.C., amend, modify or terminate
               this Agreement other than to reflect the admission, substitution,
               termination or withdrawal of partners pursuant to Article 12
               hereof;

          (2)  Make a general assignment for the benefit of creditors or appoint
               or acquiesce in the appointment of a custodian, receiver or
               trustee for all or any part of the assets of the Partnership;

          (3)  Institute any proceeding for bankruptcy on behalf of the
               Partnership; or

          (4)  Approve or acquiesce to the transfer of the Partnership Interest
               of the General Partner, or admit into the Partnership any
               Additional or Substitute General Partners.

          C.   Notwithstanding Section 7.3.B, the General Partner shall have the
power, without the Consent of the Limited Partners, to amend this Agreement as
may be required to facilitate or implement any of the following purposes:

          (1)  to add to the obligations of the General Partner or surrender any
               right or power granted to the General Partner or any Affiliate of
               the General Partner for the benefit of the Limited Partners;

          (2)  to reflect the admission, substitution, termination, or
               withdrawal of Partners in accordance with this Agreement;

          (3)  to reflect a change that is of an inconsequential nature and does
               not adversely affect the Limited Partners in any material
               respect, or to cure any ambiguity, correct or supplement any
               provision in this Agreement not inconsistent with law or with
               other provisions, or make other changes with respect to matters
               arising under this Agreement that will not be inconsistent with
               law or with the provisions of this Agreement;

                                       28
<PAGE>

          (4)  to satisfy any requirements, conditions, or guidelines contained
               in any order, directive, opinion, ruling or regulation of a
               federal or state agency or contained in federal or state law;

          (5)  to reflect such changes as are reasonably necessary for the
               General Partner to maintain status as a REIT; and

          (6)  to modify the manner in which Capital Accounts are computed but
               only to the extent set forth in the definition of "Capital
               Account."

The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.

          D.   Notwithstanding Section 7.3.B and 7.3.C hereof, this Agreement
shall not be amended, and no action may be taken by the General Partner, without
the Consent of each Partner adversely affected if such amendment or action would
(i) convert a Limited Partner's interest in the Partnership into a general
partner's interest (except as the result of the General Partner acquiring such
interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5 or Section
7.1.A(3), or the allocations specified in Article 6 (except as permitted
pursuant to Section 4.3 and Section 7.3.C, (iv) alter or modify the Exchange
Right or REIT Shares Amount as set forth in Sections 8.6 and 11.2, and related
definitions thereof, (v) cause the termination of the Partnership prior to the
time set forth in Sections 2.5 or 13.1, or (vi) amend this Section 7.3.D.
Further, no amendment may alter the restrictions on the General Partner's
authority set forth elsewhere in this Section 7.3 without the Consent specified
in such section.  Any such amendment or action consented to by any Limited
Partner shall be effective as to that Limited Partner, notwithstanding the
absence of such consent by any other Limited Partner.

          E.   At any time that the Partnership Interests of all of the Limited
Partners of the Partnership equal, in the aggregate, not less than ten percent
(10%), the General Partner shall not, without the prior Consent of the Limited
Partners, undertake, on behalf of the Partnership, any of the following actions:

          (1)  Dissolve the Partnership.

          (2)  Agree to or consummate any merger, consolidation, reorganization
               or other business combination to which the Partnership is a
               party, in each case resulting in the disposition by the then
               Limited Partners and Assignees of all outstanding Limited
               Partnership Interests and interests of Assignees therein in
               consideration for (a) cash, (b) debt instruments or other
               evidences of indebtedness, (c) other securities issued by a
               corporation, partnership or other entity, other than (i) the
               General Partner, (ii) the Partnership or (iii) any entity at
               least 80% of the total assets of which (on the basis of market
               value) are comprised of assets which, immediately prior to such
               transaction, were assets of the Partnership, or (d) any
               combination of the consideration described in (a), (b) and/or (c)
               above.

          (3)  Sell or otherwise transfer all or substantially all of the assets
               of the Partnership.

                                       29
<PAGE>

          (4)  Prior to February 27, 2002, sell or otherwise dispose of any of
               the properties knows as Covina Town Square, El Camino/Fire
               Mountain, Fountain Valley, Date Palm and City Center - San
               Francisco.

          Section 7.4  Reimbursement of the General Partner
                       ------------------------------------

          A.   Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not be compensated for its services as general partner of the Partnership.

          B.   Subject to Section 15.11, the General Partner shall be reimbursed
on a monthly basis, or such other basis as the General Partner may determine in
its sole and absolute discretion, for all expenses it incurs relating to the
ownership of interests in and operation of, or for the benefit of, the
Partnership.  The Limited Partners acknowledge that the General Partner's sole
business is the ownership of interests in and operation of the Partnership and
that all of the General Partner's expenses are incurred for the benefit of the
Partnership; provided that, the General Partner shall not be reimbursed for
             -------- ----
expenses it incurs relating to the organization of the Partnership and the
General Partner, the initial public offering of REIT Shares or subsequent public
offerings of REIT Shares by the General Partner.  Such reimbursements shall be
in addition to any reimbursement of the General Partner as a result of
indemnification pursuant to Section 7.7 hereof.

          C.   It is the intent of the Partners that any amounts paid by the
Partnership to the General Partner pursuant to this Section 7.4 shall be treated
as a "guaranteed payment" within the meaning of Section 707(c) of the Code.

          Section 7.5  Outside Activities of the General Partner
                       -----------------------------------------

          A.   The General Partner shall not, directly or indirectly, enter into
or conduct any business, other than in connection with the ownership,
acquisition and disposition of Partnership Interests as a General Partner and
the management of the business of the Partnership, its operation as a public
reporting company with a class (or classes) of securities registered under the
Exchange Act, its operation as a REIT and such activities as are incidental to
the same.  Without the Consent of the Limited Partners, the General Partner
shall not, directly or indirectly, participate in or otherwise acquire any
interest in any real or personal property, except its General Partner Interest,
and other than such bank accounts, similar instruments or other short-term
investments as it deems necessary to carry out its responsibilities contemplated
under this Agreement and the Charter; provided, however, that the General
                                      --------  -------
Partner may organize and own the stock of CT Finance, Inc. (formerly, Alexander
Haagen Properties Finance, Inc.), a Delaware corporation (and any successor
entity thereto), and do any and all such things as may be necessary and
appropriate in connection with the formation of CT Finance Partnership, L.P.
(formerly Alexander Haagen Properties Finance Partnership, L.P.) including the
contribution of an approximately 7.275% undivided interest in the La Verne Towne
Center and a demand note for the amount of $10,185,000 to the capital of CT
Finance, Inc..  Any Limited Partner Interests acquired by the General Partner,
whether pursuant to exercise by a Limited Partner of its rights to Exchange or
otherwise, shall be automatically converted into a General Partner Interest
comprised of an identical number of Partnership Units.

                                       30
<PAGE>

          B.   In the event the General Partner exercises its rights under the
Charter to purchase REIT Shares, then the General Partner shall cause the
Partnership to purchase from it a number of Partnership Units as determined
based on the REIT Shares Amount equal to the number of REIT Shares so purchased
on the same terms that the General Partner purchased such REIT Shares.

          Section 7.6  Contracts with Affiliates
                       -------------------------

          A.   The Partnership may lend or contribute to Persons in which it has
an equity investment, and such Persons may borrow funds from the Partnership, on
terms and conditions established in the sole and absolute discretion of the
General Partner.  The foregoing authority shall not create any right or benefit
in favor of any Person.

          B.   Except as provided in Section 7.5.A, the Partnership may transfer
assets to joint ventures, other partnerships, corporations or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law.

          C.   The General Partner, in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf of
the Partnership employee benefit plans funded by the Partnership for the benefit
of employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them in respect of services performed,
directly or indirectly, for the benefit of the Partnership or any of the
Partnership's Subsidiaries.  The General Partner also is expressly authorized to
cause the Partnership to issue to it Partnership Units corresponding to REIT
Shares issued or sold by the General Partner pursuant to the Stock Option Plan
or any similar or successor plan and to repurchase such Partnership Units from
the General Partner to the extent necessary to permit the General Partner to
repurchase such REIT Shares in accordance with such plan.

          D.   The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, such conflict avoidance agreements with
various Affiliates of the Partnership and the General Partner, on such terms as
the General Partner, in its sole and absolute discretion, believes are
advisable.

          Section 7.7  Indemnification
                       ---------------

          A.   The Partnership shall indemnify each Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceeding and either was committed in bad faith or
was the result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful.  The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 7.7.A.  The termination of any proceeding by conviction or

                                       31
<PAGE>

upon a plea of nolo contendere or its equivalent, or any entry of an order of
probation prior to judgment, creates a rebuttable presumption that the
Indemnitee acted in a manner contrary to that specified in this Section 7.7.A.
Any indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership. Notwithstanding the foregoing provisions, the General
Partner shall be entitled to reimbursement by the Partnership for any amounts
paid by it in satisfaction of indemnification obligations owed by the General
Partner to present or former directors of the General Partner or its
predecessors, as provided for in or pursuant to the Charter and Bylaws of the
General Partner.

          B.   Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding may be paid or reimbursed by the Partnership in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.

          C.   The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.

          D.   The Partnership may purchase and maintain insurance, on behalf of
the Indemnities and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.

          E.   For purposes of this Section 7.7, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participates or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of Section 7.7; and actions taken or
omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Partnership.

          F.   In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

          G.   An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

          H.   The provisions of this Section 7.7 are for the benefit of the
Indemnities, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

                                       32
<PAGE>

          I.   It is the intent of the Partners that any amounts paid by the
Partnership to the General Partner pursuant to this Section 7.7 shall be treated
as a "guaranteed payment" within the meaning of Section 707(c) of the Code.

          Section 7.8  Liability of the General Partner
                       --------------------------------

          A.   Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable or accountable in damages or
otherwise to the Partnership, any Partners or any Assignees for losses
sustained, liabilities incurred or benefits not derived as a result of errors in
judgment or mistakes of fact or law or of any act or omission if the General
Partner acted in good faith.

          B.   The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Limited Partners and
the General Partner's stockholders collectively, that the General Partner is
under no obligation to give priority to the separate interests of the Limited
Partners or the General Partner's stockholders (including, without limitation,
the tax consequences to either) in deciding whether to cause the Partnership to
take (or decline to take) any actions.

          C.   Subject to its obligations and duties as General Partner set
forth in Section 7.1.A hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents.  The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.

          D.   Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

          E.   Notwithstanding anything herein to the contrary, except for
fraud, willful misconduct and gross negligence, or pursuant to any express
indemnities given to the Partnership by any Partner pursuant to any other
written instrument, no Partner shall have any personal liability whatsoever, to
the Partnership or to the other Partners, for the debts or liabilities of the
Partnership or its obligations hereunder, and the full recourse of the other
Partners shall be limited to the interest of such Partners in the Partnership.
To the fullest extent permitted by law, no officer, director or stockholder 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 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, or pursuant to any such express indemnity, no property or
assets of any Partners, 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 Partner(s) and
arising out of, or in connection with, this Agreement.  This Agreement is
executed by the officers of the General Partner solely as officers of the same
and not in their own individual capacities.

                                       33
<PAGE>

          Section 7.9  Other Matters Concerning the General Partner
                       --------------------------------------------

          A.   The General Partner may rely and shall be protected in acting or
refraining from acting upon 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 signed or presented by
the proper party or parties.

          B.   The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters which such General Partner
reasonably believes to be within such Person's professional or expert competence
shall be conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.

          C.   The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact.  Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.

          D.   Notwithstanding any other provisions of this Agreement or 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 good faith belief 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 Section 857 or Section 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.

          Section 7.10  Title to Partnership Assets
                        ---------------------------

          Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partners, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof.  Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner.  The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement; provided,
                                                                     --------
however, that the General Partner shall use its best efforts to cause beneficial
-------
and record title to such assets to be vested in the Partnership as soon as
reasonably practicable.  All Partnership assets shall be recorded as the
property of the Partnership in its books and records, irrespective of the name
in which legal title to such Partnership assets is held.

          Section 7.11  Reliance by Third Parties
                        -------------------------

          Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority to encumber, sell or otherwise use in any
manner any and all assets of the Partnership and to enter into any contracts on
behalf of the Partnership, and such Person shall be entitled to

                                       34
<PAGE>

deal with the General Partner as if it were the Partnership's sole party in
interest, both legally and beneficially. Each Limited Partner hereby waives any
and all defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and
every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and (iii)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.

                                   ARTICLE 8.
                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

          Section 8.1  Limitation of Liability
                       -----------------------

          The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement or under the Act.

          Section 8.2  Management of Business
                       ----------------------

          No Limited Partner or Assignee (other than the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the General Partner, the Partnership or any of their Affiliates, in their
capacity as such) shall take part in the operations, management or control
(within the meaning of the Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership.  The transaction of any such business by the
General Partner, any of  its Affiliates or any officer, director, employee,
partner, agent, representative, or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.

          Section 8.3  Outside Activities of Limited Partners
                       --------------------------------------

          Subject to any agreements entered into by a Limited Partner or its
Affiliates with the General Partner, the Partnership or a Subsidiary, any
Limited Partner and any officer, director, employee, agent, trustee, Affiliate
or stockholder of any Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership.  Neither the Partnership nor any Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited
Partner or Assignee.  Subject to such agreements, none of the Limited Partners
nor any other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any business ventures of any
other Person, other than the General Partner, and such Person shall have no
obligation pursuant to this Agreement to offer any interest in any such business
ventures to the Partnership, any

                                       35
<PAGE>

Limited Partner or any such other Person, even if such opportunity is of a
character which, if presented to the Partnership, any Limited Partner or such
other Person, could be taken by such Person.

          Section 8.4  Return of Capital
                       -----------------

          Except pursuant to the rights of Exchange set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of his Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein.  No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions or, except to the
extent otherwise expressly provided in this Agreement, as to profits, losses,
distributions or credits.

          Section 8.5  Rights of Limited Partners Relating to the Partnership
                       ------------------------------------------------------

          A.   In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.C hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense:

          (1)  to obtain a copy of the most recent annual and quarterly reports
               filed with the Securities and Exchange Commission by the General
               Partner pursuant to the Exchange Act and each report sent to the
               stockholders of the General Partner;

          (2)  to obtain a copy of the Partnership's federal, state and local
               income tax returns for each Partnership Year;

          (3)  to obtain a current list of the name and last known business,
               residence or mailing address of each Partner;

          (4)  to obtain a copy of this Agreement and the Certificate and all
               amendments thereto, together with executed copies of all powers
               of attorney pursuant to which this Agreement, the Certificate and
               all amendments thereto have been executed; and

          (5)  to obtain true and full information regarding the amount of cash
               and a description and statement of any other property or services
               contributed by each Partner and which each Partner has agreed to
               contribute in the future, and the date on which each became a
               Partner.

          B.   The Partnership shall notify each Limited Partner in writing of
any adjustment made in the calculation of the REIT Shares Amount within 10
Business Days of the date such change becomes effective.

          C.   Notwithstanding any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners, for such period
of time as the General Partner determines in its sole and absolute discretion to
be reasonable, any information that (i) the General Partner believes to be in
the nature of trade secrets or other information the

                                       36
<PAGE>

disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or the General Partner or (ii) the Partnership
or the General Partner is required by law or by agreements with unaffiliated
third parties to keep confidential.

          Section 8.6  Exchange Rights
                       ---------------

          A.   The Limited Partners shall have the following exchange rights:

          (1)  On or after the date one year after the Effective Date, each
               Limited Partner who was a Limited Partner on December 27, 1993
               and each Substituted Limited Partner who received his Partnership
               Interest from a Limited Partner who was a Limited Partner on
               December 27, 1993 shall have the right (subject to the terms and
               conditions set forth herein) to require the General Partner to
               acquire all or a portion of the Partnership Units held by such
               Limited Partner (such Partnership Units being hereafter "Tendered
               Units") in exchange for REIT Shares (an "Exchange").  Any
               Exchange shall be exercised pursuant to a Notice of Exchange
               delivered to the General Partner by the Limited Partner who is
               exercising such right (the "Tendering Partner").

          (2)  Each Additional Limited Partner shall have the right (subject to
               the terms and conditions as set forth herein) to require the
               General Partner to acquire all or a portion of the Partnership
               Units held by such Limited Partner (also referred to as "Tendered
               Units") in an Exchange.  Any such Exchange shall be exercised
               pursuant to a Notice of Exchange delivered to the General Partner
               by such Tendering Partner.  Any such Exchange may not occur until
               the first anniversary of the date on which such Limited Partner
               is admitted to the Partnership, provided that the General Partner
               in its sole and absolute discretion may agree to permit an
               Exchange at an earlier time or times, either by agreement with
               the Additional Limited Partner entered into at the time of such
               admission or by agreement at any time thereafter, and such
               agreement need not be reflected by an amendment hereto.

          B.   A Tendering Partner effecting an Exchange shall have the right to
receive, on the Specified Exchange Date, the REIT Shares Amount with respect to
the Tendered Units, subject to the limitations on ownership and transfer of REIT
Shares and provisions with respect to Excess Shares set forth in Article VII of
the Charter.  The REIT Shares Amount shall be delivered as duly authorized,
validly issued, fully paid and nonassessable REIT Shares and, if applicable,
rights, free of any pledge, lien, encumbrance or restriction, other than those
provided in the Charter, the Bylaws of the General Partner, the Securities Act,
relevant state securities or blue sky laws and any applicable registration
rights agreement with respect to such REIT Shares entered into by the Tendering
Partner.  Notwithstanding any delay in such delivery (but subject to Section
8.6.C), the Tendering Partner shall be deemed the owner of such REIT Shares and
rights for all purposes, including without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Exchange
Date.

          C.   Notwithstanding the provisions of Section 8.6.A and 8.6.B or any
other provision of this Agreement, a Limited Partner (i) shall not be entitled
to effect an Exchange to the extent the ownership or right to acquire REIT
Shares pursuant to such Exchange by such

                                       37
<PAGE>

Partner on the Specified Exchange Date would cause such Partner or any other
Person to violate the restrictions on ownership and transfer of REIT Shares set
forth in Article VII of the Charter and (ii) shall have no rights under this
Agreement to acquire REIT Shares which would otherwise be prohibited under the
Charter. To the extent any attempted Exchange would be in violation of this
Section 8.6.C., it shall be null and void ab initio and such Limited Partner
shall not acquire any rights or economic interest in the REIT Shares otherwise
issuable upon such Exchange.

          D.   Notwithstanding anything herein to the contrary (but subject to
Section 8.6.C), with respect to any Exchange pursuant to this Section 8.6:

          (1)  All Partnership Units acquired by the General Partner pursuant
               thereto shall automatically, and without further action required,
               be converted into and deemed to be General Partner Interests
               comprised of the same number of Partnership Units.

          (2)  Each Limited Partner may not effect an Exchange for less than 500
               Partnership Units or, if the Limited Partner holds less than 500
               Partnership Units, all of the Partnership Units held by such
               Limited Partner.

          (3)  Each Limited Partner may not effect an Exchange during the period
               after the Partnership Record Date with respect to a distribution
               and before the record date established by the General Partner for
               a distribution to its stockholders of some or all of its portion
               of such distribution.

          (4)  Limited Partners who are Immediate Family members of Alexander
               Haagen, Sr. or Seymour Kreshek may effect an Exchange only once
               in each three-month period.

          (5)  The consummation of any Exchange shall be subject to the
               expiration or termination of the applicable waiting period, if
               any, under the Hart-Scott-Rodino Antitrust Improvements Act of
               1976, as amended.

          (6)  [Intentionally Deleted].

          (7)  Each Tendering Partner shall continue to own all Partnership
               Units subject to any Exchange, and be treated as a Limited
               Partner with respect to such Partnership Units for all purposes
               of this Agreement, until such Partnership Units are transferred
               to the General Partner and paid for on the Specified Exchange
               Date.  Until a Specified Exchange Date, the Tendering Partner
               shall have no rights as a stockholder of the General Partner.

          E.   Notwithstanding anything herein to the contrary (but subject to
Section 8.6.C), Limited Partners shall have the right solely upon any sale,
exchange, disposition or other transfer of any Property by the Operating
Partnership, to effect an Exchange for up to the amount of registered REIT
Shares which, when sold by the holders thereof, would equal or exceed the total
liability of each Tendering Partner for federal, state and local income and
franchise taxes and other taxes resulting from (i) such sale, exchange,
disposition or other transfer of such Property and (ii) the exchange of the
Tendered Units for REIT Shares.

                                       38
<PAGE>

                                   ARTICLE 9.
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

          Section 9.1  Records and Accounting
                       ----------------------

          The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including without limitation, all books and records
necessary to provide to the Limited Partners any information, lists and copies
of documents required to be provided pursuant to Section 9.3 or Section 8.5.A.
Any records maintained by or on behalf of the Partnership in the regular course
of its business may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, micrographics or any other information storage device,
provided that the records so maintained are convertible into clearly legible
written form within a reasonable period of time.  The books of the Partnership
shall be maintained, for financial and tax reporting purposes, on an accrual
basis in accordance with generally accepted accounting principles.

          Section 9.2  Fiscal Year
                       -----------

          The fiscal year of the Partnership shall be the calendar year.

          Section 9.3  Reports
                       -------

          A.   As soon as practicable, but in no event later than 105 days after
the close of each Partnership Year, or such later date as they are filed with
the Securities and Exchange Commission, the General Partner shall cause to be
mailed to each Limited Partner as of the close of the Partnership Year, an
annual report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, for such Partnership Year, presented in accordance
with generally accepted accounting principles, such statements to be audited by
a nationally recognized firm of independent public accountants selected by the
General Partner.

          B.   As soon as practicable, but in no event later than 105 days after
the close of each calendar quarter (except the last calendar quarter of each
year) or such later date as they are filed with the Securities and Exchange
Commission, the General Partner shall cause to be mailed to each Limited Partner
as of the last day of the calendar quarter, a report containing unaudited
financial statements of the Partnership, or of the General Partner, if such
statements are prepared solely on a consolidated basis with the applicable law
or regulation, or as the General Partner determines to be appropriate.

                                  ARTICLE 10.
                                  TAX MATTERS

          Section 10.1 Preparation of Tax Returns
                       --------------------------

          The General Partner shall arrange for the preparation and timely
filing of all returns of Partnership income, gains, deductions, losses and other
items required of the Partnership for federal and state income tax purposes and
shall use all reasonable efforts to furnish, within 90 days of the close of each
taxable year, the tax information reasonably required by Limited Partners for
federal and state income tax reporting purposes.  The Limited Partners shall
promptly provide the General Partner with such information relating to the
Contributed

                                       39
<PAGE>

Properties, including tax basis and other relevant information, as may be
reasonably requested by the General Partner from time to time.

          Section 10.2 Tax Elections
                       -------------

          Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code, including the election under Section 754 of the Code.  The
General Partner shall have the right to seek to revoke any such election
(including without limitation, any election under Section 754 of the Code) upon
the General Partner's determination in its sole and absolute discretion that
such revocation is the best interests of the Partners.

          Section 10.3 Tax Matters Partner
                       -------------------

          A.   The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes.  Pursuant to Section 6223(c)(3) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address and profit interest of each
of the Limited Partners; provided, however, that such information is provided to
                         --------  -------
the Partnership by the Limited Partners.

          B.   The tax matters partner is authorized, but not required:

          (1)  to enter into any settlement with the IRS with respect to any
               administrative or judicial proceedings for the adjustment of
               Partnership items required to be taken into account by a Partner
               for income tax purposes (such administrative proceedings being
               referred to as a "tax audit" and such judicial proceedings being
               referred to as "judicial review"), and in the settlement
               agreement the tax matters partner may expressly state that such
               agreement shall bind all Partners, except that such settlement
               agreement shall not bind any Partner (i) who (within the time
               prescribed pursuant to the Code and Regulations) files a
               statement with the IRS providing that the tax matters partner
               shall not have the authority to enter into a settlement agreement
               on behalf of such Partner or (ii) who is a "notice partner" (as
               defined in Section 6231 of the Code) or a member of a "group" (as
               defined in Section 6223(b)(2) of the Code);

          (2)  in the event that a notice of a final administrative adjustment
               at the Partnership level of any item required to be taken into
               account by a Partner for tax purposes (a "final adjustment") is
               mailed to the tax matters partner, to seek judicial review of
               such final adjustment, including the filing of a petition for
               readjustment with the Tax Court or the United States Claims
               Court, or the filing of a complaint for refund with the District
               Court of the United States for the district in which the
               Partnership's principal place of business is located;

          (3)  to intervene in any action brought by any other Partner for
               judicial review of a final adjustment;

                                       40
<PAGE>

          (4)  to file a request for an administrative adjustment with the IRS
               at any time and, if any part of such request is not allowed by
               the IRS, to file an appropriate pleading (petition or complaint)
               for judicial review with respect to such request;

          (5)  to enter into an agreement with the IRS to extend the period for
               assessing any tax which is attributable to any item required to
               be taken into account by a Partner for tax purposes, or an item
               affected by such item; and

          (6)  to take any other action on behalf of the Partners of the
               Partnership in connection with any tax audit or judicial review
               proceeding to the extent permitted by applicable law or
               regulations.

          The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.

          C.   The tax matters partner shall receive no compensation for its
services.  All third party costs and expenses incurred by the tax matters
partner in performing his duties as such (including legal and accounting fees)
shall be borne by the Partnership.  Nothing herein shall be construed to
restrict the Partnership from engaging an accounting firm to assist the tax
matters partner in discharging his duties hereunder, so long as the compensation
paid by the Partnership for such services is reasonable.

          Section 10.4 Organizational Expenses
                       -----------------------

          The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a 60-month period as provided in
Section 709 of the Code.

          Section 10.5 Withholding
                       -----------

          Each Limited Partner hereby authorizes the Partnership to withhold
from or pay on behalf of or with respect to such Limited Partner any amount of
federal, state, local or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code.  Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within 15 days after notice from the General Partner that
such payment must be made unless (i) the Partnership withholds such payment from
a distribution which would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner.  Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner.  Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 10.5.  In the event that a

                                       41
<PAGE>

Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 10.5 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Limited Partner and shall succeed to all rights
and remedies of the Partnership as against such defaulting Limited Partner
(including, without limitation, the right to receive distributions). Any amounts
payable by a Limited Partner hereunder shall bear interest at the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in the Wall Street Journal, plus 1.0 percentage
                                   -------------------
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., 15 days after demand) until such amount is paid in full. Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.

                                  ARTICLE 11.
                           TRANSFERS AND WITHDRAWALS

          Section 11.1 Transfer
                       --------

          A.   The term "transfer," when used in this Article 11 with respect to
a Partnership Unit, shall be deemed to refer to a transaction by which the
General Partner purports to assign its General Partner Interest to another
Person or by which a Limited Partner purports to assign its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift (outright or
in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise.  The term "transfer" when used in this Article
11 does not include any redemption of Partnership Units by the Partnership or
acquisition of Partnership Units from a Limited Partner by the General Partner
pursuant to Section 8.6.  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.

          B.   No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article 11.  Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void ab initio.

          Section 11.2 Transfer of General Partner's Partnership Interest
                       --------------------------------------------------

          A.   The General Partner shall not withdraw from the Partnership and
shall not sell, assign, pledge, encumber or otherwise dispose of all or any
portion of its interest in the Partnership (whether by sale, disposition,
statutory merger or consolidation, liquidation or otherwise) without the Consent
of the Limited Partners.  Upon any transfer of such a Partnership Interest
pursuant to the Consent of the Limited Partners and otherwise in accordance with
the provisions of this Section 11.2, the transferee shall become a Substitute
General Partner for all purposes herein, and shall be vested with the powers and
rights of the transferor General Partner, and shall be liable for all
obligations and responsible for all duties of the General Partner, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired.  It is a condition to any such transfer that the transferee
assumes, by express agreement in a form suitable for filing or

                                       42
<PAGE>

recordation, as necessary, all of the obligations of the transferor General
Partner under this Agreement with respect to such transferred Partnership
interest, and no such transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor General
Partner are assumed by a successor corporation by operation of law) shall
relieve the transferor General Partner of its obligations under this Agreement
without the Consent of the Limited Partners. In the event the General Partner
withdraws from the Partnership, in violation of this Agreement or otherwise, or
otherwise dissolves or terminates, or upon the bankruptcy of the General
Partner, a Majority In Interest of the Limited Partners may elect to continue
the Partnership business by selecting a Substitute General Partner in accordance
with the Act.

          B.   In addition to, and not in lieu of, the restrictions set forth
elsewhere in this Agreement, including without limitation in Section 11.2.A and
Section 7.3E hereof, the General Partner shall not engage in any merger,
consolidation or other combination with or into another person, sale of all or
substantially all of its assets or any reclassification, recapitalization or
change of its outstanding equity interests (each, a "Termination Transaction"),
unless (i) the Termination Transaction has been approved by a Consent of the
Partners, and (ii) except as otherwise provided in Section 11.2.C, in connection
with which all Limited Partners either will receive, or will have the right to
elect to receive, for each Partnership Unit an amount of cash, securities, or
other property equal to the product of the REIT Shares Amount and the greatest
amount of cash, securities or other property paid to a holder of one REIT Share
in consideration of one REIT Share pursuant to the terms of the Termination
Transaction; provided that, if, in connection with the Termination Transaction,
             --------
a purchase, tender or exchange offer shall have been made to and accepted by the
holders of the outstanding REIT Shares, each Limited Partner shall receive, or
shall have the right to elect to receive, the greatest amount of cash,
securities, or other property which such holder would have received had it
exercised its right to Redemption (as set forth in Section 8.6) and received
REIT Shares in exchange for its Partnership Units immediately prior to the
expiration of such purchase, tender or exchange offer and had thereupon accepted
such purchase, tender or exchange offer and then such Termination Transaction
shall have been consummated.

          C.   In addition to, and not in lieu of, the restrictions set forth
elsewhere in this Agreement, including without limitation in Section 11.2.A and
Section 7.3.E hereof, the General Partner may merge, or otherwise combine its
assets, with another entity without satisfying the requirements of Section
11.2.B(ii) hereof if: (i) immediately after such merger or other combination,
substantially all of the assets directly or indirectly owned by the surviving
entity, other than Partnership Units hold, by such General Partner, are owned
directly or indirectly by the Partnership or another limited partnership or
limited liability company which is the survivor of a merger, consolidation or
combination of assets with the Partnership (in each case, the "Surviving
Partnership"); (ii) the Limited Partners own a percentage interest of the
Surviving Partnership based on the relative fair market value of the net assets
of the Partnerships (as determined pursuant to Section 11.2.E) and the other net
assets of the Surviving Partnership (as determined pursuant to Section 11.2.E)
immediately prior to the consummation of such transaction; (iii) the rights,
preferences and privileges of the Limited Partners in the Surviving Partnership
are at least as favorable as those in effect immediately prior to the
consummation of such transaction and as those applicable to any other limited
partners or non-managing members of the Surviving Partnership; and (iv) such
rights of the Limited Partners include the right to exchange their interests in
the Surviving Partnership for at least one of: (a) the consideration available
to such Limited Partners pursuant to Section 11.2.B or (b) if the ultimate
controlling

                                       43
<PAGE>

person of the Surviving Partnership has publicly traded common equity
securities, with an exchange ratio based on the relative fair market value of
such securities (as determined pursuant to Section 11.2.E) and the REIT Shares.

          D.   In connection with any transaction described in Section 11.2.B or
Section 11.2.C hereof, the General Partner shall use its commercially reasonable
efforts to structure such Termination Transaction to avoid causing the Limited
Partners to recognize gain for federal income tax purposes by virtue of the
occurrence of or their participation in such Termination Transaction.

          E.   In connection with any transaction described in Section 11.2.B or
11.2.C, the relative fair market values shall be reasonably determined by the
General Partner as of the time of such transaction and, to the extent
applicable, shall be no less favorable to the Limited Partners than the relative
values reflected in the terms of such transaction.

          Section 11.3 Limited Partners' Rights to Transfer
                       ------------------------------------

          A.   Any Limited Partner may, at any time, without the consent of the
General Partner, (i) transfer all or any portion of its Partnership Interest to
the General Partner, subject to the provisions of Section 11.6, (ii) transfer
all or any portion of its Partnership Interest to an Affiliate, another original
Limited Partner or to an Immediate Family member, subject to the provisions of
Section 11.6, (iii) transfer all or any portion of its Partnership Interest
pursuant to its rights to effect an Exchange as provided in Section 8.6 hereof,
(iv) pledge all or any portion of its Partnership Interest to a lending
institution, which is not an Affiliate of such Limited Partner, as collateral or
security for a bona fide loan or other extension of credit, and transfer such
pledged Partnership Interest to such lending institution in connection with the
exercise of remedies under such loan or extension or credit, and (v) if such
Limited Partner is one of the initial Limited Partners of the Partnership and is
a partnership, such Limited Partner may distribute all of its Partnership
Interest to the partners of such partnership pursuant to a dissolution or
liquidation of the Limited Partner.

          It is a condition to any transfer otherwise permitted hereunder that
the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such transferred Partnership Interest and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under
this Agreement without the approval of the General Partner, in its sole and
absolute discretion.  Notwithstanding the foregoing, any transferee of any
transferred Partnership Interest shall be subject to any and all ownership
limitations contained in the Charter which may limit or restrict such
transferee's ability to exercise its Exchange rights.  Any transferee, whether
or not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder.  Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the rights of an
Assignee as provided in Section 11.5.

          B.   If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited

                                       44
<PAGE>

Partners, for the purpose of settling or managing the estate, and such power as
the Incapacitated Limited Partner possessed to transfer all or any part of his
or its interest in the Partnership. The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.

          C.   The General Partner may prohibit any transfer otherwise permitted
under this Section 11.3 by a Limited Partner of his Partnership Units if, in the
opinion of legal counsel to the Partnership, such transfer would require the
filing of a registration statement under the Securities Act by the Partnership
or would otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Units.

          D.   No transfer by a Limited Partner of his Partnership Units
(including any Exchange) may be made to any person if (i) in the opinion of
legal counsel for the Partnership, it would result in the Partnership being
treated as an association taxable as a corporation, or (ii) such transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section 7704 of
the Code.

          Section 11.4 Substituted Limited Partners
                       ----------------------------

          A.   No Limited Partner shall have the right to substitute a
transferee (including transferees pursuant to transfers permitted by Section
11.3, other than pursuant to Section 11.3 (v) as set forth below) as a Limited
Partner in his place.  The General Partner shall, however, have the right to
consent to the admission of a transferee of the interest of a Limited Partner
pursuant to this Section 11.4 as a Substituted Limited Partner, which consent
may be given or withheld by the General Partner in its sole and absolute
discretion.  The General Partner's failure or refusal to permit a transferee of
any such interests to become a Substituted Limited Partner shall not give rise
to any cause of action against the Partnership or any Partner.  Notwithstanding
the foregoing, transferees pursuant to Section 11.3(v) who were partners in the
Limited Partner at the time the Limited Partner became a Partner in this
Partnership may become Substitute Limited Partners and the General Partner
hereby consents in advance to the admission of such transferees as Substitute
Limited Partners; provided, however, in no event shall this exception apply to
Partnership Interests representing more than 40 percent of the Percentage
Interests of the Partnership.

          B.   A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement.

          C.   Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.

          Section 11.5 Assignees
                       ---------

          If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee shall
be considered an Assignee for purposes of this Agreement.  An Assignee shall be
entitled to all the rights of an assignee of a limited partnership interest
under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain and loss attributable to the
Partnership Units assigned to

                                       45
<PAGE>

such transferee, the rights to transfer the Partnership Units provided in this
Article 11, and the rights to effect an Exchange provided in Section 8.6, but
shall not be deemed to be a holder of Partnership Units for any other purpose
under this Agreement, and shall not be entitled to effect a Consent with respect
to such Partnership Units on any matter presented to the Limited Partners for
approval (such Consent remaining with the transferor Limited Partner). In the
event any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all the provisions of
this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.

          Section 11.6 General Provisions
                       ------------------

          A.   No Limited Partner may withdraw from the Partnership other than
as a result of a permitted transfer of all of such Limited Partner's Partnership
Units in accordance with this Article 11, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to an Exchange of all of its
Partnership Units under Section 8.6.

          B.   Any Limited Partner who shall transfer all of his Partnership
Units in a transfer permitted pursuant to this Article 11 where such transferee
was admitted as a Substituted Limited Partner or pursuant to the exercise of its
rights of Exchange of all of its Partnership Units under Section 8.6 shall cease
to be a Limited Partner.

          C.   Transfers pursuant to this Article 11 may only be made as of the
first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise consents, which shall not be unreasonably withheld.

          D.   [Intentionally Deleted].

          E.   In addition to any other restrictions on transfer herein
contained, in no event may any transfer or assignment of a Partnership Interest
by any Partner (including any Exchange, any other acquisition of Partnership
Units by the General Partner or any acquisition of Partnership Units by the
Partnership) be made (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of applicable
law; (iii) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest, (iv) in the event such transfer would
cause the General Partner to cease to comply with the REIT Requirements; (v) if
such transfer would cause a termination of the Partnership for federal or state
income tax purposes (except as a result of the Exchange of all Partnership Units
held by all Limited Partners); (vi) if such transfer would, in the opinion of
counsel to the Partnership, cause the Partnership to cease to be classified as a
partnership for Federal income tax purposes (except as a result of the Exchange
of all Partnership Units held by all Limited Partners); (vii) if such transfer
would cause the Partnership to become, with respect to any employee benefit plan
subject to Title I of ERISA, a "party-in-interest" (as defined in Section 3(14)
of ERISA) or a "disqualified person" (as defined in Section 4975(c) of the
Code); (viii) if such transfer would, in the opinion of counsel to the
Partnership, cause any portion of the assets of the Partnership to constitute
assets of any employee benefit plan pursuant to Department of Labor Regulations
Section 2510.2-101; (ix) if such transfer requires the registration of such
Partnership Interest pursuant to any applicable federal or state securities
laws; (x) if such transfer causes the Partnership to become a "Publicly Traded
Partnership," as such term is defined in Sections 469(k)(2) or 7704(b) of the
Code or if such transfer would cause the Partnership to have more

                                       46
<PAGE>

than 500 partners (including as partners those persons indirectly owning an
interest in the Partnership through a partnership, subchapter S corporation or
grantor trust) or to become a reporting Company under the Exchange Act; or (xi)
if such transfer subjects the Partnership to be regulated under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended.

                                  ARTICLE 12.
                             ADMISSION OF PARTNERS

          Section 12.1 Admission of Successor General Partner
                       --------------------------------------

          A successor to all of the General Partner's General Partner Interest
pursuant to Section 11.2 hereof who is proposed to be admitted as a successor
General Partner with the consent of the Limited Partners shall be admitted to
the Partnership as the General Partner effective upon such transfer.  Any such
transferee shall carry on the business of the Partnership without dissolution.
In each case, the admission shall be subject to the successor General Partner
executing and delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or instruments as may
be required to effect the admission.

          Section 12.2 Admission of Additional Limited Partners
                       ----------------------------------------

          A.   After the admission to the Partnership of the initial Limited
Partners on the date hereof, a Person (other than an existing Partner) who makes
a Capital Contribution to the Partnership in accordance with this Agreement
shall be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in
Section 2.4 hereof and (ii) such other documents or instruments as may be
required in the discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.

          B.   Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion.  The admission of any Person and an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.

          Section 12.3 Amendment of Agreement and Certificate of Limited
                       -------------------------------------------------
Partnership
-----------

          For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.

                                       47
<PAGE>

          Section 12.4 Limit on Number of Partners
                       ---------------------------

          No Person shall be admitted to the Partnership as an Additional
Partner if the effect of such admission would be to cause the Partnership to
have more than 500 Partners, including as Partners for this purpose those
Persons indirectly owning an interest in the Partnership through another
partnership, subchapter S corporation or a grantor trust, or otherwise cause the
Partnership to become a reporting company under the Exchange Act.

                                  ARTICLE 13.
                          DISSOLUTION AND LIQUIDATION

          Section 13.1 Dissolution
                       -----------

          The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement.  Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership.  The Partnership shall dissolve, and
its affairs shall be wound up, upon the first to occur of any of the following
("Liquidating Events"):

          A.   the expiration of its term as provided in Section 2.5 hereof;

          B.   an event of withdrawal of the General Partner, as defined in the
Act, unless, within 90 days after the withdrawal, a Majority in Interest of the
Limited Partners and at least a Majority in Interest of all the remaining
partners agree in writing, in their sole and absolute discretion, to continue
the business of the Partnership and to the appointment, effective as of the date
of withdrawal, of a substitute General Partner;

          C.   an election to dissolve the Partnership made by the General
Partner, subject to the Consent of the Limited Partners;

          D.   entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;

          E.   a Terminating Capital Transaction;

          F.   a bankruptcy of the General Partner within the meaning of the
Act, unless all of the remaining Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such bankruptcy, of a substitute General Partner; or

          G.   the Exchange by all Partners (other than the General Partner) of
all Partnership Units.

          Section 13.2 Winding Up
                       ----------

          A.   Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's

                                       48
<PAGE>

business and affairs. The General Partner (or, in the event there is no
remaining General Partner, any Person elected by a Majority in Interest of the
Limited Partners (the "Liquidator")) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership property shall be
liquidated as promptly as is consistent with obtaining the fair value thereof,
and the proceeds therefrom (which may, to the extent determined by the General
Partner, include shares of stock in the General Partner) shall be applied and
distributed in the following order:

          (1)  First, to the payment and discharge of or provision for all of
               the Partnership's debts and liabilities to creditors other than
               the Partners;

          (2)  Second, to the payment and discharge of or provision for all of
               the Partnership's debts and liabilities to the General Partner;

          (3)  Third, to the payment and discharge of or provision for all of
               the Partnership's debts and liabilities to the Partners; and

          (4)  The balance, if any, to the General Partner and Limited Partners
               in accordance with their positive Capital Account balances,
               determined after taking into account all Capital Account
               adjustments for the Partnership taxable year during which the
               liquidation occurs (other than those made as a result of the
               liquidating distribution set forth in this Section 13.2.A(4)).

The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13 other than reimbursement of its
expenses as provided in Section 7.4.

          B.   Notwithstanding the provisions of Section 13.2.A hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time.  The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.

          Section 13.3 Compliance with Timing Requirements of Regulations
                       --------------------------------------------------

          In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the General Partner and Limited Partners who have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2).
If any Partner has a deficit balance in his Capital Account (after giving effect
to all contributions, distributions and allocations for the taxable years,
including the year during which such liquidation occurs), such Partner shall
have no

                                       49
<PAGE>

obligation to make any contribution to the capital of the Partnership with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Partnership or to any other Person for any purpose whatsoever. In the
discretion of the General Partner, a pro rata portion of the distributions that
would otherwise be made to the General Partner and Limited Partners pursuant to
this Article 13 may be:

          (A) distributed to a trust established for the benefit of the General
Partner and Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership.  The assets of any
such trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the General Partner, in the same
proportions and the amount distributed to such trust by the Partnership would
otherwise have been distributed to the General partner and Limited Partners
pursuant to this Agreement; or

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

          Section 13.4 Deemed Distribution and Recontribution
                       --------------------------------------

          Notwithstanding any other provision of this Article 13, in the event
the Partnership is liquidated within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's property
shall not be liquidated, the Partnership's liabilities shall not be paid or
discharged, and the Partnership's affairs shall not be wound up.  Instead, the
Partnership shall be deemed to have distributed the Property in kind to the
General Partner and Limited Partners, who shall be deemed to have assumed and
taken such property subject to all Partnership liabilities, all in accordance
with their respective Capital Accounts.  Immediately thereafter, the General
Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.

          Section 13.5 Rights of Limited Partners
                       --------------------------

          Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of his Capital
Contribution.  No Limited Partner shall have priority over any other Limited
Partner as to the return of his Capital Contributions, distributions or
allocations.

          Section 13.6 Notice of Dissolution
                       ---------------------

          In the event a Liquidating Event occurs or an event occurs that would,
but for provisions of Section 13.1, result in a dissolution of the Partnership,
the General Partner shall, within 30 days thereafter, provide written notice
thereof to each of the Partners and to all other parties with whom the
Partnership regularly conducts business (as determined in the discretion of the
General Partner) and shall publish notice thereof in a newspaper of general
circulation in each place in which the Partnership regularly conduct business
(as determined in the discretion of the General Partner).

                                       50
<PAGE>

          Section 13.7 Cancellation of Certificate of Limited Partnership
                       --------------------------------------------------

          Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 13.2 hereof, the Partnership shall be terminated
and the Certificate and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of California shall be
cancelled and such other actions as may be necessary to wind up the Partnership
shall be taken.

          Section 13.8 Reasonable Time for Winding-Up
                       ------------------------------

          A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.

                                  ARTICLE 14.
                PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS

          Section 14.1 Procedures For Actions And Consents of Partners
                       -----------------------------------------------

          A.   The actions requiring consent or approval of Limited Partners
pursuant to this Agreement, including Section 7.3, or otherwise pursuant to
applicable law, are subject to the following procedures.

          B.   Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners holding 20 percent or more of the Partnership
Units held by Limited Partners. Following such proposal, the General Partner
shall submit any proposed amendment to the Limited Partners.  The General
Partner shall seek the written consent of the Partners on the proposed amendment
or shall call a meeting to vote thereon and to transact any other business that
it may deem appropriate.  For purposes of obtaining a written consent, the
General Partner may require a response within a reasonable specified time, but
not less than 15 days, and failure to respond in such time period shall
constitute a consent which is consistent with the General Partner's
recommendation with respect to the proposal; provided, that, an action shall
                                             --------  ----
become effective at such time as requisite consents are received even if prior
to such specified time.

          C.   Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners holding 20 percent or more of the Limited Partnership
Interests.  The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
days nor more than 30 days prior to the data of such meeting.  Partners may vote
in person or by proxy at such meeting.  Whenever the vote or Consent of Partners
is permitted or required under this Agreement, such vote or Consent may be given
at a meeting of Partners or may be given in accordance with the procedure
prescribed in Section 14.1.D.

          D.   Any action required or permitted to be taken by the meeting of
the Partners may be taken without a meeting if a written consent setting forth
the action so taken is signed by the percentage as is expressly required by this
Agreement for the action in question.  Such consent may be in one instrument or
in several instruments, and shall have the same force and effect as a vote of
the Percentage Interests of the Partners (expressly required by this

                                       51
<PAGE>

Agreement). Such consent shall be filed with the General Partner. An action so
taken shall be deemed to have been taken at a meeting held on the effective date
so certified.

          E.   Each Limited Partner may authorize any Person or Persons to act
for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting.  Every proxy must be signed by the Limited Partner or his
attorney-in-fact.  No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy.  Every proxy shall
be revocable at the pleasure of the Limited Partner executing it.

          F.   Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate.

                                  ARTICLE 15.
                               GENERAL PROVISIONS

          Section 15.1 Addresses and Notice
                       --------------------

          Any notice, demand, request or report required or permitted to be
given or made to a Partner or Assignee under this Agreement shall be in writing
and shall be deemed given or made when delivered in person or when sent by
certified mail, postage prepaid, return receipt requested, or by other means of
written communication (including by telecopy, facsimile, or commercial courier
service) to the Partner or Assignee at the address set forth in Exhibit A or
such other address as the Partners shall notify the General Partner in writing.

          Section 15.2 Titles and Captions
                       -------------------

          All article or section titles or captions in this Agreement are for
convenience only.  They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.

          Section 15.3 Pronouns and Plurals
                       --------------------

          Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.

          Section 15.4 Further Action
                       --------------

          The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

          Section 15.5 Binding Effect
                       --------------

          This Agreement shall be binding upon an inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

                                       52
<PAGE>

          Section 15.6  Creditors
                        ---------

          None of the provisions of this Agreement shall be for the benefit of,
or shall be enforceable by, any creditor of the Partnership.

          Section 15.7  Waiver
                        ------

          No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon any breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.

          Section 15.8  Counterparts
                        ------------

          This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.  Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.

          Section 15.9  Applicable Law
                        --------------

          This Agreement shall be construed in accordance with and governed by
the laws (other than the law governing the choice of law) of the State of
California, without regard to the principles of conflicts of law.  In the event
of a conflict between any provision of this Agreement and any non-mandatory
provision of the Act, the provisions of this Agreement shall control and take
precedence.

          Section 15.10 Invalidity of Provisions
                        ------------------------

          If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

          Section 15.11 Maximum Amount Paid or Credited to General Partner
                        --------------------------------------------------

          To the extent that the amount paid or credited to the General Partner
or its officers, directors, employees or agents pursuant to Section 7.4 or
Section 7.7 would constitute gross income to the General Partner for purposes of
Sections 856(c)(2) or 856(c)(3) of the Code (a "General Partner Payment") then,
notwithstanding any other provision of this Agreement, the amount of such
General Partner Payments for any fiscal year shall not exceed the lesser of:

                    (i) an amount equal to the excess, if any, of (a) 4.17% of
          the General Partners' total gross income (but not including the amount
          of any General Partner Payments) for the fiscal year which is
          described in subsections (A) through (H) of Section 856(c)(2) of the
          Code over (b) the amount of gross income (within the meaning of
          Section 856(c)(2) of the Code) derived by the General Partner from
          sources other than those described in subsections (A) through (H) of
          Section 856(c)(2) of the Code (but not including the amount of any
          General Partner Payments); or

                                       53
<PAGE>

                    (ii) an amount equal to the excess, if any, of (a) 25% of
          the General Partners' total gross income (but not including the amount
          of any General Partner Payments) for the fiscal year which is
          described in subsections (A) through (I) of Section 856(c)(3) of the
          Code over (b) the amount of gross income (within the meaning of
          Section 856(c)(3) of the Code) derived by the General Partner from
          sources other than those described in subsections (A) through (I) of
          Section 856(c)(3) of the Code (but not including the amount of any
          General Partner Payments);

provided, however, that General Partner Payments in excess of the amounts set
--------  -------
forth in paragraphs (i) or (ii) above may be made if the General Partner, as a
condition precedent, obtains the opinion of tax counsel that the receipt of such
excess amounts would not adversely affect the General Partner's ability to
qualify as a REIT.  To the extent GP Payments may not be made in a year due to
the above limitations, such General Partner Payments shall carry over and be
treated as arising in the following year, provided, however, that such amounts
                                          --------  -------
shall not carry over for more than five years, and if not paid within such five
year period, shall expire; provided further, that (i) as General Partner
                           ----------------
Payments are made, such payments shall be applied first to carry over amounts
outstanding, if any, and (ii) with respect to carry over amounts for more than
one Partnership Year, such payments shall be applied to the earliest Partnership
Year first.

          Section 15.12 Partition
                        ---------

          No Partner nor any successor-in-interest to a Partner shall have the
right while this Agreement remains in effect to have any property of the
Partnership partitioned, or to file a complaint or institute to any proceeding
at law or in equity to have such property of the Partnership partitioned, and
each Partner, on behalf of itself and its successors and assigns hereby waives
any such right.  It is the intention of the Partners that the rights of the
parties hereto and their successors-in-interest to Partnership Property, as
among themselves, shall be governed by the terms of this Agreement, and that the
rights of the Partners and their successors-in-interest shall be subject to the
limitations and restrictions as set forth in this Agreement.

          Section 15.13 No Third-Party Rights Created Hereby
                        ------------------------------------

          The provisions of this Agreement are solely for the purpose of
defining the interests of the Partners, inter se; and no other person, firm or
entity (i.e., a party who is not a signatory hereto or a permitted successor to
such signatory hereto) shall have any right, power, title or interest by way of
subrogation or otherwise, in and to the rights, powers, title and provisions of
this Agreement.

                                       54
<PAGE>

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

                                     "GENERAL PARTNER"


                                     CENTER TRUST, INC., a Maryland corporation



                                     By: /s/ Edward D. Fox
                                         ---------------------------------------
                                         Name:   Edward D. Fox
                                         Title:  Chief Executive Officer and
                                                 President

                                       55
<PAGE>

<TABLE>
<CAPTION>
                                                              Agreed        Gross Asset
               Name and                                      Value of        Value of
               Address                         Cash         Contributed    Contributed        Total       Partnership    Percentage
              of Partner                   Contributions     Property*       Property      Contributions     Units        Interest
--------------------------------------    --------------   ------------    -------------   -------------  -----------    ----------
<S>                                       <C>              <C>             <C>             <C>            <C>            <C>
Ed Krasnove

Saul Kreshek

Alex Kreshek

Russell Grosse

Margaret Lewicki

Ernest Grossman

Tom Corley

Gresham - RPR Associates

Peter T. Jouflas

Federal Way Shopping Center Associates

Scott Shanks

Hughes Investments

BARTFAM

CJJ Limited Partnership

Cecile C. Bartman
</TABLE>

                                      A-1
<PAGE>

<TABLE>
<CAPTION>
                                                              Agreed        Gross Asset
               Name and                                      Value of        Value of
                Address                        Cash         Contributed    Contributed        Total      Partnership    Percentage
              of Partner                  Contributions      Property*      Property      Contributions     Units        Interest
--------------------------------------   --------------    ------------   -------------   -------------  -----------    ----------
<S>                                      <C>               <C>            <C>             <C>            <C>            <C>
HI-Loma

Speer Family Partnership

HI-NC

The Harry J.L. Frank, Jr. and Margaret
   S. Frank Family Trust U/A 5/9/91

Cecile C. Bartman, Trustee under the
   Will of Bernard Citron, deceased

Hughes Milliken Associates

Visalia MKP, Inc.

Myrtle Gronske

Holmes Development Group, Inc.

John L. Holmes

North Mountain Village Shopping
   Center Limited Partnership, a
   California limited partnership
</TABLE>

          *Gross Asset Value net of Debt (if any) to which the Contributed
Property is subject.

                                      A-2
<PAGE>

                                   EXHIBIT B
                               NOTICE OF EXCHANGE

          The undersigned hereby irrevocably (i) exchanges ____________
Partnership Units in CT Operating Partnership, L.P. in accordance with the terms
of the Amended and Restated Agreement of Limited Partnership of CT Operating
Partnership, L.P. and the Exchange Right referred to therein, (ii) surrenders
such Partnership Units and all right, title and interest therein, and (iii)
directs that the REIT Shares deliverable upon exercise of the right of Exchange
be delivered to the address specified below, and such REIT Shares be registered
or placed in the name(s) and at the address(es) specified below.

Dated:  ________________________

                    Name of Limited Partner:


                              ________________________________________________
                              (Signature of Limited Partner)


                              ________________________________________________
                              (Street Address)


                              ________________________________________________
                              (City)           (State)        (Zip Code)



                              Signature Guaranteed by:

                              ________________________________________________


REIT Shares are to be issued to:

Please insert social security or identifying number:

Name:

                                      B-1
<PAGE>

                                   EXHIBIT C
                            FORM OF UNIT CERTIFICATE

                            Certificate for OP Units

                                       of
                         CT Operating Partnership, L.P.

No. __________________                                  _______________ OP UNITS

          Center Trust, Inc., as the General Partner of CT Operating
Partnership, L.P., a California limited partnership (the "Operating
Partnership"), hereby certifies that _________________________________________
is a Limited Partner of the Operating Partnership whose Partnership Interests
therein, as set forth in the Amended and Restated Agreement of Limited
Partnership of CT Operating Partnership, L.P. (the "Partnership Agreement"),
under which the Operating Partnership is existing and as filed in the Office of
the Secretary of State of California (copies of which are on file at the
Operating Partnership's principal office at 3500 Sepulveda Boulevard, Manhattan
Beach, California), represent _________ units of limited partnership interest in
the Operating Partnership (the "OP Units").

THE OP UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT AS OF
DECEMBER 27, 1993 AS IT MAY BE AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON
FILE WITH THE OPERATING PARTNERSHIP).  EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE OP UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR (B) IF THE OPERATING PARTNERSHIP HAS BEEN
FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN
EFFECT THEREUNDER.

DATED:                                     CENTER TRUST, INC.

                                           General Partner of CT Operating
                                           Partnership, L.P.


ATTEST:

By: __________________________________     By: ____________________________
    Steven M. Jaffe                            Edward D. Fox
    Secretary                                  Chief Executive Officer and
                                               President

                                      C-1
<PAGE>

                                   EXHIBIT D

          The term "Constructively Owns" means ownership determined through the
application of the constructive ownership rules of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code.  Generally, these rules provide the
following:

          a.   an individual is considered as owning the Ownership Interest that
               is owned, directly or constructively, by or for his spouse, his
               children, his grandchildren, and his parents;

          b.   an Ownership Interest that is owned, directly or constructively,
               by or for a partnership or estate is considered as owned
               proportionately by its partners or beneficiaries;

          c.   an Ownership Interest that is owned, directly or constructively,
               by or for a trust is considered as owned by its beneficiaries in
               proportion to the actuarial interest of such beneficiaries
               (provided, however, that in the case of a "grantor trust" the
               Ownership Interest will be considered as owned by the grantors);

          d.   if 10 percent or more in value of the stock in a corporation is
               owned, directly or constructively, by or for any person, such
               person shall be considered as owning the Ownership Interest that
               is owned, directly or constructively, by or for such corporation
               in that proportion which the value of the stock which such person
               so owns bears to the value of all the stock in such corporation;

          e.   an Ownership Interest that is owned, directly or constructively,
               by or for a partner of a partnership or a beneficiary of an
               estate or trust shall be considered as owned by the partnership,
               estate, or trust;

          f.   if 10 percent or more in value of the stock in a corporation is
               owned, directly or constructively, by or for any person, such
               corporation shall be considered as owning the Ownership Interest
               that is owned, directly or constructively, by or for such person;

          g.   if any person has an option to acquire an Ownership Interest
               (including an option to acquire an option or any one of a series
               of such options), such Ownership Interest shall be considered as
               owned by such person;

          h.   an Ownership Interest that is constructively owned by a person by
               reason of the application of the rules described in paragraphs
               (a) through (g) above shall, for purposes of applying paragraphs
               (a) through (g), be considered as directly owned by such person
               provided, however, that (i) an Ownership Interest constructively
               owned by an individual by reason of paragraph (a) shall not be
               considered as owned by him for purposes of again applying
               paragraph (a) in order to make another the constructive owner of
               such Ownership Interest, (ii) an Ownership Interest
               constructively owned by a partnership, estate, trust, or
               corporation by

                                      D-1
<PAGE>

               reason of the application of paragraphs (e) or (f) shall not be
               considered as owned by it for purposes of applying paragraphs
               (b), (c), or (d) in order to make another the constructive owner
               of such Ownership Interest, (iii) if an Ownership Interest may be
               considered as owned by an individual under paragraphs (a) or (g),
               it shall be considered as owned by him under paragraph (g), and
               (iv) for purposes of the above described rules, an S corporation
               shall be treated as a partnership and any shareholder of the S
               corporation shall be treated as a partner of such partnership
               except that this rule shall not apply for purposes of determining
               whether stock in the S corporation is constructively owned by any
               person.

          i.   For purposes of the above summary of the constructive ownership
               rules, the term "Ownership Interest" means the ownership of stock
               with respect to a corporation and, with respect to any other type
               of entity, the ownership of an interest in either its assets or
               net profits.

                                      D-2