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                                                                     EXHIBIT 4.4



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                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                        IGP X SHADOW RIDGE MEADOWS, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP













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                                TABLE OF CONTENTS


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ARTICLE 1    ESTABLISHMENT...................................................................1
             1.1   Name......................................................................1
             1.2   Principal Place of Business...............................................1
             1.3   Term......................................................................1
             1.4   Certificate of Limited Partnership and Other Filings......................1


ARTICLE 2    PURPOSE AND LIMITATIONS
             OF PARTNERSHIP REAL ESTATE INVESTMENT...........................................2
             2.1   Purpose...................................................................2
             2.2   Further Limitations on Partnership Transactions...........................2
             2.3   Reinvestments.............................................................3
             2.4   Conflicts.................................................................3


ARTICLE 3    CAPITALIZATION..................................................................4
             3.1   Capital Contributions.....................................................4
                   3.1.1  General Partner....................................................4
                   3.1.2  Limited Partner....................................................4
             3.2   Partner's Capital Account.................................................4
             3.3   Limited Partners' Liability...............................................4


ARTICLE 4    DISTRIBUTIONS AND ALLOCATIONS...................................................4
             4.1   Cash Distributions........................................................4
                   4.1.1  Distributable Cash from Operations.................................4
                   4.1.2  Distributable Cash from Sale or Refinancing........................4
             4.2   Allocation of Net Income and Net Loss.....................................5
                   4.2.1  Allocations of Net Income and Net Losses...........................5
                   4.2.2  Recapture Income.................................................. 9
                   4.2.3  Allocation of Partnership Items................................... 9
                   4.2.4  Special Allocations to General Partner............................ 9
                   4.2.5  Allocation Among Limited Partners................................. 9
                   4.2.6  Assignment........................................................ 9
                   4.2.7  Quarterly Distributions.......................................... 10
                   4.2.8  Power of General Partner to Vary Allocations of Net Income and
                          Net Loss..........................................................10
                   4.2.9  Consent of Partners...............................................10
             4.3   Working Capital Reserve..................................................10


ARTICLE 5    MANAGEMENT AND ADMINISTRATION..................................................10
             5.1   Powers and Authority of the General Partner..............................10
             5.2   Duties of the General Partner............................................11
                   5.2.1  Maintenance of Limited Partnership Status.........................12
                   5.2.2  Acquisition of the Property.......................................12
                   5.2.3  Management of the Property........................................12
                   5.2.4  Disposition of the Property.......................................13
                   5.2.5  Insurance.........................................................13
                   5.2.6  Net Worth.........................................................13
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                   5.2.7  Avoidance of Investment Company Status............................13
                   5.2.8  Records...........................................................13
                   5.2.9  Delivery to Limited Partners and Inspection.......................14
                   5.2.10 Reports...........................................................14
                   5.2.11 Interim Reports; Accountant's Report..............................15
             5.3   Restrictions on Authority of General Partner.............................15
                   5.3.1  Actions Requiring Consent of all Limited Partners.................15
                   5.3.2  Actions Requiring Consent of a Majority-In-Interest of the Limited
                          Partners..........................................................15
                   5.3.3  Unconditional Restrictions on General Partner's Authority.........16
             5.4   Method of Action by General Partner......................................17
             5.5   Time and Efforts of the General Partner..................................17
             5.6   Power of Attorney........................................................18
             5.7   Section 754 Election.....................................................18
             5.8   Fiscal Year..............................................................18
             5.9   Banking..................................................................18


ARTICLE 6    COMPENSATION OF GENERAL PARTNER AND EXPENSES...................................18
             6.1   General Partner's Compensation...........................................18
                   6.1.1  Acquisition Fees..................................................19
                   6.1.2  Management Fee....................................................19
                   6.1.3  Subordinated Real Estate Commissions on Sale of Partnership Real
                          Estate............................................................19
             6.2   Operating Expenses.......................................................20
                   6.2.1  Payment Generally.................................................20
                   6.2.2  Reimbursements to General Partner.................................20
             6.3   Indemnification of General Partner.......................................21
                   6.3.1  Indemnification Generally.........................................21
                   6.3.2  Restrictions on Indemnification...................................21
                   6.3.3  Indemnification Limited to Partnership Assets.....................21
             6.4   Exoneration of General Partner for Acts in Good Faith....................21


ARTICLE 7    LIMITED PARTNER INTEREST.......................................................21
             7.1   Limited Liability........................................................21
             7.2   Withdrawal and Return of Limited Partner's Capital Contribution..........22
             7.3   Role of Limited Partners.................................................22
             7.4   Unanimous Votes; Consent of General Partner..............................22
             7.5   Meetings of the Limited Partners.........................................22
             7.6   Notice...................................................................22
             7.7   Adjourned Meeting and Notice Thereof.....................................23
             7.8   Quorum...................................................................23
             7.9   Consent of Absentees.....................................................23
             7.10  Action Without Meeting...................................................23
             7.11  Record Dates.............................................................24
             7.12  Proxies..................................................................24
             7.13  Chairman of Meeting......................................................24
             7.14  Inspectors of Election...................................................24
             7.15  Record Date and Closing Partnership Books................................24
             7.16  No Termination by Reason of Change in Limited Partners...................25
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             7.17  Transfer of Units........................................................25
                   7.17.1 Restrictions on Transfer and Assignment of Units..................25
                   7.17.2 Transfers of Units by Operation of Law............................26
                   7.17.3 Repurchase of Units by Partnership................................26
                   7.17.4 Recognition Date for Assignments and Other Transfers..............26
                   7.17.5 Admission of Substitute Limited Partners..........................27
                   7.17.6 Names and Addresses of Limited Partners...........................27


ARTICLE 8    GENERAL PARTNER INTERESTS......................................................28
             8.1   Removal of General Partner...............................................28
                   8.1.1  Removal by Vote of Limited Partners...............................28
                   8.1.2  Removal by Other General Partner..................................28
             8.2   Withdrawal of General Partner Upon Election of a New General Partner.....28
             8.3   Admission of New or Substitute General Partner...........................28
             8.4   Continuation of the Partnership..........................................28
             8.5   Payment to Removed or Withdrawn General Partner..........................29
                   8.5.1  Removal of All General Partners or Remaining General Partner......29
             8.6   Liability of General Partner.............................................30


ARTICLE 9    TERMINATION, LIQUIDATION AND DISSOLUTION OF THE PARTNERSHIP
              ..............................................................................30
             9.1   Events of Termination....................................................30
             9.2   Liquidation..............................................................30
             9.3   Application and Distribution of Proceeds of Liquidation..................31
                   9.3.1  General...........................................................31
                   9.3.2  General Partner's Deficit Capital Accounts........................32
             9.4   Cancellation of Certificate of Limited Partnership.......................32
             9.5   Final Partnership Statement..............................................32


ARTICLE 10   DEFINITIONS....................................................................32
             10.1  Acquisition Fees.........................................................32
             10.2  Adjusted Capital Account Deficit.........................................33
             10.3  Adjusted Invested Capital................................................32
             10.4  Affiliate................................................................32
             10.5  Basic Regulatory Allocations.............................................33
             10.6  Capital Account..........................................................33
             10.7  Capital Contribution.....................................................34
             10.8  Certificate of Limited Partnership.......................................34
             10.9  CRLPA....................................................................34
             10.10 Distributable Cash.......................................................34
                   10.10.1 Distributable Cash from Operations...............................34
                   10.10.2 Distributable Cash from Sale or Refinancing......................34
             10.11 General Partner..........................................................34
             10.12 Gross Operating Revenues.................................................34
             10.13 Gross Property Revenues..................................................34
             10.14 Internal Revenue Code....................................................35
             10.15 Legal Restrictions.......................................................35
             10.16 Limited Partner..........................................................35
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             10.17 Majority-In-Interest.....................................................35
             10.18 Management Fee...........................................................35
             10.19 Minimum Gain.............................................................35
             10.20 Net Income or Net Loss...................................................35
             10.21 Nonrecourse Debt.........................................................35
             10.22 Nonrecourse Deductions...................................................35
             10.23 Nonrecourse Regulatory Allocations.......................................36
             10.24 10% Operating Cash Preference............................................36
             10.25 Original Invested Capital................................................36
             10.26 Other Definitions........................................................36
             10.27 Partner..................................................................36
             10.28 Partner Nonrecourse Debt.................................................36
             10.29 Partner Nonrecourse Deductions...........................................36
             10.30 Partner Nonrecourse Regulatory Allocations...............................36
             10.31 Partners of Record.......................................................36
             10.32 Partnership..............................................................36
             10.33 Partnership Minimum Gain.................................................36
             10.34 Person...................................................................36
             10.35 10% Preferred Return.....................................................36
             10.36 Property or Properties...................................................37
             10.37 Purchase Price...........................................................37
             10.38 Qualified Plan...........................................................37
             10.39 Recognition Date.........................................................37
             10.40 Refinancing..............................................................37
             10.41 Regulatory Allocations...................................................37
             10.42 Sale.....................................................................37
             10.43 Substitute Limited Partner...............................................37
             10.44 Unit.....................................................................37
             10.45 Working Capital Reserve..................................................37


ARTICLE 11   RELATIONSHIP OF CERTAIN TERMS OF THIS
             AGREEMENT TO PROVISIONS  OF THE CALIFORNIA
             REVISED LIMITED PARTNERSHIP ACT................................................38
             11.1  Revised Limited Partnership Act Governs..................................38
             11.2  Provisions of the CRLPA Supplanted by the Terms of this Agreement........38
             11.3  Other Terms and Provisions...............................................38


ARTICLE 12   GENERAL PROVISIONS.............................................................39
             12.1  Notices..................................................................39
             12.2  Amendment of Agreement and the Certificate of Limited Partnership........39
                   12.2.1 Admission of Limited Partners.....................................39
                   12.2.2 Amendments with Consent of Limited Partners.......................39
                   12.2.3 Amendments Without Consent of Limited Partners....................39
                   12.2.4 Execution and Recording of Amendments.............................40
             12.3  Partition................................................................40
             12.4  Severability.............................................................40
             12.5  Headings.................................................................40
             12.6  Further Assurances.......................................................40
             12.7  Integrated and Binding Agreement.........................................40
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             12.8  Counterparts.............................................................40
             12.9  Governing Law............................................................40


ARTICLE 13   REPRESENTATIONS OF LIMITED PARTNERS............................................41
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<PAGE>   7

                        IGP X SHADOW RIDGE MEADOWS, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP


                        AGREEMENT OF LIMITED PARTNERSHIP


        THIS AGREEMENT OF LIMITED PARTNERSHIP ("Agreement") is made this 10th
day of August, 1997, by and among INCOME GROWTH MANAGEMENT, INC., a California
corporation, IGP X SHADOW RIDGE MEADOWS, INC., a California corporation
(collectively, the "General Partner"), and INCOME GROWTH PARTNERS, LTD. X, a
California limited partnership (the "Limited Partner") under the California
Revised Limited Partnership Act ("CRLPA") for the purposes and upon the terms
and conditions hereinafter set forth. Capitalized terms used in this Agreement
are defined in Section 10 hereof.


                                    ARTICLE 1

                                  ESTABLISHMENT

        1.1 NAME. The name of the Partnership shall be IGP X SHADOW RIDGE
MEADOWS, LTD., A CALIFORNIA LIMITED PARTNERSHIP; provided, that the General
Partner may from time to time, in its sole discretion, change such name and
amend this Agreement and the Certificate of Limited Partnership to reflect such
change.

        1.2 PRINCIPAL PLACE OF BUSINESS. The principal place of business of the
Partnership shall be 11300 Sorrento Valley Road, Suite 108, San Diego,
California 92121; provided, that the General Partner may from time to time, in
its sole discretion, elect to change the principal place of business, so long as
such place remains within the contiguous United States.

        1.3 TERM. The Partnership shall have a term commencing September 18,
1992, and ending 33 years therefrom, unless (i) the Partnership has been sooner
terminated as provided herein or otherwise by law or (ii) the term has been
extended by the affirmative vote of the General Partner and the Limited Partner.

        1.4 CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS. The General
Partner has caused a Certificate of Limited Partnership to be recorded in the
office of the Secretary of State of the State of California, as required by
applicable California law (i) to preserve and maintain the status of the
Partnership as a limited partnership under the CRLPA. The General Partner shall
cause to be recorded, filed and/or published, in each county (or other
jurisdiction) where the Partnership acquires real property or otherwise does
business, a certified copy of the Certificate of Limited Partnership, a
fictitious business name statement and/or such other recording or filing as may
be required under any applicable law to preserve the Partnership's limited
partnership status and right to the use of its name. The General Partner shall
also cause the Certificate of Limited Partnership and each such other recording
or filing to be amended whenever there is any addition to or change in the
General Partner, or change of the Partnership's name or principal place of
business or other change requiring such an amendment under applicable law.


                                    ARTICLE 2

                             PURPOSE AND LIMITATIONS
                      OF PARTNERSHIP REAL ESTATE INVESTMENT

        2.1 PURPOSE. This Partnership has been formed for the sole purpose of
acquiring for investment and the production of income, and to own, operate,
maintain, improve, develop, lease, mortgage, sell, sell and lease back,




                                        1

<PAGE>   8

exchange, refinance, transfer, or dispose of the real property known as the
Shadow Ridge Meadows Apartments ("Property"), as more fully described at Exhibit
"A", together with such other activities as may be necessary or advisable in
connection with the ownership of the Property. The Partnership shall not engage
in any business unrelated to the ownership and operation of the Property and
shall not own any assets other than those related to the Property or otherwise
in furtherance of the purposes of the Partnership. The Partnership shall not
incur indebtedness other than the indebtedness related to the Property and
otherwise provided herein. The Partnership shall maintain its own separate
books, records, and accounts.

        2.2 FURTHER LIMITATIONS ON PARTNERSHIP TRANSACTIONS. In its acquisition
of the Properties, the Partnership shall be further subject to the following
restrictions on transactions with the General Partner and Affiliates:

            2.2.1 Notwithstanding any other provision in this Agreement or
applicable law to the contrary, until such time as all obligations of the
Partnership secured by the mortgage loan ("Mortgage" or "Loan") from Lehman
Brothers Holdings., Inc. ("Lender") or relating to the Loan originated by
Lender, and all other loan documents in connection with the Loan ("Loan
Documents") have been indefeasibly paid in accordance with their terms and
otherwise fully discharged, neither the Partnership nor any Partner shall take
any action to do any of the following:

                  (1) to elect any additional or substitute General Partner; or

                  (2) act which would constitute an "Event of Default" or a
"Default" as those terms are defined in the Mortgage or any of the Loan
Documents evidencing or securing the obligations secured by the Mortgage.

            2.2.2 Notwithstanding anything in this Agreement, the Certificate,
or applicable law to the contrary, any obligation of the Partnership to
indemnify any Partner herein shall be fully subordinated to the Loan and the
Loan and the rated obligations issued in connection with a securitization of the
Loan, and shall not constitute a claim against the Partnership or its assets
until such time as all obligations of the Partnership secured by the Loan and
all of the Loan Documents have been indefeasibly paid in accordance with their
terms and otherwise fully discharged and the rated obligations are no longer
outstanding.

            2.2.3 Upon dissolution of the Partnership, or upon an Event of
Default or a Default as those terms are defined in the Mortgage or under any of
the Loan Documents, the Trustee appointed in connection with the securitization
shall have the independent ability to retain all collateral secured by the
Mortgage and other Loan Documents and to continue to pay scheduled debt service,
or to liquidate the collateral in the event the proceeds would be insufficient
to repay all amounts due to holders of the Loan.

            2.2.4 Notwithstanding any other provisions of this Agreement, the
Certificate or any provision of the law that empowers the Partnership, until
such time as all obligations of the Partnership under the Mortgage and other
Loan Documents have been fully indefeasibly paid and discharged, without the
express written unanimous consent of all the Partners, the Partnership shall not
take any of the following actions:

                  (1) amend, alter, change or repeal the Certificate or this
Agreement;

                  (2) dissolve or liquidate, in whole or in part, consolidate or
merge with or into any other entity or convey, sell or transfer the
Partnership's properties or assets substantially as an entirety to any entity,
except as otherwise may be permitted under the Mortgage or under any of the
other Loan Documents or in connection with the satisfaction or permitted
assumption of the Loan;

                  (3) incur any indebtedness or assume or guaranty any
indebtedness of any other entity or person, or engage in any other business or
activity other than as set forth herein;

                  (4) file a voluntary petition or otherwise initiate
proceedings to be adjudicated bankrupt or insolvent or seek an order for relief
as a debtor under the United States Bankruptcy Code, as amended (11 U.S.C.
Section 101,



                                        2

<PAGE>   9
et seq.), or file or cause the filing of, or consent to, or acquiesce in, any
petition seeking any composition, reorganization, readjustment, liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
laws or any other present or future applicable federal, state or other statute
or law relative to bankruptcy, insolvency or other relief for debtors; or seek,
or consent to, or acquiesce in, the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or other similar
official) of the Partnership or any substantial part of the properties and
assets of the Partnership, or make, or cause to be made, any general assignment
for the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt or
take any Partnership action in furtherance of any such action.

                  (5) When voting in matters set forth in this Section 13.4
hereof, the Parties shall take in to account the interest of the Partnership's
creditors, including without limitation, the Lender, regardless of whether the
Partnership is then insolvent on either a balance sheet basis or equitable
basis.

            2.2.5 The Partnership shall at all times (i) maintain, separate from
any other person, its own separate and distinct books of account, bank accounts
and partnership records, (ii) maintain separate financial statements and cause
its financial statements to be prepared and maintained in accordance with
generally accepted accounting principles in a manner that indicates the separate
existence of the Partnership and its assets and liabilities, (iii) pay all of
its liabilities out of its own funds (including the salaries of its own
employees) and allocate fairly and reasonably any overhead for shared office
space, (iv) maintain and use its own separate stationary, invoices and checks,
(v) in all dealings with the public identify itself and conduct its own business
under its own name as a separate and distinct legal entity (vi) maintain an
arm's-length relationship with its Affiliates, (vii) pay the salaries of its own
employees and maintain a sufficient number of employees in light of its
contemplated business operations, and (viii) independently make decisions with
respect to its business and daily operations. The Partnership shall not (i)
pledge its assets for the benefit of any other person (ii) commingle its assets
with those of any other person, (iii) assume or guarantee the liabilities or
obligations of any other person or otherwise hold out its credit as being
available or able to satisfy the liabilities or obligations of any other person
(iv) acquire obligations or securities of, or make loans or advances to, any
Affiliate of the Partnership, or (v) incur any indebtedness, liabilities or
obligations relating to the operation of the Property, other than trade debt
incurred in the ordinary course of business, except as otherwise required by the
Lender in connection with the Loan.

            2.2.6 For so long as the Loan is outstanding, the Partnership shall
have at least one General Partner which is a single purpose entity, whose sole
purpose is to serve as a General Partner of the Partnership. The Board of
Directors of this corporation shall include one (1) Independent Director. An
"Independent Director" shall mean a person who is not and has not within the
past five (5) years been, (i) an officer, director, employee, partner, member,
beneficial-interest holder or stockholder of any partner of the Partnership (a
"Partner"), any partner of a Partner, or the Partnership, or any affiliate of
any of the foregoing; (ii) a lessee under any lease or supplier of the
Partnership or any affiliate thereof (other than a supplier that does not derive
more than 10% of its revenues from its activities with the Partnership or any
affiliate thereof); or (iii) a spouse, parent, sibling, or child of any person
described in (i) or (ii) above provided, however, that a person shall not be
deemed to be a director of an affiliate solely by reason of such person being a
director of a single-purpose entity. For the purpose of this definition along,
affiliate means any person or entity which is controlled by, or under common
control with, any person or entity described in clause (i) above; provided that
the terms "control" and "controlled by" shall have the meanings assigned to them
in Rule 405 under the Securities Act of 1933.

        2.3 REINVESTMENTS. The Partnership shall not use any Gross Operating
Revenues or Net Cash from Sales or Refinancings to acquire real estate, or make
any other investments.

        2.4 CONFLICTS. General Partner Income Growth Management, Inc. is in the
business of acquiring, operating, managing, developing and/or disposing of real
estate, and may hereafter, from time to time, act as a general partner, sponsor
or manager for other real estate limited partnerships or similar real estate
investment entities (hereinafter called "Other Purchasers") with investment
objectives and criteria comparable to those of the Partnership. General Partner
Income Growth Management, Inc. shall not be obligated to identify or present any
real estate acquisition to the Partnership, or to refrain from presenting such
acquisition to any other Person (or making, or entering into an agreement for,
such acquisition itself).




                                        3

<PAGE>   10

                                    ARTICLE 3
                                 CAPITALIZATION

        3.1 CAPITAL CONTRIBUTIONS.

            3.1.1 General Partner. The General Partner shall not make any
separate Capital Contribution to the Partnership.

            3.1.2 Limited Partner. The Limited Partner shall be Income Growth
Partners Ltd., X, a California Limited Partnership. In exchange for Units, the
Limited Partner shall contribute the Property to the Partnership.

        3.2 PARTNER'S CAPITAL ACCOUNT. On the books of the Partnership, there
shall be maintained for the General Partner and the Limited Partner a Capital
Account, which shall be maintained in accordance with Section 10.6.

        3.3 LIMITED PARTNERS' LIABILITY. In no event shall the liability of the
Limited Partner for Partnership losses exceed the aggregate amount of its
Capital Contribution (including, in some instances, portions returned to it),
plus its pro rata share of undistributed profits.


                                    ARTICLE 4

                          DISTRIBUTIONS AND ALLOCATIONS

        4.1 CASH DISTRIBUTIONS.

            4.1.1 Distributable Cash from Operations. The General Partner shall
        have the right to make distributions to Partners from Distributable Cash
        from Operations in such amounts and at such times as the General Partner
        determines to be appropriate, consistent with sound business practices.
        Distributions made from Distributable Cash from Operations for a fiscal
        year, if any, shall be made in the following order of priority:

                  (1) FIRST, 100% to the Limited Partner until it has received
                  during such fiscal year an amount equal to a 10% per annum
                  noncumulative return on its Adjusted Invested Capital. The
                  distribution under this Section 4.1.1(1) is referred to herein
                  as the "Operating Cash Preference"; and

                  (2) SECOND, thereafter, 99% to the Limited Partner and 1% to
                  the General Partner.

            4.1.2 Distributable Cash from Sale or Refinancing. Distributions of
        Distributable Cash from Sale or Refinancing of a Property (other than
        sales made in connection with the liquidation of the Partnership, the
        distribution of which is governed by Section 9.3.1) or from Working
        Capital Reserves will be made in the following order of priority:

                  (1) FIRST, 100% to the Limited Partner, until it has received
            an amount equal to its Adjusted Invested Capital;

                  (2) SECOND, 100% to nonsubordinated fees, compensation and
            debts payable to the General Partner;

                  (3) THIRD, thereafter, 100% to the Limited Partner until it
            has received an amount which, when added to any prior distributions
            to the Limited Partner from any source whatsoever (other than
            distributions under Section 4.1.2(1)-(2)), equals a 10% per annum
            cumulative, but not compounded, return on its Adjusted Invested
            Capital. The distribution under this Subsection 4.1.2(3) is referred
            to herein as the "Preferred Return"; and




                                        4

<PAGE>   11

                  (4) After the distributions described in Sections 4.1.2(1) -
            (3) have been made, remaining Distributable Cash from Sale or
            Refinancing shall be distributed 99% to the Limited Partner and 1%
            to the General Partner.

        4.2 ALLOCATION OF NET INCOME AND NET LOSS. For each fiscal year, Net
Income and Net Loss of the Partnership shall be allocated as follows:

            4.2.1 Allocations of Net Income and Net Losses. For each fiscal
        year, Net Income and Net Loss of the Partnership shall be allocated as
        follows:

                  (1) Net Losses. After giving effect to the special allocations
set forth in Section 4.2.1(3) hereof, Net Losses for any fiscal year shall be
allocated as follows:

                      (a) First, 99% to the Limited Partner and 1% to the
General Partner, except that Net Losses shall not be allocated pursuant to this
Section 4.2.1(1)(a) to the extent such allocation would cause any Limited
Partner to have an Adjusted Capital Account Deficit at the end of such fiscal
year; and

                      (b) The balance, if any, to the General Partner.

                  (2) Net Income. After giving effect to the special allocations
set forth in Section 4.2.1(3), hereof, Net Income for any fiscal year shall be
allocated as follows:

                      (a) First, 100% to the General Partner until the aggregate
Net Income allocated to the General Partner pursuant to this Section 4.2.1(2)(a)
for such fiscal year and all previous fiscal years is equal to the aggregate Net
Losses allocated to the General Partner pursuant to Section 4.2.1(1)(b) hereof
for all previous fiscal years; and

                      (b) The balance, if any, 1% to the General Partner and 99%
to the Limited Partner.

                  (3) Special Allocations.

                      (a) Qualified Income Offset. Except as provided in Section
4.2.1(3)(c) but subject to Section 4.2.1(3)(f), in the event the Limited Partner
unexpectedly receives any adjustments, allocations, or distributions described
in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704- 1(b)(2)(ii)(d)(6), items of Partnership
income and gain shall be specially allocated to the Limited Partner in an amount
and manner sufficient to eliminate, to the extent required by the Treasury
Regulations, the Adjusted Capital Account Deficits created by such adjustments,
allocations or distributions as quickly as possible.

                      (b) Gross Income Allocation. In the event any Partner has
an Adjusted Capital Account Deficit at the end of any Partnership fiscal year,
each such Partner shall be specially allocated items of Partnership gross income
and gain, in the amount of such Adjusted Capital Account Deficit as quickly as
possible.

                      (c) Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 4 (other than Section 4.2.1(f)), if there is a net
decrease in Partnership Minimum Gain during any Partnership 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 the
greater of (i) the portion of such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Treasury Regulations
Section 1.704-1T(b)(4)(iv)(f), that is allocable to the disposition of Property
subject to Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-1T(b)(4)(iv)(e), or (ii) if such Partner would otherwise have an
Adjusted Capital Account Deficit at the end of such year, an amount sufficient
to eliminate such Adjusted Capital Account Deficit. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Partner. The items to be so allocated shall be
determined in accordance with Treasury Regulations Section
1.704-1T(b)(4)(iv)(e). This Section 4.2.1(3)(c) is intended to comply with the
minimum gain chargeback




                                        5

<PAGE>   12

requirement in the Treasury Regulations and shall be interpreted consistently
therewith. To the extent permitted by the Treasury Regulations and for purposes
of this Section 4.2.1(3)(c) only, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to this
Section 4 with respect to such fiscal year and without regard to any net
decrease in Partner Minimum Gain during such fiscal year.

                      (d) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated 1% to the General
Partner and 99% to the Limited Partner.

                      (e) Code Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant to
Internal Revenue Code Section 734(b) or Internal Revenue Code Section 743(b) is
required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, 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 a manner consistent with the manner in which its Capital Accounts
are required to be adjusted pursuant to such section of the Treasury
Regulations.

                      (f) Allocations to Qualified Plans. Notwithstanding
anything contained in this Agreement to the contrary:

                          (A) No distributive share of overall Partnership loss
allocable to a Partner that is not a Qualified Plan shall exceed such Partner's
smallest distributive share of overall Partnership income for any fiscal year
and any such loss that cannot be allocated because of this provision shall be
allocated to Partners that are Qualified Plans; and

                          (B) No distributive share of overall Partnership
income allocable to a Partner that is a Qualified Plan shall exceed such
Partner's smallest distributive share of overall Partnership loss for any
taxable year, provided, however, that overall Partnership income shall be
allocated among Partners that are Qualified Plans to the maximum extent
permissible under Section 514(c)(9)(E)(ii) of the Internal Revenue Code so that
on a cumulative basis, overall Partnership income allocable to Partners that are
Qualified Plans pursuant to this Section 4.2.1(3)(f)(B) equals the amount of
overall Partnership losses specially allocated to such Partners pursuant to
Section 4.2.1(3)(f)(A) above.

                      (g) Priority Allocations. After giving effect to all other
special allocations in this Section 4.2.1(3), all or a portion of the remaining
items of Partnership income or gain for the year, if any, shall be specially
allocated to the Partners in proportion to the cumulative distributions of both
(i) the 10% Preferred Return pursuant to Section 4.1.2(3); and (ii) the
Operating Cash Preference pursuant to Section 4.1.1(1) from the commencement of
the Partnership to a date 30 days after the end of such fiscal year until the
aggregate amounts allocated to each such Partner pursuant to this Section
4.2.1(3)(g) for such fiscal year and all previous fiscal years is equal to the
cumulative amount of such distributions to such Partner. In addition, in
connection with a sale upon liquidation of the Partnership, as described in
Section 9.3, there shall be allocated to each Limited Partner, an amount of Net
Income equal to the amount to be distributed to such Partner under Section
9.3.1(c), (e) and (f), provided that such allocation shall not duplicate the
allocation described in the preceding sentence.

                      (h) Gain. After giving effect to all of the special
allocations in this Section 4.2.1(3), any remaining Partnership gain for any
fiscal year resulting from any Sales or other dispositions of Partnership
Property shall be allocated in the following order and priority:

                          (A) First, to the Limited Partner, in proportion to
the sum of its Units, until the sum of the cumulative gains allocated pursuant
to this Section 4.2.1(3)(h)(A) for the current and all previous fiscal years and
the cumulative Net Income allocated to the Limited Partner pursuant to Section
4.2.1(2) hereof for the current and all previous fiscal years is equal to the
cumulative Net Losses allocated pursuant to Section 4.2.1(1)(a) to the Limited
Partner for the current and all previous fiscal years;




                                        6

<PAGE>   13

                          (B) Second, 99% to the Limited Partner and 1% to the
General Partner in a total amount equal to the excess, if any, of (i) the
cumulative distributions pursuant to Sections 4.1.1(3) and 4.1.1(5) hereof from
the commencement of the Partnership to the date 30 days after the end of such
fiscal year over (ii) the sum of the cumulative Net Income allocated pursuant to
Section 4.2.1(2)(b) hereof for the current and all previous fiscal years plus
the cumulative gains allocated pursuant to this Section 4.2.1(3)(h)(B) for all
previous fiscal years; and

                          (C) The balance, if any, 99% to the Limited Partner in
proportion to the sum of its Original Invested Capital, and 1% to the General
Partner.

                      (i) Net Income Arising From Sale Upon Liquidation of
Partnership. After giving effect to the special allocations set forth in Section
4.2.1(3) (other than those set forth in Section 4.2.1(3)(g) and 4.2.1(3)(h))
hereof, Net Income arising from a Sale upon liquidation of the Partnership shall
be allocated as follows:

                          (A) First, 100% to the General Partner until the
aggregate Net Income allocated to the General Partner pursuant to Section
4.2.1(2)(a) and this Section 4.2.1(3)(i)(A) for such fiscal year and all
previous fiscal years is equal to the aggregate Net Losses allocated to the
General Partner pursuant to Section 4.2.1(1)(b) hereof for all previous fiscal
years;

                          (B) Second, the balance, if any, 1% to the General
Partner and 99% to the Limited Partner until the aggregate Net Income allocated
to the Partners pursuant to Section 4.2.1(2)(b) and this Section 4.2.1(3)(i)(B)
for such fiscal year and all previous fiscal years is equal to the aggregate Net
Losses allocated to the Partners pursuant to Section 4.2.1(1)(a) for all
previous fiscal years;

                          (C) Third, Net Income arising from a Sale upon
liquidation of the Partnership shall be allocated pursuant to Section
4.2.1(3)(g);

                          (D) Fourth, Net Income arising from a Sale upon
liquidation of the Partnership shall be allocated pursuant to Section
4.2.1(3)(h); and

                          (E) Any remaining Net Income arising from a Sale upon
liquidation of the Partnership shall be allocated 1% to the General Partner and
99% to the Limited Partner.

                      (j) Partner Nonrecourse Deductions. All Partner
Nonrecourse Deductions for any fiscal year or other period shall be specially
allocated to the Partner who bears the economic risk of loss (as set forth in
Treasury Regulations Section 1.704-1T(b)(4)(iv)(k)(1)) with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulations Section 1.704-
1T(b)(4)(iv)(h).

                      (k) Partner Minimum Gain Chargeback. Notwithstanding any
other provision of this Section 4 (other than Section 4.2.1(3)(c) and Section
4.2.1(3)(f)), if there is a net decrease in Partner Minimum Gain attributable to
a Partner Nonrecourse Debt during any Partnership fiscal year, each Partner who
has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Section 1.704-1T(b)(4)(iv)(h)(5), shall be
specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to the greater of (i) the
portion of such Partner's share of the net decrease in Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Treasury Regulations Section 1.704-1T(b)(4)(iv)(h)(5), that is allocable to the
disposition of Property subject to such Partner Nonrecourse Debt, determined in
accordance with Treasury Regulations Section 1.704-1T(b)(4)(iv)(h)(4), or (ii)
if such Partner would otherwise have an Adjusted Capital Account Deficit at the
end of such year, an amount sufficient to eliminate such Adjusted Capital
Account Deficit. 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 so allocated shall be determined in accordance
with Section 1.704-1T(b)(4)(iv)(h)(4) of the Treasury Regulations. This Section
4.2.1(3)(k) is intended to comply with the minimum gain chargeback requirement
in the Treasury Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 4.2.1(3)(k), each Partner's




                                        7

<PAGE>   14

Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to this Section 4 with respect to such fiscal year, other
than allocations pursuant to Section 4.2.1(3)(c).

                      (l) Curative Allocations. Notwithstanding any other
provision of this Agreement, the Regulatory Allocations shall be taken into
account in allocating 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 ("Curative Allocations"). For purposes of applying
the foregoing sentence, (i) Curative Allocations shall only be made with respect
to allocations pursuant to Section 4.2.1(3)(e) to the extent the General Partner
reasonably determines that such allocations will otherwise be inconsistent with
the economic agreement among the Partners, (ii) no Curative Allocations
attributable to Nonrecourse Regulatory Allocations shall be made prior to the
Partnership fiscal year during which there is a net decrease in Partnership
Minimum Gain, and then only to the extent necessary to avoid any potential
economic distortions caused by such net decrease in Partnership Minimum Gain,
(iii) Curative Allocations shall be deferred with respect to allocations
pursuant to Section 4.2.1(3)(d) to the extent the General Partner reasonably
determines that such allocations are likely to be offset by subsequent
allocations pursuant to Section 4.2.1(3)(c), (iv) no Curative Allocation
attributable to Partner Nonrecourse Regulatory Allocations shall be made with
respect to allocations pursuant to Section 4.2.1(3)(j) relating to a particular
Partner Nonrecourse Debt prior to the Partnership fiscal year during which there
is a net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, and then only to the extent necessary to avoid any potential
economic distortions caused by such net decrease in Partner Minimum Gain, and
(v) Curative Allocations shall be deferred with respect to allocations pursuant
to Section 4.2.1(3)(j) relating to a particular Partner Nonrecourse Debt to the
extent the General Partner reasonably determines that such allocations are
likely to be offset by subsequent allocations pursuant to Section 4.2.1(3)(k).
The General Partner shall have reasonable discretion to apply, and divide among
the Partners, the Regulatory Allocations in whatever order is likely to minimize
the economic distortions that might otherwise result from the Regulatory
Allocations.

            4.2.2 Recapture Income. Each Partner's allocable share of
Partnership Net Income which is characterized as ordinary income pursuant to
Section 1245 or 1250 of the Internal Revenue Code shall be allocated to the
Partners to whom the Net Income or Net Loss which included the prior
corresponding depreciation deductions were allocated, such allocation to be made
pro rata to the Partners in accordance with the manner in which such Net Income
or Net Losses were allocated.

            4.2.3 Allocation of Partnership Items. Except as otherwise provided
in this Agreement, whenever a proportionate part of Net Income or Net Loss is
allocated to a Partner, every item of income, gain, loss or deduction entering
into the computation of such Net Income and Net Loss shall be considered
allocated, and every item of credit or tax preference related to such Net Income
and Net Loss and applicable to the period during which such Net Income or Net
Loss was realized shall be allocated to the Partner in the same proportion.

            4.2.4 Special Allocations to General Partner. To the extent
compensation paid to the General Partner under this Partnership Agreement is
determined not to be a guaranteed payment under Section 707(c) of the Internal
Revenue Code, and is not paid to a General Partner other than in its capacity as
a partner within the meaning of Section 707(a) of the Internal Revenue Code, the
General Partner shall be specially allocated gross income of the Partnership at
a time and in an amount equal to the amount of such compensation, and the
General Partner's Capital Account shall be adjusted to reflect the payment of
such compensation. Such allocations shall be shared equally between the General
Partners.

            4.2.5 Allocation Among Limited Partners. Except as otherwise
provided in this Agreement, all allocations to the Limited Partners shall be in
the ratio of the number of Units which are held by each such Limited Partner on
the date of such allocation (which allocation date shall be deemed to be the
last day of each month) to the total number of Limited Partner Units issued and
outstanding as of such date, and, except as otherwise provided in this
Agreement, without regard to the number of days during such month that the
Limited Partner Units were held by each Limited Partner. For purposes of this
Section 4.2 only, an Assignee of Record shall be treated as a Limited Partner.




                                        8

<PAGE>   15

            4.2.6 Assignment. In the event of the assignment of a Unit as a
result of which the Assignee becomes an Assignee of Record, the Net Income or
Net Loss and Distributions during the period commencing with the last allocation
date before the assignment shall be apportioned as between the Partner and his
Assignee based upon the number of months of its respective ownership during the
year in which the assignment occurs, without regard to the results of the
Partnership's operations during the period before or after such assignment. An
Assignee of a Unit who becomes an Assignee of Record during the first 15 days of
the month will receive any Distributions and allocations relative to such month.
An Assignee of a Unit who becomes an Assignee of Record on or after the 16th day
of the month will be treated as acquiring his Unit on the first day of the
following month.

            4.2.7 Quarterly Distributions. The Partnership intends to make
quarterly distributions (within 30 days after the first days of January, April,
July and October of each year) of substantially all Distributable Cash available
as determined by the General Partner, subject to the following: (i)
distributions may be restricted or suspended for limited periods when the
General Partner determines in its absolute discretion that it is in the best
interests of the Partnership; and (ii) all distributions are subject to the
payment of Partnership expenses and to the maintenance of reasonable reserves
for debt service, alterations, repairs, improvements, maintenance and
replacement of furniture and fixtures.

            4.2.8 Power of General Partner to Vary Allocations of Net Income and
Net Loss. It is the intent of the Partners that each Partner's distributive
share of Net Income or Net Loss and tax credits be determined and allocated in
accordance with Section 4.2 of this Agreement to the fullest extent permitted by
Section 704(b) of the Internal Revenue Code. Therefore, if the Partnership is
advised that the allocations provided in Section 4.2 of this Agreement are
unlikely to be respected for federal income tax purposes, the General Partner is
granted the power in Section 5.1.14 of this Agreement to amend the allocation
provisions of this Agreement, on advice of accountants and legal counsel, to the
minimum extent necessary to effect the plan of allocations and distributions
provided in this Agreement and yet have such allocations respected for federal
income tax purposes.

            4.2.9 Consent of Partners. The methods hereinabove set forth by
which the distributions and allocations of Net Income and Net Loss are made and
apportioned are hereby expressly consented to by each Partner as a condition of
becoming a Partner.

        4.3 WORKING CAPITAL RESERVE. Until its dissolution and liquidation, the
Partnership shall use its best efforts to maintain the Working Capital Reserve,
Gross Operating Revenues and Cash from Sale or Refinancing.


                                    ARTICLE 5

                          MANAGEMENT AND ADMINISTRATION

        5.1 POWERS AND AUTHORITY OF THE GENERAL PARTNER. The General Partners
shall have complete and exclusive control over the management of the
Partnership's business and affairs, and the Limited Partner shall have no right
to participate in the management or conduct of such business or affairs nor any
power or authority to act for or on behalf of the Partnership in any respect
whatsoever. Except as otherwise expressly provided in this Agreement, the
General Partners shall equally have the right, power and authority, on behalf of
the Partnership and in its name, to exercise all of the rights, powers and
authority permitted to a general partner under the CRLPA, including, without
limitation, the power and authority to do all of the following, at such times
and on such terms and conditions as it deems, in its absolute discretion, to be
in the best interests of the Partnership:

            5.1.1 To acquire, hold, sell, exchange, lease, rent or otherwise
dispose of the Property, interests therein or appurtenances thereto, as well as
personal or mixed property connected therewith, including the purchase, lease,
development, improvement, maintenance, repair, exchange, trade or sale of the
Property;

            5.1.2 To borrow money required for the business and affairs of the
Partnership, to secure the repayment of such borrowing by executing mortgages or
pledging or otherwise encumbering or subjecting to security




                                        9

<PAGE>   16

interests all or any part of the assets of the Partnership, and to refund,
refinance, increase, modify, consolidate or extend the maturity of any
indebtedness created by such borrowing, or any such mortgage, pledge,
encumbrance or other security device;

            5.1.3 To place record title to, or the right to use, Partnership
assets in the name or names of a nominee or nominees for any purpose convenient
or beneficial to the Partnership;

            5.1.4 To operate, manage and develop the Property or other asset of
the Partnership, to enter into agreements with others with respect to such
management, operation and development, and to employ Persons, at the expense of
the Partnership, in the operation and management of the Property (including, but
not limited to, supervisory managing agents, building or project managers,
insurance brokers, real estate brokers and property appraisers);

            5.1.5 To purchase, at the expense of the Partnership, contracts of
liability, casualty and other insurance for the protection of the assets or
affairs of the Partnership or for any purpose convenient or beneficial to the
Partnership;

            5.1.6 To invest Partnership funds in commercial paper, government
securities, certificates of deposit, banker's acceptances, or similar
investments having a maturity of not more than 360 days;

            5.1.7 To employ Persons, at the expense of the Partnership, to
perform legal and independent auditing services in connection with the operation
and management of the Partnership's business, and to provide services in
connection with the preparation and filing of any tax return required of the
Partnership;

            5.1.8 To incur, at the expense of the Partnership, bank charges with
respect to bank accounts maintained, and expenses relating to the purchase of
supplies, materials, equipment or similar items used in connection with the
operation of, and escrow fees, recording fees, title insurance premiums and
similar expenses in connection with the acquisition or disposition of, the
Property;

            5.1.9 To cause the Partnership to participate in any transaction in
any legal capacity other than that of partner or joint venturer;

            5.1.10 To enter into such agreements, contracts, documents and
instruments with such parties, and to give such receipts, releases and
discharges with respect to all of the foregoing and any matters incident
thereto, as the General Partner may deem advisable, appropriate and convenient;

            5.1.11 To admit, without the consent of the Limited Partner, any
Limited Partner or Substitute Limited Partner;

            5.1.12 To perform any and all other acts which the General Partner
is obligated to perform hereunder;

            5.1.13 In addition to any amendments otherwise authorized herein,
and subject to the provisions regarding amendment of this Agreement without any
action on the part of the Limited Partner by special or general power of
attorney or otherwise to amend the provisions of Sections 4.1, 4.2 and 9.3 of
this Agreement, if the Partnership is advised at any time by the Partnership's
accountants or legal counsel that the allocations and distributions provided in
such sections are unlikely to be respected for federal income tax purposes,
either because of promulgation of Treasury Regulations under Section 704 of the
Internal Revenue Code or other developments in the law. The General Partner is
empowered to amend such provisions to the minimum extent necessary in accordance
with the advice of the accountants and counsel to effect the plan of allocations
and distributions provided in this Agreement and yet have the allocations
respected for federal income tax purposes. New allocations made by the General
Partner in reliance upon the advice of the accountants or counsel described
above shall be deemed to be made pursuant to the fiduciary obligation of the
General Partner to the Partnership and the Limited Partner, and no such new
allocation shall give rise to any claim or cause of action by any Limited
Partner;




                                       10

<PAGE>   17



            5.1.15 In the event that the State of California amends the CRLPA in
any manner and, as a result of such amendment, tax counsel to the Partnership is
unable to give the Partnership an opinion to the effect that the Partnership
will be treated as a partnership for federal income tax purposes and not as an
association taxable as a corporation, then in the sole discretion of the General
Partner, to reconstitute the Partnership under the laws of another state;

            5.1.16 To require in any Partnership contracts that the General
Partner shall not have any personal liability thereon, but that the Person or
entity contracting with the Partnership is to look solely to the Partnership and
its assets for satisfaction;

            5.1.17 To execute, acknowledge and deliver any and all instruments
to effectuate the foregoing, and to take all such action in connection therewith
as the General Partner shall deem necessary or appropriate. Any and all
documents or instruments may be executed on behalf and in the name of the
Partnership by the duly authorized signature of any agent of the General
Partner;

            5.1.18 To represent the Partnership and Partners as "Tax Matters
Partner" within the meaning of the Code in discussions with the Internal Revenue
Service regarding the tax treatment of items of Partnership income, loss,
deduction or credit, or any other matter reflected in the Partnership's
information returns, and, if deemed appropriate and in the best interests of the
Partners, to agree to final Partnership administrative adjustments or file a
petition for a readjustment of the Partnership items in question with the United
States Tax Court, the appropriate United States District Court or the United
States Claims Court;

            5.1.19 To annually make available to trustees of Qualified Plans and
IRAs Unit valuation information which the General Partner deems appropriate, but
only to the extent such information is otherwise readily available from records
actually maintained by the Partnership; and

            In the exercise of its powers and authority, the General Partner
shall have fiduciary responsibility for the safekeeping and use of all funds and
other assets of the Partnership, whether or not the same are in the immediate
possession or control of the General Partner. The General Partner shall not
employ, or permit another to employ, any such funds or assets in any manner
except for the purpose of benefiting the Partnership.

        5.2 DUTIES OF THE GENERAL PARTNER. In addition to any other obligations
imposed upon it by this Agreement, the General Partner shall have the specific
duties described below. The General Partner may allocate any or all such duties
and obligations, by written agreement, and may also allocate by such agreement
fees and other compensation to be paid the General Partner for or with respect
to performance of such duties and obligations.

            5.2.1 Maintenance of Limited Partnership Status. The General Partner
shall now and hereafter take all actions reasonably practicable to maintain the
Partnership's valid existence and status as a limited partnership under the
CRLPA and to permit the Partnership to conduct its business, including, without
limitation, making all of the filings specified in Section 1.5 hereof.

            5.2.2 Acquisition of the Property. The General Partner shall have
examined, investigated and approved the Property prior to its acquisition.

            5.2.3 Management of the Property. The General Partner shall at all
times be responsible for providing to the Partnership, either through its own
employees or other agents, who may be Affiliates of the General Partner, or by
qualified real property managers engaged by it, property management services for
the Property, including supervision of the operation of the Property, monitoring
and projecting the economic results of the operation of the Property, monitoring
all lease agreements, management agreements, maintenance agreements and other
such contracts, and making periodic determinations of the appropriate amount of
the Working Capital Reserve. To the extent that the General Partner engages
third Persons, including Affiliates, to manage the Property, the General Partner
shall oversee such management and shall pay the fees charged by such third
Persons; provided, however, that nothing contained in this Agreement shall
preclude the General Partner from hiring for each Property, at the




                                       11

<PAGE>   18

Partnership's cost and expense, an on-site building manager or superintendent,
or similar such Person providing building management services full-time with
respect to such Property.

            5.2.4 Disposition of the Property. The Partnership may engage any of
the General Partners and Affiliates, on a nonexclusive basis, to sell the
Property for the Partnership.

            5.2.5 Insurance. The General Partner shall obtain and keep in force
policies of fire and extended coverage, worker's compensation and public
liability insurance covering the Partnership and the Property, with such
carriers and in such amounts as the General Partner deems appropriate, but no
less (and in deductible amounts no greater) than customarily maintained for
properties similar to the Property. Any such policies of insurance may, at the
election of the General Partner, name the General Partner as an additional
insured thereunder, provided, however, that the Partnership shall obtain no such
policy naming the General Partner as additional insured if any of the terms of
such policy have the effect of indemnifying the General Partner against
liabilities not permitted to be indemnified under any applicable law or
regulation.

            5.2.6 Net Worth. The General Partner shall at all times use its best
efforts to maintain a net worth sufficient to satisfy currently applicable
Treasury Regulations and rulings, procedures and policies of the Internal
Revenue Service (or controlling decisions by federal courts under the Internal
Revenue Code, as amended), concerning treatment of the Partnership for federal
income tax purposes as a partnership and not as an association taxable as a
corporation.

            5.2.7 Avoidance of Investment Company Status. The General Partner
shall use its best efforts to insure that the Partnership at no time becomes an
investment company, as such term is defined in the Investment Company Act of
1940.

            5.2.8 Records. The General Partner shall keep at the Partnership's
office in California the following Partnership documents:

                  (1) A current list of the full name and last known business or
residence address of each Partner, together with the contribution and share in
Net Income and Net Losses of each Partner;

                  (2) A copy of the Certificate of Limited Partnership, and all
Certificates of Amendment, and executed copies of any powers of attorney
pursuant to which any certificate has been executed;

                  (3) Copies of the Partnership's federal, state and local
income tax or information returns and reports if any, for the six most recent
fiscal years;

                  (4) Copies of the original Agreement and all amendments to the
Agreement;

                  (5) Financial statements of the Partnership for the six most
recent fiscal years;

                  (6) The Partnership' s books and records for at least the
current and past three fiscal years; and

                  (7) Originals or copies of all minutes, actions by written
consent, consents to action and waivers of notice of Partner and Limited Partner
votes, actions and consents.

            5.2.9 Delivery to Limited Partners and Inspection. The Limited
Partner have the following rights regarding access to Partnership records:

                  (1) Upon the request of a Limited Partner, the General Partner
shall promptly deliver to the requesting Limited Partner, at the expense of the
Partnership, a copy of the information required to be maintained by Sections
5.2.8(1), (2) or (4).




                                       12

<PAGE>   19

                  (2) The Limited Partner has the right, upon reasonable
request, to the following:

                      (A) Inspect and copy, at such Limited Partner's expense,
during normal business hours any of the Partnership records required to be
maintained by Section 5.2.8; and

                      (B) Obtain, at the Limited Partner's expense, from the
General Partner promptly after becoming available, a copy of the Partnership's
federal, state and local income tax or information returns for each year.

            5.2.10 Reports. The General Partner shall cause to be prepared and
distributed to each of the Partners the following reports:

                   (1) Within 60 days after the end of each calendar quarter, a
quarterly report containing:

                       (A) A balance sheet for the Partnership as of the end of
such period;

                       (B) A statement of Net Income (or Net Loss) of the
Partnership for such period;

                       (C) A cash flow statement of the Partnership for such
period; and

                       (D) Other pertinent information regarding the Partnership
and its activities.

           All of such financial statements may be unaudited.

                   (2) Within 120 days after the end of each fiscal year of the
Partnership, an annual report containing:

                       (A) A balance sheet of the Partnership as of the end of
such fiscal year, and statements of Net Income (or Net Loss), Partners' equity,
changes in financial position, and cash flow for the Partnership for such fiscal
year;

                       (B) A report of the activities of the Partnership during
such fiscal year, all of which financial statements shall be prepared in
accordance with generally accepted accounting principles and all of which
(except such cash flow statement) shall be accompanied by an audit report of an
independent certified public accountant; and

                       (C) A description of all Distributions to the Limited
Partner which shall separately identify Distributions from: (i) Distributable
Cash from Operations during such fiscal year; (ii) Distributable Cash from
Operations during a prior fiscal year which were held in the Working Capital
Reserve; (iii) Distributable Cash from Sale or Refinancing; and (iv) the
original Working Capital Reserve.

                   (3) Within 75 days after the end of each fiscal year of the
Partnership, a copy of that portion of the Partnership's federal income tax
return for such year as the Limited Partner may need for preparation of its
federal income tax returns; and

                   (4) Within 60 days after the end of each semi-annual period
in each fiscal year in which the General Partner receive fees for services from
the Partnership (including Acquisition Fees), a report containing a detailed
statement setting forth the services rendered, or to be rendered, by each
General Partner and the amount of fees received therefor. Concurrently with the
transmittal to the Partners of each report required by this Section 5.2.10, the
General Partner shall also cause a copy of such report to be filed with the
Commissioner of Corporations of the State of California and with such other
state securities regulatory agencies (if any) as may require such filing.




                                       13

<PAGE>   20

            5.2.11 Interim Reports; Accountant's Report. If as of the end of the
fiscal year there are more than 35 Limited Partners:

                   (1) Limited Partners owning at least 5% of the Units may make
a written request to the General Partner for an income statement of the
Partnership for the initial three-month, six-month or nine-month period of the
current fiscal year ended more than 30 days before the date of the request, and
a balance sheet of the Partnership as of the end of that period. The statement
shall be delivered or mailed to the Limited Partners within 30 days after the
request; and

                   (2) The financial statements referred to herein shall be
accompanied by a report if any, from the independent accountant engaged by the
Partnership. If there is no report, the financial statements shall be
accompanied by the certificate of the General Partner stating that the financial
statements were prepared without audit from the books and records of the
Partnership.

        5.3 RESTRICTIONS ON AUTHORITY OF GENERAL PARTNER.

            5.3.1 Actions Requiring Consent of the Limited Partner. Without the
prior written consent of the Limited Partner, the General Partner shall not have
the authority to:

                  (1) Do any act in contravention of this Agreement;

                  (2) Do any act that would make it impossible to carry on the
ordinary business of the Partnership (except as provided in Section 5.3.2(1)
hereof);

                  (3) Confess a judgment against the Partnership;

                  (4) Possess any Partnership assets, or assign its right in any
such assets, for other than a Partnership purpose; or

                  (5) Knowingly perform any act that would subject the Limited
Partner to liability as general partners in any jurisdiction.

            5.3.2 Actions Requiring Consent of the Limited Partner. Without the
consent of the Limited Partner, the General Partner shall not have authority to:

                  (1) Sell, or otherwise dispose of, all or substantially all of
the assets of the Partnership, except where such sale is part of (i) the
disposition of the Property (whether real, personal or mixed) in the ordinary
course of business or (ii) the orderly liquidation and winding up of the
Partnership upon its termination and dissolution, in either of which case no
consent of the Limited Partner will be required;

                  (2) Elect to dissolve the Partnership, except upon the
removal, bankruptcy, death, insanity or dissolution of the remaining General
Partner;

                  (3) Amend this Agreement or the Certificate of Limited
Partnership except as provided in Section 12.2 hereof; or

                  (4) Retire as a General Partner.

           5.3.3 Unconditional Restrictions on General Partner's Authority. The
General Partner shall have no authority to:

                  (1) Grant to itself or any Affiliate an exclusive right or
engagement to sell any Property;




                                       14

<PAGE>   21

                  (2) Enter into any agreement or arrangement on behalf of the
Partnership with itself or any Affiliate for the provision of services or supply
of goods, except as set forth in Article 6 hereof, unless such agreement (i)
does not contravene applicable Legal Restrictions and (ii) permits termination
thereof by the Partnership without penalty on no more than 60 days prior notice;

                  (3) Sell or lease any Property or other Partnership asset to
itself or to any Affiliate;

                  (4) Lend any Partnership funds or other assets to the General
Partner or any Affiliate;

                  (5) Commingle funds of the Partnership with the funds of any
other Person;

                  (6) Receive or permit any Affiliate to receive from the
Partnership any rebate or give up, or participate or permit any Affiliate to
participate in any reciprocal business arrangements that would circumvent the
foregoing restriction or any other restrictions herein against dealings between
the Partnership and the General Partner and its Affiliates;

                  (7) Directly or indirectly pay or award any finder's fees,
commissions or other compensation to any Person engaged by a potential investor
in Units for investment advice as an inducement to such Person to recommend the
purchase of Units to such potential investor, provided, however, that the
foregoing shall not preclude normal sales commissions payable to registered
broker/dealers or other properly licensed Persons for selling Units;

                  (8)   Make any assessment on the Limited Partner;

                  (9) Admit any Limited Partner or General Partner to the
Partnership except in accordance with the provisions of this Agreement;

                  (10) Make any distributions to the Partners of the cash or
other assets of the Partnership, except as expressly provided in this Agreement;

                  (11) Invest in limited partnership interests of another
program;

                  (12) Except as provided in Section 6.3 hereof, enter into any
agreement or arrangement by which the Limited Partner or the Partnership waive
or otherwise limit any of the fiduciary obligations of the General Partner; or

                  (13) Acquire any future Property on behalf of the Partnership
in exchange for Units.

                  (14) The General Partner shall only incur or cause the
Partnership to incur indebtedness in an amount necessary to acquire, operate and
maintain the Property. For so long as any mortgage lien exists on the Property,
the General Partner shall not cause the Partnership to incur, assume, or
guaranty any other indebtedness.

                  (15) The General Partner shall not cause the Partnership to
dissolve as long as the first deed of trust mortgage encumbers the Property.

                  (16) The General Partner shall not and shall not cause the
Partnership to consolidate or merge with or into any other entity or convey or
transfer the Property and assets substantially as an entirety to any entity
unless

                       (i) the entity (if other than the General Partner or the
Partnership) formed or surviving such consolidation or merger or that acquired
by conveyance or transfer the Property and assets of the General Partner or the
Partnership substantially as an entirety (a) shall be organized and existing
under the laws of the United States of America or any State or the District of
Columbia; (b) shall include in its organizational documents the same




                                       15

<PAGE>   22

limitations set forth in this subsection 5.3.3(16); and (c) shall expressly
assume the due and punctual performance of the Partnership's obligations; and

                       (ii) immediately after giving effect to such transaction,
no default or event of default under any agreement to which it is a party shall
have been committed by this Partnership and be continuing.

                  (17) For so long as a mortgage lien exists on the Property,
the General Partner shall not voluntarily commence a case with respect to
itself, as debtor, under the Federal Bankruptcy Code or any similar federal or
state statute without the unanimous consent of the Board of Directors of both
General Partners, including the Independent Director.

                  (18) For so long as a mortgage lien exists on the Property, no
material amendment to the General Partner's certificate of incorporation or to
the bylaws of the General Partner may be made without first obtaining approval
of the mortgagees holding any first mortgage on the Property.

        5.4 METHOD OF ACTION BY GENERAL PARTNER. The Partnership may act by any
of the General Partners, and each General Partner is authorized to perform any
act within the General Partners' power and authority under this Agreement,
provided such act has been duly authorized by all General Partners. Except as
provided in Section 8.1 hereof, neither the Partnership nor any of the General
Partners shall take any action that has not been approved by all of the General
Partners. Any Individual General Partner or any officer of a Corporate General
Partner may execute, sign and deliver documents and instruments on behalf of the
Partnership, and all such documents and instruments shall constitute duly
executed and delivered documents and/or instruments of the Partnership.

        5.5 TIME AND EFFORTS OF THE GENERAL PARTNER. The General Partners shall
devote such of their time and efforts to the Partnership's business as, in their
sole discretion, it deems to be necessary for the proper management and
supervision of the Partnership's business and assets. The Limited Partner hereby
acknowledges that the General Partner, Income Growth Management, Inc. has other
businesses and will engage in activities other than those relating to the
Partnership, including, without limitation, the acquisition, development,
management, operation, maintenance, refinancing and sale, both for itself and
for others, of real properties, some of which may be comparable to or
competitive with the Property, and General Partner IGP X Shadow Ridge Meadows,
Inc. shall devote its time solely to serving as a General Partner of this
Partnership. Nothing in this Agreement or in the relationship of the General
Partner to the Partnership and the Limited Partner shall preclude General
Partner, Income Growth Management, Inc. from engaging in such other businesses
and activities (including, without limitation, businesses and activities that
may in some instances be competitive with the Partnership), or create in the
Partnership or in any Partner any right to the income or proceeds derived from
such other businesses or activities, or create any other obligations or
liabilities on the part of such General Partner to the Partnership or to any
Partner by reason thereof.

        5.6 POWER OF ATTORNEY. The Limited Partner hereby irrevocably makes,
constitutes and appoints the General Partner with full power of substitution,
its true and lawful attorney-in-fact, in its name alone, place and stead to
make, execute, sign, acknowledge, record, file and publish, on behalf of it and
of the Partnership, the following:

            5.6.1 The Certificate of Limited Partnership, fictitious business
        name statements and any and all other certificates or instruments that
        are required to be filed pursuant to Section 1.4 hereof;

            5.6.2 Upon the termination of the Partnership, a certificate of
        cancellation of the Partnership and such other instruments and documents
        required to effect such termination or by Section 12.2 hereof;

            5.6.3 Any contract for purchase or sale of real estate, and any
        deed, deed of trust, mortgages or other instrument of conveyance or
        encumbrance, with respect to the Property; and

            5.6.4 Any and all such other instruments as the General Partner may
        deem necessary or desirable to effect the purposes of this Agreement and
        carry out fully its provisions, in accordance with its terms.




                                       16

<PAGE>   23

        The power of attorney hereby granted is acknowledged to be coupled with
the interest of the General Partner in the Partnership and its assets, and is
therefore irrevocable and shall survive the death, incapacity, termination or
dissolution of any Limited Partner granting the power, or the assignment by any
Limited Partner of all or any of his Units. Such power of attorney may be
exercised by the General Partner by and through one or more of the officers of
such General Partner, or by listing the names of all of the Limited Partners
executing any instrument subscribed with a single signature for such General
Partner as attorney-in-fact for them, or by such other method as may be required
or requested in connection with the recording or filing of any instrument or
other document so executed. Each instrument and other document executed under
the power of attorney granted hereby shall be in such form as the General
Partner and counsel for the Partnership deem appropriate.

        5.7 SECTION 754 ELECTION. The General Partner shall have the authority,
but not the obligation, to make or revoke, on behalf of the Partnership, the
election provided for in Section 754 of the Internal Revenue Code and such other
elections, as the General Partner, in its sole discretion, determines to be in
the best interests of the Limited Partner.

        5.8 FISCAL YEAR. The Partnership's fiscal year shall be the calendar
year, and the Partnership's tax year shall be the same as its fiscal year.

        5.9 BANKING. All funds of the Partnership shall be deposited in a
separate and distinct bank account or accounts, as determined by the General
Partner, and all withdrawals from such accounts shall be made upon checks signed
by the General Partner (or by such other Person or Persons as the General
Partner may authorize) or by such other method(s) of withdrawal as the General
Partner may authorize.


                                    ARTICLE 6

                  COMPENSATION OF GENERAL PARTNER AND EXPENSES

        6.1 GENERAL PARTNER'S COMPENSATION. In addition to the distributions to
the General Partner provided for in Section 4.1 hereof for services rendered by
the General Partner to the Partnership, the General Partner shall be compensated
as follows:

            6.1.1 Acquisition Fees. For services rendered in connection with an
acquisition of real property by the Partnership, the General Partner, or an
Affiliate of the General Partner, shall be entitled to receive from the
Partnership, at the time the Partnership acquires a Property, an Acquisition Fee
in an amount equal to 3% of the Purchase Price of the Property being acquired by
the Partnership, subject to the lesser of the following limitations:

                  (1) Any such Acquisition Fee shall not exceed the normal and
competitive rate for similar services in the locality where the services are
provided.

                  (2) The total of such Acquisition Fee paid pursuant to this
Section 6.1.1 plus any other Acquisition Fee known to the General Partner to be
paid to any person by any person in connection with the acquisition or
development of the Property by the Partnership shall not exceed an amount equal
to the normal and competitive rates for similar services in the locality where
the services are provided. The Acquisition Fee paid to the General Partner shall
be reduced to the extent that Acquisition Fees to be paid to any Person by any
Person in connection with the acquisition or development of the Property by the
Partnership exceeds the maximum set forth in this Section 6.1.1.

                  (3) The sum of the Purchase Price of any Property acquired by
the Partnership and the Acquisition Fee shall not exceed the fair market value
of the Property as substantiated by an independent, qualified appraisal.

            6.1.2 Management Fee. In the event that the General Partner (or its
Affiliates) renders services to the Partnership in connection with the
management and operation of the Properties, the General Partner (or its
Affiliates) shall be entitled to receive a monthly Management Fee equal to 5% of
the Gross Property Revenues earned during the calendar month for which such fee
is paid. Each such fee shall be paid on or before the thirtieth (30th)




                                       17

<PAGE>   24

day after the end of the calendar month for which it is payable. Notwithstanding
the above, such Management Fee paid to the General Partner or its Affiliates
shall be competitive in price and terms with that which would be charged by a
nonaffiliated Person for comparable services which could reasonably be made
available. In addition, in the event any Management Fee is paid by the
Partnership to a nonaffiliated Person for similar management services, the total
of all such fees payable to all Persons shall not exceed a single standard
property management fee, as provided herein.

            6.1.3 Subordinated Real Estate Commissions on Sale of Partnership
Real Estate. The General Partner shall be entitled to receive a fee in
connection with any sale of the Property effected in whole or in part through
the efforts of the General Partner, or any Affiliate, including, without
limitation, sales in which the General Partner is instrumental in (i)
identifying or interesting the buyer in the Property, (ii) negotiating the terms
of such sale, (iii) investigating the then available market for sale of the
Property and determining what offer the Partnership should make or accept in
connection with a prospective sale thereof, (iv) investigating the financial
condition, experience and reputation of the buyer, where any portion of the
Purchase Price for such sale is to be deferred, or (v) performing any services
that are customarily performed in connection with sales of real estate by real
estate brokers acting for the seller. Nothing contained in this Section 6.1.3
shall be deemed to give any General Partner or any Affiliate of the General
Partner an exclusive right to list or sell any Property. The fee (if any) paid
to the General Partner under this Section 6.1.3 shall be the same as the
customary fee the Partnership would pay to an independent real estate broker for
the sale of the Property in question, subject to and limited by the following
conditions:

                  (1) With respect to any sale of a Property by the Partnership
on which the General Partner will collect a fee under this Section 6.1.3, the
aggregate amount of such fee and all real estate brokerage commissions or
similar fees paid to other Persons shall not exceed 6% of the contract price for
the Property and the amount payable to the General Partner shall not exceed 3%
of the contract price; and

                  (2) Payment of any such fees to the General Partner (other
than payments in the form of promissory notes that are subordinated to the
return of Capital Contributions to the Limited Partner) shall be deferred until
the Limited Partner has received, in distributions under either Section 4.1.2 or
9.3.1 hereof, an aggregate amount equal to its Adjusted Invested Capital plus a
10% per annum cumulative, but not compounded, return on its Adjusted Invested
Capital. After such condition has been satisfied, however, such fees shall be
paid to the General Partner out of Distributable Cash from Sale or Refinancing.

        6.2 OPERATING EXPENSES.

            6.2.1 Payment Generally. Subject to limitations expressly set forth
in Section 6.2.2 hereof and elsewhere in this Agreement, the Partnership shall
pay all of the costs and expenses incurred in acquiring, operating, maintaining,
refinancing and disposing of the Properties, conducting the other affairs of the
Partnership and dissolving, liquidating, winding up and terminating the
Partnership. All such Partnership costs and expenses shall be billed directly
to, and paid in the first instance by, the Partnership, except for costs
reimbursable to the General Partner under Section 6.2.2 hereof.

            6.2.2 Reimbursements to General Partner. Except as provided in this
Section 6.2.2, the Partnership shall not reimburse the General Partner or any
Affiliate for its general or administrative overhead or any of the expenses of
any of the officers and directors of the General Partner and Affiliates not
directly attributable to the rendering of services or providing facilities to
the Partnership, and no payment shall be made for services for which the General
Partner (or any Affiliate) are entitled to compensation by way of any Management
Fees or subordinated real estate commissions on sales of the Properties or the
General Partner's interest in the Partnership. Notwithstanding the foregoing
general prohibition on reimbursement to the General Partner and Affiliates,
however, the Partnership shall reimburse a General Partner or an Affiliate, as
set forth below, for all accounting, documentation, professional (including, but
not limited to, regulatory reporting and legal services), recording and Partner
communications expenses incurred for the Partnership. Such expenses shall be
reimbursed in amounts equal to the lower of (i) such General Partner's or
Affiliate's actual costs for the services or facilities provided, or (ii) 90% of
the rates customarily charged for similar services or facilities in the same or
comparable geographic location by Persons dealing at arm's-length and having no
affiliation with the Partnership. "Actual cost" as used herein means




                                       18

<PAGE>   25

the pro rata cost of personnel or facilities including an allocation for the
direct cost associated therewith (as if such personnel were part-time employees
of the Partnership or such facilities were time-shared among the Partnership and
others), all based on the amount of time such personnel spent or such facilities
were used on business or affairs of the Partnership. The General Partner has an
adequate staff to render the required administrative services. For purposes of
reimbursement to a General Partner or Affiliate, accounting, documentation,
professional and recording expenses of the Partnership shall not include the
cost of time devoted to the Partnership's business affairs by any executive
personnel of a General Partner or Affiliate who will be involved in making
investment and other management decisions for the Partnership (or by any of its
successors in such role), but may include time spent by officers and other
employees of the General Partner and Affiliates who do not have such executive
responsibility. The provision of any services to the Partnership shall be
embodied in a written contract describing services to be rendered and
compensation to be paid therefor and providing that the contract will be
terminable without penalty upon 60 days notice.

        6.3 INDEMNIFICATION OF GENERAL PARTNER.

            6.3.1 Indemnification Generally. The Partnership its receiver or
trustee shall hold harmless, indemnify and defend the General Partner and its
shareholders, directors, officers and other employees from and against any
claim, liability or expense (including, without limitation, reasonable
attorneys' fees) suffered by them by virtue of any act performed or omitted to
be performed by them in connection with the Partnership's activities, provided,
that if such claim, liability or expense arises out of any action or inaction by
the General Partner, or other related Person, the General Partner must have
determined, in good faith, that such course of conduct was in the best interests
of the Partnership, and such course of conduct must not have constituted
negligence or misconduct by the General Partner. All judgments against a General
Partner, concerning which such General Partner is entitled to indemnification,
shall be satisfied from Partnership assets before such General Partner shall be
held responsible.

            6.3.2 Restrictions on Indemnification. Notwithstanding Section 6.3.1
hereof, the Partnership shall not indemnify any General Partner or shareholder,
director, officer or other employee thereof, for liability imposed or expenses
incurred in connection with any claim arising out of a violation of the
Securities Act of 1933, or any other federal or state securities law, with
respect to the offer and sale of the Units. Indemnification will be allowed for
settlements and related expenses in lawsuits alleging securities law violations,
and for expenses incurred in successfully defending such law suits, provided
that a court either:

                  (1) approves the settlement and finds that indemnification of
the settlement and related costs should be made; or

                  (2) approves indemnification of litigation costs, if a
successful defense is made.

                      If the General Partner seek indemnification, it will
apprise the court of the position of the Securities and Exchange Commission and
applicable state securities laws commissions (including the California
Commissioner of Corporations) with respect to indemnification for securities law
violations, before seeking court approval for indemnification.

            6.3.3 Indemnification Limited to Partnership Assets. Any
indemnification hereunder shall be made only to the extent of the Partnership's
assets, and no Limited Partner shall be personally liable on such
indemnification. Any indemnification shall be fully subordinated to any
obligations respecting the Property and shall not constitute a claim against the
Partnership in the event that cash flow is insufficient to pay such obligations.

        6.4 EXONERATION OF GENERAL PARTNER FOR ACTS IN GOOD FAITH.
Notwithstanding any other provision hereof, and to the maximum extent
permissible under applicable law, the Partnership and of the Limited Partner
hereby waives and releases the General Partner, its shareholders, directors,
officers, employees, and other agents from any and all claims and liabilities by
reason of adverse results to the Partnership or any Limited Partner of any act
or failure to act on the part of the General Partner, in the performance of any
duty of the General Partner hereunder, so long




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<PAGE>   26

as the General Partner was proceeding in good faith to promote the best
interests of the Partnership and did not act in a manner which would constitute
negligence or misconduct.

                                    ARTICLE 7

                            LIMITED PARTNER INTEREST

        7.1 LIMITED LIABILITY. Except as otherwise provided by applicable state
law, a Limited Partner shall not be liable for any of the debts, liabilities,
contracts or other obligations of the Partnership, except to the extent of the
Capital Contribution made by him in return for the Units. Once such Capital
Contribution is fully paid to the Partnership, in cash, a Limited Partner shall
not be obligated to make any further contribution to, or be subject to any
assessment by, the Partnership.

        7.2 WITHDRAWAL AND RETURN OF LIMITED PARTNER'S CAPITAL CONTRIBUTION.
Except upon the dissolution and liquidation of the Partnership, no Limited
Partner shall be entitled to withdraw any of his Capital Contribution, and no
Limited Partner shall have the right to receive a return of his Capital
Contribution at any time in property other than cash.

        7.3 ROLE OF LIMITED PARTNERS. The Limited Partners shall take no part
in, nor in any manner interfere with, the management, control, conduct or
operation of the Partnership, its business or assets, and shall have no right or
authority to act for or bind the Partnership in any particular; provided,
however, that the Limited Partners shall have the right, by affirmative vote
thereof, to:

            7.3.1 Remove a General Partner, as provided in Section 8.1 hereof;

            7.3.2 Elect or approve a successor to any removed or withdrawn
General Partner, as provided in Section 8.3 hereof;

            7.3.3 Subject to the limitations set forth in Section 5.3(15),
dissolve the Partnership;

            7.3.4 Approve any amendment of this Agreement, except as otherwise
provided in Section 12.2 hereof; and

            7.3.5 Approve any proposed sale of all or substantially all of the
assets of the Partnership, except as permitted without consent of the Limited
Partners under Subsection 5.3.2(1) hereof.

Any vote of the Limited Partners taken pursuant to this Section 7.3 may be taken
either at a meeting of the Limited Partners of Record, to be called in
accordance with Section 7.5 hereof or, without a meeting in accordance with
Section 7.10.

        7.4 UNANIMOUS VOTES; CONSENT OF GENERAL PARTNER. Each Limited Partner
shall be entitled to one vote for each Unit he owns and to the equivalent
fraction of one vote for each fraction of a Unit he owns. Any amendment that
would affect the compensation to be paid to the General Partner under this
Agreement or the General Partner's interest in the Partnership, the election of
an additional General Partner when the General Partner will continue as such,
extension of the term of the Partnership and any amendment that would affect the
rights, powers or authorities of the General Partner as provided for in this
Agreement, shall also require the consent of the General Partner to pass and
become effective. Election of a General Partner or election to continue to be a
General Partner (other than by removal) where there is no remaining General
Partner, and any amendment that would reduce the economic interest of the
Limited Partners in the Partnership or increase its obligations or liabilities
thereto shall require the consent of each of the Limited Partners to pass and
become effective.

        7.5 MEETINGS OF THE LIMITED PARTNERS. The General Partner may at any
time call for a meeting of the Partners, or for a vote without a meeting, on
matters on which the Limited Partners are entitled to vote, and shall call




                                       20

<PAGE>   27

for such a meeting (but not a vote without a meeting) following receipt of a
written request therefor of Limited Partners holding 10% or more of the Units
entitled to vote as of the record date. Within 20 days (or as soon as
practicable if the date for the meeting specified in the request, if any, is
earlier) after receipt of such request, the General Partner shall notify all
Limited Partners of record as of the record date of the Partnership meeting.

        7.6 NOTICE. Written notice of each meeting shall be given to each
Limited Partner entitled to vote, either personally or by mail or other means of
written communication, charges prepaid, addressed to such Limited Partner at his
address appearing on the books of the Partnership or given by him to the
Partnership for the purpose of notice or, if no such address appears or is
given, at the principal executive office of the Partnership, or by publication
of notice at least once in a newspaper of general circulation in the county in
which such office is located. All such notices shall be sent to each Limited
Partner entitled thereto not less than 10 nor more than 60 days before such
meeting. The notice shall specify the place, date and hour of the meeting and
the general nature of business to be transacted, and no other business shall be
transacted at the meeting. In addition, the notice shall state such other
matters, if any, as may be expressly required by law.

        7.7 ADJOURNED MEETING AND NOTICE THEREOF. When a Limited Partners'
meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken. At the adjourned meeting, the Partnership may
transact any business which might have been transacted at the original meeting.
If the adjournment is for more than 45 days or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Limited Partner of record entitled to vote at the
meeting.

        7.8 QUORUM. Except as to matters as to which this Agreement requires a
greater vote, the presence in Person or by proxy of the Persons entitled to vote
a Majority-In-Interest of the Units shall constitute a quorum for the
transaction of business. The Partners present at a duly called or held meeting
at which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough Partners to leave less
than a quorum, if any action taken (other than adjournment) is approved by at
least a Majority-In-Interest or such greater vote as may be required by this
Agreement or by law. In the absence of a quorum, any meeting of Partners may be
adjourned from time to time by the vote of a majority of the Units represented
either in Person or by proxy, but no other business may be transacted, except as
provided above.

        7.9 CONSENT OF ABSENTEES. The transactions of any meeting of Partners,
however called and noticed and wherever held, are as valid as though had at a
meeting duly held after regular call and notice, if a quorum is present either
in Person or by proxy, and if, either before or after the meeting, each of the
Persons entitled to vote, not present in Person or by proxy, signs a written
waiver of notice, or a consent to the holding of the meeting or an approval of
the minutes thereof. All waivers, consents and approvals shall be filed with the
Partnership records or made a part of the minutes of the meeting.

     7.10 ACTION WITHOUT MEETING. Except as may otherwise be provided in this
Agreement, any action that may be taken at any meeting of the Partners may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by Partners having not less than the minimum number of
votes that would be necessary to authorize or take that action at a meeting at
which all Partners entitled to vote thereon were present and voted. In the event
the Limited Partners are requested to consent on a matter without a meeting,
each Partner shall be given at least 10, but not more than 60, days notice
before the consummation of the action to be authorized by such approval. In the
event any General Partner or Limited Partners representing more than 10% of the
Units request a meeting for the purpose of discussing or voting on the matter,
the notice of a meeting shall be given in the same manner as required by Section
7.6 and no action shall be taken until the meeting is held. Unless delayed in
accordance with the provisions of the preceding sentence, any action taken
without a meeting will be effective 15 days after the required minimum number of
Partners has signed the consent; however, the action will be effective
immediately if the General Partner and Limited Partners representing at least
90% of the Units have signed the consent.

        7.11 RECORD DATES. For purposes of determining the Partners entitled to
notice of any meeting or to vote or entitled to receive any distributions or to
exercise any rights in respect of any other lawful matter, the General




                                       21

<PAGE>   28

Partner or Limited Partners representing more than 10% of the Units may fix in
advance a record date, which shall be not more than 60 nor less than 10 days
prior to the date of the meeting nor more than 60 days prior to any other
action. If no record date is fixed:

             7.11.1 The record date for determining Partners entitled to notice
of or to vote at a meeting of Partners shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held;

             7.11.2 The record date for determining Partners entitled to give
consent to Partnership action in writing without a meeting shall be the day on
which the first written consent is given;

             7.11.3 The record date for determining Partners for any other
purpose shall be at the close of business on the day on which the General
Partner adopts it, or the sixtieth day prior to the date of the other action,
whichever is later; and

             7.11.4 A determination of Partners of record entitled to notice of
or to vote at a meeting of Partners shall apply to any adjournment of the
meeting unless the General Partner, or the Limited Partners who called the
meeting, fix a new record date for the adjourned meeting, but the General
Partner, or such Limited Partners, shall fix a new record date if the meeting is
adjourned for more than 45 days from the date set for the original meeting.

        7.12 PROXIES. Except as may otherwise be provided in this Agreement,
every Person entitled to vote or execute consents shall have the right to do so
either in Person or by one or more agents authorized by a written proxy executed
by such Person or his duly authorized agent and filed with the General Partner.
No proxy shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy continues in full force and
effect until revoked as specified in Section 705(b) of the California General
Corporations Law or unless it states that it is irrevocable. A proxy which
states that it is irrevocable is irrevocable for the period specified therein
when it is held by a Person specified in Section 705(e) of the California
General Corporations Law.

        7.13 CHAIRMAN OF MEETING. The General Partner may select any Person to
preside as Chairman of any meeting of Partners, and if such Person shall be
absent from the meeting, or fail or be unable to preside, the General Partner
may name any other Person in substitution therefor as Chairman. In the absence
of an express selection by the General Partner of a Chairman or substitute
therefor, the General Partner's Chairman of the Board, President, Vice President
or Vice Presidents in order of its rank, Secretary, or Chief Financial Officer,
shall preside as Chairman, in that order. The Chairman of the meeting shall
designate a secretary for such meeting, who shall take and keep or cause to be
taken and kept minutes of the proceedings thereof.

             The conduct of all Partners' meetings shall at all times be within
the discretion of the Chairman of the meeting and shall be conducted under such
rules as he may prescribe. The Chairman shall have the right and power to
adjourn any meeting at any time, without a vote of the Units present in Person
or represented by proxy, if the Chairman shall determine such action to be in
the best interests of the Partnership and its Partners.

        7.14 INSPECTORS OF ELECTION. In advance of any meeting of Partners, the
General Partner may appoint any Persons, other than nominees for General Partner
or other office, as inspectors of election to act at the meeting and any
adjournment thereof. If inspectors of election are not so appointed, or if any
such Persons fail to appear or refuse to act, the Chairman of any such meeting
may, and on the request of any Partner or his proxy shall, make such appointment
at the meeting. The number of inspectors shall be either one or three. If
appointed at a meeting on the request of one or more Partners or proxies, the
majority of Units present in Person or by proxy shall determine whether one or
three inspectors are to be appointed. The inspectors of election shall (i)
determine the number of Units outstanding and the voting power of each, the
Units represented at the meeting, the existence of a quorum and the
authenticity, validity and effect of proxies, (ii) receive votes, ballots or
consents, (iii) hear and determine all challenges and questions in any way
arising in connection with the right to vote, (iv) count and tabulate all votes
or consents, (v) determine when the polls shall close, (vi) determine the result
and (vii) do such acts as may be proper




                                       22

<PAGE>   29

to conduct the election or vote with fairness to all Partners. If there are
three inspectors of election, the decision, act or certificate of a majority is
effective in all respects as the decision, act or certificate of all.

        7.15 RECORD DATE AND CLOSING PARTNERSHIP BOOKS. When a record date is
fixed, only Partners of Record on that date are entitled to notice of and to
vote at the meeting or to receive a distribution, or allotment of rights, or to
exercise the rights, as the case may be, notwithstanding any transfer of any
Units on the books of the Partnership after the record date.

        7.16 NO TERMINATION BY REASON OF CHANGE IN LIMITED PARTNERS. The
Partnership shall not be dissolved or terminated, or subject to dissolution or
termination, by reason of the death, dissolution, termination, legal incapacity,
bankruptcy or insolvency of any Limited Partner or Limited Partners, or the
transfer or assignment of any Unit (whether or not in accordance with the
provisions of this Agreement), or by any other change in the circumstances or
identity of the holders of Units (unless such holder is also a General Partner).

        7.17 TRANSFER OF UNITS.

             7.17.1 Restrictions on Transfer and Assignment of Units. No
transfer, assignment or conveyance of any Unit shall be effective unless and
until the following conditions are satisfied:

                    (1) No Limited Partner shall have the right to transfer any
Unit to any minor or to any Person who, for any reason, lacks the capacity to
contract for himself under applicable law. Such limitations shall not, however,
restrict the right of any Limited Partner to transfer any one or more Units to a
custodian or a trustee for a minor or other Person who lacks such contractual
capacity.

                    (2) The General Partner, with advice of counsel, must
determine that such transfer will not result in the Partnership being treated,
for federal income tax purposes, as having been terminated pursuant to Section
708 of the Internal Revenue Code, and will not violate the requirements of the
Securities Act of 1933, as amended, and applicable state securities laws.

                    (3) The instrument of transfer and all other necessary
documentation is in form and substance satisfactory to the General Partner, and
the transferee has paid all costs and expenses of the Partnership in an amount
not to exceed $200.00, incurred in connection with such transfer.

                    (4) The General Partner, with advice of counsel, determines
that such transfer will not (i) cause the Units to be deemed "readily tradable
on a secondary market (or the substantial equivalent thereof)" under the
provisions of the Internal Revenue Code relating to publicly traded partnerships
or (ii) cause the Partnership to be treated as a publicly traded partnership.

                    Any attempted transfer, assignment or conveyance or offer to
transfer, assign or convey a Unit that does not comply with this Section 7.17.1
shall be null and void ab initio and shall not be recognized by the Partnership.
In addition, a transferee shall have no rights to any information regarding an
accounting of the Partnership's transactions, to inspect the Partnership's books
or to vote in any matter presented to the Limited Partners; nor may such rights
be exercised by the transferor in respect of the Units so transferred.

                    An assignment of Units satisfying the conditions specified
in this Section 7.17.1 shall entitle the transferee or assignee to receive all
distributions of cash and other property from the Partnership, and all
allocations of Net Income and Net Losses made with respect to the assigned Units
after the Recognition Date for such assignment; but shall not entitle such
assignee to any other of the rights and privileges of a Limited Partner
hereunder unless such assignee becomes a Substitute Limited Partner in
accordance with Section 7.17.5 hereof. In the event that the Partnership or its
counsel determines that an assignment does not satisfy the conditions specified
in this Section 7.17.1, the General Partner shall promptly notify the assignor
of such determination and such assignment shall be void ab initio and shall not
be recognized for any purpose; provided, however, nothing contained in this
Section 7.17.1 shall




                                       23

<PAGE>   30

obligate the General Partner or counsel to the Partnership to make any
independent examination or investigation to determine whether such conditions
have been satisfied.

             7.17.2 Transfers of Units by Operation of Law. Upon any transfer of
Units by operation of law (including, without limitation, transfers at death,
whether testamentary or otherwise), either the transferee or transferor (or the
transferor's personal representative) shall promptly give the Partnership
written notice of such transfer, stating by what means it occurred. The
Partnership shall recognize any such transfer of which it receives such notice,
provided such transfer does not violate any applicable federal or state
securities law or regulation, and any restriction imposed thereby with respect
to the financial suitability of, or minimum purchase (in terms of number of
Units) by, any transferee for consideration. If a transfer violates any
applicable federal or state securities laws, it shall be void ab initio. A
transferee of Units satisfying the conditions specified in this Section 7.17.2
shall be entitled to receive all distributions of cash and other property from
the Partnership and all allocations of Net Income and Net Losses made with
respect to the transferred Units after the Recognition Date for such transfer,
but shall not be entitled to any other of the rights and privileges of a Limited
Partner hereunder unless such transferee becomes a Substitute Limited Partner in
accordance with Section 7.17.5 hereof.

             7.17.3 Repurchase of Units by Partnership. The Partnership may only
repurchase Units from any Limited Partner under all of the following conditions:

                    (1) A Limited Partner must request repurchase of his Unit(s)
by delivery of a written request to the General Partner;

                    (2) The repurchase price shall be equal to 90% of the
Limited Partner's Adjusted Invested Capital. In the event that such price is
greater than the fair market value of the Units on the date of repurchase or
less than 99% of the fair market value of the Units on the date of repurchase,
then the repurchase price shall be equal to such higher or lower limit, as
applicable;

                    (3) Whether the General Partner accepts a request for
repurchase will be at its sole and absolute discretion, and a condition to
exercise of such discretion in favor of repurchase will be the General Partner's
determination that such repurchase will not impair the capital or operation of
the Partnership;

                    (4) Any requests for repurchase will be accepted and
satisfied on a first-received, first-purchased basis;

                    (5) Units repurchased may, in the sole and absolute
discretion of the General Partner, be resold, subject to applicable securities
laws, or, if not resold, cancelled;

                    (6) The Partnership will not purchase, in any year, Units
with an aggregate purchase price in excess of $200,000.

             7.17.4 Recognition Date for Assignments and Other Transfers. The
Recognition Date for any assignment or other transfer of Units satisfying the
conditions set forth in Section 7.17.1 or 7.17.2 hereof shall be the first day
of the calendar month in which the Partnership receives written notice of such
assignment or other transfer if notice is received before the sixteenth day of
the month or the first day of the following month if notice of such assignment
or transfer is received on or after the sixteenth day of the month.
Notwithstanding the foregoing sentence, however, if recognition by the
Partnership of any assignment or other transfer of Units would result in 50% or
more of all outstanding Units having been assigned or otherwise transferred
within a 12-month period, the Partnership shall have the right to defer the
Recognition Date for such assignment or transfer, whenever the General Partner
in its sole discretion determines that recognition thereof could result in a
determination for federal income tax purposes that the Partnership had
terminated, until the last day of the next ensuing calendar month during which
such recognition would not risk such a tax "termination."




                                       24

<PAGE>   31

             7.17.5 Admission of Substitute Limited Partners. An assignee or
transferee of Units recognized under Section 7.17.1 or 7.17.2 hereof may become
a Substitute Limited Partner in place of his assignor or transferor, to the
extent of the Units assigned, only if:

                    (1) With respect to such an assignment, the written and
executed instrument of assignment delivered to the Partnership with respect to
such assignment sets forth the intention of the assignor that the assignee
become a Substitute Limited Partner in his place, to the extent of the Units
assigned;

                    (2) The assignee or transferee of such Units executes,
acknowledges and delivers to the Partnership a written agreement to become a
party to and be bound by the provisions of this Agreement, in a form
satisfactory to the General Partner, as well as such other instruments as the
General Partner may deem necessary or desirable with respect to the admission of
such assignee or transferee as a Substitute Limited Partner;

                    (3) Such assignee or transferee tenders to the Partnership a
uniform transfer fee, in an amount determined by the General Partner sufficient
to cover all reasonable expenses incurred by the Partnership in connection with
admission of a Substitute Limited Partner; and

                    (4) The General Partner gives its written consent, which may
be given or withheld in its sole and absolute discretion, to the admission of
such assignee or transferee as a Substitute Limited Partner. The General
Partner's refusal to consent to any admission as a Substitute Limited Partner
shall be deemed reasonable if, inter alia, it is based upon a reasonable belief
that such admission would (a) cause a termination of the Partnership under
Section 708(b) of the Internal Revenue Code; (b) violate the conditions of any
applicable state or federal securities law; or (c) cause the admission of an
individual as a Substitute Limited Partner who does not meet the suitability
standards established for purchasers of Units hereunder.

                    It is expressly understood that the General Partner's
discretion to consent or to refuse to consent to the admission of an assignee or
transferee of Units as a Substitute Limited Partner is granted to the General
Partner for the benefit of the Limited Partners in order to negate the corporate
characteristic of free transferability of interests. No consent of any of the
Limited Partners shall be required to effect the admission of such an assignee
or transferee as a Substitute Limited Partner, except (in the case of an
assignment) the consent of the Limited Partner making such assignment, which
shall be evidenced as provided in Section 7.17.5(1), above. The Recognition Date
for admission of any Substitute Limited Partner shall be the last day of the
calendar quarter in which the General Partner gives its written consent to the
admission of such Substitute Limited Partner, and on or before such Recognition
Date the General Partner shall cause the Certificate of Limited Partnership to
be amended to reflect the admission of such Substitute Limited Partner.

             7.17.6 Names and Addresses of Limited Partners. The General Partner
shall keep at the principal place of business of the Partnership a list
containing the name and address of each Limited Partner.


                                    ARTICLE 8

                            GENERAL PARTNER INTERESTS

        8.1 REMOVAL OF GENERAL PARTNER.

            8.1.1 Removal by Vote of Limited Partners. By the vote of a
Majority-In-Interest (as provided in Section 7.3 hereof) the Limited Partners
may at any time remove the General Partner.

            8.1.2 Removal by Other General Partner. Any General Partner may
remove any other General Partner, if such other General Partner:




                                       25

<PAGE>   32

                  (1) Has been judicially determined to have committed a
material default of its obligations hereunder, and fails to cure such default
within 30 days after receiving written notice of such judicial determination;

                  (2) Is adjudicated a bankrupt or insolvent under the
Bankruptcy Code, as amended, or federal legislation related thereto or other
debtor relief laws; or otherwise seeks, by way of petition or answer, any form
of debtor's relief under said Bankruptcy Code or any such laws; or makes an
assignment for the benefit of its creditors; or seeks or consents to the
appointment of any receiver, liquidator, trustee, or similar creditor's
representative for itself or its assets; or fails to have dismissed or denied,
within 60 days after filing, any petition by another for adjudication of such
General Partner as a bankrupt or as insolvent under said Bankruptcy Code or any
such laws, or for the appointment of a receiver, trustee, liquidator or similar
such creditor's representative for such General Partner or its assets; or

                  (3) Is an individual General Partner and becomes insane.

        8.2 WITHDRAWAL OF GENERAL PARTNER UPON ELECTION OF A NEW GENERAL
PARTNER. Notwithstanding the provisions of Section 5.3.2(4), in the event that a
General Partner is removed or withdraws, and a new General Partner is elected by
the Limited Partners pursuant to Section 8.3 hereof, then within 60 days after
such election occurs, any remaining General Partner shall have the right to give
such newly elected General Partner written notice of its intention to withdraw
as a General Partner, such withdrawal to be effective 90 days after such written
notice is given or (if earlier) upon the election of such new General Partner.
Any withdrawing General Partner shall have no obligation or liability as a
General Partner with respect to any decision, act, event or condition that
occurs after such withdrawal becomes effective.

        8.3 ADMISSION OF NEW OR SUBSTITUTE GENERAL PARTNER. Except as provided
in, and subject to the General Partner's rights under Section 8.5, after the
removal or withdrawal of one of the General Partners (as provided for in
Sections 8.1 and 8.2 hereof), a Majority-In-Interest of the Limited Partners
may, at a meeting or by action without a meeting, designate a successor to such
removed or withdrawn General Partner. Any such successor shall become a General
Partner in place of such removed or withdrawn General Partner, as of the date of
such election, provided that such successor General Partner agrees in writing to
become a party to, and be bound by, the provisions of this Agreement and to
assume all of the obligations of such removed or withdrawn General Partner
hereunder.

        8.4 CONTINUATION OF THE PARTNERSHIP. The retirement, withdrawal,
removal, death, insanity or bankruptcy of the General Partner shall dissolve the
Partnership unless (i) within 90 days thereafter the remaining General Partner
elects to continue the business of the Partnership, (ii) there remains one
solvent General Partner, or (iii) if there is no remaining General Partner, the
Limited Partners, within 120 days of the date of such event, elect by unanimous
vote to continue the business of the Partnership and elect a new General
Partner. In the event of such election by the remaining General Partner or
Limited Partners, the Partnership shall not be dissolved, but shall continue
with any remaining or replacement General Partner as a General Partner, with all
rights, power and authority vested by this Agreement. In the event no such
election is made, the Partnership shall be dissolved and liquidated in
accordance with Article 9 hereof.

        8.5 PAYMENT TO REMOVED OR WITHDRAWN GENERAL PARTNER.

            8.5.1 Removal of All General Partners or Remaining General Partner.
In the event that all General Partners are removed, or that (after removal or
withdrawal of one or more General Partners) the remaining General Partner is
removed, pursuant to the provisions of this Article 8, the removed General
Partner shall be entitled to receive payment of all fees and other compensation
to which it (or it) would have otherwise been entitled hereunder, to the extent
the same have been earned but not paid, as of the date of such removal
(hereinafter called the "Termination Date"), as well as the present value of the
General Partner's interest in the assets and business of the Partnership, as
follows:

                  (1) Such General Partner shall be paid, as soon as the same
would otherwise have been payable, the following:




                                       26

<PAGE>   33

                      (A) Management Fees for any month, or portion of a month,
prior to the Termination Date (with such fee for the month in which the
Termination Date occurs prorated on a daily basis); and

                      (B) Subject to Section 6.1 hereof, the subordinated real
estate commissions on the sale of the Properties, to the extent it have been
sold, or are subject to binding agreements for sale, as of the Termination Date.

                  (2) If the Limited Partners do not reconstitute the
Partnership and continue its business with the same assets, as provided in
Sections 8.4 and 9.1 hereof, then such General Partner shall be entitled to
receive, after the liquidation of the Partnership's assets, the General
Partner's distributive share of the Distributable Cash resulting from such
liquidation; but

                  (3) If the Limited Partners do reconstitute the Partnership
and continue its business with the same assets, as provided in Sections 8.4 and
9.1 hereof, then such General Partner shall be entitled to receive, in addition
to any fees and other compensation then payable to such General Partner under
Section 8.5.1(1), above, the amount that would be payable to such General
Partner if the Properties of the Partnership were sold for its fair market
values as of the Termination Date, plus the present value (as of the Termination
Date) of the General Partner's interest in the future distributions by the
Partnership of Distributable Cash, as follows:

                      (A) The total amount payable to such former General
Partner under this Section 8.5.1(3) shall be resolved by arbitration under the
rules of the American Arbitration Association, before three arbitrators, each of
which shall be an M.A.I. appraiser. The expense of such arbitration shall be
borne equally by the Partnership and such former General Partner. The results of
such arbitration shall be binding upon, and enforceable by, such former General
Partner and the Partnership; and

                      (B) The Partnership shall, in its sole discretion, within
30 days following determination of the total amount payable to the former
General Partner, give such former General Partner either (i) a lump sum of cash
equal to the total amount due to the former General Partner, or (ii) a
promissory note for the total amount of the payments due such General Partner
which note shall bear interest at an annual rate of 10% and shall provide for
the payment of equal monthly installments of principal and interest over a
period of 60 months, but shall be paid earlier (with respect to both interest
and principal) to the extent of all cash from Sale or Refinancing received or
retained by the Partnership after the Limited Partner has received from all
distributions hereunder an aggregate amount equal to its Capital Contribution.

        8.6 LIABILITY OF GENERAL PARTNER. The General Partner shall be liable
for the debts and obligations of the Partnership, to the extent such debts and
obligations exceed the Partnership's assets, but the General Partner shall not
be obligated to incur, or cause the Partnership to incur, any such obligations
or debts in excess of its assets, or to obtain recourse debt financing for the
Partnership (even in a situation where nonrecourse debt financing is not
available on competitive terms). Except as provided in Section 9.3.2 hereof, in
no event shall the General Partner be personally liable for the repayment of any
of the Capital Contributions or payment of any return thereon.


                                    ARTICLE 9

           TERMINATION, LIQUIDATION AND DISSOLUTION OF THE PARTNERSHIP

        9.1 EVENTS OF TERMINATION. Upon the occurrence of any of the following
events:

            9.1.1 Any event listed in Section 8.4 hereof, unless the remaining
General Partner(s) or, if there is no remaining General Partner the Limited
Partners, by unanimous vote, elect to continue the business of the Partnership;




                                       27

<PAGE>   34

            9.1.2 The sale or other disposition of the Property; provided,
however, that if the sale of the Property involves the Partnership's receipt of
a note, the General Partner may keep the Partnership in existence until such
note is paid in full;

            9.1.3 Subject to Section 9.1.5 hereinbelow, election by a
Majority-ln-Interest of the Limited Partners to dissolve the Partnership,
whether or not with the concurrence of the General Partner; or

            9.1.4 Upon the expiration of the term of the Partnership, the
Partnership shall dissolve, its assets shall be liquidated as provided in
Section 9.2 hereof, the proceeds of such liquidation shall be applied and
distributed as provided in Section 9.3 hereof, and finally, the Certificate of
Limited Partnership shall be cancelled (and the Partnership terminated) as
provided in Section 9.4 hereof. During the period elapsing between dissolution
and termination of the Partnership, the business of the Partnership and affairs
of the Partners shall continue to be governed by this Agreement, and the General
Partner, or remaining General Partner, shall continue to manage such business
and affairs. If such dissolution results from a removal of all General Partners,
or the sole remaining General Partner, any Limited Partner may apply to a court
of competent jurisdiction to appoint a liquidator, who shall then administer the
liquidation and termination of the Partnership, but otherwise have none of the
obligations or liabilities of a General Partner. If the Limited Partners elect
to continue the business of the Partnership, as provided in Subsection 9.1(1),
above, and elect a new General Partner, the new General Partner shall
reconstitute the Partnership and continue its business with the same assets for
the balance of the term specified in Section 1.3 hereof. The relationship of all
of the Partners in the reconstituted Partnership shall be governed by this
Agreement, as it may be then or thereafter amended. Each Limited Partner hereby
consents to any such reconstitution and waives any right which such Limited
Partner may otherwise have to demand a return of his Capital Contribution by
reason of such a dissolution.

            9.1.5 Subject to applicable law, the dissolution of the Partnership
shall not occur so long as the Partnership remains mortgagor of the Property.

        9.2 LIQUIDATION. Upon the dissolution of the Partnership, the General
Partner shall proceed to liquidate all of the assets of the Partnership in an
orderly and expeditious manner, provided, however, that if such dissolution
results from the removal of all General Partners or of the sole remaining
General Partner, such liquidation shall be deferred until the Limited Partners
have had an opportunity to reconstitute the Partnership, as provided in Section
9.1 hereof; provided, further, that, if the General Partner determines that an
immediate sale of part of all of such assets would result in unnecessary loss to
the Partnership, then the General Partner may, after giving written notice of
the intention to do so to each of the Limited Partners and to the extent not
then prohibited by the CRLPA, defer liquidation of such assets (except those
necessary to satisfy debts and obligations of the Partnership) for a reasonable
time. The Partnership shall not terminate solely as a consequence of the
insolvency or bankruptcy of one or more of the general partners of the
Partnership so long as there remains a solvent general partner of the
Partnership.

        9.3 APPLICATION AND DISTRIBUTION OF PROCEEDS OF LIQUIDATION.

            9.3.1 General. Upon dissolution and termination of the Partnership,
the assets of the Partnership will be liquidated, and, after all debts and
obligations of the Partnership to third Persons have been satisfied, the
proceeds from such liquidation will be distributed as follows after giving
effect to the allocations referred to under Section 4.2.1(3)(i) hereof:

                  (a) First, to the payment of creditors of the Partnership,
including Partners who are creditors to the extent permitted by law, but
excluding secured creditors whose obligations will be assumed or otherwise
transferred on the liquidation of the Partnership's assets;

                  (b) Second, to the setting up of any reserves reasonably
necessary for any contingent or unforeseen liabilities or obligations of the
Partnership; provided, however, that such reserves shall be deposited with a
bank or trust company in an interest-bearing escrow account for the purpose of
disbursing such reserves for the payment of any of the aforementioned
contingencies and, at the expiration of a reasonable period, for the purpose of
distributing the balance remaining in accordance with this Section 9.3.1;




                                       28

<PAGE>   35

                  (c) Third, 100% to the Limited Partners until it has received
an amount which, when added to any prior distributions to the Limited Partners
from any source whatsoever (other than distributions under Section 4.1.2(4)),
equals the 10% Preferred Return described in Section 4.1.2(6), but not in excess
of its positive Capital Account balances;

                  (d) Fourth, to each Partner in an amount equal to the positive
balance, if any, of such Partner's Capital Account after giving effect to the
distribution under Section 9.3.1(f); provided, however, that if the remaining
Capital Accounts of all Limited Partners exceed the amount of the liquidation
proceeds available for distribution, such distributions shall be made to each
Partner in the ratio that the positive balance of each Partner's Capital Account
bears to the positive Capital Account balances of all Partners who have positive
Capital Account balances; and

                  (e) Fifth, the balance of any such liquidation proceeds 99% to
the Limited Partners and 1% to the General Partner.

                  If the Limited Partner has received from the distributions
described in Section 9.3.1(c) through (f) and/or from prior distributions of
Distributable Cash From Sale or Refinancing or initial Working Capital Reserves
an aggregate amount equal to 100% of its Original Invested Capital plus the 10%
Preferred Return, then the Partnership shall withhold from the amount otherwise
distributable to the Limited Partners from Distributable Cash under Section
9.3.1(g) an amount equal to the subordinated compensation payments (if any) then
owing to the General Partner for real estate commissions on the Sale of
Partnership real estate, as described in Section 6.1.3, above. The Partnership
shall pay such withheld amounts to the General Partner rather than to the
Limited Partners, but only to the extent that such payment to the General
Partner does not cause the Limited Partners to receive aggregate distributions
upon liquidation and/or from prior distributions of Distributable Cash from Sale
or Refinancing or initial Working Capital Reserves that are less than 100% of
its Original Invested Capital plus the 10% Preferred Return. The Limited
Partners' share of such final cash distribution will be paid in equal shares on
account of each Unit.

            9.3.2 GENERAL PARTNER'S DEFICIT CAPITAL ACCOUNTS. If, following the
dissolution and termination of the Partnership and the liquidation of its
assets, any General Partner shall have a deficit Capital Account balance, the
General Partner shall pay to the Partnership, within the time and in the manner
specified in Treasury Regulations under Section 704(b)(2) of the Internal
Revenue Code, for distribution to creditors and then to Partners with positive
Capital Account balances in accordance with Section 9.3.1 an amount equal to the
lessor of (i) the deficit in the General Partner's Capital Account, or (ii) the
difference between the amount of the General Partner's Capital Contributions to
the Partnership immediately prior to the dissolution and termination of the
Partnership and liquidation of its assets and 1% of the total Capital
Contributions to the Partnership.

        9.4 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon completion
of the liquidation of the Partnership and distribution of the proceeds there
from, as provided in Section 9.3 hereof, the General Partner shall record a
cancellation certificate with respect to the Certificate of Limited Partnership,
record or file a copy of the cancellation certificate in each place where a copy
of the Certificate of Limited Partnership has been recorded or filed and record
or file cancellations of any other filings made pursuant to Section 1.5 hereof.

        9.5 FINAL PARTNERSHIP STATEMENT. Within a reasonable time after the
Partnership's assets have been fully liquidated and the proceeds therefrom fully
allocated and distributed as provided in Section 9.3 hereof, the General Partner
shall furnish to each of the Limited Partners a statement prepared by the
Partnership's independent certified public accountants, which shall set forth
the receipts and disbursements of the Partnership in the course of such
liquidation, together with the amount of proceeds from such liquidation
distributed with respect to each Unit and the amount of such proceeds paid or
distributed to the General Partner.




                                       29

<PAGE>   36


                                   ARTICLE 10

                                   DEFINITIONS

        10.1 ADJUSTED CAPITAL ACCOUNT DEFICIT. "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.

             10.1.1 Credit to such Capital Account any amounts which such
        Partner is obligated to restore or is deemed to be obligated to restore
        pursuant to the penultimate sentence of Treasury Regulations Section
        1.704- 1T(b)(4)(iv)(f); and

             10.1.2 Debit to such Capital Account the items described in
        Sections 1.704-1(b)(2)(ii)(d)(4), 1.704- 1(b)(2)(ii)(id)(S) and
        1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations.

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

        10.2 ADJUSTED INVESTED CAPITAL. "Adjusted Invested Capital" of a Limited
Partner shall be the Original Invested Capital paid for or attributable to his
Units reduced by the total cash distributed to him and prior owners of the same
Units from Distributable Cash from Sales or Refinancing and from Working Capital
Reserves, and which distributions were attributable to his Units.

        10.3 AFFILIATE. "Affiliate" means any of (i) each Person, if any, other
than the General Partner, directly or indirectly instrumental in organizing,
wholly or in part the Partnership or participating in its management (excluding,
however, wholly independent third Persons such as attorneys, accountants and
underwriters whose only compensation from the Partnership is for professional
services rendered), (ii) each Person directly or indirectly controlling,
controlled by or under common control with a General Partner or another
Affiliate, or owning or controlling 10% or more of the outstanding voting
securities of a General Partner or another Affiliate, or acting as an officer,
director or partner of a General Partner or another Affiliate.

        10.4 BASIC REGULATORY ALLOCATIONS. "Basic Regulatory Allocations"
consist of allocations pursuant to Sections 4.2.1(3)(a), (b) and (e).

        10.5 CAPITAL ACCOUNT. "Capital Account" with respect to any Partner (or
such Partner's transferee) shall mean such Partner's Original Invested Capital
(including, when made, principal payments by a Partner under a promissory note,
this Agreement, or other obligation to make capital contributions), adjusted in
accordance with this Section.

             10.5.1 A Partner's Capital Account shall be increased by all of:

                    (1) such Partner's share of Net Income;

                    (2) any item of income or gain specially allocated to a
Partner and not included in Net Income or Net Loss;

                    (3) any additional cash contribution by such Partner to the
Partnership; and

                    (4) the fair market value of any additional property
contributed by such Partner to the capital of the Partnership reduced by any
liabilities assumed by the Partnership in connection with such contribution or
to which the property is subject.




                                       30

<PAGE>   37



             10.5.2 A Partner's Capital Account shall be reduced by all of:

                    (1) such Partner's share of Net Loss;

                    (2) any deduction specially allocated to a Partner and not
included in Net Income or Net Loss;

                    (3) any cash Distribution to such Partner; and

                    (4) the Partnership's fair market value of any Property
(reduced by any liabilities assumed by the Partner in connection with the
distribution or to which the distributed property is subject) distributed to
such Partner; provided that, upon liquidation and winding up of the Partnership,
unsold property will be valued for distribution at fair market value and the
Capital Account of each Partner before such distribution shall be adjusted to
reflect the allocation of gain or loss that would have been realized had the
Partnership then sold the property for fair market value. Such fair market value
shall in no case be treated as less than the amount of any nonrecourse
indebtedness of the Partnership secured by the Property.

             10.5.3 The Capital Account of a Substituted Limited Partner or an
Assignee of Record shall include the Capital Account of his transferor.

             10.5.4 Notwithstanding anything to the contrary in this Agreement,
the Capital Accounts of the Partners shall be maintained in accordance with
Treasury Regulations Section 1.704-1(b), or any corresponding subsequent
provision, and the provisions of this Agreement concerning maintenance of
Capital Accounts will be interpreted consistently therewith.

        10.6 CAPITAL CONTRIBUTION. "Capital Contribution" means the gross amount
invested in the Partnership by a Partner and shall be equal in amount to the
cash purchase price paid or value of real property contributed by such Partner
for the Units sold to him by the Partnership. In the plural, "Capital
Contributions" means the aggregate amount invested by all of the Partners in the
Partnership and shall equal in total the amount of the proceeds attributable to
the purchase of Units and any contribution of the General Partner.

        10.7 CERTIFICATE OF LIMITED PARTNERSHIP. "Certificate of Limited
Partnership" means the certificate required to be recorded under Section 15621
of the California Corporations Code, or successor legislation thereto.

        10.8 CRLPA. "CRLPA" means the California Revised Limited Partnership
Act, as currently enacted or hereafter amended, as well as any successor
legislation thereto.

        10.9 DISTRIBUTABLE CASH. "Distributable Cash" means the sum of (i)
Distributable Cash from Operations and (ii) Distributable Cash from Sale or
Refinancing held by the Partnership at a given time.

             10.9.1 Distributable Cash from Operations. "Distributable Cash from
Operations" means Gross Operating Revenues during a given period less (i) all
cash expenditures by the partnership during such period to pay the Partnership's
operating expenses, including the Management Fee, debt payments and costs of
capital improvements or replacements (but without any deduction for
depreciation), and less (ii) any additional funds then required for the Working
Capital Reserve, or plus (iii) any funds then held in the Working Capital
Reserve in excess of the amounts required therefor.

             10.9.2 Distributable Cash from Sale or Refinancing. "Distributable
Cash from Sale or Refinancing" means, with respect to any Sale or Refinancing or
series of such transactions involving a Property, the gross cash proceeds
received by the Partnership therefrom or on account thereof, less (i) all
expenses incurred and paid by the Partnership with respect to such transaction
or transactions, including, without limitation, brokerage commissions paid to
third Persons, and (ii) the amount paid, in connection with such transactions,
on pre-existing indebtedness of the Partnership.




                                       31

<PAGE>   38

        10.10 GENERAL PARTNER. "General Partner" means the Persons who, at a
given time, are general partners in the Partnership under the terms of this
Agreement, and shall collectively refer to INCOME GROWTH MANAGEMENT, INC., a
California corporation, and IGP X SHADOW RIDGE MEADOWS, INC., a California
corporation.

        10.11 GROSS OPERATING REVENUES. "Gross Operating Revenues," with respect
to a given period, means the sum of (i) Gross Property Revenues received by the
Partnership during such period, plus (ii) all other cash revenues received by
the Partnership during such period, except proceeds from any loans to the
Partnership or any sales or other dispositions of the Property.

        10.12 GROSS PROPERTY REVENUES. "Gross Property Revenues," with respect
to any given period, means all rents, concession payments and other payments
received by the Partnership from the operation of the Property during such
period, excluding only (i) refundable security deposits or (ii) proceeds from
any Sale, financing or Refinancing of the Property.

        10.13 INTERNAL REVENUE CODE. "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended.

        10.14 LEGAL RESTRICTIONS. "Legal Restrictions" means restrictions upon
the operations and management of the Partnership and upon the actions of the
General Partner in its capacity as such, imposed by (i) applicable securities
laws, including, without limitation, the California Corporate Securities Law of
1968, and any regulations promulgated pursuant to such laws (except to the
extent that such regulations have been expressly waived with respect to the
Partnership); or (ii) the terms and conditions upon which the Units are
qualified under such securities laws.

        10.15 LENDER. "Lender" shall refer to Lehman Brothers Holdings, Inc.,
dba Lehman Capital, a division of Lehman Brothers Holdings, Inc.

        10.16 LIMITED PARTNER. "Limited Partner" shall mean Income Growth
Partners, Ltd. X, a California limited partnership, or any Person owning Units
who has been admitted by the General Partner as a Limited Partner or Substitute
Limited Partner pursuant to the provisions of this Agreement. In the plural,
"the Limited Partners" refers to all Limited Partners as of a given time.

        10.17 LOAN OR MORTGAGE LOAN. "Loan" or "Mortgage Loan" shall refer to
the mortgage/deed of trust loan originated by the Lender and secured by the
Property.

        10.18 LOAN DOCUMENTS. "Loan Documents" shall refer to the loan documents
as defined in the Mortgage/Deed of Trust and Security Agreement executed by the
Company as Trustor and the Lender as Beneficiary.

        10.19 MAJORITY-IN-INTEREST. "Majority-In-Interest" means the vote of
more than 50% of the outstanding Units.

        10.20 MANAGEMENT FEE. "Management Fee" means the monthly fee to be paid
for services in managing and operating the Properties. The Management Fee shall
include all fees paid for bookkeeping services and fees, rent-up, leasing and
re-leasing fees and bonuses, and related services. The Management Fee shall not
include other direct costs of operating the Properties, which costs shall be
borne by the Partnership.

        10.21 MINIMUM GAIN. "Partner Minimum Gain" shall mean 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 Section 1.704-1T(b)(4)(iv)(h) of the
Treasury Regulations.

        10.22 NET INCOME OR NET LOSS. "Net Income" or "Net Loss" shall mean,
respectively, for each taxable year of the Partnership the taxable income and
tax loss of the Partnership as determined for federal income tax purposes in
accordance with Section 702(a) of the Internal Revenue Code (including all items
of income, gain, loss, or




                                       32

<PAGE>   39

deduction required to be separately stated pursuant to Section 702(a)(1) of the
Internal Revenue Code) (other than any specific item of income, gain, loss,
deduction or credit subject to special allocation under this Agreement), with
the following modifications:

             10.22.1 The amount determined above shall be increased by any
        income exempt from federal income tax;

             10.22.2 The amount determined above shall be reduced by any Section
        705(a)(2)(B) of the Internal Revenue Code expenditures or expenditures
        treated as such pursuant to Treasury Regulations Section 1.704-
        1(b)(2)(iv)(i) or any corresponding subsequent provision; and

             10.22.3 Depreciation, amortization and other cost recovery
        transactions shall be computed based on the value of the Property as
        determined for book purposes instead of in the amount determined in
        computing taxable income or loss. Any item of income, loss, credit,
        gain, amortization, cost recovery or basis specially allocated to a
        Partner and not included in Net Income or Net Loss shall be determined
        for Capital Account purposes in a manner similar to this Section 10.19.

        10.23 NONRECOURSE DEBT. "Nonrecourse Debt" shall have the meaning set
forth in Treasury Regulations Section 1.704-1T(b)(4)(iv)(k)(3).

        10.24 NONRECOURSE DEDUCTIONS. "Nonrecourse Deductions" has the meaning
set forth in Section 1.704- 1T(b)(4)(iv)(b) of the Treasury Regulations. The
amount of Nonrecourse Deductions for a Partnership fiscal year equals the net
increase, if any, in the amount of Partnership Minimum Gain during that fiscal
year, determined according to the provisions of Section 1.704-1T(b)(4)(iv)(b) of
the Treasury Regulations.

        10.25 NONRECOURSE REGULATORY ALLOCATIONS. "Nonrecourse Regulatory
Allocations" consist of allocations pursuant to Sections 4.2.1(3)(c) and (d).

        10.26 10% OPERATING CASH PREFERENCE. "10% Operating Cash Preference"
shall mean the amount, if any, distributed to the Limited Partners from
Distributable Cash from Operations for each fiscal year until the Limited
Partner has received during such year an amount equal to a 10% per annum
noncumulative return on its Adjusted Invested Capital.

        10.27 ORIGINAL INVESTED CAPITAL. "Original Invested Capital" shall mean
the amount of cash or property contributed by each Limited Partner to the
capital of the Partnership upon the acquisition of Units. This amount shall be
attributed to such Units in the hands of a subsequent Limited Partner.

        10.28 OTHER DEFINITIONS. Each term defined in this Article 10, as well
as each term defined elsewhere in this Agreement, shall have its defined meaning
wherever used with an initial capital letter herein. The terms "hereof,"
"herein" and variations thereof shall, whenever used in this Agreement, refer to
this Agreement as a whole, and not to any particular Article or Section hereof.
Where appropriate to the context of this Agreement, use of the singular shall be
deemed also to refer to the plural, and use of the plural to the singular, and
pronouns of certain gender shall be deemed to comprehend either or both genders.

        10.29 PARTNER. "Partner" means any of the General Partner or the Limited
Partners and, in the plural, "the Partners" means each of the General Partners
and all of the Limited Partners as of a given time.

        10.30 PARTNER NONRECOURSE DEBT. "Partner Nonrecourse Debt" has the
meaning set forth in Section 1.704- 1T(b)(4)(iv)(k)(4) of the Treasury
Regulations.

        10.31 PARTNER NONRECOURSE DEDUCTIONS. "Partner Nonrecourse Deductions"
shall mean the deductions and the amount as set forth in Treasury Regulations
Section 1.704-1T(b)(4)(iv)(h)(3).




                                       33

<PAGE>   40

        10.32 PARTNER NONRECOURSE REGULATORY ALLOCATIONS. "Partner Nonrecourse
Regulatory Allocations" shall mean the allocations under Section 4.2.1(3)(j) and
(k).

        10.33 PARTNERS OF RECORD. "Partners of Record" means, at any given date,
the General Partner, the Limited Partner and all other Limited Partners who have
been admitted as such in accordance with the provisions of this Agreement on or
prior to such date.

        10.34 PARTNERSHIP. "Partnership" means the limited partnership formed by
this Agreement.

        10.35 PARTNERSHIP MINIMUM GAIN. "Partnership Minimum Gain" has the
meaning set forth in Treasury Regulations Section 1.704-1T(b)(4)(iv)(c).

        10.36 PERSON. "Person" means any natural Person or other legal entity
(such as a partnership, joint venture, corporation or trust).

        10.37 10% PREFERRED RETURN. "10% Preferred Return" shall mean the
amount, if any, distributed to the Limited Partners from Distributable Cash from
Sale or Refinancing (other than amounts representing repayment of Adjusted
Invested Capital) which, when added to prior distributions to the Limited
Partners from any source whatsoever (other than amounts representing repayment
of Adjusted Invested Capital), equals a 10% per annum cumulative, but not
compounded, return on the Limited Partners' Adjusted Invested Capital.

        10.38 PROPERTY OR PROPERTIES. "Property" or "Properties" means the
Shadow Ridge Meadows Apartments located in San Diego County, California.

        10.39 PURCHASE PRICE. "Purchase Price" means, with respect to the
acquisition of the Property by the Partnership, the sum of (i) the cash
consideration paid to the seller of the Property by or on behalf of the
Partnership, plus (ii) the principal amount of any purchase money note or
similar purchase money obligation given to such seller, plus (iii) the
outstanding amount of principal on any mortgage(s) or other lien(s) to which
such Property is subject at the time of its acquisition by the Partnership, plus
(iv) the fair market value of all other consideration given to such seller, plus
(v) the amount of all Acquisition Fees paid with respect to such acquisition
other than such fees paid, directly or indirectly, by such seller out of the
proceeds to him from such sale, and (vi) all other costs related to such
acquisition which, by custom in the area where such Property is located, are
normally paid by the seller of real estate, but which in connection with such
acquisition are paid by the Partnership (but excluding all other costs of such
acquisition, including, without limitation, any points or prepaid interest
charged to the Partnership with respect to any debt financing for such
acquisition).

        10.40 QUALIFIED PLAN. "Qualified Plan" means any pension, profit sharing
or stock bonus plan that is qualified under Section 401(a) of the Internal
Revenue Code and any Keogh Plan.

        10.41 RECOGNITION DATE. "Recognition Date" means the date upon which the
Partnership recognizes, in accordance with the applicable provisions of this
Agreement, (i) the admission of any Limited Partner or Substitute Limited
Partner or (ii) the assignment or other transfer of any Units, for purposes of
the exercise of any rights or privileges or the distribution of any cash or
allocation of any Net Income or Net Losses to which a Limited Partner or holder
of Units is entitled under this Agreement.

        10.42 REFINANCING. "Refinancing" means any transaction in which
indebtedness secured by a Property is incurred for the purpose of repaying
existing principal of, and/or accrued interest on, indebtedness that is secured
by Partnership Property.

        10.43 REGULATORY ALLOCATIONS. "Regulatory Allocations" shall mean the
Basic Regulatory Allocations, the Nonrecourse Regulatory Allocations, and the
Partner Nonrecourse Regulatory Allocations.




                                       34

<PAGE>   41

        10.44 SALE. "Sale" means any sale, exchange or other disposition of real
property, condemnation, or recovery of damage awards and insurance proceeds
(other than business or rental interruption insurance proceeds) not reinvested
in repair or reconstruction of a Property.

        10.45 SUBSTITUTE LIMITED PARTNER. "Substitute Limited Partner" means a
Limited Partner admitted in place of another Limited Partners (to the extent of
Units transferred by such other Limited Partner to such Substitute Limited
Partner) in accordance with the provisions of Section 7.17.5 hereof.

        10.46 UNIT. "Unit" means any one of equal interests in the Distributable
Cash, Net Income and Net Losses of the Partnership which are issued to the
Partners in return for a cash capital contribution or real property contribution
equal to $1,000 for each such interest. All references to Units held by Partners
shall include all fractional Units held by those Limited Partners.

        10.47 WORKING CAPITAL RESERVE. "Working Capital Reserve" means a cash
reserve, to be maintained by the Partnership in an amount deemed reasonably
sufficient by the General Partner to cover anticipated capital improvements and
replacement costs and other contingencies that may be incurred by the
Partnership.


                                   ARTICLE 11

                      RELATIONSHIP OF CERTAIN TERMS OF THIS
                    AGREEMENT TO PROVISIONS OF THE CALIFORNIA
                         REVISED LIMITED PARTNERSHIP ACT

        11.1 REVISED LIMITED PARTNERSHIP ACT GOVERNS. The Partnership, the
rights and obligations of the Partners, and the terms of this Agreement are
governed in certain respects by the provisions of the CRLPA effective July 1,
1984, which, however, permits or contemplates that certain of its provisions may
be altered, extended or supplanted by provisions of this Agreement. Set forth
below are rules governing the intent of the Partners with respect to the
relationship of the terms of this Agreement to the provisions of the CRLPA as to
certain matters.

        11.2 PROVISIONS OF THE CRLPA SUPPLANTED BY THE TERMS OF THIS AGREEMENT.
The following provisions of the CRLPA are supplanted by the terms of this
Agreement in that the Partners intend such provisions of the CRLPA to have no
effect on the rights and obligations of the Partners or the construction,
interpretation or enforcement of this Agreement:

             11.2.1 Section 15611(b), regarding the definition of "capital
account."

             11.2.2 Section 15611(d), regarding the definition of
"contribution."

             11.2.3 Section 15611(q), regarding the definition of "return of
capital."

             11.2.4 The second sentence, respectively, of Sections 15653 and
15654, regarding the allocation of profits and losses and distributions of money
or property to Partners absent a provision with respect thereto in the
partnership agreement (it being the Partners' intent that any such matter be
determined by the construction and interpretation of this Agreement under
principles of law otherwise applicable without regard to provisions of the Act
that might apply absent a provision in the Agreement).

             11.2.5 Section 15662, regarding the withdrawal by a general partner
except for (i) the provision of Section 15662(a) that a general partner may
withdraw from a limited partnership at any time by giving written notice to the
other partners, and (ii) the provision of Section 15662(b)(2) that a general
partner who withdraws shall not be personally liable for partnership debts
incurred after the Person ceases to be a general partner.

             11.2.6 The second sentence of Section 15663, regarding the right of
a limited partner to withdraw.




                                       35

<PAGE>   42

             11.2.7 Section 15664, regarding certain rights of a withdrawing
limited partner to the extent it affords a withdrawing limited partner any
rights greater than those afforded by this Agreement.

             11.2.8 Section 15684(b), regarding the priority of certain
distributions upon winding up of a limited partnership, to the extent it would
alter the priority or amounts of distributions to Partners under the terms of
this Agreement.

        11.3 OTHER TERMS AND PROVISIONS. Many of the terms of this Agreement are
intended to alter or extend provisions of the CRLPA as they may apply to the
Partnership or the Partners and in some instances express reference to
provisions of the CRLPA is made. Any failure on the part of any other term of
this Agreement to mention or specify the relationship of such term to provisions
of the CRLPA that may affect the scope or application of such term shall not be
construed to mean that any such term is not intended to be a partnership
agreement provision authorized or permitted by the CRLPA or which in whole or in
part alters, extends or supplants provisions of the CRLPA as may be allowed
thereby.

                                   ARTICLE 12

                               GENERAL PROVISIONS

        12.1 NOTICES. All notices and demands required or permitted under this
Agreement shall be delivered in writing, and either in Person or by registered
or certified mail, return receipt requested, at the principal office of the
Partnership (if a notice to or demand on the Partnership or either or both of
the Partnership and the General Partner) or to the address shown for the
recipient Limited Partner on the list maintained by the Partnership in
accordance with Section 7.17.6 hereof. Notices and demands to the General
Partner shall be deemed delivered and received on the actual date of its
delivery, and notices to and demands on the Limited Partners shall be deemed
delivered and received 48 hours after the same are deposited in the U.S. mails
(except in the case of a mail strike).

        12.2 AMENDMENT OF AGREEMENT AND THE CERTIFICATE OF LIMITED PARTNERSHIP.

             12.2.1 Admission of Limited Partners. Admission of a Limited
Partner or Substitute Limited Partner shall not, if in accordance with other
provisions of this Agreement, require the consent of any Limited Partner
(except, in the case of a Substitute Limited Partner, the consent of the Limited
Partner transferring Units thereto).

             12.2.2 Amendments with Consent of Limited Partner. In addition to
any amendments otherwise authorized herein, this Agreement and the Certificate
of Limited Partnership may be amended by the General Partner with the consent of
a Majority-In-Interest of the Limited Partners; provided, however, that neither
this Agreement nor the Certificate of Limited Partnership may be amended without
the consent of the Lender, and all Partners adversely affected thereby so as (i)
to convert a Limited Partner interest into a General Partner interest, or
otherwise modify the limited liability of a Limited Partner (including, without
limitation, any amendment which, in the opinion of counsel to the Partnership,
poses a significant risk of impairing the limited liability of any or all of the
Limited Partners), or (ii) to alter the interest of any Limited Partner in
Distributable Cash, Net Income, Net Losses, or otherwise cause unequal treatment
of the Limited Partners; provided, further, that this Section 12.2.2 may be
amended only by the consent of all the Partners.

           12.2.3 Amendments Without Consent of Limited Partners. Subject to the
written consent of the Lender, in addition to any amendments otherwise
authorized herein, the General Partner may amend this Agreement and/or the
Certificate of Limited Partnership, without the consent of any of the Limited
Partners, to (i) change the name and/or principal place of business of the
Partnership, (ii) increase the duties or obligations of the General Partner or
decrease the rights and powers of the General Partner (so long as such decrease
does not impair the ability of the General Partner to manage the Partnership and
conduct its business and affairs), (iii) cure any ambiguity, or correct or
supplement any provision hereof which may be inconsistent with any other
provision hereof, or make provision with respect to any matter or question
arising under this Agreement so long as such additional provision is not
inconsistent herewith, (iv) delete or add any provision of or to this Agreement
required to be so deleted or added by




                                       36

<PAGE>   43

the staff of the Securities and Exchange Commission or of any other federal
agency, or by any state securities commissioner or similar such official, and
(v) comply with final regulations under the Employment Retirement Income
Security Act defining "plan assets"; provided, however, that no amendment shall
be adopted pursuant to this Section 12.2.3 unless the adoption thereof (A) is
for the benefit of or not adverse to the interests of the Limited Partners, (B)
is not inconsistent with Article 4 hereof, (C) does not alter, adversely to the
Limited Partners or any of them, the allocations of Distributable Cash, Net
Income or Net Losses among the Limited Partners or between the Limited Partners
and the General Partner except as provided in Section 5.1.14, and (D) does not
affect the limited liability of the Limited Partners or the status of the
Partnership as a partnership for federal income tax purposes.

             12.2.4 Execution and Recording of Amendments. Any amendment to this
Agreement adopted in accordance with the provisions of this Section 12.2 or in
accordance with any other provisions of this Agreement shall be executed by the
General Partner for itself, and by the General Partner as attorney-in-fact for
the Limited Partners pursuant to the power-of-attorney contained in Section 5.6
hereof. After the execution of such amendment, the General Partner shall also
prepare and record or file any certificate or other document which may be
required to be recorded or filed with respect to such amendment, either under
the CRLPA or under the laws of any other jurisdiction in which the Partnership
holds any Property or otherwise does business.

        12.3 PARTITION. The Partners hereby acknowledge and agree that the
assets of the Partnership will not be suitable for partition; and, accordingly,
each Partner hereby irrevocably waives any and all rights which he may otherwise
have, under the CRLPA or any other applicable law, to maintain any action for
partition of such assets.

        12.4 SEVERABILITY. In the event that any provision of this Agreement, or
the application thereof to any person or under any circumstances, is determined
to be invalid, unlawful or unenforceable to any extent, then to such extent such
provision shall be deemed severed from this Agreement; but the application of
such provision to any other Persons or under any other circumstances other than
those as to which it is determined to be invalid, unlawful or unenforceable, and
every remaining provision of this Agreement, shall continue in full force and
effect.

        12.5 HEADINGS. Article and section headings in this Agreement are for
convenience of reference only and shall not be used in any way to interpret or
construe this Agreement.

        12.6 FURTHER ASSURANCES. Each Partner hereby agrees to execute,
acknowledge (if necessary) and deliver any and all further instruments and other
documents as counsel to the Partnership may determine to be necessary or
desirable for the achievement of the purposes of this Agreement (including,
without limitation, the Certificate of Limited Partnership and any and all
amendments thereto, as well as any cancellation thereof); provided that such
instrument or other document does not adversely affect the rights and
obligations of such Partner hereunder.

        12.7 INTEGRATED AND BINDING AGREEMENT. This Agreement contains the
entire understanding and agreement among the Partners with respect to the
subject matter hereof, and there are no other agreements, understandings,
representations or warranties among the Partners other than those set forth
herein (subject, however, to the General Partners (in the event there is more
than one General Partner) having agreed or hereafter agreeing between themselves
with respect to the allocation of the duties, distributions, allocations or
other rights herein imposed upon or provided to the General Partners jointly).
This Agreement may be amended only as provided in Section 12.2 hereof, or
elsewhere herein; and this Agreement shall be binding upon, and inure to the
benefit of, each of the Partners and his respective heirs, successors and
assigns (subject, however, to the provisions hereof relating to assignment and
transfer of a Partner's interest in the Partnership).

        12.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by each party on separate counterparts, each of which shall be
an original, but all of which taken together shall constitute but one and the
same instrument.

        12.9 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with the laws of the State of California.




                                       37

<PAGE>   44

                                   ARTICLE 13

                       REPRESENTATIONS OF LIMITED PARTNERS

        13.1 The Limited Partner represents as follows:

             13.1.1 The Limited Partner is thoroughly informed concerning the
type of Property to be owned by the Partnership and has asked and has answered
such questions relating thereto as the Limited Partner deems necessary, and
understands that no return of, on, or with respect to the consideration given
for the Limited Partners' Units of interest is represented, warranted or
promised in any way by the General Partner or the Partnership;

             13.1.2 The Limited Partner has read this Partnership Agreement and
understands and agrees to its terms;

             13.1.3 The Limited Partner is capable of evaluating the risks and
merits of acquiring an interest in Units of the Partnership, has no need for
liquidity of investment with respect to the acquisition of such Units, and can
afford to sustain a complete loss of such investment;

             13.1.4 The Limited Partner understands that neither the General
Partner nor its counsel have represented the interests of the Limited Partner in
connection with the transaction, and the Limited Partner is free (and
encouraged) to seek independent counsel of the Limited Partner's choosing; and

             13.1.5 The Limited Partner is acquiring the Units for investment
purposes only and not with a view to resale or distribution of record or
beneficially to any other person.


        IN WITNESS WHEREOF, the parties hereto have, by themselves or by their
officers or representatives duly authorized thereunto, caused this Agreement to
be executed and delivered effective as of the date first above written.


GENERAL PARTNER:

INCOME GROWTH MANAGEMENT, INC.           IGP X SHADOW RIDGE MEADOWS, INC.
a California corporation                 a California corporation


By: /s/ DAVID MAURER                     By: /s/ DAVID MAURER
   -------------------------------           -------------------------------
     David Maurer, President                   David Maurer, President

                                         LIMITED PARTNER:
                                         INCOME GROWTH PARTNERS, LTD. X
                                         a California limited partnership
                                         By its General Partner:
                                         Income Growth Management, Inc.
                                         a California corporation


                                         By: /s/ DAVID MAURER
                                             -------------------------------
                                               David Maurer, President





                                       38







<PAGE>   45
                                  EXHIBIT "A"               01-165325

                               LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:

PARCEL 1:

PARCEL A OF PARCEL MAP NO. 14711, IN THE CITY OF VISTA, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY ON FEBRUARY 27, 1987 AS FILE NO. 87-105065 OF OFFICIAL RECORDS.

PARCEL 2:

AN EASEMENT FOR INGRESS AND EGRESS ONLY, OVER THAT PORTION OF PARCEL B OF
PARCEL MAP NO. 14711, IN THE CITY OF VISTA, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
FEBRUARY 27, 1987 AS FILE NO. 87-105065 OF OFFICIAL RECORDS, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE WESTERLY BOUNDARY LINE OF SAID PARCEL B; SAID POINT
FORMED BY THE INTERSECTION OF TWO COURSES: NORTH 27 DEGREES 37' 40" EAST 343.67
FEET AND NORTH 62 DEGREES 22' 20" WEST 37.48 FEET; THENCE ALONG SAID WESTERLY
BOUNDARY LINE AND THE NORTHERLY BOUNDARY LINE OF SAID PARCEL B THE FOLLOWING
COURSES: NORTH 62 DEGREES 22' 20" WEST 37.48 FEET TO A POINT ON THE ARC OF A
NON-TANGENT 200.00 FOOT RADIUS CURVE CONCAVE WESTERLY, A RADIAL LINE TO SAID
POINT BEARS SOUTH 71 DEGREES 59' 40" EAST; THENCE NORTHERLY ALONG THE ARC OF
SAID CURVE THROUGH A CENTRAL ANGLE OF 16 DEGREES 14' 24", A DISTANCE OF 56.69
FEET TO A POINT OF REVERSE CURVATURE OF A 200.00 FOOT RADIUS CURVE CONCAVE
EASTERLY; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE
OF 25 DEGREES 46' 34", A DISTANCE OF 89.98 FEET; THENCE NORTH 27 DEGREES 32'
30" EAST 10.00 FEET; THENCE SOUTH 62 DEGREES 27' 30" EAST 35.35 FEET TO A POINT
ON A NON-TANGENT 24.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY, TO WHICH A
RADIAL LINE BEARS NORTH 23 DEGREES 46' 34" WEST; THENCE LEAVING SAID BOUNDARY
LINE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 40
DEGREES 38' 41", A DISTANCE OF 17.03 FEET TO A POINT OF COMPOUND CURVATURE OF
A 170.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY, TO WHICH A RADIAL LINE BEARS
NORTH 64 DEGREES 25' 15" WEST; THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 5 DEGREES 11' 58", A DISTANCE OF 15.43 FEET; THENCE
TANGENT TO SAID CURVE SOUTH 20 DEGREES 22' 47" WEST 77.51 FEET TO THE BEGINNING
OF A TANGENT 34.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE
SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 82 DEGREES
31' 08", A DISTANCE OF 48.97 FEET TO A POINT ON THE PROLONGATION OF THE
WESTERLY BOUNDARY LINE OF SAID PARCEL B; THENCE ALONG SAID PROLONGATION SOUTH
27 DEGREES 37' 40" WEST 13.00 FEET TO THE POINT OF BEGINNING.
<PAGE>   46
                                                                       01-165325

PARCEL 3:

AN EASEMENT FOR GRADING, EXCAVATION, CONSTRUCTION, USE AND MAINTENANCE OF SLOPES
AND INCIDENTAL PURPOSES THERETO OVER, UNDER, ALONG AND ACROSS THAT PORTION OF
PARCEL B OF PARCEL MAP NO. 14100, IN THE CITY OF OCEANSIDE, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY, DECEMBER 30, 1985 AS FILE NO. 85-493506 OF OFFICIAL RECORD, AS SHOWN ON
EXHIBIT "C" OF THAT CERTAIN "SLOPE EASEMENT AGREEMENT" RECORDED MARCH 31,1987 AS
FILE NO. 87-167797 OF OFFICIAL RECORDS.

THE EASEMENT HEREIN DESCRIBED IS HEREBY DECLARED TO BE APPURTENANT TO AND FOR
THE USE AND BENEFIT OF THE PRESENT AND FUTURE OWNERS OF ALL OR ANY PORTION OF
PARCEL A, ABOVE DESCRIBED.
<PAGE>   47
                                  EXHIBIT "B"
<PAGE>   48
                            CERTIFICATE OF BORROWER


     The undersigned, President of Income Growth Management, Inc., a California
corporation, and President of IGP X Shadow Ridge Meadows, Inc., a California
corporation, general partners of IGP X SHADOW RIDGE MEADOWS, LTD., A CALIFORNIA
LIMITED PARTNERSHIP (the "Borrower"), HEREBY CERTIFIES TO LEHMAN BROTHERS
HOLDINGS, INC. D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS,
INC., its successors and assigns, as follows:

     1.   Attached hereto as Exhibit A is a true and correct copy of the
Agreement of Limited Partnership of the Borrower dated as of September 3, 1997,
which has not been amended or modified in any respect except as stated herein
and is in full force and effect as of the date hereof.

     2.   Attached hereto as Exhibit B is a true and correct copy of the
Certificate of Limited Partnership of the Borrower dated September 18, 1992, as
first amended on August 6, 1997, which has been duly filed in the California
Secretary of State and has not been amended or modified in any respect except
as stated herein and is in full force and effect as of the date hereof.

     IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of September,
1997.

                                        INCOME GROWTH MANAGEMENT, INC.
                                        a California corporation


                                        By: /s/ DAVID W. MAURER
                                            -----------------------------------
                                            David W. Maurer, President



                                        IGP X SHADOW RIDGE MEADOWS, INC.
                                        a California corporation


                                        By: /s/ DAVID W. MAURER
                                            -----------------------------------
                                            David W. Maurer, President
<PAGE>   49
                                  EXHIBIT "A"