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                                                                    EXHIBIT 10.2

                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                     CORNERSTONE OPERATING PARTNERSHIP, L.P.

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                                TABLE OF CONTENTS

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ARTICLE 1  DEFINED TERMS.........................................................................................    1
ARTICLE 2  PARTNERSHIP FORMATION AND IDENTIFICATION..............................................................    6
   2.1      Formation............................................................................................    6
   2.2      Name, Office and Registered Agent....................................................................    6
   2.3      Partners.............................................................................................    6
   2.4      Term and Dissolution.................................................................................    6
   2.5      Filing of Certificate and Perfection of Limited Partnership..........................................    7
   2.6      Certificates Describing Partnership Units............................................................    7
ARTICLE 3  BUSINESS OF THE PARTNERSHIP...........................................................................    7
ARTICLE 4  CAPITAL CONTRIBUTIONS AND ACCOUNTS....................................................................    7
   4.1      Capital Contributions................................................................................    7
   4.2      Additional Capital Contributions and Issuances of Additional Partnership Interests...................    8
   4.3      Additional Funding...................................................................................    9
   4.4      Capital Accounts.....................................................................................    9
   4.5      Percentage Interests.................................................................................    9
   4.6      No Interest On Contributions.........................................................................   10
   4.7      Return Of Capital Contributions......................................................................   10
   4.8      No Third Party Beneficiary...........................................................................   10
ARTICLE 5  PROFITS AND LOSSES; DISTRIBUTIONS.....................................................................   10
   5.1      Allocation Of Profit And Loss........................................................................   10
   5.2      Distribution Of Cash.................................................................................   11
   5.3      Reit Distribution Requirements.......................................................................   12
   5.4      No Right To Distributions In Kind....................................................................   12
   5.5      Limitations On Return Of Capital Contributions.......................................................   12
   5.6      Distributions Upon Liquidation.......................................................................   12
   5.7      Substantial Economic Effect..........................................................................   13
ARTICLE 6  RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER.................................................   13
   6.1      Management Of The Partnership........................................................................   13
   6.2      Delegation Of Authority..............................................................................   15
   6.3      Indemnification And Exculpation Of Indemnitees.......................................................   15
   6.4      Liability Of The General Partner.....................................................................   16
   6.5      Reimbursement Of General Partner.....................................................................   17
   6.6      Outside Activities...................................................................................   17
   6.7      Employment Or Retention Of Affiliates................................................................   17
   6.8      General Partner Participation........................................................................   17
   6.9      Title To Partnership Assets..........................................................................   17
   6.10     Miscellaneous........................................................................................   18
ARTICLE 7  CHANGES IN GENERAL PARTNER............................................................................   18
   7.1      Transfer Of The General Partner's Partnership Interest...............................................   18
   7.2      Admission Of A Substitute Or Additional General Partner..............................................   19
   7.3      Effect Of Bankruptcy, Withdrawal, Death Or Dissolution Of A General Partner..........................   20
   7.4      Removal Of A General Partner.........................................................................   20
ARTICLE 8  RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS........................................................   21
   8.1      Management Of The Partnership........................................................................   21
   8.2      Power Of Attorney....................................................................................   21
   8.3      Limitation On Liability Of Limited Partners..........................................................   21
   8.4      Ownership By Limited Partner Of Corporate General Partner Or Affiliate...............................   21
   8.5      Exchange Right.......................................................................................   21
ARTICLE 9  TRANSFERS OF LIMITED PARTNERSHIP INTERESTS............................................................   22
   9.1      Purchase For Investment..............................................................................   22
   9.2      Restrictions On Transfer Of Limited Partnership Interests............................................   23
   9.3      Admission Of Substitute Limited Partner..............................................................   24
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                                       (i)

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   9.4      Rights Of Assignees Of Partnership Interests.........................................................   24
   9.5      Effect Of Bankruptcy, Death, Incompetence Or Termination Of A Limited Partner........................   25
   9.6      Joint Ownership Of Interests.........................................................................   25
   9.7      Redemption Of Partnership Units......................................................................   25
ARTICLE 10  BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS...........................................................   25
   10.1     Books And Records....................................................................................   25
   10.2     Custody Of Partnership Funds; Bank Accounts..........................................................   25
   10.3     Fiscal And Taxable Year..............................................................................   26
   10.4     Annual Tax Information And Report....................................................................   26
   10.5     Tax Matters Partner; Tax Elections; Special Basis Adjustments........................................   26
   10.6     Reports To Limited Partners..........................................................................   26
ARTICLE 11  AMENDMENT OF AGREEMENT; MERGER.......................................................................   26
ARTICLE 12  GENERAL PROVISIONS...................................................................................   27
   12.1     Notices..............................................................................................   27
   12.2     Survival Of Rights...................................................................................   27
   12.3     Additional Documents.................................................................................   27
   12.4     Severability.........................................................................................   27
   12.5     Entire Agreement.....................................................................................   27
   12.6     Pronouns And Plurals.................................................................................   27
   12.7     Headings.............................................................................................   27
   12.8     Counterparts.........................................................................................   27
   12.9     Governing Law........................................................................................   28

EXHIBITS:

EXHIBIT A -       General Partner and Original Limited Partner, Capital Contributions and Percentage Interests...   29

EXHIBIT B -       Notice of Exercise of Exchange Right...........................................................   30

EXHIBIT C -       Indemnification Guideline......................................................................   31
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                                      (ii)

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                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                     CORNERSTONE OPERATING PARTNERSHIP, L.P.

      Cornerstone Operating Partnership, L.P. (the "Partnership"), was formed as
a limited partnership under the law of the State of Delaware, pursuant to a
Certificate of Limited Partnership filed with the Office of the Secretary of
State of the State of Delaware on November 30, 2004. This Agreement of Limited
Partnership ("Agreement") is entered into effective as of November 30, 2004
between Cornerstone Realty Fund, Inc., a Maryland corporation (the "General
Partner") and the Limited Partners set forth on Exhibit A hereto. Capitalized
terms used herein but not otherwise defined shall have the meanings given them
in Article 1.

      NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                                    ARTICLE 1
                                  DEFINED TERMS

      The following defined terms used in this Agreement shall have the meanings
specified below:

      Act means the Delaware Revised Uniform Limited Partnership Act, as it may
be amended from time to time.

      Additional Funds has the meaning set forth in Section 4.3.

      Additional Securities means any additional REIT Shares (other than REIT
Shares issued in connection with an exchange pursuant to Section 8.5 hereof or
REIT Shares issued pursuant to a dividend reinvestment plan of the General
Partner) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.2(a)(ii).

      Administrative Expenses means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; provided, however, that
Administrative Expenses shall not include any administrative costs and expenses
incurred by the General Partner that are attributable to Properties or
partnership interests in a Subsidiary Partnership (other than this Partnership)
that are owned by the General Partner directly.

      Advisor or Advisors means the Person or Persons, if any, appointed,
employed or contracted with by the General Partner and responsible for directing
or performing the day-to-day business affairs of the General Partner, including
any Person to whom the Advisor subcontracts substantially all of such functions.

      Advisory Agreement means the agreement between the General Partner and the
Advisor pursuant to which the Advisor will direct or perform the day-to-day
business affairs of the General Partner.

      Affiliate or Affiliated means, as to any individual, corporation,
partnership, trust, limited liability company or other legal entity (other than
this Partnership), (i) any Person or entity directly or indirectly through one
or more intermediaries controlling, controlled by, or under common control with
another Person or entity; (ii) any Person or entity, directly or indirectly
owning, controlling, or holding with power to vote ten percent (10%) or more of
the outstanding voting securities of another Person or entity; (iii) any
officer, director, general partner or trustee of such Person or entity; (iv) any
Person ten percent (10%) or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held, with power to vote, by such
other Person; and (v) if such other Person or entity is an officer, director,
general partner, or trustee of a Person or entity, the Person or entity for
which such Person or entity acts in any such capacity.

                                      -1-

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      Agreed Value means the fair market value of a Partner's non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner. The names and addresses of the General Partner and Original
Limited Partner, number of Partnership Units issued to each of them, and their
respective Capital Contributions as of the date of contribution is set forth on
Exhibit A.

      Agreement means this Agreement of Limited Partnership, as amended,
modified supplemented or restated from time to time, as the context requires.

      Articles of Incorporation means the Articles of Incorporation of the
General Partner filed with the Maryland State Department of Assessments and
Taxation, as amended or restated from time to time.

      Capital Account has the meaning provided in Section 4.4 hereof.

      Capital Contribution means the total amount of cash, cash equivalents, and
the Agreed Value of any Property or other asset (other than cash) contributed or
agreed to be contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of this Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.

      Cash Amount means an amount of cash per Partnership Unit equal to the
Value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Exchange.

      Certificate means any instrument or document that is required under the
laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.2 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.

      Code means the Internal Revenue Code of 1986, as amended, and as hereafter
amended from time to time. Reference to any particular provision of the Code
shall mean that provision in the Code at the date hereof and any successor
provision of the Code.

      Conversion Factor means 1.0, provided that in the event that the General
Partner (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares other than the Special 10% Stock Dividend, (ii) subdivides its
outstanding REIT Shares, or (iii) combines its outstanding REIT Shares into a
smaller number of REIT Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on such
date and, provided further, that in the event that an entity other than an
Affiliate of the General Partner shall become General Partner pursuant to any
merger, consolidation or combination of the General Partner with or into another
entity (the "Successor Entity"), the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by the number of shares of the Successor
Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination. Any adjustment to the Conversion Factor shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event; provided, however, that if the
General Partner receives a Notice of Exchange after the record date, but prior
to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Exchange immediately prior to the record date for
such dividend, distribution, subdivision or combination.

      Event of Bankruptcy as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the

                                      -2-

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appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.

      Exchange Amount means either the Cash Amount or the REIT Shares Amount, as
selected by the General Partner in its sole and absolute discretion pursuant to
Section 8.5(b) hereof.

      Exchange Right has the meaning provided in Section 8.5(a) hereof.

      Exchanging Partner has the meaning provided in Section 8.5(a) hereof.

      General Partner means Cornerstone Realty Fund, Inc., a Maryland
corporation, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.

      General Partnership Interest means a Partnership Interest held by the
General Partner that is a general partnership interest.

      Indemnitee means (i) the General Partner or a director, officer or
employee of the General Partner or Partnership, (ii) the Advisor or a director,
officer, employee of the Advisor or another agent of the Advisor if such agent
is an Affiliate of the Advisor and (iii) such other Persons (including
Affiliates of the General Partner, the Advisor or the Partnership) as the
General Partner may designate from time to time, in its sole and absolute
discretion.

      Independent Director means a director of the General Partner who is not an
officer or employee of the General Partner, any Affiliate of an officer or
employee or any Affiliate of (i) any lessee of any property of the General
Partner or any Subsidiary of the General Partner, (ii) any Subsidiary of the
General Partner, or (iii) any partnership that is an Affiliate of the General
Partner.

      Limited Partner means any Person named as a Limited Partner on Exhibit A
attached hereto, and any Person who becomes a Substitute Limited Partner, in
such Person's capacity as a Limited Partner in the Partnership.

      Limited Partnership Interest means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.

      Listing means the listing of the shares of the General Partner's stock,
previously issued by the General Partner pursuant to an effective registration
statement and such shares currently registered with the SEC pursuant to an
effective registration statement, on a national securities exchange or
over-the-counter market.

      Loss has the meaning provided in Section 5.1(h) hereof.

      Notice of Exchange means the Notice of Exercise of Exchange Right
substantially in the form attached as Exhibit B hereto.

      NYSE means the New York Stock Exchange.

      Offer has the meaning set forth in Section 7.1(c) hereof.

      Offering means the initial offer and sale by the General Partner and the
purchase by the Dealer Manager (as defined in the Prospectus) of REIT Shares for
sale to the public.

      OP Unitholders means all holders of Partnership Interests.

                                      -3-

<PAGE>

      Original Limited Partner means the Limited Partners designated as
"Original Limited Partners" on Exhibit A hereto.

      Partner means any General Partner or Limited Partner.

      Partner Nonrecourse Debt Minimum Gain has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).

      Partnership means Cornerstone Operating Partnership, L.P., a Delaware
limited partnership.

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

      Partnership Minimum Gain has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).

      Partnership Record Date means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.2 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its shareholders of some or all of its portion of
such distribution.

      Partnership Unit means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on Exhibit A, as such Exhibit may be
amended from time to time.

      Percentage Interest means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
such Exhibit may be amended from time to time.

      Person means any individual, partnership, limited liability company,
corporation, joint venture, trust or other entity.

      Profit has the meaning provided in Section 5.1(h) hereof.

      Property means any office or industrial property or other investment in
which the Partnership holds an ownership interest.

      Prospectus means the final prospectus delivered to purchasers of REIT
Shares in the Offering.

      Regulations means the Federal income tax regulations promulgated under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.

      Regulatory Allocations has the meaning set forth in Section 5.1(i) hereof.

      REIT means a real estate investment trust under Sections 856 through 860
of the Code.

      REIT Expenses means (i) costs and expenses relating to the formation and
continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included

                                      -4-

<PAGE>

within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses
relating to any public offering and registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the General Partner, (iv) costs and
expenses associated with the preparation and filing of any periodic or other
reports and communications by the General Partner under federal, state or local
laws or regulations, including filings with the SEC, (v) costs and expenses
associated with compliance by the General Partner with laws, rules and
regulations promulgated by any regulatory body, including the SEC and any
securities exchange, (vi) costs and expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan providing for compensation for the
employees of the General Partner, (vii) costs and expenses incurred by the
General Partner relating to any issuing or redemption of Partnership Interests,
and (viii) all other operating or administrative costs of the General Partner
incurred in the ordinary course of its business on behalf of or in connection
with the Partnership.

      REIT Share means a common share of beneficial interest in the General
Partner (or successor entity, as the case may be).

      REIT Shares Amount means a number of REIT Shares equal to the product of
the number of Partnership Units offered for exchange by an Exchanging Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Exchange Date; provided that in the event the General Partner issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "rights"), and the rights
have not expired at the Specified Exchange Date, then the REIT Shares Amount
shall also include the rights issuable to a holder of the REIT Shares Amount of
REIT Shares on the record date fixed for purposes of determining the holders of
REIT Shares entitled to rights.

      SEC means the U.S. Securities and Exchange Commission.

      Securities Act means the Securities Act of 1933, as amended.

      Service means the United States Internal Revenue Service.

      Special 10% Stock Dividend means the 10% stock dividend declared by the
General Partner to be paid to the stockholders of record of the General Partner
on the date that the General Partner raises the first $125,000,000 in its
initial public offering or such lesser amount on such earlier date as determined
by the General Partner.

      Specified Exchange Date means the first business day of the month that is
at least 60 business days after the receipt by the General Partner of the Notice
of Exchange.

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

      Subsidiary Partnership means any partnership of which the partnership
interests therein are owned by the General Partner or a direct or indirect
subsidiary of the General Partner.

      Substitute Limited Partner means any Person admitted to the Partnership as
a Limited Partner pursuant to Section 9.3 hereof.

      Successor Entity has the meaning provided in the definition of "Conversion
Factor" contained herein.

      Surviving General Partner has the meaning set forth in Section 7.1(d)
hereof.

      Transaction has the meaning set forth in Section 7.1(c) hereof.

                                      -5-

<PAGE>

      Transfer has the meaning set forth in Section 9.2(a) hereof.

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

                                    ARTICLE 2
                    PARTNERSHIP FORMATION AND IDENTIFICATION

      2.1 Formation. The Partnership was formed as a limited partnership
pursuant to the Act for the purposes and upon the terms and conditions set forth
in this Agreement.

      2.2 Name, Office and Registered Agent. The name of the Partnership is
Cornerstone Operating Partnership, L.P.. The specified office and place of
business of the Partnership shall be 4590 McArthur Blvd., Suite 610, Newport
Beach, California 92660. The General Partner may at any time change the location
of such office, provided the General Partner gives notice to the Partners of any
such change. The name and address of the Partnership's registered agent is
Corporate Research Services, Inc., 32 Lockerman Square, Suite 109, Dover,
Delaware 19904. The sole duty of the registered agent as such is to forward to
the Partnership any notice that is served on him as registered agent.

      2.3 Partners.

            (a) The General Partner of the Partnership is Cornerstone Real
Estate Fund, Inc., a Maryland corporation. Its principal place of business is
the same as that of the Partnership.

            (b) The Limited Partners are those Persons identified as Limited
Partners on Exhibit A hereto, as amended from time to time.

      2.4 Term and Dissolution.

            (a) The Partnership shall have perpetual duration, except that the
Partnership shall be dissolved upon the first to occur of any of the following
events:

                  (i) The occurrence of an Event of Bankruptcy as to a General
Partner or the dissolution, death, removal or withdrawal of a General Partner
unless the business of the Partnership is continued pursuant to Section 7.3(b)
hereof; provided that if a General Partner is on the date of such occurrence a
partnership, the dissolution of such General Partner as a result of the
dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in
such partnership shall not be an event of dissolution of the Partnership if the
business of such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this Agreement;

                                      -6-

<PAGE>

                  (ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the Partnership
(provided that if the Partnership receives an installment obligation as
consideration for such sale or other disposition, the Partnership shall
continue, unless sooner dissolved under the provisions of this Agreement, until
such time as such note or notes are paid in full);

                  (iii) The exchange of all Limited Partnership Interests (other
than any of such interests held by the General Partner or Affiliates of the
General Partner) for REIT Shares or the securities of any other entity; or

                  (iv) The election by the General Partner that the Partnership
should be dissolved.

            (b) Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.3(b) hereof), the General Partner
(or its trustee, receiver, successor or legal representative) shall amend or
cancel the Certificate and liquidate the Partnership's assets and apply and
distribute the proceeds thereof in accordance with Section 5.6 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.

      2.5 Filing of Certificate and Perfection of Limited Partnership. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, The Certificate any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.

      2.6 Certificates Describing Partnership Units. At the request of a Limited
Partner, the General Partner, at its option, may issue a certificate summarizing
the terms of such Limited Partner's interest in the Partnership, including the
number of Partnership Units owned and the Percentage Interest represented by
such Partnership Units as of the date of such certificate. Any such certificate
(i) shall be in form and substance as approved by the General Partner, (ii)
shall not be negotiable and (iii) shall bear a legend to the following effect:

      This certificate is not negotiable. The Partnership Units represented by
this certificate are governed by and transferable only in accordance with the
provisions of the Agreement of Limited Partnership of Cornerstone Operating
Partnership, L.P., as amended from time to time.

                                    ARTICLE 3
                           BUSINESS OF THE PARTNERSHIP

      The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act, provided, however, that such business
shall be limited to and conducted in such a manner as to permit the General
Partner at all times to qualify as a REIT, unless the General Partner otherwise
ceases to qualify as a REIT, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership
of interests in any entity engaged in any of the foregoing and (iii) to do
anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting the General Partner's right in its sole and
absolute discretion to cease qualifying as a REIT, the Partners acknowledge that
the General Partner's current status as a REIT and the avoidance of income and
excise taxes on the General Partner inures to the benefit of all the Partners
and not solely to the General Partner. Notwithstanding the foregoing, the
Limited Partners agree that the General Partner may terminate its status as a
REIT under the Code at any time to the full extent permitted under the Articles
of Incorporation. The General Partner shall also be empowered to do any and all
acts and things necessary or prudent to ensure that the Partnership will not be
classified as a "publicly traded partnership" for purposes of Section 7704 of
the Code.

                                    ARTICLE 4
                       CAPITAL CONTRIBUTIONS AND ACCOUNTS

      4.1 Capital Contributions. The General Partner and the Limited Partners
have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as amended
from time to time.

                                      -7-

<PAGE>

      4.2 Additional Capital Contributions and Issuances of Additional
Partnership Interests. Except as provided in this Section 4.2 or in Section 4.3,
the Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner may contribute
additional capital to the Partnership, from time to time, and receive additional
Partnership Interests in respect thereof, in the manner contemplated in this
Section 4.2.

            (a) Issuances of Additional Partnership Interests.

                  (i) General. The General Partner is hereby authorized to cause
the Partnership to issue such additional Partnership Interests in the form of
Partnership Units for any Partnership purpose at any time or from time to time,
to the Partners (including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established by the
General Partner in its sole and absolute discretion, all without the approval of
any Limited Partners. Any additional Partnership Interests issued thereby may be
issued in one or more classes, or one or more series of any of such classes,
with such designations, preferences and relative, participating, optional or
other special rights, powers and duties, including rights, powers and duties
senior to Limited Partnership Interests, all as shall be determined by the
General Partner in its sole and absolute discretion and without the approval of
any Limited Partner, subject to Delaware law, including, without limitation, (i)
the allocations of items of Partnership income, gain, loss, deduction and credit
to each such class or series of Partnership Interests; (ii) the right of each
such class or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership; provided,
however, that no additional Partnership Interests shall be issued to the General
Partner unless:

                        (1) (A) the additional Partnership Interests are issued
in connection with an issuance of REIT Shares of or other interests in the
General Partner, which shares or interests have designations, preferences and
other rights, all such that the economic interests are substantially similar to
the designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner by the Partnership in accordance with
this Section 4.2 and (B) the General Partner shall make a Capital Contribution
to the Partnership in an amount equal to the proceeds raised in connection with
the issuance of such shares of stock of or other interests in the General
Partner;

                        (2) the additional Partnership Interests are issued in
exchange for property owned by the General Partner with a fair market value, as
determined by the General Partner, in good faith, equal to the value of the
Partnership Interests; or

                        (3) the additional Partnership Interests are issued to
all Partners holding Partnership Units in proportion to their respective
Percentage Interests.

      In addition, the General Partner may acquire Partnership Interests from
other Partners pursuant to this Agreement. In the event that the Partnership
issues Partnership Interests pursuant to this Section 4.2(a), the General
Partner shall make such revisions to this Agreement (without any requirement of
receiving approval of the Limited Partners) as it deems necessary to reflect the
issuance of such additional Partnership Interests and any special rights,
powers, and duties associated therewith.

      Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for less than
fair market value, so long as the General Partner concludes in good faith that
such issuance is in the best interests of the General Partner and the
Partnership.

                  (ii) Upon Issuance of Additional Securities. The General
Partner shall not issue any additional REIT Stock (other then REIT Stock issued
in connection with an exchange pursuant to Section 8.5 hereof) or rights,
options, warrants or convertible or exchangeable securities containing the right
to subscribe for or purchase REIT Stock (collectively, "Additional Securities"
other than to all holders of REIT Stock, unless (A) the General Partner shall
cause the Partnership to issue to the General Partner, as the General Partner
may designate, Partnership Interests or rights, options, warrants or convertible
or exchangeable securities of the Partnership having designations, preferences
and other rights, all such that the economic interests are substantially similar
to those of the Additional Securities, and (B) the General Partner contributes
the net proceeds from the issuance of such Additional Securities and from any
exercise of rights contained in such Additional Securities, directly and through
the General Partner, to the Partnership;

                                      -8-

<PAGE>

provided, however, that the General Partner is allowed to issue Additional
Securities in connection with an acquisition of a property to be held directly
by the General Partner, but if and only if, such direct acquisition and issuance
of Additional Securities have been approved and determined to be in the best
interests of the General Partner and the Partnership by a majority of the
Independent Directors (as defined in the General Partner's Articles of
Incorporation). Without limiting the foregoing, the General Partner is expressly
authorized to issue Additional Securities for less than fair market value, and
to cause the Partnership to issue to the General Partner corresponding
Partnership Interests, so long as (x) the General Partner concludes in good
faith that such issuance is in the best interests of the General Partner and the
Partnership, including without limitation, the issuance of REIT Shares and
corresponding Partnership Units pursuant to an employee share purchase plan
providing for employee purchases of REIT Shares at a discount from fair market
value or employee stock options that have an exercise price that is less than
the fair market value of the REIT Shares, either at the time of issuance or at
the time of exercise, and (y) the General Partner contributes all proceeds from
such issuance to the Partnership. For example, in the event the General Partner
issues REIT Shares for a cash purchase price and contributes all of the proceeds
of such issuance to the Partnership as required hereunder, the General Partner
shall be issued a number of additional Partnership Units equal to the product of
(A) the number of such REIT Shares issued by the General Partner, the proceeds
of which were so contributed, multiplied by (B) a fraction, the numerator of
which is 100%, and the denominator of which is the Conversion Factor in effect
on the date of such contribution.

            (b) Certain Deemed Contributions of Proceeds of Issuance of REIT
Shares. In connection with any and all issuances of REIT Shares, the General
Partner shall make Capital Contributions to the Partnership of the proceeds
therefrom, provided that if the proceeds actually received and contributed by
the General Partner are less than the gross proceeds of such issuance as a
result of any underwriter's discount or other expenses paid or incurred in
connection with such issuance, then the General Partner shall be deemed to have
made Capital Contributions to the Partnership in the aggregate amount of the
gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such offering expenses in accordance with Section
6.5 hereof and in connection with the required issuance of additional
Partnership Units to the General Partner for such Capital Contributions pursuant
to Section 4.2(a) hereof.

      4.3 Additional Funding. If the General Partner determines that it is in
the best interests of the Partnership to provide for additional Partnership
funds ("Additional Funds") for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise.

      4.4 Capital Accounts. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution, (ii) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.1 if there were a taxable disposition of such property for
its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the
date of the revaluation.

      4.5 Percentage Interests. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner's Percentage Interest
shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section 4.5,
the Profits and Losses for the taxable year in which the adjustment occurs shall
be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for

                                      -9-

<PAGE>

the taxable year in which the adjustment occurs. The allocation of Profits and
Losses for the earlier part of the year shall be based on the Percentage
Interests before adjustment, and the allocation of Profits and Losses for the
later part shall be based on the adjusted Percentage Interests.

      4.6 No Interest on Contributions. No Partner shall be entitled to interest
on its Capital Contribution.

      4.7 Return of Capital Contributions. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.

      4.8 No Third Party Beneficiary. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.

                                    ARTICLE 5
                        PROFITS AND LOSSES; DISTRIBUTIONS

      5.1 Allocation of Profit And Loss.

            (a) General. Profit and Loss of the Partnership for each fiscal year
or other applicable period of the Partnership shall be allocated among the
Partners in accordance with their respective Percentage Interests.

            (b) Minimum Gain Chargeback. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a "nonrecourse deduction"
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in
accordance with the Partners' respective Percentage Interests, (ii) any expense
of the Partnership that is a "partner nonrecourse deduction" within the meaning
of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that
bears the "economic risk of loss" of such deductions in accordance with
Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership
taxable year, then, subject to the exceptions set forth in Regulations Section
1.704-(2)(g), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner's "interest in
partnership profits" for purposes of determining its share of the nonrecourse
liabilities of the Partnership within the meaning of Regulations Section
1.752-3(a)(3) shall be such Partner's Percentage Interest.

            (c) Qualified Income Offset. If a Partner unexpectedly receives in
any taxable year an adjustment, allocation, or distribution described in
subparagraphs (4), (5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that
causes or increases a deficit balance in such Partner's Capital Account that
exceeds the sum of such Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations
Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially
for such taxable year (and, if necessary, later taxable years) items of income
and gain in an amount and manner sufficient to

                                      -10-

<PAGE>

eliminate such deficit Capital Account balance as quickly as possible as
provided in Regulations Section 1.704-1(b)(2)(ii)(d). This Section 5.1(e) is
intended to constitute a "qualified income offset" under Section
1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently
therewith. After the occurrence of an allocation of income or gain to a Partner
in accordance with this Section 5.1(e), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.1(e).

            (d) Capital Account Deficits. Loss shall not be allocated to a
Limited Partner to the extent that such allocation would cause or increase a
deficit in such Partner's Capital Account at the end of any fiscal year (after
reduction to reflect the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner's shares
of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i).
Any Loss in excess of that limitation shall be allocated to the General Partner.
After the occurrence of an allocation of Loss to the General Partner in
accordance with this Section 5.1(d), to the extent permitted by Regulations
Section 1.704-1(b), Profit shall be allocated to such Partner in an amount
necessary to offset the Loss previously allocated to each Partner under this
Section 5.1(d).

            (e) Allocations Between Transferor and Transferee. If a Partner
transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated between the transferor and the
transferee Partner either (i) as if the Partnership's fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal
year that each was a Partner without regard to the results of Partnership
activities in the respective portions of such fiscal year in which the
transferor and the transferee were Partners. The General Partner, in its sole
and absolute discretion, shall determine which method shall be used to allocate
the distributive shares of the various items of Profit and Loss between the
transferor and the transferee Partner.

            (f) Definition of Profit and Loss. "Profit" and "Loss" and any items
of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.1(b), 5.1(c) or 5.1(d). All allocations of income,
Profit, gain, Loss and expense (and all items contained therein) for federal
income tax purposes shall be identical to all allocations of such items set
forth in this Section 5.1, except as otherwise required by Section 704(c) of the
Code and Regulations Section 1.704-1(b)(4). The General Partner shall have the
authority to elect the method to be used by the Partnership for allocating items
of income, gain, and expense as required by Section 704(c) of the Code including
a method that may result in a Partner receiving a disproportionately larger
share of the Partnership tax depreciation deductions, and such election shall be
binding on all Partners.

            (g) Curative Allocations. The allocations set forth in Section
5.1(c), (d) and (e) of this Agreement (the "Regulatory Allocations") are
intended to comply with certain requirements of the Regulations. The General
Partner is authorized to offset all Regulatory Allocations either with other
Regulatory Allocations or with special allocations of other items of Partnership
income, gain, loss or deduction pursuant to this Section 5.1(g). Therefore,
notwithstanding any other provision of this Section 5.1 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special
allocations of Partnership income, gain, loss or deduction in whatever manner it
deems appropriate so that, after such offsetting allocations are made, each
Partner's Capital Account is, to the extent possible, equal to the Capital
Account balance such Partner would have had if the Regulatory Allocations were
not part of this Agreement and all Partnership items were allocated pursuant to
Section 5.1(a) and (e).

      5.2 Distribution of Cash.

            (a) The Partnership shall distribute cash on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount determined
by the General Partner in its sole and absolute discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or
existing Partner acquires an additional Partnership Interest in exchange for a
Capital Contribution on any date other than the next day after a Partnership
Record Date, the cash distribution attributable to such additional Partnership
Interest relating to the Partnership Record Date next following the issuance of
such additional Partnership Interest (or relating to the Partnership Record Date
if such Partnership Interest was acquired on the Partnership Record Date) shall

                                      -11-

<PAGE>

be reduced in the proportion to (i) the number of days that such additional
Partnership Interest is held by such Partner bears to (ii) the number of days
between such Partnership Record Date (including such Partnership Record Date)
and the immediately preceding Partnership Record Date.

            (b) Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner or assignee (including by reason of
Section 1446 of the Code), either (i) if the actual amount to be distributed to
the Partner equals or exceeds the amount required to be withheld by the
Partnership, the amount withheld shall be treated as a distribution of cash in
the amount of such withholding to such Partner, or (ii) if the actual amount to
be distributed to the Partner is less than the amount required to be withheld by
the Partnership, the amount required to be withheld shall be treated as a loan
(a "Partnership Loan") from the Partnership to the Partner on the day the
Partnership pays over such amount to a taxing authority. A Partnership Loan
shall be repaid through withholding by the Partnership with respect to
subsequent distributions to the applicable Partner or assignee. In the event
that a Limited Partner (a "Defaulting Limited Partner") fails to pay any amount
owed to the Partnership with respect to the Partnership Loan within 15 days
after demand for payment thereof is made by the Partnership on the Limited
Partner, the General Partner, in its sole and absolute discretion, may elect to
make the payment to the Partnership on behalf of such Defaulting Limited
Partner. In such event, on the date of payment, the General Partner shall be
deemed to have extended a loan (a "General Partner Loan") to the Defaulting
Limited Partner in the amount of the payment made by the General Partner and
shall succeed to all rights and remedies of the Partnership against the
Defaulting Limited Partner as to that amount. Without limitation, the General
Partner shall have the right to receive any distributions that otherwise would
be made by the Partnership to the Defaulting Limited Partner until such time as
the General Partner Loan has been paid in full, and any such distributions so
received by the General Partner shall be treated as having been received by the
Defaulting Limited Partner and immediately paid to the General Partner.

      Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.2(c) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.

            (c) In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a cash
distribution as the holder of record of a REIT Share for which all or part of
such Partnership Unit has been or will be exchanged.

      5.3 REIT Distribution Requirements. The General Partner shall use its
commercially reasonable efforts to cause the Partnership to distribute amounts
sufficient to enable the General Partner to pay shareholder dividends that will
allow the General Partner to (i) meet its distribution requirement for
qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid
any federal income or excise tax liability imposed by the Code.

      5.4 No Right to Distributions In Kind. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership.

      5.5 Limitations on Return of Capital Contributions. Notwithstanding any of
the provisions of this Article 5, no Partner shall have the right to receive and
the General Partner shall not have the right to make, a distribution that
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, the sum of all
Partnership liabilities, other than the liabilities to a Partner for the return
of his Capital Contribution, does not exceed the fair market value of the
Partnership's assets.

      5.6 Distributions Upon Liquidation. Upon liquidation of the Partnership,
after payment of, or adequate provision for, debts and obligations of the
Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts
in accordance with their respective positive Capital Account balances. For
purposes of the preceding sentence, the Capital Account of each Partner shall be
determined after all adjustments have been made in accordance with Sections 4.4,
5.1 and 5.2 resulting from Partnership

                                      -12-

<PAGE>

operations and from all sales and dispositions of all or any part of the
Partnership's assets.. To the extent deemed advisable by the General Partner,
appropriate arrangements (including the use of a liquidating trust) may be made
to assure that adequate funds are available to pay any contingent debts or
obligations.

      5.7 Substantial Economic Effect. It is the intent of the Partners that the
allocations of Profit and Loss under this Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article 5 and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.

                                    ARTICLE 6
                             RIGHTS, OBLIGATIONS AND
                          POWERS OF THE GENERAL PARTNER

      6.1 Management of the Partnership.

            (a) Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:

                  (i) to acquire, purchase, own, operate, lease and dispose of
any real property and any other property or assets including, but not limited to
notes and mortgages, that the General Partner determines are necessary or
appropriate or in the best interests of the business of the Partnership;

                  (ii) to construct buildings and make other improvements on the
properties owned or leased by the Partnership;

                  (iii) to authorize, issue, sell, redeem or otherwise purchase
any Partnership Interests or any securities (including secured and unsecured
debt obligations of the Partnership, debt obligations of the Partnership
convertible into any class or series of Partnership Interests, or options,
rights, warrants or appreciation rights relating to any Partnership Interests)
of the Partnership;

                  (iv) to borrow or lend money for the Partnership, issue or
receive evidences of indebtedness in connection therewith, refinance, increase
the amount of, modify, amend or change the terms of, or extend the time for the
payment of, any such indebtedness, and secure such indebtedness by mortgage,
deed of trust, pledge or other lien on the Partnership's assets;

                  (v) to pay, either directly or by reimbursement, for all
operating costs and general administrative expenses of the Partnership to third
parties or to the General Partner or its Affiliates as set forth in this
Agreement;

                  (vi) to guarantee or become a co-maker of indebtedness of the
General Partner or any Subsidiary thereof, refinance, increase the amount of,
modify, amend or change the terms of, or extend the time for the payment of, any
such guarantee or indebtedness, and secure such guarantee or indebtedness by
mortgage, deed of trust, pledge or other lien on the Partnership's assets;

                  (vii) to use assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with this Agreement,
including, without limitation, payment, either directly or by reimbursement, of
all operating costs and general administrative expenses of the General Partner,
the Partnership or any Subsidiary of either, to third parties or to the General
Partner as set forth in this Agreement;

                  (viii) to lease all or any portion of any of the Partnership's
assets, whether or not the terms of such leases extend beyond the termination
date of the Partnership and whether or not any portion of the Partnership's

                                      -13-

<PAGE>

assets so leased are to be occupied by the lessee, or, in turn, subleased in
whole or in part to others, for such consideration and on such terms as the
General Partner may determine;

                  (ix) to prosecute, defend, arbitrate, or compromise any and
all claims or liabilities in favor of or against the Partnership, on such terms
and in such manner as the General Partner may reasonably determine, and
similarly to prosecute, settle or defend litigation with respect to the
Partners, the Partnership, or the Partnership's assets;

                  (x) to file applications, communicate, and otherwise deal with
any and all governmental agencies having jurisdiction over, or in any way
affecting, the Partnership's assets or any other aspect of the Partnership
business;

                  (xi) to make or revoke any election permitted or required of
the Partnership by any taxing authority;

                  (xii) to maintain such insurance coverage for public
liability, fire and casualty, and any and all other insurance for the protection
of the Partnership, for the conservation of Partnership assets, or for any other
purpose convenient or beneficial to the Partnership, in such amounts and such
types, as it shall determine from time to time;

                  (xiii) to determine whether or not to apply any insurance
proceeds for any property to the restoration of such property or to distribute
the same;

                  (xiv) to establish one or more divisions of the Partnership,
to hire and dismiss employees of the Partnership or any division of the
Partnership, and to retain legal counsel, accountants, consultants, real estate
brokers, and such other persons, as the General Partner may deem necessary or
appropriate in connection with the Partnership business and to pay therefor such
reasonable remuneration as the General Partner may deem reasonable and proper;

                  (xv) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such remuneration
as the General Partner may deem reasonable and proper;

                  (xvi) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority conferred
upon the General Partner;

                  (xvii) to maintain accurate accounting records and to file
promptly all federal, state and local income tax returns on behalf of the
Partnership;

                  (xviii) to distribute Partnership cash or other Partnership
assets in accordance with this Agreement;

                  (xix) to form or acquire an interest in, and contribute
property to, any further limited or general partnerships, joint ventures or
other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, its
Subsidiaries and any other Person in which it has an equity interest from time
to time);

                  (xx) to establish Partnership reserves for working capital,
capital expenditures, contingent liabilities, or any other valid Partnership
purpose;

                  (xxi) to merge, consolidate or combine the Partnership with or
into another Person;

                  (xxii) to do any and all acts and things necessary or prudent
to ensure that the Partnership will not be classified as a "publicly traded
partnership" for purposes of Section 7704 of the Code; and

                  (xxiii) to take such other action, execute, acknowledge, swear
to or deliver such other documents and instruments, and perform any and all
other acts that the General Partner deems necessary or appropriate

                                      -14-

<PAGE>

for the formation, continuation and conduct of the business and affairs of the
Partnership (including, without limitation, all actions consistent with allowing
the General Partner at all times to qualify as a REIT unless the General Partner
voluntarily terminates its REIT status) and to possess and enjoy all of the
rights and powers of a general partner as provided by the Act.

            (b) Except as otherwise provided herein, to the extent the duties of
the General Partner require expenditures of funds to be paid to third parties,
the General Partner shall not have any obligations hereunder except to the
extent that partnership funds are reasonably available to it for the performance
of such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual
funds for payment to third parties or to undertake any individual liability or
obligation on behalf of the Partnership.

      6.2 Delegation of Authority. The General Partner may delegate any or all
of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.

      6.3 Indemnification and Exculpation of Indemnitees.

            (a) The Partnership shall indemnify an Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.3(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.3(a). Any indemnification pursuant to this Section 6.3 shall be
made only out of the assets of the Partnership.

            (b) The Partnership shall reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.3 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.

            (c) The indemnification provided by this Section 6.3 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.

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

            (e) For purposes of this Section 6.3, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.3; and actions taken
or omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the

                                      -15-

<PAGE>

participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.

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

            (g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.3 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

            (h) The provisions of this Section 6.3 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

            (i) Neither the amendment nor repeal of this Section 6.03, nor the
adoption or amendment of any other provision of the Agreement inconsistent with
Section 6.03, shall apply to or affect in any respect the applicability with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption.

      6.4 Liability of the General Partner.

            (a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the General Partner
acted in good faith. The General Partner shall not be in breach of any duty that
the General Partner may owe to the Limited Partners or the Partnership or any
other Persons under this Agreement or of any duty stated or implied by law or
equity provided the General Partner, acting in good faith, abides by the terms
of this Agreement.

            (b) The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, itself and its shareholders
collectively, that the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or the tax consequences of some, but not
all, of the Limited Partners) in deciding whether to cause the Partnership to
take (or decline to take) any actions. In the event of a conflict between the
interests of its shareholders on one hand and the Limited Partners on the other,
the General Partner shall endeavor in good faith to resolve the conflict in a
manner not adverse to either its shareholders or the Limited Partners; provided,
however, that for so long as the General Partner directly owns a controlling
interest in the Partnership, any such conflict that the General Partner, in its
sole and absolute discretion, determines cannot be resolved in a manner not
adverse to either its shareholders or the Limited Partner shall be resolved in
favor of the shareholders. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith.

            (c) Subject to its obligations and duties as General Partner set
forth in Section 6.1 hereof, the General Partner may exercise any of the powers
granted to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.

            (d) Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the General
Partner to continue to qualify as a REIT or (ii) to prevent the General Partner
from incurring any taxes under Section 857, Section 4981, or any other provision
of the Code, is expressly authorized under this Agreement and is deemed approved
by all of the Limited Partners.

            (e) Any amendment, modification or repeal of this Section 6.4 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.4 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.

                                      -16-

<PAGE>

      6.5 Reimbursement of General Partner.

            (a) Except as provided in this Section 6.5 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments, and allocations to which it may be entitled), the General Partner
shall not be compensated for its services as general partner of the Partnership.

            (b) The General Partner shall be reimbursed on a monthly basis, or
such other basis as the General Partner may determine in its sole and absolute
discretion, for all Administrative Expenses.

      6.6 Outside Activities. The Articles of Incorporation and any agreements
entered into by the General Partner or its Affiliates with the Partnership or a
Subsidiary, any officer, director, employee, agent, trustee, Affiliate or
shareholder of the General Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities substantially similar
or identical to those of the Partnership. Neither the Partnership nor any of the
Limited Partners shall have any rights by virtue of this Agreement in any such
business ventures, interest or activities. None of the Limited Partners nor any
other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any such business ventures,
interests or activities, and the General Partner shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures,
interests and activities to the Partnership or any Limited Partner, even if such
opportunity is of a character which, if presented to the Partnership or any
Limited Partner, could be taken by such Person.

      6.7 Employment or Retention of Affiliates.

            (a) Any Affiliate of the General Partner may be employed or retained
by the Partnership and may otherwise deal with the Partnership (whether as a
buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent,
lender or otherwise) and may receive from the Partnership any compensation,
price, or other payment therefor which the General Partner determines to be fair
and reasonable.

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

            (c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement, applicable law.

            (d) Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.

      6.8 General Partner Participation. The General Partner agrees that all
business activities of the General Partner, including activities pertaining to
the acquisition, development or ownership of office or industrial property or
other property, shall be conducted through the Partnership or one or more
Subsidiary Partnerships; provided, however, that the General Partner is allowed
to make a direct acquisition, but if and only if, such acquisition is made in
connection with the issuance of Additional Securities, which direct acquisition
and issuance have been approved and determined to be in the best interests of
the General Partner and the Partnership by a majority of the Independent
Directors.

      6.9 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or

                                      -17-

<PAGE>

Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.

      6.10 Miscellaneous. In the event the General Partner redeems any REIT
Shares (other than REIT Shares redeemed in accordance with the share redemption
program of the General Partner through proceeds received from the General
Partner's dividend reinvestment plan), then the General Partner shall cause the
Partnership to purchase from the General Partner a number of Partnership Units
as determined based on the application of the Conversion Factor on the same
terms that the General Partner exchanged such REIT Shares. Moreover, if the
General Partner makes a cash tender offer or other offer to acquire REIT Shares,
then the General Partner shall cause the Partnership to make a corresponding
offer to the General Partner to acquire an equal number of Partnership Units
held by the General Partner. In the event any REIT Shares are exchanged by the
General Partner pursuant to such offer, the Partnership shall redeem an
equivalent number of the General Partner's Partnership Units for an equivalent
purchase price based on the application of the Conversion Factor.

                                    ARTICLE 7
                           CHANGES IN GENERAL PARTNER

      7.1 Transfer of the General Partner's Partnership Interest.

            (a) The General Partner shall not transfer all or any portion of its
General Partnership Interest or withdraw as General Partner except as provided
in or in connection with a transaction contemplated by Section 7.1(c), (d) or
(e).

            (b) The General Partner agrees that the Percentage Interest for it
will at all times be in the aggregate, at least 1%.

            (c) Except as otherwise provided in Section 6.4(b) or Section 7.1(d)
or (e) hereof, the General Partner shall not engage in any merger, consolidation
or other combination with or into another Person or sale of all or substantially
all of its assets, (other than in connection with a change in the General
Partner's state of incorporation or organizational form) in each case which
results in a change of control of the General Partner (a "Transaction"), unless:

                  (i) the holders of a majority of the Partnership Units
(including the Partnership Units held by the General partner or an Affiliate
thereof) is obtained;

                  (ii) as a result of such Transaction all Limited Partners will
receive for each Partnership Unit an amount of cash, securities, or other
property equal to the product of the Conversion Factor and the greatest amount
of cash, securities or other property paid in the Transaction to a holder of one
REIT Share in consideration of one REIT Share, provided that if, in connection
with the Transaction, a purchase, tender or exchange offer ("Offer") shall have
been made to and accepted by the holders of more than 50% of the outstanding
REIT Shares, each holder of Partnership Units shall be given the option to
exchange its Partnership Units for the greatest amount of cash, securities, or
other property which a Limited Partner would have received had it (A) exercised
its Exchange Right and (B) sold, tendered or exchanged pursuant to the Offer the
REIT Shares received upon exercise of the Exchange Right immediately prior to
the expiration of the Offer; or

                  (iii) the General Partner is the surviving entity in the
Transaction and either (A) the holders of REIT Shares do not receive cash,
securities, or other property in the Transaction or (B) all Limited Partners
(other than the General Partner or any Subsidiary) receive an amount of cash,
securities, or other property (expressed as an amount per REIT Share) that is no
less than the product of the Conversion Factor and the greatest amount of cash,
securities, or other property (expressed as an amount per REIT Share) received
in the Transaction by any holder of REIT Shares.

            (d) Notwithstanding Section 7.1(c), the General Partner may merge
with or into or consolidate with another entity if immediately after such merger
or consolidation (i) substantially all of the assets of the successor or

                                      -18-

<PAGE>

surviving entity (the "Surviving General Partner"), other than Partnership Units
held by the General Partner, are contributed, directly or indirectly, to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value equal to the value of the assets so contributed as determined
by the Surviving General Partner in good faith and (ii) the Surviving General
Partner expressly agrees to assume all obligations of the General Partner, as
appropriate, hereunder. Upon such contribution and assumption, the Surviving
General Partner shall have the right and duty to amend this Agreement as set
forth in this Section 7.1(d). The Surviving General Partner shall in good faith
arrive at a new method for the calculation of the Cash Amount, the REIT Shares
Amount and Conversion Factor for a Partnership Unit after any such merger or
consolidation so as to approximate the existing method for such calculation as
closely as reasonably possible. Such calculation shall take into account, among
other things, the kind and amount of securities, cash and other property that
was receivable upon such merger or consolidation by a holder of REIT Shares or
options, warrants or other rights relating thereto, and to which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Surviving General Partner also
shall in good faith modify the definition of REIT Shares and make such
amendments to Sections 8.5 and 8.7 hereof so as to approximate the existing
rights and obligations set forth in Sections 8.5 and 8.7 as closely as
reasonably possible. The above provisions of this Section 7.1(d) shall similarly
apply to successive mergers or consolidations permitted hereunder.

      In respect of any transaction described in the preceding paragraph, the
General Partner is required to use its commercially reasonable efforts to
structure such transaction to avoid causing the Limited Partners to recognize a
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided such efforts are consistent with the
exercise of the Board of Directors' fiduciary duties to the shareholders of the
General Partner under applicable law.

            (e) Notwithstanding Section 7.1(c),

                  (i) a General Partner may transfer all or any portion of its
General Partnership Interest to (A) a wholly-owned Subsidiary of such General
Partner or (B) the owner of all of the ownership interests of such General
Partner, and following a transfer of all of its General Partnership Interest,
may withdraw as General Partner; and

                  (ii) the General Partner may engage in Transactions not\
required by law or by the rules of any national securities exchange on which the
REIT Shares are listed to be submitted to the vote of the holders of the REIT
Shares.

      7.2 Admission of a Substitute or Additional General Partner. A Person
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:

            (a) the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.5 hereof in connection
with such admission shall have been performed;

            (b) if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and

            (c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.

                                      -19-

<PAGE>

      7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General
Partner.

            (a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.4(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.3(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.2 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.

            (b) Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.4(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Limited Partners, within 90 days after such
occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.4 hereof by selecting, subject to
Section 7.2 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a majority in interest of the Limited Partners. If
the Limited Partners elect to continue the business of the Partnership and admit
a substitute General Partner, the relationship with the Partners and of any
Person who has acquired an interest of a Partner in the Partnership shall be
governed by this Agreement.

      7.4 Removal of a General Partner.

            (a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.

            (b) If a General Partner has been removed pursuant to this Section
7.4 and the Partnership is continued pursuant to Section 7.3 hereof, such
General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.3(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.2
hereof. At the time of assignment, the removed General Partner shall be entitled
to receive from the substitute General Partner the fair market value of the
General Partnership Interest of such removed General Partner as reduced by any
damages caused to the Partnership by such General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General
Partner and a majority in interest of the Limited Partners within 10 days
following the removal of the General Partner. In the event that the parties are
unable to agree upon an appraiser, the removed General Partner and a majority in
interest of the Limited Partners each shall select an appraiser. Each such
appraiser shall complete an appraisal of the fair market value of the removed
General Partner's General Partnership Interest within 30 days of the General
Partner's removal, and the fair market value of the removed General Partner's
General Partnership Interest shall be the average of the two appraisals;
provided, however, that if the higher appraisal exceeds the lower appraisal by
more than 20% of the amount of the lower appraisal, the two appraisers, no later
than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the
removed General Partner's General Partnership Interest no later than 60 days
after the removal of the General Partner. In such case, the fair market value of
the removed General Partner's General Partnership Interest shall be the average
of the two appraisals closest in value.

            (c) The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section 7.4(b), shall be
converted to that of a special Limited Partner; provided, however, such removed
General Partner shall not have any rights to participate in the management and
affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead, such
removed General Partner shall receive and be

                                      -20-
<PAGE>
entitled only to retain distributions or allocations of such items that it would
have been entitled to receive in its capacity as General Partner, until the
transfer is effective pursuant to Section 7.4(b).

            (d) All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section.

                                    ARTICLE 8
                 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

      8.1 Management of the Partnership. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.

      8.2 Power of Attorney. Each Limited Partner hereby irrevocably appoints
the General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of its Partnership Interest.

      8.3 Limitation on Liability of Limited Partners. No Limited Partner shall
be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.

      8.4 Ownership by Limited Partner of Corporate General Partner or
Affiliate. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal tax purposes. The General Partner shall be entitled to
make such reasonable inquiry of the Limited Partners as is required to establish
compliance by the Limited Partners with the provisions of this Section.

      8.5 Exchange Right.

            (a) Subject to Sections 8.5(b), 8.5(c), 8.5(d) and 8.5(e) and the
provisions of any agreements between the Partnership and one or more Limited
Partners with respect to Partnership Units held by them, each Limited Partner,
other than the General Partner, shall have the right (the "Exchange Right") to
require the Partnership to redeem on a Specified Exchange Date all or a portion
of the Partnership Units held by such Limited Partner at an exchange price equal
to and in the form of the Cash Amount to be paid by the Partnership, provided
that such Partnership Units shall have been outstanding for at least one year.
The Exchange Right shall be exercised pursuant to a Notice of Exchange delivered
to the Partnership (with a copy to the General Partner) by the Limited Partner
who is exercising the Exchange Right (the "Exchanging Partner"); provided,
however, that the Partnership shall not be obligated to satisfy such Exchange
Right if the General Partner elects to purchase the Partnership Units subject to
the Notice of Exchange pursuant to Section 8.5(b); and provided, further, that
no Limited Partner may deliver more than two Notices of Exchange during each
calendar year. A Limited Partner may not exercise the Exchange Right for less
than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000
Partnership Units, all of the Partnership Units held by such Partner. The
Exchanging Partner shall have no right, with respect to any Partnership Units so
exchanged, to receive any distribution paid with respect to Partnership Units if
the record date for such distribution is on or after the Specified Exchange
Date.

            (b) Notwithstanding the provisions of Section 8.5(a), a Limited
Partner that exercises the Exchange Right shall be deemed to have offered to
sell the Partnership Units described in the Notice of Exchange to the General
Partner, and the General Partner may, in its sole and absolute discretion, elect
to purchase directly and acquire

                                      -21-
<PAGE>

such Partnership Units by paying to the Exchanging Partner either the Cash
Amount or the REIT Shares Amount, as elected by the General Partner (in its sole
and absolute discretion), on the Specified Exchange Date, whereupon the General
Partner shall acquire the Partnership Units offered for exchange by the
Exchanging Partner and shall be treated for all purposes of this Agreement as
the owner of such Partnership Units. If the General Partner shall elect to
exercise its right to purchase Partnership Units under this Section 8.5(b) with
respect to a Notice of Exchange, it shall so notify the Exchanging Partner
within five Business Days after the receipt by the General Partner of such
Notice of Exchange. Unless the General Partner (in its sole and absolute
discretion) shall exercise its right to purchase Partnership Units from the
Exchanging Partner pursuant to this Section 8.5(b), the General Partner shall
have no obligation to the Exchanging Partner or the Partnership with respect to
the Exchanging Partner's exercise of the Exchange Right. In the event the
General Partner shall exercise its right to purchase Partnership Units with
respect to the exercise of a Exchange Right in the manner described in the first
sentence of this Section 8.5(b), the Partnership shall have no obligation to pay
any amount to the Exchanging Partner with respect to such Exchanging Partner's
exercise of such Exchange Right, and each of the Exchanging Partner, the
Partnership, and the General Partner, as the case may be, shall treat the
transaction between the General Partner, as the case may be, and the Exchanging
Partner for federal income tax purposes as a sale of the Exchanging Partner's
Partnership Units to the General Partner, as the case may be. Each Exchanging
Partner agrees to execute such documents as the General Partner may reasonably
require in connection with the issuance of REIT Shares upon exercise of the
Exchange Right.

            (c) Notwithstanding the provisions of Section 8.5(a) and 8.5(b), a
Limited Partner shall not be entitled to exercise the Exchange Right if the
delivery of REIT Shares to such Partner on the Specified Exchange Date by the
General Partner pursuant to Section 8.5(b) (regardless of whether or not the
General Partner would in fact exercise its rights under Section 8.5(b)) would
(i) result in such Partner or any other person owning, directly or indirectly,
REIT Stock in excess of the Ownership Limit (as defined in the Articles of
Incorporation and calculated in accordance therewith), except as provided in the
Articles of Incorporation, (ii) result in REIT Stock being owned by fewer than
100 persons (determined without reference to any rules of attribution), except
as provided in the Articles of Incorporation, (iii) result in the General
Partner being "closely held" within the meaning of Section 856(h) of the Code,
or (iv) cause the General Partner to own, directly or constructively, 10% or
more of the ownership interests in a tenant within the meaning of Section
856(d)(2)(B) of the Code. The General Partner, in its sole and absolute
discretion, may waive the restriction on exchange set forth in this Section
8.5(c).

            (d) Any Cash Amount to be paid to an Exchanging Partner pursuant to
this Section 8.5 shall be paid on the Specified Exchange Date; provided,
however, that the General Partner may elect to cause the Specified Exchange Date
to be delayed for up to an additional 180 days to the extent required for the
General Partner to cause additional REIT Shares to be issued to provide
financing to be used to make such payment of the Cash Amount. Notwithstanding
the foregoing, the General Partner agrees to use its best efforts to cause the
closing of the acquisition of exchanged Partnership Units hereunder to occur as
quickly as reasonably possible.

            (e) Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Exchange Rights as and if deemed necessary to
ensure that the Partnership does not constitute a "publicly traded partnership"
under section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt
written notice thereof (a "Restriction Notice") to each of the Limited Partners,
which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership which states that, in the opinion of such counsel, restrictions are
necessary in order to avoid the Partnership being treated as a "publicly traded
partnership" under section 7704 of the Code.

                                    ARTICLE 9
                   TRANSFERS OF LIMITED PARTNERSHIP INTERESTS

      9.1 Purchase for Investment.

            (a) Each Limited Partner hereby represents and warrants to the
General Partner and to the Partnership that the acquisition of his Partnership
Interests is made as a principal for his account for investment purposes only
and not with a view to the resale or distribution of such Partnership Interest.

                                      -22-
<PAGE>

            (b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.1(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.

      9.2 Restrictions on Transfer of Limited Partnership Interests.

            (a) Subject to the provisions of 9.2(b), (c) and (d), no Limited
Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all
or any portion of his Limited Partnership Interest, or any of such Limited
Partner's economic rights as a Limited Partner, whether voluntarily or by
operation of law or at judicial sale or otherwise (collectively, a "Transfer")
without the consent of the General Partner, which consent may be granted or
withheld in its sole and absolute discretion. Any such purported transfer
undertaken without such consent shall be considered to be null and void ab
initio and shall not be given effect. The General Partner may require, as a
condition of any Transfer to which it consents, that the transferor assume all
costs incurred by the Partnership in connection therewith.

            (b) No Limited Partner may withdraw from the Partnership other than
as a result of a permitted Transfer (i.e., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
Section 9.5 below) of all of its Partnership Interest pursuant to this Article 9
or pursuant to an exchange of all of its Partnership Units pursuant to Section
8.5. Upon the permitted Transfer or redemption of all of a Limited Partner's
Partnership Interest, such Limited Partner shall cease to be a Limited Partner.

            (c) Subject to 9.2(d), (e) and (f) below, a Limited Partner may
Transfer, with the consent of the General Partner, all or a portion of its
Partnership Units to (i) a parent or parent's spouse, natural or adopted
descendant or descendants, spouse of such descendant, or brother or sister, or a
trust created by such Limited Partner for the benefit of such Limited Partner
and/or any such person(s), of which trust such Limited Partner or any such
person(s) is a trustee, (ii) a corporation controlled by a Person or Persons
named in (i) above, or (iii) if the Limited Partner is an entity, its beneficial
owners.

            (d) No Limited Partner may effect a Transfer of its Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would otherwise violate any
applicable federal or state securities or blue sky law (including investment
suitability standards).

            (e) No Transfer by a Limited Partner of its Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the General Partner to continue to qualify as a REIT or subject the
General Partner to any additional taxes under Section 857 or Section 4981 of the
Code, or (iii) such transfer is effectuated through an "established securities
market" or a "secondary market (or the substantial equivalent thereof)" within
the meaning of Section 7704 of the Code.

            (f) No transfer of any Partnership Units may be made to a lender to
the Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion, provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.

            (g) Any Transfer in contravention of any of the provisions of this
Article 9 shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.

                                      -23-
<PAGE>

            (h) Prior to the consummation of any Transfer under this Article 9,
the transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.

      9.3 Admission of Substitute Limited Partner.

            (a) Subject to the other provisions of this Article 9, an assignee
of the Limited Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee, or other recipient of
any disposition of such Limited Partnership Interest) shall be deemed admitted
as a Limited Partner of the Partnership only with the consent of the General
Partner and upon the satisfactory completion of the following:

                  (i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart or an
amendment thereof, including a revised Exhibit A, and such other documents or
instruments as the General Partner may require in order to effect the admission
of such Person as a Limited Partner.

                  (ii) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have been signed,
acknowledged and filed for record in accordance with the Act.

                  (iii) The assignee shall have delivered a letter containing
the representation set forth in Section 9.1(a) hereof and the agreement set
forth in Section 9.1(b) hereof.

                  (iv) If the assignee is a corporation, partnership or trust,
the assignee shall have provided the General Partner with evidence satisfactory
to counsel for the Partnership of the assignee's authority to become a Limited
Partner under the terms and provisions of this Agreement.

                  (v) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section 8.2 hereof.

                  (vi) The assignee shall have paid all legal fees and other
expenses of the Partnership and the General Partner and filing and publication
costs in connection with its substitution as a Limited Partner.

                  (vii) The assignee has obtained the prior written consent of
the General Partner to its admission as a Substitute Limited Partner, which
consent may be given or denied in the exercise of the General Partner's sole and
absolute discretion.

            (b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.3(a)(ii) hereof or, if no such filing is required, the later of the
date specified in the transfer documents or the date on which the General
Partner has received all necessary instruments of transfer and substitution.

            (c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article 9 to the admission of such Person as a Limited
Partner of the Partnership.

      9.4 Rights of Assignees of Partnership Interests.

            (a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except
as required by operation of law, the Partnership shall not be obligated for any
purposes whatsoever to recognize the assignment by any Limited Partner of its
Partnership Interest until the Partnership has received notice thereof.

            (b) Any Person who is the assignee of all or any portion of a
Limited Partner's Limited Partnership Interest, but does not become a Substitute
Limited Partner and desires to make a further assignment of such

                                      -24-
<PAGE>

Limited Partnership Interest, shall be subject to all the provisions of this
Article 9 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of its Limited Partnership Interest.

      9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited
Partner. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.

      9.6 Joint Ownership of Interests. A Partnership Interest may be acquired
by two individuals as joint tenants with right of survivorship, provided that
such individuals either are married or are related and share the same home as
tenants in common. The written consent or vote of both owners of any such
jointly held Partnership Interest shall be required to constitute the action of
the owners of such Partnership Interest; provided, however, that the written
consent of only one joint owner will be required if the Partnership has been
provided with evidence satisfactory to the counsel for the Partnership that the
actions of a single joint owner can bind both owners under the applicable laws
of the state of residence of such joint owners. Upon the death of one owner of a
Partnership Interest held in a joint tenancy with a right of survivorship, the
Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one of the owners of a jointly-held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two equal Partnership Interests, which shall thereafter be owned separately
by each of the former owners.

      9.7 Redemption of Partnership Units. The General Partner will cause the
Partnership to redeem Partnership Units, to the extent it shall have legally
available funds therefor, at any time the General Partner redeems shares of
beneficial interest in itself. The number and class or series of Partnership
Units redeemed and the redemption price shall equal the number (multiplied by
the Conversion Factor) of shares of beneficial interest the General Partner
redeems and the redemption price at which the General Partner redeems such
shares, respectively.

                                   ARTICLE 10
                   BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

      10.1 Books and Records. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports, (d)
copies of this Agreement and amendments thereto and any financial statements of
the Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.

      10.2 Custody of Partnership Funds; Bank Accounts.

            (a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.

            (b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such

                                      -25-
<PAGE>

commingling as may necessarily result from an investment in those investment
companies permitted by this Section 10.2(b).

      10.3 Fiscal and Taxable Year. The fiscal and taxable year of the
Partnership shall be the calendar year.

      10.4 Annual Tax Information and Report. Within 75 days after the end of
each fiscal year of the Partnership, the General Partner shall furnish to each
person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.

      10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments.

            (a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.

            (b) All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.

            (c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Partnership's assets. Notwithstanding anything contained in Article 5 of this
Agreement, any adjustments made pursuant to Section 754 of the Code shall affect
only the successor in interest to the transferring Partner and in no event shall
be taken into account in establishing, maintaining or computing Capital Accounts
for the other Partners for any purpose under this Agreement. Each Partner will
furnish the Partnership with all information necessary to give effect to such
election.

      10.6 Reports to Limited Partners.

            (a) As soon as practicable after the close of each fiscal quarter
(other than the last quarter of the fiscal year), the General Partner shall
cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General Partner,
for such fiscal quarter, presented in accordance with generally accepted
accounting principles. As soon as practicable after the close of each fiscal
year, the General Partner shall cause to be mailed to each Limited Partner an
annual report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, for such fiscal year, presented in accordance with
generally accepted accounting principles. The annual financial statements shall
be audited by accountants selected by the General Partner.

            (b) Any Partner shall further have the right to a private audit of
the books and records of the Partnership at the expense of such Partner,
provided such audit is made for Partnership purposes and is made during normal
business hours.

                                   ARTICLE 11
                         AMENDMENT OF AGREEMENT; MERGER

      The General Partner's consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners, may
amend this Agreement in any respect or merge or consolidate the Partnership with
or into any other partnership or business entity (as defined in Section 17-211
of the Act) in a transaction pursuant to Section 7.1(c), (d) or (e) hereof;
provided, however, that the following amendments and any

                                      -26-
<PAGE>

other merger or consolidation of the Partnership shall require (i) the consent
of Limited Partners holding more than 50% of the Percentage Interests of the
Limited Partners and (ii) in the case of any of the following (b), (c) or (d),
the consent of Limited Partners holding more than 50% of the Special Percentage
Interests of the Limited Partners:

            (a) any amendment affecting the operation of the Conversion Factor
or the Exchange Right (except as provided in Section 8.5(d) or 7.1(d) hereof) in
a manner adverse to the Limited Partners;

            (b) any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them hereunder, other
than with respect to the issuance of additional Partnership Units pursuant to
Section 4.2 hereof;

            (c) any amendment that would alter the Partnership's allocations of
Profit and Loss to the Limited Partners, other than with respect to the issuance
of additional Partnership Units pursuant to Section 4.2 hereof; or

            (d) any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership.

                                   ARTICLE 12
                               GENERAL PROVISIONS

      12.1 Notices. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
specify a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed to
its specified office.

      12.2 Survival of Rights. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.

      12.3 Additional Documents. Each Partner agrees to perform all further acts
and execute, swear to, acknowledge and deliver all further documents which may
be reasonable, necessary, appropriate or desirable to carry out the provisions
of this Agreement or the Act.

      12.4 Severability. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.

      12.5 Entire Agreement. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.

      12.6 Pronouns and Plurals. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.

      12.7 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.

      12.8 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original copy and all of which together
shall constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.

                                      -27-
<PAGE>

      12.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware; provided, however, that
causes of action for violations of federal or state securities laws shall not be
governed by this Section 12.9.

      IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Agreement of Limited Partnership, all as of the ____ day of
November, 2004.

                                    GENERAL PARTNER:

                                    CORNERSTONE REALTY FUND, INC.

                                    By: ___________________________________
                                        Terry G. Roussel, President


                                    LIMITED PARTNERS:

                                    CORNERSTONE ADVISORS, LLC

                                    By: CORNERSTONE VENTURES, INC.
                                        Managing Member

                                        By: _____________________________
                                            Terry G. Roussel, President

                                      -28-
<PAGE>

                                    EXHIBIT A

<TABLE>
<CAPTION>
                                                                          AGREED
         PERCENTAGE                                                      VALUE OF
          PARTNER                                      CASH               CAPITAL                  PARTNERSHIP
          INTEREST                                 CONTRIBUTION        CONTRIBUTION                   UNITS
         ----------                                ------------        ------------                -----------
<S>                                                <C>                 <C>                         <C>
GENERAL PARTNER:
Cornerstone Realty Fund, Inc.
4590 MacArthur Blvd.
Suite 610
Newport Beach, California 92660                      $2,000                  0                       250

ORIGINAL LIMITED PARTNER:
Cornerstone Advisors, LLC
4590 MacArthur Blvd.
Suite 610
Newport Beach, California 92660                      $1,000              1,000                       125

           Totals                                    $2,000               1000                       375
</TABLE>

                                      -29-
<PAGE>

                                    EXHIBIT B

                      NOTICE OF EXERCISE OF EXCHANGE RIGHT

      In accordance with Section 8.5 of the Agreement of Limited Partnership
(the "Agreement") of Cornerstone Operating Partnership, L.P., the undersigned
hereby irrevocably (i) presents for exchange ________ Partnership Units in
Cornerstone Operating Partnership, L.P. in accordance with the terms of the
Agreement and the Exchange Right referred to in Section 8.5 thereof, (ii)
surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Cash Amount or REIT Stock Amount (as defined in the
Agreement) as determined by the General Partner deliverable upon exercise of the
Exchange Right be delivered to the address specified below, and if REIT Stock
(as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.

Dated:  ____________, ____

                            ___________________________________
                            (Name of Limited Partner)

                            ___________________________________
                            (Signature of Limited Partner)

                            ___________________________________
                                     (Mailing Address)

                            ___________________________________
                            (City)        (State) (Zip Code)

                            Signature Guaranteed by:

                            ___________________________________

If REIT Stock is to be issued, issue to:

Name:

________________________________________

Social Security or Tax I.D. Number:

________________________________________

                                      -30-
<PAGE>

                                    EXHIBIT C

                            INDEMNIFICATION GUIDELINE

      1. The REIT shall not provide for indemnification of the TRUSTEES,
ADVISORS or AFFILIATES for any liability or loss suffered by the TRUSTEES,
ADVISORS or AFFILIATES, nor shall it provide that the TRUSTEES, ADVISORS or
AFFILIATES be held harmless for any loss or liability suffered by the REIT,
unless all of the following conditions are met:

            (a) The TRUSTEES, ADVISORS or AFFILIATES have determined, in good
faith, that the course of conduct which caused the loss or liability was in the
best interests of the REIT.

            (b) The TRUSTEES, ADVISORS or AFFILIATES were acting on behalf of or
performing services for the REIT.

            (c) Such liability or loss was not the result of:

                  (i) negligence or misconduct by the TRUSTEES, excluding the
INDEPENDENT TRUSTEES, ADVISORS or AFFILIATES; OR

                  (ii) gross negligence or willful misconduct by the INDEPENDENT
TRUSTEES.

            (d) Such indemnification or agreement to hold harmless is
recoverable only out of REIT net assets and not from SHAREHOLDERS.

      2. Notwithstanding anything to the contrary contained in Section II.G.1,
the TRUSTEES, ADVISORS or AFFILIATES and any persons acting as a broker-dealer
shall not be indemnified by the REIT for any losses, liabilities or expenses
arising from or out of an alleged violation of federal or state securities laws
by such party unless one or more of the following conditions are met:

            (a) There has been a successful adjudication on the merits of each
count involving alleged securities law violations as to the particular
indemnitee.

            (b) Such claims have been dismissed with prejudice on the merits by
a court of competent jurisdiction as to the particular Indemnitee.

            (c) A court of competent jurisdiction approves a settlement of the
claims against a particular indemnitee and finds that indemnification of the
settlement and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the Securities
and Exchange SEC and of the published position of any state securities
regulatory authority in which securities of the REIT were offered or sold as to
indemnification for violations of securities laws.

      3. The advancement of REIT funds to the TRUSTEES, ADVISORS or AFFILIATES
for legal expenses and other costs incurred as a result of any legal action for
which indemnification is being sought is permissible only if all of the
following conditions are satisfied:

            (a) The legal action relates to acts or omissions with respect to
the performance of duties or services on behalf of the REIT.

            (b) The legal action is initiated by a third party who is not a
SHAREHOLDER or the legal action is initiated by a SHAREHOLDER acting in his or
her capacity as such and a court of competent jurisdiction specifically approves
such advancement.

            (c) The TRUSTEES, ADVISORS and AFFILIATES undertake to repay the
advanced funds to the REIT, together with the applicable legal rate of interest
thereon, in cases in which such TRUSTEES, ADVISORS or AFFILIATES are found not
to be entitled to indemnification.

                                      -31-