<PAGE>

                                                                    EXHIBIT 10.4

                                    EXHIBIT B
                              AMENDED AND RESTATED
                            RIGHTS OF PREFERRED UNITS
                                AND COMMON UNITS

 Amended and Restated Terms of Series 1997-A Preferred Units and Common Units of
    Burnham Pacific Operating Partnership, L.P. (the "OPERATING PARTNERSHIP")


         Section 1.        DESIGNATION AND AMOUNT.

                  Pursuant to Section 4.2.A. of the Agreement of Limited
Partnership of the Operating Partnership, as amended (the "PARTNERSHIP
AGREEMENT"), the General Partner of the Operating Partnership (the "GENERAL
PARTNER") has designated 4,800,000 units of Limited Partnership Interest as
Series 1997-A Preferred Units (the "SERIES 1997-A PREFERRED UNITS"), which units
shall have the preferences, exchange, redemption and other rights, and voting
powers, restrictions, limitations as to distributions, qualifications and terms
and conditions of redemption as set forth below. All other Units of Limited
Partnership Interest shall constitute "COMMON Units" or "UNITS" that shall
collectively have all of their rights of the Limited Partners of the Operating
Partnership except for those that are expressly granted to the Series 1997-A
Preferred Units in this Exhibit B.

         Section 2.        DISTRIBUTIONS.

                  (a) Holders of Series 1997-A Preferred Units will be entitled
to receive, when, as and if authorized by the General Partner out of funds
legally available for the payment of distributions, cumulative quarterly cash
distributions (rounded up to the nearest whole cent) equal to the greater of (i)
2.00% (per quarter) of the Stated Value for each Series 1997-A Preferred Unit
("STATED VALUE" means $25.00 per Series 1997-A Preferred Unit, as such amount is
reduced from time to time pursuant to payments in respect of the Change of
Control Preference (as defined below) or the Liquidation Preference (as defined
below)), and (ii) the per unit Common Stock Dividend Amount (as hereinafter
defined) for each Series 1997-A Preferred Unit, payable in each case in arrears
on the last Business Day (as hereinafter defined) of each of March, June,
September and December of each year, commencing on the first such day after the
first issuance of Series 1997-A Preferred Units (each a "DISTRIBUTION PAYMENT
DATE"). The "COMMON STOCK DIVIDEND AMOUNT" applicable as of any Distribution
Payment Date shall mean the amount which is the product of (i) the dividend
payable (or immediately preceding as set forth below) on such Distribution
Payment Date with respect to each share of Common Stock, par value $.01 per
share (the "CORPORATION COMMON STOCK"), of Burnham Pacific Properties, Inc. (the
"CORPORATION"), and (ii) the number of shares of


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Corporation Common Stock for which each Series 1997-A Preferred Unit may, at the
option of the Corporation, be exchanged, at the Common Exchange Rate (as
hereinafter defined) then in effect and otherwise as set forth herein as of the
record date established for such Distribution Payment Date (determined, for
purposes of this computation, to the fourth decimal place); PROVIDED, HOWEVER,
that the Common Stock Dividend Amount shall be adjusted as to any Distribution
Payment Date only when and to the extent that the average amount of the
dividends payable on or most closely to such Distribution Payment Date and the
three next preceding Distribution Payment Dates exceeds the amount of the
regular dividend ($.25 per share of Common Stock per quarter (as adjusted for
splits, share dividends and other similar events), as the same may from time to
time be reasonably and sustainably increased by the Board of Directors by
resolution stating that such increased dividend is "regular". Such cumulative
quarterly cash distributions will accrue daily on the basis of a 360-day year of
twelve 30-day months, and will, to the extent not paid in full on a Distribution
Payment Date, together with accruals thereon at the compounded quarterly at a
rate of 2.00% from such Distribution Payment Date until payment is made, whether
or not the Operating Partnership has earnings or surplus. The distribution
payable to the holder of each Series 1997-A Preferred Unit on the first
Distribution Payment Date after such unit is issued will be the Accrued
Distributions thereon calculated from the date of issuance to such Distribution
Payment Date. If any Distribution Payment Date is not a Business Day, the
distribution due on that Distribution Payment Date will be paid on the first
Business Day immediately succeeding that Distribution Payment Date. Each
Distribution Payment Date will be on a date which is the date fixed for payment
of dividends with respect to the shares of Corporation Common Stock or is not
more than five Business Days after the date fixed for payment of dividends with
respect to the shares of Corporation Common Stock. As used with regard to the
Series 1997-A Preferred Units, the term "BUSINESS DAY" means a day on which both
state and federally chartered banks in New York, New York are required to be
open for general banking business; "ACCRUED DISTRIBUTIONS" means all accrued and
due distributions together with all accrued but not yet due distributions
(compounded as provided above and together with accruals thereon) (whether or
not declared or authorized); and "OUTSTANDING DISTRIBUTIONS" means all accrued
and due distributions (compounded as provided above together with accruals
thereon) (whether or not declared or authorized) but excluding all accrued but
not yet due distributions.

                  (b) Each distribution will be payable to holders of record of
Series 1997-A Preferred Units on a date (a "RECORD DATE") selected by the
General Partner which is not less than 10 nor more than 45 days before the
Distribution Payment Date on which the distribution is to be paid. No Record
Date will precede the close of business on the date the Record Date is fixed.

                  (c) Unless and until all Accrued Distributions on the Series
1997-A Preferred Units under Section 2(a) through the most recent preceding
Distribution Payment Date have been paid (or are being paid contemporaneously
therewith), the Operating Partnership may not (i) declare or pay any
distribution (other than a distribution payable solely in Common Units), or set
aside any funds or assets for payment or distribution with regard to


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<PAGE>

any Junior Units (as hereinafter defined), (ii) redeem or purchase or set aside
any funds or other assets for the redemption or purchase of any Junior Units or
(iii) authorize, take or cause or permit to be taken any action that will result
in (A) the declaration or payment by the Operating Partnership of any
distribution to its partners, or the setting aside of any funds or assets for
payment of any distributions to its partners, or (B) the redemption or purchase,
or the setting aside of any funds or other assets for the redemption or purchase
of, any partnership interests in the Operating Partnership, except as otherwise
set forth herein. As used herein, the term "JUNIOR UNITS" means, with regard to
the Series 1997-A Preferred Units, all partnership interests in the Operating
Partnership to which the Series 1997-A Preferred Units are prior in rank with
regard to payment of distributions or payments upon the liquidation, dissolution
or winding-up of the Operating Partnership; the term "PERSON" shall mean an
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture, nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or other entity of whatever nature.

                  (d) While any Series 1997-A Preferred Units are outstanding,
the Operating Partnership may not pay any distribution, or set aside any funds
for the payment of a distribution, with regard to any units of any class or
series of the Operating Partnership which rank on a parity with the Series
1997-A Preferred Units as to payment of distributions unless at least a
proportionate payment is made with regard to all Accrued Distributions on the
Series 1997-A Preferred Units (except, as to any Series 1997-A Preferred Units
as to which a Notice of Redemption (as hereinafter defined) has been furnished
by the holder thereof, at the effective time of redemption) under Section 2(a)
through the most recent preceding Distribution Payment Date. A payment of
distributions with regard to the Series 1997-A Preferred Units will be
proportionate to a payment of a distribution with regard to another class or
series of units of partnership interest if the distribution per Series 1997-A
Preferred Units is the same percentage of the Accrued Distributions (except as
aforesaid) under Section 2(a) through the most recent preceding Distribution
Payment Date, with regard to a Series 1997-A Preferred Unit that the
distribution paid with regard to a unit of the other class or series of
partnership interest is of the Accrued Distributions (except as aforesaid) under
Section 2(a) through the most recent preceding Distribution Payment Date, with
regard to a unit of that other class or series of partnership interest.

                  (e) Any distribution paid with regard to Series 1997-A
Preferred Units will be paid equally with regard to each outstanding Series
1997-A Preferred Unit, except to the extent that Series 1997-A Preferred Units
are outstanding for differing amounts of time during the relevant distribution
period.


                                       3
<PAGE>

                  Section 3.        VOTING RIGHTS.

                  The voting rights of the holders of Series 1997-A Preferred
Units will be only the following:

                  (a) The holders of Series 1997-A Preferred Units will have the
right to vote on any matters on which the holders of Common Units are entitled
to vote on an "as converted" basis with holders of Common Units, as though part
of the same class as holders of Common Units, with such number of Common Units
deemed held of record by holders of Series 1997-A Preferred Units on any Record
Date as would be the number of Common Units into which the Series 1997-A
Preferred Units held by such holders would be entitled to be exchanged on such
Record Date (such number to be based upon the Common Exchange Rate). The holders
of Series 1997-A Preferred Units shall receive notice of any meetings of the
holders of Common Units, and all other notices and correspondence to the holders
of Common Units provided by the Operating Partnership, and shall be entitled to
take such actions, and shall have such rights, as are set forth herein or are
otherwise available to the holders of Common Units as set forth in the Operating
Partnership Agreement as are in effect on the date hereof, in each case with the
same effect as would be taken by holders of Series 1997-A Preferred Units if
deemed to be holders of such number of Common Units determined as aforesaid.

                  (b) While any Series 1997-A Preferred Units are outstanding,
the Operating Partnership will not, directly or indirectly, including through a
recapitalization or a merger or consolidation with any other Person, or
otherwise, without approval of holders of at least a majority of the outstanding
Series 1997-A Preferred Units, voting separately as a class, (i) issue in excess
of 4,800,000 Series 1997-A Preferred Units; (ii) increase the number of
authorized Series 1997-A Preferred Units; (iii) combine, split or reclassify the
outstanding Series 1997-A Preferred Units into a smaller or larger number of
units; (iv) exchange any Series 1997-A Preferred Units for other securities or
the right to receive cash, or propose or require an exchange other than as
provided herein, or reclassify any Series 1997-A Preferred Units (other than
Series 1997-A Preferred Units that are redeemed in accordance with the terms
hereof), or authorize, create, classify, reclassify or issue any class or series
of units ranking prior to or on a parity with the Series 1997-A Preferred Units
either as to distributions or upon liquidation, dissolution or winding-up of the
Operating Partnership or as to the rights of the Series 1997-A Preferred Units
set forth in this Section 3; (v) amend, alter or repeal, or permit to be
amended, altered or repealed, any provision of this Thirteenth Amendment to the
Partnership Agreement in a manner which would affect adversely the rights and
preferences of the holders of Series 1997-A Preferred Units.

                  (c) With respect to any matter to be approved by holders of
the Series 1997-A Preferred Units, the General Partner will act in accordance
with Section 3(f) of the Articles Supplementary of the General Partner with
respect to any Series 1997-A Preferred Units held by the General Partner.


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                  (d) Holders of Series 1997-A Preferred Units may enter into
agreements governing the exercise of their voting, consent, approval and other
rights as such holders. From and after the date that the General Partner has
received on behalf of the Partnership notice of any such agreement, (i) any
valid action taken by such a holder party to and under any such agreement shall
be binding upon the Partnership, (ii) any proxies delivered by holders of Series
1997-A Preferred Units under such agreement shall be recognized by the
Partnership and given effect in accordance with their terms and (iii) the
Partnership shall provide to each such holder notice of any matter as to which
any such holder in its capacity as a holder of Series 1997-A Preferred Units is
entitled to or given notice. Unless otherwise provided in any such agreement,
any party thereto may exercise its rights with respect to Series 1997-A
Preferred Units and as a partner of the Partnership, solely in its own interest
(and in so acting need not consider the interests of others, including other
partners of the Partnership), and shall not by virtue of such agreement be
deemed to be a fiduciary of or owe any duty, including any fiduciary duty, to,
any of the General Partner, any Limited Partner, any holder of Common Units or
any other holder of Series 1997-A Preferred Units.

         Section 4.        CHANGE OF CONTROL; LIQUIDATION.

                  (a) Upon the occurrence of any event (a "CHANGE OF CONTROL
EVENT") which would permit the holders of Series 2000-C Convertible Preferred
Stock of the Corporation ("CORPORATION PREFERRED STOCK") to receive a Change of
Control Preference as defined in Section 4(a) of the Articles Supplementary of
the Corporation designating the Corporation Preferred Stock as in effect as of
the date hereof, each holder of Series 1997-A Preferred Units may, at its
option, receive, and, if so electing by written notice to the Operating
Partnership to such effect, will be entitled to receive, out of the assets of
the Operating Partnership available for distribution to its partners, whether
from capital, surplus or earnings, before any distributions made to holders of
any Junior Units, an amount per unit (the "CHANGE OF CONTROL PREFERENCE") equal
to the sum of (1) Stated Value plus the per unit amount of Accrued Distributions
with regard to such Series 1997-A Preferred Unit to the date of final
distribution (whether or not declared), (2) $1.25 (which amount is 5% of the
original Stated Value) (the "STATED VALUE PREMIUM", as such amount is reduced
from time to time pursuant to payments in respect of the Change of Control
Preference or the Liquidation Preference) and (3) 5% of the per unit amount of
the aggregate amount of Outstanding Distributions (as defined below) with regard
to the Series 1997-A Preferred Units during the period from the date hereof to
the date of final distribution (the "OUTSTANDING DISTRIBUTION PREMIUM"). Any
amounts paid to a holder of the Series 1997-A Preferred Units in respect of the
Change of Control Preference shall be applied (i) first, towards payment of the
Accrued Distributions of such holder's Series 1997-A Preferred Units and (ii)
second, towards payment of (A) the Stated Value Premium of such holder's Series
1997-A Preferred Units, (B) the Outstanding Distribution Premium, if any, of
such holder's Series 1997-A Preferred Units and (C) the Stated Value of such
holder's Series 1997-A Preferred Units, ratably in accordance with the relative
outstanding amounts of the Stated Value Premium, the Outstanding Distribution
Premium and the Stated Value of such


                                       5

<PAGE>

holder's Series 1997-A Preferred Units. The Operating Partnership shall provide
proper notice to each holder of record of Series 1997-A Preferred Units of any
Change of Control Event.

                  (b) In the event of any involuntary or voluntary liquidation,
dissolution or winding up of the Operating Partnership, each holder of Series
1997-A Preferred Units, may at its option receive, and, if so electing by
written notice to the Operating Partnership to such effect, shall be entitled to
receive, out of the assets of the Operating Partnership available for
distribution to its partners, whether from capital, surplus or earnings, before
any distributions made to holders of any Junior Units, an amount per unit equal
to the sum of (i) Stated Value plus the per unit amount of Outstanding
Distributions with respect to such Series 1997-A Preferred Unit to the date of
final distribution (whether or not declared), plus (ii) the Stated Value Premium
and (iii) the Outstanding Distribution Premium. All amounts payable under this
Section 4(b) shall be payable as a liquidation preference (the "LIQUIDATION
PREFERENCE"). Any amounts paid to a holder of the Series 1997-A Preferred Units
in respect of the Liquidation Preference shall be applied (i) first, towards
payment of the Accrued Distribution of such holder's Series 1997-A Preferred
Units and (ii) second, towards payment of (A) the Stated Value Premium of such
holder's Series 1997-A Preferred Units, (B) the Outstanding Distribution
Premium, if any, of such holder's Series 1997-A Preferred Units and (C) the
Stated Value of such holder's Series 1997-A Preferred Units, ratably in
accordance with the relative outstanding amounts of the Stated Value Premium,
the Outstanding Distribution Premium, if any, and the Stated Value of such
holder's Series 1997-A Preferred Units.

                  (c) Holders of Series 1997-A Preferred Units other than the
Corporation as General Partner may further elect, when delivering the written
notice to the Operating Partnership with respect to the election under
Section 4(a) or Section 4(b), in lieu of receiving the Change of Control
Preference or the Liquidation Preference, as the case may be, to receive
Corporation Preferred Stock or Common Units upon the redemption or exchange
of Series 1997-A Preferred Units, in the manner and as provided in Section 5
hereof.

                  (d) If, upon any liquidation, dissolution or winding-up of the
Operating Partnership, the assets of the Operating Partnership, or proceeds of
those assets, available for distribution to the holders of Series 1997-A
Preferred Units and of units of all other classes or series which are on a
parity as to distributions on liquidation with the Series 1997-A Preferred Units
are not sufficient to pay in full the Change of Control Preference or the
Liquidation Preference, as the case may be, to the holders of Series 1997-A
Preferred Units which have not elected to redeem Series 1997-A Preferred Units
as provided in Section 4(c) by reference to Section 5 hereof, and any
liquidation preference of all other classes or series of units of Partnership
Interests which are on a parity as to distributions on liquidation with the
Series 1997-A Preferred Units, then the assets, or the proceeds of those assets,
which are available for distribution to such holders of Series 1997-A Preferred
Units and of the units of all other classes or series which are on a parity as
to distributions on liquidation with Series 1997-A Preferred Units, will be
distributed to the holders of Series 1997-A Preferred Units, and of the units of
all other classes or series which are on a parity as to distributions on
liquidation with the Series 1997-A Preferred Units, ratably in accordance with
the respective amounts of the


                                       6
<PAGE>

Liquidation Preference, with respect to the Series 1997-A Preferred Units
entitled thereto, and the liquidation preferences applicable to the units of
other classes or series which are on a parity as to distributions on liquidation
with the Series 1997-A Preferred Units, with respect to the units of any such
other class or series entitled thereto. Upon payment of amounts in respect of
the Change of Control Preference and/or the Liquidation Preference in respect of
any Series 1997-A Preferred Unit, which in the aggregate equal the Change of
Control Preference or the Liquidation Preference for such Preferred Unit, such
Preferred Unit shall be deemed to have been redeemed by the Operating
Partnership, such Preferred Unit shall be automatically canceled, and the holder
of such Preferred Unit will not be entitled to any further distribution of
assets of the Operating Partnership or any other rights under this Partnership
Agreement with respect to such Preferred Unit.

                  As used herein, a "CHANGE OF CONTROL" of the Operating
Partnership shall be deemed to have occurred upon a Change of Control of the
Corporation (as defined in the Articles Supplementary of the Corporation
relating to the Series 2000-C Convertible Preferred Stock as in effect as of the
date hereof).

                   Section 5.       REDEMPTION AND EXCHANGE.

                  (a) OPTIONAL REDEMPTION. Except as otherwise set forth in
clause (iii) below, each holder of Series 1997-A Preferred Units (other than the
General Partner) shall have the right (the "REDEMPTION RIGHT") to require the
Operating Partnership to redeem such Units at a redemption price equal to and in
the form of the Cash Amount (as hereinafter defined) to be paid by the Operating
Partnership. Any such Redemption Right shall be exercised pursuant to a Notice
of Redemption (a "NOTICE OF REDEMPTION") delivered to the Operating Partnership
(with a copy to the General Partner) by the holder of such Series 1997-A
Preferred Unit who is exercising the Redemption Right (the "REDEEMING HOLDER").
A holder may exercise the Redemption Right from time to time with respect to
part or all of the Series 1997-A Preferred Units that it owns, as selected by
the holder, provided, that a holder may not exercise the Redemption Right for
less than one thousand (1,000) Series 1997-A Preferred Units unless such holder
then holds less than one thousand (1,000) Series 1997-A Preferred Units, in
which event the Redeeming Holder must exercise the Redemption Right for all of
its Series 1997-A Preferred Units. "SPECIFIED REDEMPTION DATE" means the tenth
business day after receipt by the General Partner of a Notice of Redemption;
provided that if Corporation Common Stock is not then publicly traded, Specified
Redemption Date means the thirtieth business day after receipt by the General
Partner of a Notice of Redemption. "CASH AMOUNT" shall mean (i) an amount of
cash per Series 1997-A Preferred Unit equal to the greater of (x) the
Liquidation Preference per Series 1997-A Preferred Unit and (y) an amount of
cash equal to the product of the Common Exchange Rate and the Current Market
Price (as hereinafter defined). "COMMON EXCHANGE RATE" means that number of
shares of Corporation Common Stock into which a share of Corporation Preferred
Stock is then convertible, pursuant to the Articles Supplementary of the
Corporation in effect on the date hereof. "CURRENT MARKET PRICE" as of any date
of determination will be the average of the volume


                                       7
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weighted average price per share of the Corporation Common Stock (the "VWAP") on
each of the twenty Trading Days (as hereinafter defined), immediately preceding
such date as the VWAP for each day is reported by a nationally-recognized market
quotation or information service that is selected by the Corporation and
approved by a majority in interest of the holders of the Series 1997-A Preferred
Units (exclusive of the units held by the Corporation) which approval will not
be unreasonably withheld. As used herein, the term "TRADING DAY" means (A) if
the Corporation Common Stock is listed on at least one stock exchange, a day on
which there is trading on the principal stock exchange on the Corporation Common
Stock is listed, (B) if the Corporation Common Stock is not listed on a stock
exchange, but sale prices of the Corporation Common Stock are reported on an
automated quotation system a day on which trading is reported on the principal
automated quotation system on which sales of the Corporation Common Stock are
reported, (C) if the Corporation Common Stock is not listed on a stock exchange
and sale prices of the Corporation Common Stock are not reported on an automated
quotation system, a day on which quotations are reported by National Quotation
Bureau Incorporated, or (D) if the Corporation Common Stock is not so listed and
sale prices are not so reported, any day other than a Saturday, a Sunday or a
bank holiday in New York, New York.

                    (A) The Redeeming Holder shall have no right to receive any
distributions paid after the Specified Redemption Date with respect to any
Series 1997-A Preferred Units so redeemed.

                    (B) The assignee of any holder may exercise the rights
(subject to applicable limitations) of such holder pursuant to this Section 5,
and such holder shall be deemed to have assigned such rights to such assignee
and shall be bound by the exercise of such rights by such holder's assignee. In
connection with any exercise of such rights by such assignee on behalf of such
holder, the applicable Cash Amount shall be paid by the Operating Partnership
directly to such assignee and not to such holder.

                    (C) At any time within five business days of receipt by the
General Partner of a written request of a holder of a Series 1997-A Preferred
Unit, the General Partner shall provide such holder with written notice of the
Common Exchange Rate.

                  (ii) GENERAL PARTNER ASSUMPTION OF RIGHT.

                    (A) If a Redeeming Holder has delivered a Notice of
Redemption, the General Partner may, in its sole and absolute discretion, elect
to assume directly and satisfy a Redemption Right (a) by paying to the Redeeming
Holder the Cash Amount or (b) issuing a number of fully paid and non-assessable
shares of Series 2000-C Convertible Preferred Stock such that each Series 1997-A
Preferred Unit will be entitled to be exchanged for one share of Corporation
Preferred Stock. Unless the General Partner, in its sole and absolute
discretion, shall exercise its right to assume directly and satisfy the
Redemption Right, the General Partner shall not have any obligation to the
Redeeming Holder


                                       8
<PAGE>

or to the Operating Partnership with respect to the Redeeming Holder's exercise
of the Redemption Right. If the General Partner shall exercise its right to
satisfy the Redemption Right in the manner described in the first sentence of
this Section 5(a)(ii)(A) and shall fully perform its obligations in connection
therewith, the Operating Partnership shall have no obligation to pay any amount
to the Redeeming Holder with respect to such Redeeming Holder's exercise of the
Redemption Right, and each of the Redeeming Holder, the Operating Partnership
and the General Partner shall, for federal income tax purposes, treat the
transaction between the General Partner and the Redeeming Holder as a sale of
the Redeeming Holder's Series 1997-A Preferred Units to the General Partner.
Nothing contained in this Section 5(a)(ii)(A) shall imply any right of the
General Partner to require any holder of Series 1997-A Preferred Units to
exercise the Redemption Right afforded to such holder pursuant to Section
5(a)(i).

                    (B) Each Redeeming Holder agrees to execute such documents
as the General Partner may reasonably require in connection with any issuance of
such shares of Corporation Preferred Stock upon exercise of the Redemption
Right.

                  (iii) NO LIENS ON SERIES 1997-A PREFERRED UNITS DELIVERED FOR
REDEMPTION. Each Redeeming Holder covenants and agrees with the General Partner
that all Series 1997-A Preferred Units delivered for redemption shall be
delivered to the Operating Partnership or the General Partner, as the case may
be, free and clear of all liens, and, notwithstanding anything contained herein
to the contrary, neither the General Partner nor the Operating Partnership shall
be under any obligation to redeem Series 1997-A Preferred Units which are or may
be subject to any liens.

                  (b) MANDATORY EXCHANGE. Subject to Section 7 hereof, in the
event that the Corporation properly gives a Notice of Mandatory Conversion (as
defined in the Articles Supplementary of the Corporation relating to the right
and preferences of the Corporation Preferred Stock as in effect on the date
hereof) to holders of Corporation Preferred Stock, the Operating Partnership
shall have the right to exchange on the Mandatory Conversion Date (as defined in
such Articles Supplementary) not less than all of the outstanding Series 1997-A
Preferred Units into a number of fully paid and non-assessable Common Units such
that each Series 1997-A Preferred Unit will be entitled to be exchanged for a
number of Common Units equal to the Common Exchange Rate (assuming, for such
purpose that a Common Unit is equivalent to a share of Common Stock). In order
to elect to effect the mandatory exchange (the "MANDATORY EXCHANGE") of Series
1997-A Preferred Units, the Operating Partnership shall issue a notice that all
Series 1997-A Preferred Units are to be exchanged, setting forth the date of the
intended exchange (such notice, the "NOTICE OF MANDATORY EXCHANGE," and such
date, the "MANDATORY EXCHANGE DATE") to all holders of outstanding Series 1997-A
Preferred Units on a date (the "MANDATORY EXCHANGE NOTICE DATE") at least 90 but
not more than 120 days prior to the Mandatory Exchange Date. The Notice of
Mandatory Exchange shall also specify a record date (the "MANDATORY EXCHANGE
RECORD DATE") selected by the Board of Directors of the General Partner which is
not less than 20 but not more than 45 days


                                       9
<PAGE>

before the Mandatory Exchange Date and the number of Common Units for which each
Series 1997-A Preferred Unit will be exchanged. If the Operating Partnership
gives a Notice of Mandatory Exchange, then, provided that the computation set
forth in the Notice of Mandatory Exchange is not clearly erroneous, the
outstanding Series 1997-A Preferred Units will be automatically exchanged for
Common Units at the close of business on the Mandatory Exchange Date and on such
date the Operating Partnership will pay holders of the Series 1997-A Preferred
Units an amount equal to all Accrued Distributions thereon through the Mandatory
Exchange Date. At the close of business on the Mandatory Exchange Date, the
General Partner shall cause appropriate amendments to the Partnership Agreement
to be made to reflect the Mandatory Exchange and shall deliver to the holders of
the Series 1997-A Preferred Units a counterpart of the Partnership Agreement to
reflect the issuances of such Common Units to such holders. Any Common Units
issued pursuant to a Mandatory Exchange shall be immediately redeemable at any
time thereafter, at the option of the holder thereof, in accordance with the
redemption provisions of the Partnership Agreement.

                  (c) REDEMPTION AND EXCHANGE PROCEDURES.

                  (i) If Series 1997-A Preferred Units are noticed for
redemption or exchange between the close of business on a distribution payment
Record Date and the opening of business on the corresponding Distribution
Payment Date ("EX RECORD DATE UNITS"), the distribution with respect to those
units will be payable on the Distribution Payment Date to the holder of record
of the Ex Record Date Units on the distribution payment Record Date
notwithstanding the surrender of the Ex Record Date Units for redemption or
exchange after the distribution payment Record Date and prior to the
Distribution Payment Date. The Operating Partnership will make no payment or
adjustment for Accrued Distributions on Ex Record Date Units, whether or not in
arrears, or for distributions on the Common Units or shares of Corporation
Preferred Stock issued upon redemption or exchange of the Ex Record Date Units,
other than to make payment to the holder of record thereof on the Record Date.
All Accrued Distributions payable with respect to Series 1997-A Preferred Units
noticed for exchange during any period commencing with the close of business on
each Distribution Payment Date and ending with the opening of business on the
next succeeding Record Date will be paid to the holder redeeming or exchanging
such units on the related redemption or exchange date.

                  (ii) As promptly as practicable after a Specified Redemption
Date, or the Mandatory Exchange Date, as the case may be, the Operating
Partnership will issue and will deliver to the holder at the office of the
holder set forth in the Notice of Election to Exchange, or on the holder's
written order, a certificate or certificates representing the number of whole
shares of Corporation Preferred Stock or a fully executed counterpart of an
amendment to the Partnership Agreement reflecting the number of Common Units
issued upon exchange of the Series 1997-A Preferred Units.


                  (iii) Each redemption or exchange will be deemed to have been
effected at the Specified Redemption Date or on the Mandatory Exchange Date, as
applicable,


                                       10
<PAGE>

and the person in whose name a certificate for shares of Corporation Preferred
Stock, if any, or to whom a fully executed counterpart of an amendment to the
Partnership Agreement reflecting the ownership of Common Units, if any, is to be
issued upon a redemption or exchange, will be deemed to have become the holder
of record of the shares of Corporation Preferred Stock or the Common Units
represented by that certificate or amendment, as the case may be, at such
effective time. All shares of Corporation Preferred Stock and all Common Units
delivered upon redemption or exchange of Series 1997-A Preferred Units will upon
delivery be duly and validly issued and fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights except such
preemptive rights as may exist with respect to the Corporation Preferred Stock
under the Articles Supplementary of the Corporation relating thereto. The Series
1997-A Preferred Units so redeemed or exchanged will no longer be deemed to be
outstanding and all rights of the holder with respect to those shares will
immediately terminate, except the right to receive the shares of Corporation
Preferred Stock or the Common Units to be issued or distributed as a result of
the redemption or exchange and except that such Series 1997-A Preferred Units
that are redeemed or exchanged for Corporation Preferred Stock shall become the
property of the General Partner in order to reflect the shares of Corporation
Preferred Stock issued in exchange therefor.

                  (d) RECLASSIFICATION OF COMMON UNITS. If there is a
reclassification or change of outstanding Common Units or a merger or
consolidation of the Operating Partnership with any other entity that results in
a reclassification, change, conversion, exchange or cancellation of the
outstanding Common Units, or a sale or transfer of all or substantially all of
the assets of the Operating Partnership, upon any subsequent redemption or
exchange of Series 1997-A Preferred Units, each holder of Series 1997-A
Preferred Units will be entitled to receive the kind and amount of securities,
cash and other property which the holder would have received if a Mandatory
Exchange had occurred immediately before the first of those events and had
retained all the securities, cash and other assets received as a result of all
those events. In the event that a transaction may be viewed as causing this
Section 5(d) to be applicable and create a change in the Common Exchange Rate,
then the change in the Common Exchange Rate will be applicable and this
provision will be applicable.

                  (e) RESERVATION OF CORPORATION PREFERRED STOCK AND CORPORATION
COMMON STOCK. The General Partner will at all times reserve and keep available,
free from preemptive rights, out of the authorized but unissued shares of
Corporation Preferred Stock, for the purpose of effecting the redemption of the
Series 1997-A Preferred Units (and the subsequent conversion of Corporation
Preferred Stock into Corporation Common Stock), the maximum number of shares of
Corporation Preferred Stock and Corporation Common Stock which the General
Partner would be required to deliver upon the redemption of all the outstanding
Series 1997-A Preferred Units for Corporation Preferred Stock and the subsequent
conversion of such Corporation Preferred Stock into Corporation Common Stock.
For the purposes of this Section 5(e), the number of shares of Corporation
Preferred Stock or Corporation Common Stock which the General Partner would be
required to deliver upon the redemption of all outstanding shares of Corporation
Preferred Stock were held by a single holder.


                                       11
<PAGE>

                  (f) PAYMENT OF CERTAIN TAXES. The Operating Partnership will
pay any documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of shares of Corporation Preferred Stock or Common
Units upon the redemption or exchange of the Series 1997-A Preferred Units;
PROVIDED, HOWEVER, that the Operating Partnership will not be required to pay
any tax which may be payable in respect of any transfer involved in the issue or
delivery of shares of Corporation Preferred Stock or of Common Units in a name
other than that of the holder of record of Series 1997-A Preferred Units to be
exchanged and no such issue or delivery will be made unless and until the person
requesting the issue or delivery has paid to the Operating Partnership the
amount of any such tax or has established, to the satisfaction of the Operating
Partnership, that the tax has been paid or is not payable.

         Section 6.        STATUS.

                  So long as any Series 1997-A Preferred Units are outstanding
and held by persons other than the General Partner, no additional Series 1997-A
Preferred Units may be issued.

         Section 7.        REDEMPTION AFTER NOTICE OF MANDATORY EXCHANGE.

                  (a) Notwithstanding anything to the contrary contained in
Section 5, each holder of Series 1997-A Preferred Units prior to a Mandatory
Exchange Date will have the right, exercisable at any time after the Mandatory
Exchange Notice Date but prior to the Mandatory Exchange Date, to require the
Operating Partnership to redeem any or all of the number of Series 1997-A
Preferred Units specified in the Notice of Mandatory Exchange that are owned of
record by the holder (the number of units as to which each holder elects
redemption under this clause (a) being referred to as the "IDENTIFIED REDEMPTION
UNITS"), at a redemption price per share (the "REDEMPTION PRICE") equal to (i)
the sum of (A) Stated Value plus (B) the per unit amount of the sum of all
Accrued Distributions with regard to the Series 1997-A Preferred Units (whether
or not declared) through the Redemption Date (as hereinafter defined) times (ii)
the percentage determined in accordance with the following table:

<TABLE>
<CAPTION>

            REDEMPTION DATE                              PERCENTAGE
 <S>                                                     <C>
  December 31, 2002 to December 31, 2003                   105%
  December 31, 2003 to December 31, 2004                   104%
  December 31, 2004 to December 31, 2005                   103%
  December 31, 2005 to December 31, 2006                   102%
  December 31, 2006 to December 31, 2007                   101%
  December 31, 2007 and thereafter                         100%

</TABLE>

                                       12
<PAGE>

                  (b) In order to exercise a right to require the Operating
Partnership to redeem a holder's Series 1997-A Preferred Units under this
Section 7, the holder must deliver a request for redemption with respect to the
Identified Redemption Units to the Operating Partnership at any time prior to
the Mandatory Exchange Date. If such a request for redemption is given with
regard to Series 1997-A Preferred Units pursuant to this paragraph (b), promptly
(but in no event more than five Business Days) after the request for redemption
is given to the Operating Partnership, the Operating Partnership will pay the
holder cash equal to the Redemption Price of the units. The date of such payment
is referred to in this Section 7 as the "REDEMPTION DATE."

                  (c) (i) If a request for redemption is delivered to the
Operating Partnership, on the Redemption Date distributions will cease to accrue
with regard to the Series 1997-A Preferred Units to be redeemed, and at the
close of business on that date the holders of those units will cease to be
partners in the Operating Partnership with respect to those units, will have no
interest in or claims against the Operating Partnership by virtue of such units
(other than as described in clause (ii) below) and will have no voting or other
rights with respect to such units.

                  (ii) The distribution with respect to a Series 1997-A
Preferred Unit which is the subject of a request for redemption under this
Section 7 delivered on a day which falls between the close of business on the
Record Date for the payment of such distribution and the opening of business on
the corresponding Distribution Payment Date will be payable on the Distribution
Payment Date to the holder of record of the Series 1997-A Preferred Unit on the
Record Date for the payment of such distribution notwithstanding the redemption
of the Series 1997-A Preferred Unit after the Record Date for the payment of
such distribution and prior to the Distribution Payment Date.

         Section 8.        RANKING. The Series 1997-A Preferred Units shall,
  with respect to the payment of distributions, the right to redemption in
  accordance with Sections 7 and 9, the right to receive the Change of Control
  Preference, the right to receive the Liquidation Preference and any other
  assets on liquidation, dissolution or winding up of the Operating Partnership,
  rank senior to any other class or series of partnership interest of the
  Operating Partnership.

         Section 9.       OPTIONAL REDEMPTION ON OR AFTER SEPTEMBER 30, 2001.

                  (a) Notwithstanding anything to the contrary contained herein
or in the Partnership Agreement, each holder of Series 1997-A Preferred Units
will have the right, exercised at any time on or after September 30, 2001, to
require the Operating Partnership to redeem any or all of the number of Series
1997-A Preferred Units that are owned of record by the holder (the number of
Units as to which each holder elects redemption under this clause (a) being
referred to as the "SEPTEMBER 30 REDEMPTION UNITS"), at a redemption price per
unit (the "SEPTEMBER 30 REDEMPTION PRICE") equal to the Liquidation Preference
for such September 30


                                       13
<PAGE>

Redemption Unit calculated as of the September 30 Redemption Date (as defined
below) less any amounts previously distributed in respect of a Change of Control
Preference or Liquidation Preference for such Unit that has been applied to the
Outstanding Distribution Premium of such Unit.

                  (b) In order to exercise a right to require the Operating
Partnership to redeem a holder's Series 1997-A Preferred Units, the holder must
deliver a request for redemption with respect to the September 30 Redemption
Units to the Operating Partnership at any time on or after the September 30
Redemption Date (as defined below). If a request for redemption is given with
regard to the September 30 Redemption Units pursuant to this paragraph (b),
promptly (but in no event more than five Business Days) after the request for
redemption is given to the Operating Partnership, the Operating Partnership will
pay to such holder in cash an amount equal to the September 30 Redemption Price
multiplied by the number of such holder's September 30 Redemption Units. The
date of such payment is referred to herein as the "SEPTEMBER 30 REDEMPTION
DATE."

                  (c) If a request for redemption is delivered to the Operating
Partnership with respect to the September 30 Redemption Units, on the September
30 Redemption Date dividends will cease to accrue with regard to the September
30 Redemption Units to be redeemed, and at the close of business on that date
the holders of those Units will cease to be Unitholders with respect to those
Units, will have no interest in or claims against the Operating Partnership by
virtue of such Units (other than as described in clause (d) below) and will have
no voting or other rights with respect to such Units.

                  (d) The distribution with respect to a Series 1997-A Preferred
Unit which is the subject of a request for redemption delivered pursuant to
paragraph (b) above on a day which falls between the close of business on the
Record Date for the payment of a Distribution and the opening of business on the
corresponding Distribution Payment Date will be payable on the Distribution
Payment Date to the holder of record of the Series 1997-A Preferred Units on the
Record Date for the payment of such distribution notwithstanding the redemption
of the Series 1997-A Preferred Units after the Record Date for the payment of
such distribution and prior to the Distribution Payment Date.

                  (e) The September 30 Redemption Price in respect of each
Series 1997-A Preferred Unit redeemed shall be due on the September 30
Redemption Date. If the Operating Partnership fails to deliver the September 30
Redemption Price in respect of a Series 1997-A Preferred Unit redeemed to the
applicable holder of such Unit on or before such date, then the aggregate
September 30 Redemption Price which remains unpaid on such date with respect to
such Unit shall accrue an additional cumulative distribution amount at a monthly
rate equal to the lesser of 1.25% per month and the highest lawful rate of
interest, compounded monthly until such time as the Operating Partnership pays
to the applicable holder of such Unit the aggregate September 30 Redemption
Price due to such holder.

         Section 10.       MANDATORY REDEMPTION.


                                       14
<PAGE>

                  (a) Notwithstanding anything to the contrary contained herein,
the Operating Partnership shall have the right, subject to the right of the
holders of Series 1997-A Preferred Units, to exercise their Redemption Right
pursuant to Section 5 at any time prior to the Mandatory Redemption Date (as
defined below), to redeem all of the Series 1997-A Preferred Units at a
redemption price per Unit (the "MANDATORY REDEMPTION PRICE") equal to the Change
of Control Preference for such Units calculated as of the Mandatory Redemption
Date less any amounts previously distributed in respect of a Change of Control
Preference or Liquidation Preference for such Units that have been applied to
the Outstanding Distribution Premium of such Units.

                  (b) In order to exercise its right to redeem the Series 1997-A
Preferred Units, the Operating Partnership must deliver a notice for redemption
to each holder of Series 1997-A Preferred Units. If a notice for redemption is
given with regard to Series 1997-A Preferred Units pursuant to this paragraph
(b), promptly (but in no event less than three Business Days nor more than five
Business Days) after the request for redemption is given to each holder of
Series 1997-A Preferred Units, the Operating Partnership will pay each holder of
Series 1997-A Preferred Units in cash an amount equal to the Mandatory
Redemption Price with respect to such holder's Series 1997-A Preferred Units
multiplied by the number of such holder's Series 1997-A Preferred Units. The
date of such payment is referred to herein as the "MANDATORY REDEMPTION DATE."

                  (c) (i) Upon payment by the Operating Partnership of the
amounts specified in paragraph (b) above to each holder of Series 1997-A
Preferred Units, distributions will cease to accrue with regard to Series 1997-A
Preferred Units, and, upon such payment, the holders of such Units will cease to
be partners with respect to such Units, will have no interest in or claims
against the Operating Partnership by virtue of such Units (other than as
described in clause (ii) below), will have no voting or other rights with
respect to such Units and such Units will be deemed to be canceled.

                  (ii) The distribution with respect to a Series 1997-A
Preferred Unit which is the subject of a notice for redemption delivered
pursuant to paragraph (b) above on a day which falls between the close of
business on a distribution payment Record Date and the opening of business on
the corresponding Distribution Payment Date will be payable on the Distribution
Payment Date to the holder of record of the Series 1997-A Preferred Unit on the
distribution payment Record Date notwithstanding the redemption of the Series
1997-A Preferred Unit after the distribution payment Record Date and prior to
the Distribution Payment Date.

                  (d) The Mandatory Redemption Price in respect of each Series
1997-A Preferred Unit redeemed shall be due on the Mandatory Redemption Date.
Notwithstanding anything to the contrary set forth herein, if the Operating
Partnership fails to deliver the Mandatory Redemption Price in respect of each
Series 1997-A Preferred Unit to the applicable holder of such Unit on or before
such date, the holders of the Series 1997-A Preferred


                                       15
<PAGE>

Units shall continue to own their Series 1997-A Preferred Units and shall be
entitled to the preferences, voting powers, redemption, conversion and other
rights, dividends and distributions set forth herein as if the Operating
Partnership had not exercised its right to redeem the Series 1997-A Preferred
Units pursuant to this Section 10.

         Section 11.       MISCELLANEOUS.

                  (a) Except as otherwise expressly provided herein, whenever a
notice or other communication is required or permitted to be given to holders of
Preferred Units, the notice or other communication will be deemed properly given
if deposited in the United States mail, postage prepaid, addressed to the
persons shown on the books of the Operating Partnership as the holders of the
Series 1997-A Preferred Units at the addresses as they appear on the books of
the Operating Partnership, as of the Record Date or dates determined in
accordance with applicable law and with the Partnership Agreement, as in effect
from time to time, in each case by documented overnight delivery service or, to
the extent receipt is confirmed, telecopy, telex or other electronic
transmission service.

                  (b) Series 1997-A Preferred Units will not have any
designations, preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions and other distributions,
qualifications or terms and conditions of redemption, other than those
specifically set forth herein, in the Partnership Agreement, and as may be
provided under applicable law.

                  (c) The headings of the various subdivisions herein are for
convenience only and will not affect the meaning or interpretation of any of the
provisions herein.

                  (d) The preferences, conversion and other rights, voting
powers, restrictions, limitations as to distributions and other distributions,
qualifications and terms and conditions of redemption of the Series 1997-A
Preferred Units may be waived, and any of such provisions of the Series 1997-A
Preferred Units may be amended, with the approval of holders of at least a
majority of the outstanding Series 1997-A Preferred Units (exclusive of any
Series 1997-A Preferred Units held by the Corporation and its affiliates),
voting separately as a class.

         Section 12.       SEVERABILITY OF PROVISIONS.

                  Whenever possible, each provision hereof shall be
interpreted in a manner as to be effective and valid under applicable law,
but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating or otherwise adversely
affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change
as shall be necessary to render the provision in question effective and valid
under applicable law.

                                       16