Document:

<PAGE>   1

                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

1.  NATURE OF COMPANY'S BUSINESS AND SIGNIFICANT
    ACCOUNTING POLICIES

NATURE OF THE COMPANY'S BUSINESS

     As used herein, "Company" refers to Cornerstone Properties Limited
Partnership, a Delaware limited partnership, individually or together with its
subsidiaries. The Company is a subsidiary of Cornerstone Properties Inc. (the
"Trust"), a self-administered equity real estate investment trust ("REIT"). The
Company owns, through subsidiaries, interests in 83 Class A office buildings
comprising approximately 17 million rentable square feet, a shopping center, a
hotel and developable land (collectively, the "Properties," and each interest, a
"Property"). The Properties are primarily located in nine major metropolitan
areas throughout the United States: Atlanta, Boston, suburban Chicago,
Minneapolis, New York City, San Francisco Bay Area, Seattle, Southern California
and Washington, D.C. and surrounding suburbs. The Company's strategy is to own
and develop Class A office properties in prime Central Business District
locations and major suburban office markets in U.S. metropolitan areas. Class A
office properties are generally considered to be those that have the most
favorable locations and physical attributes, command premium rents and
experience the highest tenant retention rates within their markets. The Company
also provides property management, leasing, development and tenant improvement
services to third parties on a fee basis through WCP Services, Inc., a taxable
corporate subsidiary in which the Company owns 95% of the equity, but only 1% of
the voting common stock. Substantially all of the Trust's operations are
conducted through the Company. The Trust is the managing general partner of the
Company.

     On February 11, 2000, the Trust announced that it had entered into an
agreement and plan of merger with Equity Office Properties Trust ("EOP") (the
"EOP Merger"). The merger agreement provides for a merger of the Trust with and
into EOP and a merger of the Company with and into EOP Operating Limited
Partnership. In the mergers, holders of common stock of the Trust and holders of
Units in the Company shall be entitled to elect to receive, for each share or
unit, as the case may be, either 0.7009 of a share of beneficial interest of EOP
(or, in the case of the Company Units, 0.7009 of a Class A Unit of EOP Operating
Limited Partnership), or $18.00 per share (or per Unit, as the case may be) in
cash, subject to pro ration as provided in the merger agreement. Each share of
the Trust's 7% Cumulative Convertible Preferred Stock, liquidation preference
$16.50 per share, shall be converted into the right to receive $18.00, plus
accrued and unpaid dividends, in cash. For U.S. federal income tax purposes, the
merger is expected to be tax-free to the Trust's stockholders who are U.S.
persons and who receive EOP shares in the merger, except that any such
stockholder who receives cash in addition to EOP shares generally will recognize
gain (but not loss) in an amount equal to the amount of cash received in the
merger, or, if less, the excess of the fair market value of the EOP shares and
cash received in the merger over the stockholder's basis in the common stock
exchanged in the merger. The merger is also expected in most cases to be
tax-free to stockholders who are non-U.S. persons, although certain non-U.S.
stockholders may be subject to U.S. tax under the provisions of the Foreign
Investment in Real Property Tax Act. The mergers are subject to customary
closing conditions, including the approval of the merger by the shareholders of
EOP and the stockholders of the Trust and the approval of the partnership
merger, to the extent necessary, by the partners of EOP Operating Limited
Partnership and the Company.

PRINCIPLES OF CONSOLIDATION

     The Company has consolidated the following partnerships because it has a
majority interest in the economic benefits and is or has the right to become the
managing general partner at its sole discretion: NWC Limited Partnership
("NWC"); Third and University Limited Partnership ("Third Partnership"); Two
Twenty Two Berkeley Venture ("222 Berkeley"); Five Hundred Boylston West Venture
("500

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Boylston"); One Ninety One Peachtree Associates ("191 Peachtree"); 191 Finance
Associates, L.P. ("191 Finance"); Avenue Associates Limited Partnership ("Market
Square"); and 120 Montgomery Associates, LLC ("120 Montgomery"). The Company's
investments in the One Post Property and WCP Services, Inc. are accounted for as
equity investments (see Note 4). All significant intercompany balances and
transactions have been eliminated in consolidation.

INVESTMENT PROPERTY

     The costs of the buildings, garages, leasehold interests and improvements
are being depreciated using the straight-line method over their estimated useful
lives, ranging from 20 years for electrical and mechanical installations to 40
years for structural components. Tenant improvements are being amortized over
the terms of the related leases.

     Investment properties are carried at cost less accumulated depreciation.
Whenever events or changes in circumstances indicate that the carrying value of
an asset may not be recoverable (such as a significant adverse action by a
regulator, a significant physical change in the property or significant changes
in market conditions), the Company's policy is to assess any impairment in value
by making a comparison of the current and projected cash flows of each property
over its remaining useful life (undiscounted and without interest charges) to
the carrying amount of each property. Such carrying amount would be adjusted, if
necessary, to estimated fair value to reflect the impairment in value of the
property. No significant adjustments have been made in the accompanying
financial statements.

     Costs directly related to the acquisition and development of rental
properties are capitalized. Capitalized development costs include interest,
property taxes, insurance and other project costs incurred during the period of
construction. Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments, which improve or extend the life of the asset, are
capitalized and depreciated over their estimated useful lives.

ASSETS HELD FOR SALE

     Included in Assets Held for Sale at December 31, 1999 are four properties,
which are expected to be sold by the Company within the next year. The
Properties are valued at approximately $62.2 million, the lower of the carrying
amount or the fair value less estimated costs to sell. For the year ended
December 31, 1999, the fair value less estimated costs to sell exceeds the
carrying amount for each of these properties and therefore, the Company has not
recorded a write down on these assets. The Company discontinues the recognition
of depreciation on the assets when the property is considered held for sale.

CASH AND CASH EQUIVALENTS

     For purposes of reporting cash flows, cash and cash equivalents include
investments with original maturities of three months or less from the date of
purchase. At December 31, 1999 and 1998, the Company had on deposit with major
financial institutions substantially all of its cash and cash equivalents which
balances at times exceed federally insurable limits. The Company believes it
mitigates its risk by investing in or through major financial institutions.
Recoverability of investments is dependent upon the performance of the issuer.

DEFERRED LEASE COSTS

     As an inducement to execute a lease, incentives are sometimes offered which
may include cash and/or other allowances. These incentives and other lease
costs, such as commissions, which are directly related to specific leases, are
deferred and amortized over the terms of the related leases.

OTHER DEFERRED COSTS

     Costs incurred in the underwriting and issuance of long-term debt and
revolving lines of credit are being amortized over the term of the debt. As part
of the acquisition of the DIHC Portfolio (see Note 2),

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the Trust purchased several management contracts to which Stichting
Pensioenfonds Voor de Gezondheid Geestelijke en Maatschappelijke Belangen
("PGGM") was a party, which were subsequently contributed to the Company. The
price paid for these contracts is being amortized over four years. Included in
Other Deferred Costs is the purchase price for the intangible management and
development company assets that were acquired as part of the Wilson Acquisition
which are being amortized over a term of ten years (see Note 2).

OTHER ASSETS

     The Company records costs incurred for potential investments as Other
Assets. Upon consummation of an investment, the Company capitalizes all such
costs as an adjustment to the purchase price and depreciates these costs over
the useful life of the asset. All such costs are expensed at the time it is
determined that a potential investment will not be consummated. In addition, the
Company adopted EITF 97-11 and in accordance therewith, the Company expenses all
internal acquisition costs.

     Included in Other Assets is the Company's $1.5 million equity investment in
Allied Riser Communications Corp. ("ARC") and its $3.5 million equity investment
in Cypress Communications, Inc. ("Cypress"). ARC and Cypress are providers of
voice, video and data telecommunications services. As part of the terms of the
agreements with both ARC and Cypress, the Company received warrants for shares
of common stock by providing ARC and Cypress access to certain of the Company's
buildings. As such, the value of the warrants received from ARC and Cypress of
$5.1 million and $2.1 million, respectively, is included in Other Assets. Per
the applicable requirements of Statement of Financial Accounting Standards No.
115 ("SFAS 115"), the Company recorded an unrealized gain on its total
investment in ARC as of December 31, 1999 of $3.9 million. A corresponding
adjustment was posted to a separate component of partner's capital through Other
Comprehensive Income. As of December 31, 1999, Cypress was not publicly traded
and did not fall within the scope of SFAS 115.

MINORITY INTEREST

     Minority interest in joint ventures represents the minority partner's or
venture's capital account balances in NWC, Third Partnership, 222 Berkeley, 500
Boylston, 191 Peachtree, 191 Finance, Market Square and 120 Montgomery. Debit
balances in certain of these capital accounts originated through special cash
distributions in excess of the partner's share of income in accordance with
certain provisions of the respective partnership and joint venture agreements.
Reliability of the debit balances is continually monitored by calculating pro
forma sales proceeds under the respective agreements.

REVENUE RECOGNITION

     Rental revenue is recognized ratably as earned over the terms of the
leases. Deferred tenant receivables result from rental revenues, which have been
earned but will be received in future periods as a result of rent concessions
provided to tenants and scheduled future rent increases. Deferred tenant
receivables were approximately $77,243,000 and $53,489,000 at December 31, 1999
and 1998, respectively. Expense reimbursement and escalation income for the
years ended December 31, 1999 and 1998 was approximately $101,595,000 and
$74,590,000, respectively.

     An allowance for doubtful accounts of approximately $3,803,000 and $253,000
has been recorded at December 31, 1999 and 1998, respectively, relating to
tenant and other receivables. Bad debt expense totaled approximately $3,694,000
and $232,000 during 1999 and 1998 respectively. The Company's policy is to
reserve against all trade receivables greater than 90 days past due.

INTEREST RATE SWAP AGREEMENTS

     The Company uses interest rate swaps to effectively fix the interest rates
on certain floating-rate debt. Specific types of loans and amounts that are
hedged are determined based on prevailing market conditions and the current
shape of the yield curve. The specific terms and notional amount of the swaps
are

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determined based on management's assessment of future interest rates, as well as
short-term strategic initiatives.

     During 1999, the Company entered into and subsequently amended swap
agreements that effectively fixed the rate on $250.0 million of the amount
outstanding on the Company's Revolving Credit Facility at 6.47% for 1999 and
5.41% through the maturity of the swaps in December 2000. The swaps have been
designated as "cash flow hedges" within the meaning defined in SFAS 133 (as
defined hereinafter). At December 31, 1999, the Company recorded an unrealized
gain of $5,513,000 in Other Assets with a corresponding adjustment posted to a
separate component of partners' capital through Other Comprehensive Income as
defined in Statement of Financial Accounting Standards No. 130. Based on the
expiration of these instruments, the unrealized gain is expected to be
reclassified to earnings during the next twelve months. These swaps are
considered hedges for federal income tax purposes.

FEDERAL INCOME TAXES

     The Company is not liable for federal taxes as the partners recognize their
proportionate share of the Company's income or loss in their tax returns. The
Trust has elected to be taxed as a REIT under Sections 856-859 of the United
States Internal Revenue Code (the "Code"). Under these sections of the Code, the
Trust is permitted to deduct dividends paid to stockholders in computing its
taxable income. All taxable earnings and profits of the Trust since inception
have been distributed to the stockholders.

RECENTLY ISSUED ACCOUNTING STANDARDS

     During the first quarter of 1999, the Company adopted Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives are recorded each period in current earnings or in
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction.

     During the first quarter of 1999, the Company also adopted Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP
98-5 requires that certain costs incurred in conjunction with start-up and
organizational activities be expensed. Pursuant to the requirements of SOP 98-5,
the Company has written off all unamortized organizational costs and has
recorded a cumulative effect of a change in accounting principle of $630,044.

     In addition, during the first quarter of 1999, the Company adopted
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 provides guidance
on whether the costs of computer software developed or obtained for internal use
should be capitalized or expensed. The adoption of SOP 98-1 did not have a
significant effect on the Company's financial statements.

ESTIMATES AND RISKS

     The preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. The most significant risks, estimates and assumptions are
related to the recoverability and depreciable lives of investment property, and
the recoverability of deferred tenant receivables and the qualification of the
Trust as a REIT. Actual results could differ from those estimates.

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<PAGE>   5

2.  PROPERTIES

     The following table summarizes the Company's interest in real estate
investments at December 31, 1999:

<TABLE>
<CAPTION>
                MARKET NAME                   TOTAL RENTABLE     COMPANY        YEAR
                  PROPERTY                     SQUARE FEET     INTEREST(A)   CONSTRUCTED   LEASED   NOTES
                -----------                   --------------   -----------   -----------   ------   -----
<S>                                           <C>              <C>           <C>           <C>      <C>
BOSTON, MASSACHUSETTS
  Sixty State Street........................       823,014        100.0%        1979        100%       B
  500 Boylston Street.......................       714,513         91.5%        1988        100%       C
  222 Berkeley Street.......................       530,844         91.5%        1991        100%       C
  125 Summer Street.........................       463,691        100.0%        1989         74%
  One Memorial Drive........................       352,764        100.0%        1985        100%       D
                                                ----------                                  ---
  MARKET TOTAL..............................     2,884,826                                   96%
SAN MATEO COUNTY, CALIFORNIA
  Bayhill (4 buildings).....................       514,255        100.0%     1982-1987       96%       E
  Peninsula Office Park (7 buildings).......       492,044        100.0%     1971-1998      100%       E
  Seaport Centre............................       463,418        100.0%        1988        100%       E
  Bay Park Plaza (2 buildings)..............       257,058        100.0%     1985-1998      100%       E
  One Bay Plaza.............................       176,533        100.0%        1979         99%       E
                                                ----------                                  ---
  MARKET TOTAL..............................     1,903,308                                   99%
ATLANTA, GEORGIA
  191 Peachtree Street......................     1,215,288         80.0%        1991         98%     C,F
  200 Galleria..............................       432,698        100.0%        1985         98%       C
                                                ----------                                  ---
  MARKET TOTAL..............................     1,647,986                                   98%
EAST BAY, CALIFORNIA
  Corporate Centre (2 buildings)............       329,348        100.0%     1985-1987       96%       E
  ADP Plaza (2 buildings)...................       300,308        100.0%     1987-1989       95%       E
  PeopleSoft Plaza..........................       277,562        100.0%        1984        100%       E
  Norris Tech Center (3 buildings)..........       260,513        100.0%     1984-1990      100%       E
  Golden Bear Center........................       160,587        100.0%        1986         99%       E
  2700 Ygnacio Valley Road..................       103,214        100.0%        1984         99%       E
  Park Plaza................................        87,040        100.0%        1986        100%       E
  1600 South Main...........................        83,277        100.0%        1983         98%       E
                                                ----------                                  ---
  MARKET TOTAL..............................     1,601,849                                   98%
SEATTLE, WASHINGTON
  Washington Mutual Tower (3 buildings).....     1,154,560         50.0%        1988         98%       G
  110 Atrium Place..........................       215,172        100.0%        1981        100%       E
  Island Corporate Center...................       100,009        100.0%        1987         97%       E
                                                ----------                                  ---
  MARKET TOTAL..............................     1,469,741                                   98%
SANTA CLARA COUNTY, CALIFORNIA
  Pruneyard Office (3 buildings)............       354,629        100.0%     1971-1999       99%     E,H
  10 Almaden................................       294,809        100.0%        1989        100%       E
  Pruneyard Shopping Center.................       252,210        100.0%       1970s         90%       E
  Embarcadero Place (4 buildings)...........       192,081        100.0%        1984        100%       E
  Pruneyard Inn.............................        94,500        100.0%        1989        N/A      E,I
                                                ----------                                  ---
  MARKET TOTAL..............................     1,188,229                                   98%
</TABLE>

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<TABLE>
<CAPTION>
                MARKET NAME                   TOTAL RENTABLE     COMPANY        YEAR
                  PROPERTY                     SQUARE FEET     INTEREST(A)   CONSTRUCTED   LEASED   NOTES
                -----------                   --------------   -----------   -----------   ------   -----
<S>                                           <C>              <C>           <C>           <C>      <C>
SAN FRANCISCO, CALIFORNIA
  120 Montgomery Street.....................       420,310         66.7%        1955         95%       E
  One Post..................................       391,450         50.0%        1969         99%       E
  201 California Street.....................       240,230        100.0%        1980         96%       J
  188 Embarcadero...........................        85,183        100.0%        1985         99%       E
                                                ----------                                  ---
  MARKET TOTAL..............................     1,137,173                                   97%
MINNEAPOLIS, MINNESOTA
  Norwest Center............................     1,117,439         50.0%        1988        100%       K
                                                ----------                                  ---
  MARKET TOTAL..............................     1,117,439                                  100%
WASHINGTON, D.C./ALEXANDRIA, VIRGINIA
  Market Square (2 buildings)...............       688,709         70.0%        1990         99%     C,L
  99 Canal Center...........................       137,945        100.0%        1986        100%       C
  TransPotomac Plaza 5......................        96,392        100.0%        1983        100%       C
  11 Canal Center...........................        70,365        100.0%        1986         98%       C
                                                ----------                                  ---
  MARKET TOTAL..............................       993,411                                   99%
SUBURBAN CHICAGO, ILLINOIS
  Corporate 500 Centre (4 buildings)........       679,039        100.0%     1986/1990       99%       M
  One Lincoln Centre........................       297,040        100.0%        1986         89%
                                                ----------                                  ---
  MARKET TOTAL..............................       976,079                                   96%
SANTA MONICA/WEST LOS ANGELES, CALIFORNIA
  West Wilshire (2 buildings)...............       235,787        100.0%     1960-1976       94%       E
  Wilshire Palisades........................       186,714        100.0%        1981        100%       J
  Janss Court...............................       125,709        100.0%        1989        100%     E,N
  Searise Office Tower......................       122,292        100.0%        1975        100%       E
  Commerce Park.............................        94,367        100.0%        1977         79%     E,O
  429 Santa Monica..........................        83,243        100.0%        1982         88%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       848,112                                   95%
ORANGE COUNTY, CALIFORNIA
  Bixby Ranch...............................       277,289        100.0%        1987         98%       E
  18301 Von Karman..........................       219,508        100.0%        1991         88%       E
  2677 North Main...........................       213,318        100.0%        1987         94%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       710,115                                   94%
SAN DIEGO, CALIFORNIA
  Centerside II.............................       286,949        100.0%        1987         93%       E
  Crossroads................................       133,553        100.0%        1983        100%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       420,502                                   95%
NEW YORK CITY, NEW YORK
  527 Madison Avenue........................       215,332        100.0%        1986        100%
  Tower 56..................................       163,633        100.0%        1983         99%       P
                                                ----------                                  ---
  MARKET TOTAL..............................       378,965                                   99%
LOS ANGELES, CALIFORNIA
  700 North Brand...........................       202,531        100.0%        1981         94%       E
  Warner Park Center........................        57,366        100.0%        1986        100%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       259,897                                   95%
</TABLE>

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<TABLE>
<CAPTION>
                MARKET NAME                   TOTAL RENTABLE     COMPANY        YEAR
                  PROPERTY                     SQUARE FEET     INTEREST(A)   CONSTRUCTED   LEASED   NOTES
                -----------                   --------------   -----------   -----------   ------   -----
<S>                                           <C>              <C>           <C>           <C>      <C>
CONEJO VALLEY (VENTURA), CALIFORNIA
  Westlake Spectrum (2 buildings)...........       118,990        100.0%        1990         97%       E
  Agoura Hills..............................       115,208        100.0%        1987        100%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       234,198                                   99%
OTHER REGIONS
  U.S. West (Murray, Utah)..................       136,608        100.0%        1985         76%       E
  Exposition Centre (Sacramento,
     California)............................        72,971        100.0%        1984         70%       E
                                                ----------                                  ---
  MARKET TOTAL..............................       209,579                                   74%
  TOTAL PORTFOLIO...........................    17,981,409                                   97%
  Minority Interest Adjustment(Q)...........      (728,307)
                                                ----------
  CORNERSTONE PORTFOLIO.....................    17,253,102                                   96%
                                                                                            ===
  Adjustment For Pruneyard Inn..............       (94,500)
                                                ----------
  CORNERSTONE OFFICE PORTFOLIO..............    17,158,602
                                                ==========
</TABLE>

---------------
 (A) Unless noted below, cash flow and residual proceeds will be distributed to
     the Company according to its percentage interest.

 (B) On December 31, 1997, the Trust purchased the second mortgage on Sixty
     State Street. The mortgage is a cash flow mortgage through which all the
     economic benefits/risks (subject to the first mortgage) inure to the
     Company. The Company controls all major decisions regarding management and
     leasing. The total purchase price for the second mortgage was $131.5
     million and is consolidated in buildings due to the above factors. The
     $78.4 million first mortgage on the Property was originally recorded by the
     Trust as an $89.6 million liability due to its above-market interest rate.
     As of January 20, 1998 all of the interest stated above were contributed to
     the Company in exchange for units.

     The second mortgage, which the Company holds, is collateralized only by the
     improvements on Sixty State Street. Title to the improvements is owned by
     Sixty State Street Trust, the ground lessee under a ground lease that
     expires on December 28, 2067. The lease payments on the ground lease are
     $398,896 per annum throughout the term.

 (C) On October 27, 1997, the Trust acquired interests in nine Class A office
     properties comprising approximately 4.5 million rentable square feet in
     Alexandria, Virginia (3 properties), Atlanta (2 properties), Boston (2
     properties), Charlotte and Washington, D.C., as well as an undeveloped
     parcel of land in Chicago (collectively, "the DIHC Portfolio"). The Trust
     acquired the DIHC Portfolio for a purchase price of approximately $1.06
     billion, consisting of approximately 34.2 million shares of Common Stock
     valued and recorded at $16.00 per share, approximately $260.0 million in
     cash and $250.0 million in promissory notes. The cash portion of the
     acquisition was financed with proceeds from the Trust's initial public
     offering in April 1997 and $54.0 million from its Revolving Credit
     Facility. As of January 20, 1998 all of the interest stated above were
     contributed to the Company in exchange for units. The Company has since
     sold the asset in Charlotte as well as the undeveloped parcel of land in
     Chicago.

 (D) On April 28, 1998, the Company purchased One Memorial Drive in Cambridge,
     Massachusetts. The total purchase price for the Property was approximately
     $112.5 million, approximately $23.5 million of which was paid in cash,
     approximately $29.0 million of which was paid in Units valued at $17.50 per
     unit and approximately $60.0 million of which was paid in the Trust's
     Common Stock valued at $17.50 per share.

 (E) Property was acquired as a result of the Wilson Acquisition in December
     1998. After receiving stockholder approval on December 14, 1998, the
     Company acquired substantially all of the properties and real estate
     operations of William Wilson & Associates and related entities ("WW&A")
     (the "Wilson Acquisition"). As part of the Wilson Acquisition, the Company
     acquired interests in 69

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<PAGE>   8

     Class A office Properties, comprising approximately 9.2 million rentable
     square feet primarily in the San Francisco Bay Area and in Southern
     California, a shopping center consisting of approximately 252,000 rentable
     square feet in Santa Clara, California, a hotel consisting of 94,500 square
     feet in Santa Clara, California and 12.8 acres of developable land in the
     San Francisco Bay Area. The Company has since sold eleven assets comprising
     approximately 1.2 million square feet.

      The Company acquired WW&A for a purchase price of approximately $1.8
      billion, consisting of approximately 14.9 million shares of the Trust's
      Common Stock valued at $17.25 per share (recorded at $16.25 per share for
      GAAP purposes), approximately 16.2 million Units valued at $17.25 per unit
      (recorded at $16.25 per unit for GAAP purposes), approximately $465.0
      million in cash and the assumption of approximately $760.0 million of
      property and construction related debt (recorded at $773.7 million for
      GAAP purposes). The cash portion of the transaction was financed primarily
      from the Company's Revolving Credit Facility and the sale of $200.0
      million of Common Stock to PGGM, an approximate 33.6% stockholder prior to
      the Wilson Acquisition, priced at $17.25 per share.

 (F) While the Company's stated interest in the partnership that owns 191
     Peachtree Street is 80.0%, its economic interest is significantly larger
     since it has acquired the first mortgage note on the Property in the amount
     of $145.0 million, which earns interest at 9.375% and will receive a
     priority distribution on its acquired capital base. In 1999, the partner in
     the transaction, CH Associates, Ltd., received an annual Incentive
     Distribution (as defined) of $250,000, with the Company receiving the
     remainder of the cash flow of the Property.

     The partnership that owns 191 Peachtree Street leases a portion of the land
     upon which the project is located pursuant to a ground lease agreement. The
     agreement requires annual payments of $45,000 through January 31, 2002 and
     $75,000 through January 31, 2008. Thereafter, the annual rent increases
     $2,500 per year until the expiration date of January 31, 2087. The
     partnership records ground rental expense relating to this agreement on a
     straight-line basis. The ground lease is renewable for an additional 99
     years.

(G) While the Company's stated interest in the partnership that owns Washington
    Mutual Tower is 50.0%, its economic interest in the Property is
    significantly larger due to priority distributions it receives on its
    invested capital base. For the year ended December 31, 1999, the Company
    received 100% of the cash distributions from the partnership that owns
    Washington Mutual Tower.

(H) Pruneyard Place construction was completed and occupied on April 1, 1999.
    The building was entirely pre-leased.

 (I) The Pruneyard Inn is a three-story hotel. An expansion was completed in May
     1999, increasing the number of rooms from 118 to 172.

 (J) On June 3, 1998, the Company purchased 201 California Street and Wilshire
     Palisades. The total purchase price for the Properties was approximately
     $121.5 million, approximately $29.5 million of which was paid in cash,
     approximately $29.1 million of which was paid in Units valued at $17.50 per
     unit and approximately $62.9 million of assumed debt (recorded at $64.6
     million for GAAP purposes).

 (K) While the Company's stated interest in the partnership that owns Norwest
     Center is 50.0%, its economic interest in the Property is significantly
     larger due to priority distributions it receives on its invested capital
     base. For the year ended December 31, 1999, the Company's share of earnings
     and cash distributions from the partnership that owns Norwest Center was
     74.4%.

 (L) During 1998, through a series of transactions, the Company acquired
     partnership interests with a stated interest of approximately 70.0% in the
     partnerships that own Market Square. The Company's economic interest is
     significantly larger since it has acquired the first mortgage note on the
     Property in the amount of $181.0 million which earns interest at 9.75% and
     will receive a priority distribution on its acquired capital base. In
     addition, the Company acquired a "buffer loan", with accrued principal and
     interest of $49.0 million at purchase, which accrues interest at a rate of
     Prime plus 1.25% and is payable from cash flow, refinancing or sales
     proceeds in excess of the first mortgage.

                                      F-32
<PAGE>   9

     During the year ended December 31, 1999, the Company received 100% of the
     cash flow from the Property. On November 14, 1998, the Company purchased an
     additional interest in the partnerships that own Market Square which
     enabled it to gain sufficient control in order to consolidate the
     investment.

(M) On January 28, 1998, the Company purchased Corporate 500 Centre in
    Deerfield, Illinois. This Property consists of four Class A office buildings
    with approximately 679,000 rentable square feet. The consideration paid for
    this Property was approximately $135.0 million in cash and approximately
    $15.0 million in Units valued at $18.50 per unit, for a total purchase price
    of approximately $150.0 million. The Company financed a portion of the
    purchase price with an $80.0 million mortgage loan from Bankers Trust
    Company; this mortgage was subsequently refinanced in October 1998.

(N) Janss Court is a seven-story, 126,000-square foot Class A mixed-use
    building. In addition to 93,000 square feet of retail and office space,
    Janss Court offers 32 apartments for a total of 33,000 rentable square feet
    of residential space.

 (O) The Property is subject to a ground lease agreement. The agreement requires
     annual payments of $115,000 through March 31, 2002 and $121,000 from April
     1, 2002 through March 31, 2007. The lease payment increases every ten years
     thereafter according to a formula based on the Consumer Price Index. The
     ground lease expires on March 31, 2041.

 (P) On January 5, 1998, the Trust purchased for approximately $5.5 million, the
     remaining participation rights in the cash flow and residual value of Tower
     56 from the former participants for 307,692 shares of Common Stock. As a
     result, all of the cash flow and the residual value of Tower 56 inured to
     the Trust. As of January 20, 1998 all of the interest stated above were
     contributed to the Company in exchange for units.

(Q) Rentable square feet includes an adjustment for the interest of a joint
    venture or minority partner. Calculations are based on the partners'
    percentage interest in the cash flows of the Property.

     On March 31, 1998, the Company sold the Dearborn Land (an undeveloped
parcel of land in Chicago that was acquired as part of the acquisition of the
DIHC Portfolio in October 1997) for gross proceeds of approximately $19,000,000,
resulting in a loss of approximately $0.3 million.

     On April 29, 1998, the Trust sold the Frick Building, located in
Pittsburgh, Pennsylvania, for net proceeds of approximately $26,748. The net
proceeds were contributed to the Company.

     On December 29, 1998, Avenue Associates Limited Partnership sold a
condominium unit in Market Square, located in Washington D.C., for gross
proceeds of $326,154, resulting in a gain of approximately $0.1 million.

     During 1999, the Company sold thirteen properties for gross proceeds of
$496,530,000 resulting in a net gain of $131,033,847.

     The future minimum lease payments to be received by the Company under
noncancellable operating leases as of December 31, 1999 are as follows (Dollar
amounts in thousands):

<TABLE>
<S>                                                           <C>
2000........................................................  $  396,159
2001........................................................     373,079
2002........................................................     327,096
2003........................................................     269,223
2004........................................................     211,497
Thereafter..................................................     737,345
                                                              ----------
Total.......................................................  $2,314,399
                                                              ==========
</TABLE>

                                      F-33
<PAGE>   10

3.  RESTRICTED CASH

     Restricted cash includes security deposits for some of the Company's office
properties and escrow and reserve funds for real estate taxes, property
insurance, capital improvements, tenant improvements and leasing costs. These
funds were established pursuant to certain mortgage and construction financing
arrangements.

     The proceeds from the sales of certain properties during 1999 totaling
approximately $211.5 million, are included in restricted cash pursuant to the
terms of Section 1031 of the Internal Revenue Code of 1986, as amended,
"Exchange of property held for productive use or investment."

4.  INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

     Investment in unconsolidated joint ventures represents the Company's two
investments that are accounted for using the equity method of accounting. The
first investment is the Company's 50.0% interest in a co-tenancy with Crocker
Plaza Company for One Post, a 38-story, Class A office tower in San Francisco,
California. The Company and Crocker co-manage and lease the Property. The second
equity investment is the Company's interest in WCP Services, Inc. The Company
owns 1% of the voting common stock and 100% of the non-voting common stock of
WCP Services, Inc. The remaining shares of voting common stock of WCP Services,
Inc. are owned by certain executive officers of the Company. The Company's
ownership of voting and nonvoting common stock together represents a 95%
economic interest in the earnings of WCP Services, Inc. WCP Services, Inc.
provides property management, development and tenant construction supervision
services to third parties. WCP Services, Inc. also provides tenant construction
supervision services to tenants in Properties owned by the Company.

5.  LONG-TERM DEBT

     The following table sets forth certain information regarding the
consolidated debt obligations of the Company as of December 31, 1999 and 1998,
including mortgage obligations relating to the Properties. All of this debt, is
nonrecourse to the Company. However, notwithstanding the nonrecourse
indebtedness, the lender may have the right to recover deficiencies from the
Company in certain circumstances, including fraud, misappropriation of funds and
environmental liabilities (Dollar amounts in thousands).

<TABLE>
<CAPTION>
                                                      INTEREST         MATURITY
            PROPERTY              AMORTIZATION        RATE(A)            DATE         12/31/99    12/31/98
            --------              -------------   ----------------   -------------   ----------  ----------
<S>                               <C>             <C>                <C>             <C>         <C>
FIXED RATE
--------------------------------
TransPotomac Plaza(B)...........  Interest Only        7.28%          Oct-2000       $   65,000  $   65,000
West Wilshire Office and          25 year
  Medical.......................                       6.90%          Jan-2002           16,926      17,301
Searise Office Tower............  25 year              6.90%          Jan-2002           11,607      11,864
Exposition Centre...............  25 year              6.90%          May-2002            5,081       5,200
Wilshire Palisades..............  22 year              6.70%          Jul-2002           29,047      29,902
110 Atrium Place................  30 year              6.90%          Mar-2004           21,517      21,838
527 Madison Avenue and
  One Lincoln Centre(B).........  Interest only        7.47%          Oct-2004           65,000      65,000
Sixty State Street..............  30 year              6.84%          Jan-2005           85,420      87,627
Island Corporate Center.........  30 year              6.90%          Apr-2005           13,170      13,294
Washington Mutual Tower.........  Interest only        7.53%          Nov-2005           79,100      79,100
Norwest Center..................  Interest only        8.74%          Dec-2005          110,000     110,000
Agoura Hills....................  25 year              6.90%          Dec-2005           12,003      12,328
Janss Court.....................  30 year              6.90%          Dec-2005           18,357      18,723
Bayhill 4, 5, 6 & 7.............  25 year              6.90%          Dec-2006           57,764      59,071
Market Square(C) and 200
  Galleria(B)...................  Interest only        7.54%          Oct-2007          120,000     120,000
Corporate 500 Centre............  25 year              6.66%          Nov-2008           88,424      89,765
188 Embarcadero(D)..............  25 year              7.26%          Aug-2009           15,606       9,135
Centerside II(D)................  25 year              7.26%          Aug-2009           24,254      13,818
</TABLE>

                                      F-34
<PAGE>   11

<TABLE>
<CAPTION>
                                                      INTEREST         MATURITY
            PROPERTY              AMORTIZATION        RATE(A)            DATE         12/31/99    12/31/98
            --------              -------------   ----------------   -------------   ----------  ----------
<S>                               <C>             <C>                <C>             <C>         <C>
FIXED RATE
--------------------------------
700 North Brand(D)..............  25 year              7.26%          Aug-2009       $   26,938  $   18,108
Golden Bear Center(D)...........  25 year              7.26%          Aug-2009           20,477      15,753
Bixby Ranch(D)..................  25 year              7.26%          Aug-2009           28,528      20,243
One Memorial Drive(D)...........  25 year              7.26%          Aug-2009           63,119          --
125 Summer Street(E)............  25 year              7.23%          Nov-2009           78,844      50,000
Tower 56(E).....................  25 year              7.23%          Nov-2009           25,024      17,548
Peninsula Office Park 1, 3, 4,
  5, 6, 8
  & 9(E)........................  25 year              7.23%          Nov-2009           88,128      60,242
Embarcadero Place(E)............  25 year              7.23%          Nov-2009           38,149      26,061
201 California Street (E).......  25 year              7.23%          Nov-2009           44,504      33,071
                                                                                     ----------  ----------
Total Fixed Rate Debt...........                      7.31%(F)       7.1 yrs(F)      $1,251,987  $1,069,992
                                                                                     ----------  ----------
VARIABLE RATE
--------------------------------
Seaport Centre(G)...............  Interest only   LIBOR plus 1.50%    Dec-2000           58,000      58,000
The Pruneyard...................  24 year         LIBOR plus 1.50%    Jul-2000           60,947      49,384
120 Montgomery Street...........  24 year         LIBOR plus 1.40%    Nov-2002           48,160      46,930
Norris Tech Center..............  25 year         LIBOR plus 1.65%    Dec-2003           16,066      16,392
Other loans.....................  Various             Various         Various               245         597
                                                                                     ----------  ----------
Total Variable Rate Debt........                      7.48%(F)       1.5 yrs(F)      $  183,418  $  171,303
                                                                                     ----------  ----------
REPAID DEBT
--------------------------------
18301 Von Karman(H).............  --                     --              --                  --      10,647
1600 South Main(H)..............  --                     --              --                  --       5,038
Biltmore Lakes(H)...............  --                     --              --                  --      11,468
Belmont Shores(H)...............  --                     --              --                  --       9,839
2677 North Main(H)..............  --                     --              --                  --      10,774
2700 Ygnacio Valley Road(H).....  --                     --              --                  --       5,035
Westlake Spectrum(H)............  --                     --              --                  --       3,993
Park Plaza(H)...................  --                     --              --                  --       4,940
Warner Park Center(H)...........  --                     --              --                  --       5,213
429 Santa Monica(H).............  --                     --              --                  --      10,176
Crossroads(H)...................  --                     --              --                  --       7,339
Westlake Spectrum II(H).........  --                     --              --                  --       5,284
Two ADP Plaza(I)................  --                     --              --                  --      13,400
Two Corporate Centre(I).........  --                     --              --                  --      18,600
One & Two Gateway(J)............  --                     --              --                  --       8,679
Scottsdale Centre(J)............  --                     --              --                  --       7,745
66 Bovet(J).....................  --                     --              --                  --       3,939
One Norwest Center(K)...........  --                     --              --                  --      98,252
1300 South El Camino(J).........  --                     --              --                  --       4,007
10 Almaden(L)...................  --                     --              --                  --      33,885
                                  -------------   ----------------     --------      ----------  ----------
Total Repaid Debt...............                                                     $       --  $  278,253
                                                                                     ----------  ----------
Total Debt......................                      7.33%(F)       6.4yrs(F)       $1,435,405  $1,519,548
                                                                                     ==========  ==========
</TABLE>

---------------
(A) The interest rate is the stated interest rate (for Company originated debt)
    or the mark to market rate at the time of acquisition (for debt assumed as
    part of an acquisition).

 (B) The three notes arising from the acquisition of several properties in the
     DIHC Portfolio are cross-collateralized, having the effect of forming a
     "collateral pool" for the underlying notes.

(C) The collateral for this loan is a pledge of the $181.0 million first
    mortgage loan on Market Square that the Company purchased from PGGM.

                                      F-35
<PAGE>   12

(D) The six notes arising from the restructuring of certain debt with Prudential
    Insurance Company of America and Northwestern Mutual Life Insurance Company
    are cross-collateralized, having the effect of forming a "collateral pool"
    for the underlying notes.

(E) During October 1999 the Company restructured approximately $219.9 million of
    individual property related debt with Northwestern Mutual Life Insurance
    Company. The restructuring involved retiring the individual property related
    debt and creating a single $275.0 million loan which is cross-
    collateralized by six of the original seven properties. The loan has a ten
    year term and bears interest at 7.23%. Upon closing the loan, the lien on 10
    Almaden was released and the property was added to Cornerstone's
    unencumbered pool.

 (F) Weighted-average interest rate and maturity of the Company's long-term
     debt.

(G) On December 15, 1999, through an extension and modification agreement, the
    maturity date of the $58.0 million variable rate debt held on Seaport Centre
    was extended from December 31, 1999 to December 31, 2000. All other terms of
    the note remain unchanged.

(H) These 12 notes were prepaid as part of the Prudential Insurance Company of
    America and Northwestern Mutual Life Insurance Company restructuring, see
    note (D) above. All the notes had a mark to market interest rate of 6.9% and
    maturity dates ranging from April 2000 to March 2003.

 (I) On January 4, 1999, in connection with the Wilson Acquisition, the Company
     prepaid the notes on Two ADP Plaza and Two Corporate Centre.

 (J) These notes were prepaid in conjunction with the sale of these properties.

(K) The note was assumed by the purchaser as of the date of closing, in
    conjunction with the sale of this property during the fourth quarter.

(L) This note was prepaid as part of the Northwestern Mutual Life Insurance
    Company restructuring, see note (E) above. This note had a mark to market
    interest rate of 6.9% and a maturity of April 2004.

     The combined aggregate amount of maturities for all long-term borrowings
for 2000 through 2004 are $183,947,000, $0, $110,821,000, $16,066,000 and
$86,517,000, respectively.

     Since most of the long-term debt is property related, there are restrictive
covenants that limit the total amount of indebtedness that can be placed on
individual properties.

6.  CREDIT FACILITY

     The Company has a $550.0 million Revolving Credit Facility with a syndicate
of 17 banks led by DB Alex Brown, The Chase Manhattan Bank and Bank of America
for acquisitions and general working capital purposes as well as the issuance of
letters of credit (the "Revolving Credit Facility"). The interest rate on the
facility depends on the Company's ratio of total debt to asset value (as
defined) at the time of borrowing and will be at a spread of 1.10% to 1.40% over
the applicable LIBOR or the Prime Rate at the borrower's option. The letters of
credit will be priced at the applicable Eurodollar credit spread. The Revolving
Credit Facility expires on November 3, 2001. As of December 31, 1999, $329.0
million of the facility was outstanding at a rate of approximately 8.0%. Of this
amount, approximately $250.0 million is fixed with interest rate swaps, which
effectively fix the rate at 6.47%. Beginning January 2000, the rate will be
reduced to 5.41 through the expiration of the swaps in December 2000. The
Revolving Credit Facility contains certain restrictive covenants including: (i)
a limitation on the Company's dividend to 90.0% of funds from operations and
110.0% of funds available for distribution, both as defined in the agreement;
(ii) the percentage of total liabilities to total property asset value (as
defined) cannot exceed 55.0%; (iii) the ratio of adjusted EBITDA to interest
expense may not be less than 2.00 to 1.00 through July 1, 1999 and 2.25 to 1.00
thereafter; (iv) the fixed charge coverage ratio may not be less than 1.75 to
1.00; and (v) the ratio of total property asset value (as defined) to secured
indebtedness may not be less than 2.22 to 1.00. The above terms reflect an
amendment to the Revolving Credit Facility that occurred during 1999. The
amendment allowed the Company to increase its leverage from 55.0% to 60.0% in
(ii) above for a short period, which has since expired. The Company also
increased its ability to enter into mortgage debt under (v) above by decreasing
the ratio from 2.5 to 1.00 to 2.22 to 1.00.

                                      F-36
<PAGE>   13

7.  COMMITMENTS AND CONTINGENCIES

     In the ordinary course of business, the Company is subject to tenant and
property related claims and other litigation. It is the opinion of management,
after consultation with outside counsel, that the resolution of these claims
will not have a material adverse effect on the financial position, results of
operations or cash flows of the Company.

     In April 1998, the Company entered into a contract to acquire from the
developer the 928,857 square-foot Piper Jaffray building under construction in
Minneapolis. In November 1999, this contract was amended in connection with a
350,000 square-foot expansion lease with a major tenant of the building. The
contract was amended to provide for a purchase price equal to the costs incurred
in construction and development plus a fixed amount to the developer plus an
additional amount based on the leasing of the building. In addition, at the
Company's election, the closing of the acquisition may occur prior to the
completion of the building, but the developer will remain obligated to complete
the project. Through December 31, 1999, approximately $109.4 million has been
spent on the construction. The project is scheduled to be completed in the year
2000 and is approximately 75.0% pre-leased.

8.  PARTNERS' CAPITAL

     As of December 31, 1999, the Trust and its subsidiaries had a 1% general
partnership interest and an approximate 86.1% limited partnership interest in
the Company. The remaining limited partners had an approximate 12.9% interest in
the Company and consist of various individuals and entities that contributed
their properties to the Company in exchange for partnership interest and are
represented by 19,131,785 Units which are exchangeable on a one-for-one basis
into the Trust's Common Shares.

     The 7% Cumulative Convertible Preferred Units are convertible into Common
Stock at $16.50 per share at any time after August 4, 2000.

     On February 6, 1998, the Trust completed a secondary public offering of
14,375,000 shares of Common Stock at a price of $18.25 per share. The shares
were placed in the U.S. through a syndicate of seven investment banks led by
Merrill Lynch & Co. Net proceeds to the Company were approximately $247.9
million (approximately $262.3 million gross proceeds less an underwriting
discount of approximately $13.7 million and expenses of approximately $0.7
million), which were contributed to the Company in exchange for a corresponding
number of Units. The net proceeds were used to repay outstanding borrowings
under the Revolving Credit Facility and for working capital purposes.

9.  UNITHOLDERS' DISTRIBUTIONS

     On December 7, 1998, in connection with the Wilson Acquisition, the Company
declared a distribution of $0.15 per unit to Unitholders of record as of
December 15, 1998 and a distribution of $0.15 per unit to Unitholders of record
as of January 29, 1999. Both distributions were paid on February 26, 1999. A
distribution of $0.30 per unit was declared for the second quarter of 1999 and
paid on May 28, 1999, to Unitholders of record as of April 30, 1999. A
distribution of $0.30 per unit was declared for the third quarter of 1999 and
paid on August 31, 1999, to Unitholders of record as of July 30, 1999. A
distribution of $0.30 per unit was declared on September 28, 1999 for the fourth
quarter of 1999 and paid on November 30, 1999, to Unitholders of record as of
October 29, 1999.

     On August 4, 1999, the Company paid a dividend of $1.155 per share to all
preferred unitholders of record as of July 30, 1999.

10.  EXTRAORDINARY LOSS

     For the year ended December 31, 1999, the Company recorded extraordinary
loss of approximately $10.8 million. This amount represents the prepayment fees
paid in connection with the property debt restructurings that were completed
during June 1999 and October 1999, as well as the write off of any remaining
unamortized premium/discount recorded by the Company related to the retired
debt. See Notes 5 and 16 for more information about the two restructurings.

                                      F-37
<PAGE>   14

11.  NET INCOME PER UNIT

     The table below sets forth the calculation of income per Unit for 1999 and
1998 (Dollar amounts in thousands, except per unit amounts):

<TABLE>
<CAPTION>
                                                   1999                          1998
                                        ---------------------------   ---------------------------
                                           BASIC         DILUTED         BASIC         DILUTED
                                        ------------   ------------   ------------   ------------
<S>                                     <C>            <C>            <C>            <C>
Units issuable upon exercise of Trust
  share options.......................            --      3,175,570             --        370,612
Weighted average Units................   148,654,779    148,654,779    103,881,682    103,881,682
                                        ------------   ------------   ------------   ------------
Adjusted weighted average Units.......   148,654,779    151,830,349    103,881,682    104,252,294
                                        ------------   ------------   ------------   ------------
Net income available to Units before
  cumulative effect of a change in
  accounting principle and
  extraordinary loss..................  $    276,666   $    276,666   $     86,327   $     86,327
Income applicable to preferred
  units...............................        (3,500)            --         (3,500)            --
Cumulative effect of a change in
  accounting principle................          (630)          (630)            --             --
Extraordinary loss....................       (10,787)       (10,787)        (4,303)        (4,303)
                                        ------------   ------------   ------------   ------------
Income available to units.............  $    261,749   $    265,249   $     78,524   $     82,024
                                        ------------   ------------   ------------   ------------
Net income available to Units before
  extraordinary items.................  $       1.84   $       1.82   $       0.80   $       0.79
Cumulative effect of a change in
  accounting principle................            --             --             --             --
Extraordinary loss....................         (0.08)         (0.07)         (0.04)         (0.04)
                                        ------------   ------------   ------------   ------------
Income available to units.............  $       1.76   $       1.75   $       0.76   $       0.75
                                        ------------   ------------   ------------   ------------
</TABLE>

     The options issued in February 1998, March 1998, December 1998, January
1999, February 1999 and June 1999 were not included in the calculation of
diluted earnings per Unit as such options were anti-dilutive during the period.
As of December 31, 1999, 1,125,175 Units have been redeemed for shares of the
Trust's Common Stock on a one-for-one basis and 76,647 Units have been redeemed
for approximately $1.2 million in cash.

12.  RETIREMENT AND SHARE OPTION PLANS

     Eligible employees of the Company participate in a noncontributory
age-weighted profit sharing plan. The Company's cash contribution to such plan
was approximately $134,000, and $100,000, for the years ended December 31, 1999
and 1998, respectively.

     Eligible employees of the Company also participate in a 401(k) contributory
savings plan. Under the plan, the Company matches contributions made by eligible
employees based on a percentage of the employee's salary. The Company will match
100% of contributions up to 5.0% of such employee's salary with an annual
maximum matching contribution of $4,000 per employee. The Company's matching
contribution was approximately $654,000, and $69,600, for the years ended
December 31, 1999, and 1998, respectively.

     The Company has adopted the Cornerstone Properties Inc. 1998 Long-Term
Incentive Plan (the "Incentive Plan") to provide incentives to attract and
retain officers and key employees. Under the Incentive Plan as amended and
restated on December 14, 1998, the number of shares available for option grant
are approximately 7,400,000. During 1999, options on approximately 40,000 shares
of Common Stock at an exercise price of $17.25 per share have been granted under
the plan. As of December 31, 1999, 10,000 of these shares have been forfeited.

                                      F-38
<PAGE>   15

     The following tables summarize the Trust's stock options and restricted
stock grants for certain officers of the Company as of December 31, 1999, which
is included in the financial statements because any Common Shares issued
pursuant to the officer plan will result in the Company issuing Units to the
Trust on a one-for-one basis:

STOCK OPTIONS

<TABLE>
<CAPTION>
                        OPTIONS GRANTED   EXERCISE PRICE                          OPTIONS     OPTIONS      OPTIONS
    DATE OF GRANT       (NO. OF SHARES)    (PER SHARE)           VESTING         EXERCISED   FORFEITED   EXERCISABLE
    -------------       ---------------   --------------   -------------------   ---------   ---------   -----------
<S>                     <C>               <C>              <C>                   <C>         <C>         <C>
August, 1995..........  637,500.....          $14.30       33.3%/yr, 10yr term    75,000            0      562,500
October, 1995.........  150,000.....          $14.30       33.3%/yr, 10yr term    10,500            0      139,500
March, 1997...........  880,000.....          $14.50       33.3%/yr, 10yr term    52,000            0      534,666
November, 1997........  70,000......          $18.44       33.3%/yr, 10yr term         0            0       46,667
February, 1998........  70,000......          $18.13       33.3%/yr, 10yr term         0       46,667       23,333
February, 1998........  595,000.....          $18.25       33.3%/yr, 10yr term         0       26,668      198,333
March, 1998...........  200,000.....          $18.25       33.3%/yr, 10yr term         0      133,334       66,666
December, 1998........  3,000,000...          $17.25       33.3%/yr, 10yr term         0       34,533      978,800
January, 1999.........  20,000......          $17.25       33.3%/yr, 10yr term         0            0            0
February, 1999........  10,000......          $17.25       33.3%/yr, 10yr term         0       10,000            0
June, 1999............  10,000......          $17.25       33.3%/yr, 10yr term         0            0            0
</TABLE>

     The weighted average fair value of options granted during 1999 and 1998 was
$0.33 per share and $0.28 per share, respectively. The weighted average life of
options outstanding at December 31, 1999 was approximately 7.6 years.

RESTRICTED STOCK GRANTS

<TABLE>
<CAPTION>
                       VALUE OF GRANT    SHARES INITIALLY                          SHARES
                            DATE             GRANTED        SHARES FORFEITED     OUTSTANDING      SHARES VESTED    VESTING(A)
    DATE OF GRANT       (PER SHARES)     (NO. OF SHARES)     (NO. OF SHARE)    (NO. OF SHARES)   (NO. OF SHARES)   SEE NOTES
    -------------      --------------    ----------------   ----------------   ---------------   ---------------   ----------
<S>                    <C>               <C>                <C>                <C>               <C>               <C>
August, 1995.........      $14.30            186,713             19,091            167,622           89,396              (B)
March, 1997..........      $16.40            100,000                  0            100,000           26,666              (C)
November, 1997.......      $18.44             12,500                  0             12,500            3,333              (D)
March, 1998..........      $18.13             12,500             10,833              1,667            1,667              (E)
March, 1998..........      $18.25             19,178                  0             19,178           19,178              (F)
February, 1999.......      $15.50            113,500              1,700            111,800            1,400              (G)
</TABLE>

---------------
 (A) Deferred compensation of approximately $5,600,000 is being amortized
     according to the respective amortization schedule for each vesting period
     noted below, with the unamortized balance shown as a deduction from
     stockholders' equity. Regular distributions are paid on restricted stock.

 (B) The grant will fully vest with respect to 13.333% on June 30, 1996, 1997,
     1998, 1999 and with respect to 46.668% on June 30, 2000.

 (C) The grant will fully vest with respect to 13.333% on June 30, 1998, 1999,
     2000, 2001 and with respect to 46.668% on June 30, 2002.

 (D) The grant will fully vest with respect to 13.333% on June 30, 1998, 1999,
     2000, 2001 and with respect to 46.668% on June 30, 2002.

 (E) The grant will fully vest with respect to 13.333% on March 15, 1999, 2000,
     2001, 2002 and with respect to 46.668% on March 15, 2003.

 (F) The initial grant was to vest with respect to 13.333% on March 15, 1999,
     2000, 2001, 2002 and with respect to 46.668% on March 15, 2003. Pursuant to
     the terms of a separation agreement, the vesting with respect to 16,621
     shares was accelerated to fully vest on December 31, 1999.

(G) The grant will fully vest on February 1, 2004. Pursuant to the terms of
    certain separation agreements, the vesting with respect to 1,400 shares was
    accelerated to fully vest on July 1, 1999.

                                      F-39
<PAGE>   16

     The Trust has adopted the disclosure-only provision of Statement of
Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123"). Accordingly, no compensation cost has been recognized for the
options described above since the exercise price equaled the fair value at the
grant date. Had compensation cost for these options been determined based on the
fair value at the grant date consistent with the provisions of SFAS 123, the
Trust's net income and net income per common share would have been reduced to
the following pro forma amounts (Dollar amounts in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                           BASIC           DILUTED
                                                       NET INCOME PER   NET INCOME PER
                                        NET INCOME      COMMON SHARE     COMMON SHARE
                                        ----------     --------------   --------------
<S>                                   <C>              <C>              <C>
Year ended December 31, 1999........     $229,622          $1.76            $1.73
Year ended December 31, 1998........     $ 81,561          $0.73            $0.73
</TABLE>

     The Company has computed the value of all stock options using the
Black-Scholes option pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
                        ASSUMPTIONS                           1999      1998
                        -----------                          -------   -------
<S>                                                          <C>       <C>
Risk-free interest rate....................................     5.31%     5.31%
Assumed dividend yield.....................................     7.50%     7.50%
Expected term..............................................  6 years   6 years
Assumed volatility.........................................    10.00%    10.00%
</TABLE>

13.  CONCENTRATION OF RISK

     Approximately 5.8 million of the Company's 17 million rentable square feet
is located in the San Francisco metropolitan market, accounting for
approximately 29% of the Company's total assets at December 31, 1999. In
addition, five of the Company's 83 office Properties are located in the Downtown
Boston market, accounting for approximately 19.4% of the Company's office and
parking revenues for the year ended December 31, 1999. This concentration of
assets makes the Company particularly vulnerable to adverse changes in economic
conditions in the San Francisco and Boston metropolitan areas. A significant
decline in these economic conditions could have a material adverse effect on the
Company.

     Norwest Corporation and its subsidiary, Norwest Bank Denver N.A., tenants
of the Company, provided approximately 6.2%, and 9.5% of office and parking
rental income for the years ended December 31, 1999 and 1998, respectively.
Included in deferred tenant receivables is approximately $34.8 million and $33.9
million due from Norwest Corporation at December 31, 1998 and 1997,
respectively. As a result of the sale of the Company's property located in
Denver during the fourth quarter of 1999, the concentration of revenue received
from this tenant will be significantly reduced.

14.  RELATED PARTY TRANSACTIONS

     The Company has entered into $250.0 million of mortgage debt with one of
the Trust's major stockholders, PGGM, as further described in Note 5.

     In connection with the Wilson Acquisition, certain third-party services
business of WW&A was acquired by WCP Services, Inc., a Delaware corporation
("WCP Services"). The Company owns 100% of the non-voting common stock and 1% of
the voting common stock of WCP Services. Mr. Wilson and Mr. Moody each own 49.5%
of the voting common stock of WCP Services. To fund the purchase of such shares
of voting common stock, the Company loaned $178,750 to each of Mr. Wilson and
Mr. Moody, all of which remained outstanding as of December 31, 1999. The notes
accrue interest at a rate equal to 140 basis points plus the one-year London
Interbank Offered Rate, which rate is adjusted annually. The notes are due and
payable on or before December 16, 2008. In connection with the EOP Merger
Agreement, Messrs. Wilson and Moody entered into an agreement to sell their
voting common stock of WCP Services to EOP at a purchase price of $200,000 each.

                                      F-40
<PAGE>   17

15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company is required to disclose the fair value of financial instruments
for which it is practicable to estimate that value. The Company determines the
fair value based on discounting future cash flows at a rate that approximates
the Company's effective current borrowing rate (see also Note 5). For the year
ended December 31, 1999 and 1998, the fair value of the Company's long term debt
was approximately $1,367,000 million and $1,542,000 million, respectively.

16.  SUPPLEMENTAL CASH FLOW INFORMATION

     Cash paid for interest was approximately $138,375 million and $60,992
million for the years ended December 31, 1999 and 1998, respectively.

NON-CASH INVESTING AND FINANCING ACTIVITIES

     On January 20, 1998, the Trust converted its corporate structure into an
umbrella limited partnership REIT ("UPREIT"). Under the UPREIT structure, the
Trust assigned substantially all of its interest in its properties and
substantially all of its operations to the Company.

     On January 28, 1998, the Company purchased Corporate 500 Centre. As part of
the total purchase price of approximately $150.0 million, the Company issued
822,794 Units valued at $18.50 per unit.

     On April 28, 1998, the Company purchased One Memorial Drive. As part of the
total purchase price of approximately $112.5 million, the Trust issued 3,428,571
shares of common stock and the Company issued 1,657,426 Units, both valued at
$17.50.

     On June 3, 1998, the Company purchased 201 California Street and Wilshire
Palisades. As part of the total purchase price for the Properties of
approximately $121.5 million, the Company assumed $64.6 million in debt and
issued 1,665,663 Units valued at $17.50 per unit.

     On September 25, 1998, in conjunction with the refinancing of the One
Norwest Center mortgage, the Company incurred an extraordinary loss of
approximately $2,269,000, which represents the unamortized deferred financing
costs and prepayment fees on the previous One Norwest Center mortgage at the
time of the refinancing.

     On October 9, 1998, in conjunction with the refinancing of the Corporate
500 Centre mortgage, the Company incurred an extraordinary loss of $354,717,
which represents the unamortized deferred financing costs on the previous
Corporate 500 Centre mortgage at the time of the refinancing.

     On November 3, 1998, the Company obtained a $550.0 million Revolving Credit
Facility from a syndicate of 17 banks led by Bankers Trust Company, The Chase
Manhattan Bank and NationsBank. In conjunction with obtaining this new Revolving
Credit Facility, the Company incurred an extraordinary loss of $1,680,016, which
represents the unamortized deferred financing costs related to the previous
$350.0 million facility, which was extinguished at the time that the new
Revolving Credit Facility was obtained.

     On December 16, 1998, the Company consummated the Wilson Acquisition for a
purchase price of approximately $1.8 billion, consisting of approximately 14.9
million shares of the Trust's Common Stock valued at $17.25 per share (recorded
at $16.25 per share for GAAP purposes), approximately 16.2 million Units valued
at $17.25 per unit (recorded at $16.25 for GAAP purposes), approximately $465.0
million in cash and the assumption of approximately $760.0 million of property
and construction related debt (recorded at $773.7 million for GAAP purposes).
The Company also recorded a minority interest of $241.0 million in connection
with this acquisition.

     During the first quarter of 1999, pursuant to the requirements of SOP 98-5
(as defined in Note 1), the Company wrote off all unamortized organizational
costs and recorded a cumulative effect of a change in accounting principle of
$630,044.

     On February 1, 1999, the Trust issued 113,500 shares of restricted stock
valued at $15.50 per share to certain employees of the Company. Units were also
issued to the Trust on a one-for-one basis.

                                      F-41
<PAGE>   18

     On June 23, 1999, in conjunction with the restructuring of property-related
debt with Prudential Insurance Company of America and Northwestern Mutual Life
Insurance Company, the Company incurred an extraordinary loss of approximately
$3,355,000, of which approximately $1,560,000 represents the unamortized
premium/discounts associated with various debt instruments that were assumed as
part of the Wilson Acquisition. See Note 5 for more information about this
restructuring.

     During 1999, 1,700 shares of the Trust's restricted Common Stock issued to
certain employees of the Company were forfeited as a result of their separation
from the Company.

     On July 30, 1999, 562,588 Units were redeemed for shares of the Trust's
Common Stock on a one-for-one basis.

     On August 3, 1999, 562,587 Units were redeemed for shares of the Trust's
Common Stock on a one-for-one basis.

     On August 17, 1999, the Trust reacquired 10,833 shares of restricted Common
Stock as a result of the forfeiture of these shares by a certain employee of the
Company.

     On October 6, 1999, in conjunction with the restructuring of
property-related debt with Northwestern Mutual Life Insurance Company, the
Company incurred an extraordinary loss of approximately $7,432,000, of which
approximately $2,551,000 represents the unamortized premium/discounts associated
with various debt instruments. See Note 5 for more information about this
restructuring.

     On December 10, 1999, in conjunction with the sale of One Norwest Center in
Denver, Colorado, $97.3 million of outstanding debt was assumed by the
purchaser.

     On December 31, 1999 an affiliate of the Trust, Corpro Real Estate
Management Company, Inc., was dissolved. The remaining assets were contributed
to the Company.

17.  SEGMENT REPORTING

     The Company has one reportable segment - real estate. The Company does not
have any foreign operations. The accounting policies of the segment are the same
as those described in Note 1. See Note 13 for information regarding
concentration of risk.

     The Company evaluates performance based on net operating income from the
individual properties in the segment. (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                   CORPORATE &    COMPANY
                                                   TOTAL SEGMENT    OTHER(A)       TOTAL
                                                   -------------   -----------   ----------
<S>                                                <C>             <C>           <C>
Total revenues(B):
  1999...........................................   $  611,657      $   4,659    $  616,316
  1998...........................................      336,922          2,415       339,337
Total operating and Interest expenses(C):
  1999...........................................   $  212,686      $ 155,517    $  368,203
  1998...........................................      112,271         79,136       191,407
Net operating income(D):
  1999...........................................   $  398,971      $(150,858)   $  248,113
  1998...........................................      224,651        (76,721)      147,930
Total long-lived assets(E):
  1999...........................................   $3,770,924      $  66,064    $3,836,988
  1998...........................................    4,137,302         54,782     4,192,084
Total assets:
  1999...........................................   $3,776,765      $ 393,463    $4,170,228
  1998...........................................    4,198,099         83,559     4,281,658
</TABLE>

---------------
 (A) Corporate and Other represents all corporate-level items (including
     interest income, interest expense and general and administrative expenses)
     as well as intercompany eliminations necessary to reconcile to consolidated
     Company totals.

                                      F-42
<PAGE>   19

 (B) Total revenues represents all revenues during the period (including the
     Company's earnings in real estate joint ventures). All interest income is
     excluded from the segment amounts and is classified in Corporate and Other
     for all periods.

 (C) Total operating and interest expenses represents the sum of building
     operating expenses, real estate taxes, interest expense and general and
     administrative expenses. All interest expense (including property level
     mortgages) is excluded from the segment amounts and is classified in
     Corporate and Other for all periods. Amounts presented exclude depreciation
     and amortization of $96,726,000 and $57,031,000 in 1999 and 1998,
     respectively.

(D) Net operating income represents total revenues (as defined in note (B)
    above) less total operating and interest expense (as defined in note (C)
    above) for the period.

 (E) Long-lived assets is composed of total rentals property, investments in
     joint ventures, other deferred costs, deferred tenant receivables and
     certain other assets.

18.  SUBSEQUENT EVENTS

     On January 20, 2000, the Company declared a distribution of $0.31 per unit
paid on February 29, 2000, Unitholders of record as of January 31, 2000.

     On January 21, 2000, the Company purchased Wells Fargo Center in
Sacramento, California. This property contains approximately 502,000 rentable
square feet. The total purchase price for the Property was approximately $130.0
million, consisting of approximately $128.0 million in cash of which $104.8
million was 1031 exchange funds (see Note 3) and approximately $2.0 million of
which was paid in Units valued at $17.25 per unit.

     On March 8, 2000, the Company declared a distribution of $0.20 per unit
paid to all unitholders on April 14, 2000.

     On March 15, 2000, the Company sold it interests in a property for gross
proceeds of $14,425,000 located in East Bay, California. The property was
acquired as part of the Wilson Acquisition in December 1998.

     On March 23, 2000, the Company sold its interest in a Property located in
East Bay, California for gross proceeds of $12,800,000. The Property had been
acquired as part of the Wilson Acquisition in December 1998.

     On March 30, 2000, 101,050 Units were redeemed for shares of the Trust's
Common Stock on a one-for-one basis.

                                      F-43
<PAGE>   20

                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                  SCHEDULE III
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
       COLUMN A            COLUMN B             COLUMN C               COLUMN D                     COLUMN E
-----------------------  ------------    -----------------------   ----------------   ------------------------------------
                                                                   COST CAPITALIZED
                                                                    SUBSEQUENT TO        GROSS AMOUNT AT WHICH CARRIED
                                         INITIAL COST TO COMPANY     ACQUISITION               AT CLOSE OF PERIOD
                                         -----------------------   ----------------   ------------------------------------
                                                     BUILDING &         LAND &                    BUILDING &
DESCRIPTION              ENCUMBRANCES      LAND     IMPROVEMENTS     IMPROVEMENTS       LAND     IMPROVEMENTS     TOTAL
-----------              ------------    --------   ------------   ----------------   --------   ------------   ----------
                                                           (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>             <C>        <C>            <C>                <C>        <C>            <C>
Boston, Massachusetts
 Sixty State Street....      $85,420     $     --    $  221,568        $  6,813       $     --    $  228,381    $  228,381
 500 Boylston Street...                    45,132       181,574            (112)        45,132       181,462       226,594
 222 Berkeley Street...                    29,262       118,180             284         29,262       118,464       147,726
 125 Summer Street.....       78,844       15,750        89,250           7,867         15,750        97,117       112,867
 One Memorial Drive....       63,119       22,500        90,873              (6)        22,500        90,867       113,367
San Mateo County,
 California
 Bayhill (4
   buildings)..........       57,764       26,353       105,412           2,166         26,353       107,578       133,931
 Peninsula Office Park
   (7 buildings).......       88,128       25,426       101,705           2,885         25,426       104,590       130,016
 Seaport Centre........       58,000       23,530        94,119           5,259         23,530        99,378       122,908
 Bay Park Plaza (2
   buildings)..........                    13,139        52,556             244         13,139        52,800        65,939
 One Bay Plaza.........                     9,125        36,499           1,165          9,125        37,664        46,789
East Bay, California
 Corporate Centre (2
   buildings)..........                     9,808        39,233             637          9,808        39,870        49,678
 ADP Plaza (2
   buildings)..........                    10,278        41,110             502         10,278        41,612        51,890
 PeopleSoft Plaza......                    10,025        40,100             644         10,025        40,744        50,769
 Norris Tech Center (3
   buildings)..........       16,066        7,223        28,893             379          7,223        29,272        36,495
 Golden Bear Center....       20,477        6,426        25,705             250          6,426        25,955        32,381
 2700 Ygnacio Valley
   Road................                     2,375         9,498             192          2,375         9,690        12,065
 Park Plaza............                     2,673        10,693             323          2,673        11,016        13,689
 1600 South Main.......                     2,501        10,003             175          2,501        10,178        12,679
Atlanta, Georgia
 191 Peachtree
   Street..............                    40,110       228,962           4,575         40,110       233,537       273,647
 200 Galleria..........      120,000(B)    11,994        48,443           3,621         12,726        51,332        64,058
Seattle, Washington
 Washington Mutual
   Tower (3
   buildings)..........       79,100       21,167        43,153         150,354         21,173       193,501       214,674
 110 Atrium Place......       21,517        7,810        31,242             357          7,810        31,599        39,409
 Island Corporate
   Center..............       13,170        3,751        15,004             325          3,751        15,329        19,080
Santa Clara, California
 Pruneyard Office (3
   buildings)..........       60,947       11,896        47,583          13,162         11,896        60,745        72,641
 10 Almaden............                    14,306        57,223             314         14,306        57,537        71,843
 Pruneyard Shopping
   Center..............                     8,491        33,966           1,053          8,491        35,019        43,510
 Embarcadero Place (4
   buildings)..........       38,149       11,728        46,913             (63)        11,728        46,850        58,578
 Pruneyard Inn (C).....                     3,057        12,228           3,126          3,057        15,354        18,411

<CAPTION>
       COLUMN A            COLUMN F      COLUMN G      COLUMN H        COLUMN I
-----------------------  ------------   -----------   -----------   ---------------

                                                                     LIFE ON WHICH
                                                                    DEPRECIATION IN
                                        (UNAUDITED)   (UNAUDITED)    LATEST INCOME
                         ACCUMULATED       YEAR          DATE        STATEMENTS IS
DESCRIPTION              DEPRECIATION   CONSTRUCTED    ACQUIRED       COMPUTED(A)
-----------              ------------   -----------   -----------   ---------------
                                       (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>            <C>           <C>           <C>
Boston, Massachusetts
 Sixty State Street....   $ (11,312)           1979    12/31/97            40
 500 Boylston Street...      (9,949)           1988    10/27/97            40
 222 Berkeley Street...      (6,515)           1991    10/27/97            40
 125 Summer Street.....     (12,611)           1989     11/1/95            40
 One Memorial Drive....      (3,812)           1985     4/28/98            40
San Mateo County,
 California
 Bayhill (4
   buildings)..........      (2,836)      1982-1987    12/16/98            40
 Peninsula Office Park
   (7 buildings).......      (2,759)      1971-1998    12/16/98            40
 Seaport Centre........      (2,772)           1988    12/16/98            40
 Bay Park Plaza (2
   buildings)..........      (1,403)      1985-1998    12/16/98            40
 One Bay Plaza.........        (997)           1979    12/16/98            40
East Bay, California
 Corporate Centre (2
   buildings)..........      (1,066)      1985-1987    12/16/98            40
 ADP Plaza (2
   buildings)..........      (1,110)      1987-1989    12/16/98            40
 PeopleSoft Plaza......      (1,069)           1984    12/16/98            40
 Norris Tech Center (3
   buildings)..........        (761)      1984-1998    12/16/98            40
 Golden Bear Center....        (702)           1986    12/16/98            40
 2700 Ygnacio Valley
   Road................        (155)           1984    12/16/98            40
 Park Plaza............        (321)           1986    12/16/98            40
 1600 South Main.......        (271)           1983    12/16/98            40
Atlanta, Georgia
 191 Peachtree
   Street..............     (13,469)           1991    10/27/97            40
 200 Galleria..........      (3,146)           1985    10/27/97            40
Seattle, Washington
 Washington Mutual
   Tower (3
   buildings)..........     (82,749)           1988      5/1/88            40
 110 Atrium Place......        (839)           1981    12/16/98            40
 Island Corporate
   Center..............        (404)           1987    12/16/98            40
Santa Clara, California
 Pruneyard Office (3
   buildings)..........      (1,517)      1971-1999    12/16/98            40
 10 Almaden............      (1,510)           1989    12/16/98            40
 Pruneyard Shopping
   Center..............        (922)          1970s    12/16/98            40
 Embarcadero Place (4
   buildings)..........      (1,221)           1984    12/16/98            40
 Pruneyard Inn (C).....        (339)           1989    12/16/98            40
</TABLE>

                                      F-44
<PAGE>   21
                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                          SCHEDULE III -- (CONTINUED)
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
       COLUMN A            COLUMN B             COLUMN C               COLUMN D                     COLUMN E
-----------------------  ------------    -----------------------   ----------------   ------------------------------------
                                                                   COST CAPITALIZED
                                                                    SUBSEQUENT TO        GROSS AMOUNT AT WHICH CARRIED
                                         INITIAL COST TO COMPANY     ACQUISITION               AT CLOSE OF PERIOD
                                         -----------------------   ----------------   ------------------------------------
                                                     BUILDING &         LAND &                    BUILDING &
DESCRIPTION              ENCUMBRANCES      LAND     IMPROVEMENTS     IMPROVEMENTS       LAND     IMPROVEMENTS     TOTAL
-----------              ------------    --------   ------------   ----------------   --------   ------------   ----------
                                                           (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>             <C>        <C>            <C>                <C>        <C>            <C>
San Francisco,
 California
 120 Montgomery
   Street..............       48,160       16,427        65,709           2,958         16,427        68,667        85,094
 201 California
   Street..............       44,504       11,350        46,040           2,007         11,350        48,047        59,397
 188 Embarcadero.......       15,606        4,718        18,871             399          4,718        19,270        23,988
Minneapolis, Minnesota
 Norwest Center........      110,000       18,000        33,613         152,888         18,000       186,501       204,501
Washington, D.C./
 Alexandria, Virginia
 Market Square (2
   buildings)..........             (B)    50,199       201,084           2,964         50,199       204,048       254,247
 99 Canal Center.......                     4,551        18,380           1,574          4,551        19,954        24,505
 TransPotomac Plaza
   5...................       65,000(B)     2,124         8,577           1,000          2,124         9,577        11,701
 11 Canal Center.......                     2,326         9,394             500          2,326         9,894        12,220
Suburban Chicago,
 Illinois
 Corporate 500 Centre
   (4 buildings).......       88,424       30,000       120,163           3,456         30,000       123,619       153,619
 One Lincoln Centre....       65,000(B)     2,192        47,758           4,302          2,192        52,060        54,252
Santa Monica/West Los
 Angeles, California
 West Wilshire (2
   buildings)..........       16,926        7,492        29,970             629          7,492        30,599        38,091
 Wilshire Palisades....       29,047       12,650        52,247           1,291         12,650        53,538        66,188
 Janss Court (D).......       18,357        7,274        29,098             147          7,274        29,245        36,519
 Searise Office
   Tower...............       11,607        6,043        24,172             347          6,043        24,519        30,562
 Commerce Park.........                     2,653        10,613             149             --        13,415        13,415
 429 Santa Monica......                     3,899        15,595             317          3,899        15,912        19,811
Orange County,
 California
 Bixby Ranch...........       28,528        9,681        38,723             300          9,681        39,023        48,704
 18301 Von Karman......                     8,052        32,206           2,224          8,052        34,430        42,482
 2677 South Main.......                     5,696        22,786           1,571          5,696        24,357        30,053
San Diego, California
 Centerside II.........       24,254        7,524        30,094             609          7,523        30,703        38,226
 Crossroads............                     3,207        12,828             222          3,207        13,050        16,257
Los Angeles, California
 700 North Brand.......       26,938        8,112        32,450             145          8,112        32,595        40,707
 Warner Park Center....                     1,746         6,986             123          1,746         7,109         8,855
New York City, New York
 527 Madison Avenue....             (B)    21,440        46,643           2,627         21,440        49,270        70,710
 Tower 56..............       25,024        5,528        25,203           9,434          5,528        34,637        40,165
Conejo Valley
 (Ventura), California
 Westlake Spectrum (2
   buildings)..........                     3,510        14,038             177          3,510        14,215        17,725
 Agoura Hills..........       12,003        3,821        15,284             241          3,821        15,525        19,346

<CAPTION>
       COLUMN A            COLUMN F      COLUMN G      COLUMN H        COLUMN I
-----------------------  ------------   -----------   -----------   ---------------

                                                                     LIFE ON WHICH
                                                                    DEPRECIATION IN
                                        (UNAUDITED)   (UNAUDITED)    LATEST INCOME
                         ACCUMULATED       YEAR          DATE        STATEMENTS IS
DESCRIPTION              DEPRECIATION   CONSTRUCTED    ACQUIRED       COMPUTED(A)
-----------              ------------   -----------   -----------   ---------------
                                       (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>            <C>           <C>           <C>
San Francisco,
 California
 120 Montgomery
   Street..............      (1,846)           1955    12/16/98            40
 201 California
   Street..............      (1,845)           1969      6/3/98            40
 188 Embarcadero.......        (504)           1980    12/16/98            40
Minneapolis, Minnesota
 Norwest Center........     (84,164)           1988      7/1/88            40
Washington, D.C./
 Alexandria, Virginia
 Market Square (2
   buildings)..........      (6,142)           1990     11/1/98            40
 99 Canal Center.......      (1,089)           1986    10/27/97            40
 TransPotomac Plaza
   5...................        (544)           1983    10/27/97            40
 11 Canal Center.......        (573)           1986    10/27/97            40
Suburban Chicago,
 Illinois
 Corporate 500 Centre
   (4 buildings).......      (5,958)      1986/1990     1/28/98            40
 One Lincoln Centre....      (4,361)           1986     11/8/96            40
Santa Monica/West Los
 Angeles, California
 West Wilshire (2
   buildings)..........        (411)      1960-1976    12/16/98            40
 Wilshire Palisades....      (2,155)           1981      6/3/98            40
 Janss Court (D).......        (772)           1989    12/16/98            40
 Searise Office
   Tower...............        (657)           1975    12/16/98            40
 Commerce Park.........        (349)           1977    12/16/98            40
 429 Santa Monica......        (411)           1982    12/16/98            40
Orange County,
 California
 Bixby Ranch...........      (1,024)           1987    12/16/98            40
 18301 Von Karman......        (971)           1991    12/16/98            40
 2677 South Main.......        (681)           1987    12/16/98            40
San Diego, California
 Centerside II.........        (803)           1987    12/16/98            40
 Crossroads............        (358)           1983    12/16/98            40
Los Angeles, California
 700 North Brand.......        (852)           1981    12/16/98            40
 Warner Park Center....        (183)           1986    12/16/98            40
New York City, New York
 527 Madison Avenue....      (3,762)           1986     2/14/97            40
 Tower 56..............      (3,501)           1983     4/24/96            40
Conejo Valley
 (Ventura), California
 Westlake Spectrum (2
   buildings)..........        (367)           1990    12/16/98            40
 Agoura Hills..........        (417)           1987    12/16/98            40
</TABLE>

                                      F-45
<PAGE>   22
                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                          SCHEDULE III -- (CONTINUED)
                               DECEMBER 31, 1999
<TABLE>
<CAPTION>
       COLUMN A            COLUMN B             COLUMN C               COLUMN D                     COLUMN E
-----------------------  ------------    -----------------------   ----------------   ------------------------------------
                                                                   COST CAPITALIZED
                                                                    SUBSEQUENT TO        GROSS AMOUNT AT WHICH CARRIED
                                         INITIAL COST TO COMPANY     ACQUISITION               AT CLOSE OF PERIOD
                                         -----------------------   ----------------   ------------------------------------
                                                     BUILDING &         LAND &                    BUILDING &
DESCRIPTION              ENCUMBRANCES      LAND     IMPROVEMENTS     IMPROVEMENTS       LAND     IMPROVEMENTS     TOTAL
-----------              ------------    --------   ------------   ----------------   --------   ------------   ----------
                                                           (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>             <C>        <C>            <C>                <C>        <C>            <C>
Other
 U.S. West (Murray,
   Utah)...............                     3,311        13,245             185          3,311        13,430        16,741
 Exposition Centre
   (Sacramento, CA)....        5,081        1,772         7,089             209          1,772         7,298         9,070
Projects under
 development...........           --       46,720        10,103           6,309         46,132        17,000        63,132
                         -----------     --------    ----------        --------       --------    ----------    ----------
Grand Total............   $1,435,160     $707,854    $2,900,650        $405,795       $705,350    $3,308,948    $4,014,298
                         ===========     ========    ==========        ========       ========    ==========    ==========

<CAPTION>
       COLUMN A            COLUMN F      COLUMN G      COLUMN H        COLUMN I
-----------------------  ------------   -----------   -----------   ---------------

                                                                     LIFE ON WHICH
                                                                    DEPRECIATION IN
                                        (UNAUDITED)   (UNAUDITED)    LATEST INCOME
                         ACCUMULATED       YEAR          DATE        STATEMENTS IS
DESCRIPTION              DEPRECIATION   CONSTRUCTED    ACQUIRED       COMPUTED(A)
-----------              ------------   -----------   -----------   ---------------
                                       (DOLLAR AMOUNTS IN THOUSANDS)
<S>                      <C>            <C>           <C>           <C>
Other
 U.S. West (Murray,
   Utah)...............        (375)           1985    12/16/98            40
 Exposition Centre
   (Sacramento, CA)....        (222)           1984    12/16/98            40
Projects under
 development...........          --             N/A          --           N/A
                          ---------     -----------    --------           ---
Grand Total............   $(291,834)
                          =========
</TABLE>

---------------
(A) The life to compute depreciation on Buildings is 40 years. The life to
    compute depreciation on Building Improvements is 3 to 40 years.

(B) The three notes arising from the acquisition of several properties from PGGM
    (a major stockholder and related party) are cross-collateralized, having the
    effect of forming a "collateral pool" for the underlying notes. In addition,
    the $181.0 million first mortgage loan on Market Square, which the Company
    purchased from PGGM in 1997, has been pledged as collateral for the $120.0
    million 200 Galleria loan.

(C) The Pruneyard Inn is a 172-room hotel.

(D) In addition to 92,000 square feet of retail and office space, Janss Court
    contains 32 apartments comprising 33,000 rentable square feet of residential
    space.

                                      F-46
<PAGE>   23

                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                  SCHEDULE III
                               DECEMBER 31, 1999
                                  (CONTINUED)

RECONCILIATION OF "REAL ESTATE AND ACCUMULATED DEPRECIATION"

<TABLE>
<CAPTION>
                                                                 1999          1998
                                                              ----------    ----------
<S>                                                           <C>           <C>
INVESTMENT IN REAL ESTATE AND ASSETS HELD FOR SALE
Balance, beginning of period................................  $4,340,449    $1,918,746
  Additions during period:
     Acquisitions...........................................      38,437     2,410,427
     Improvements...........................................      14,904        30,690
  Deductions during period:
     Properties disposed of.................................    (358,670)      (19,414)
     Retirements and writeoffs..............................     (20,822)           --
                                                              ----------    ----------
Balance, end of period......................................  $4,014,298    $4,340,449
                                                              ==========    ==========
ACCUMULATED DEPRECIATION
Balance, beginning of period................................  $  288,448    $  231,421
  Additions during period:
     Depreciation...........................................      96,726        57,031
  Deductions during period:
     Properties disposed of.................................     (73,131)
     Retirements and writeoffs..............................     (20,209)           (4)
                                                              ----------    ----------
                                                              $  291,834    $  288,448
                                                              ==========    ==========
</TABLE>

                                      F-47
<PAGE>   24

                                                                         ANNEX A

                          AGREEMENT AND PLAN OF MERGER

                   DATED AS OF FEBRUARY 11, 2000, AS AMENDED

<PAGE>   25

                          AGREEMENT AND PLAN OF MERGER
                                     AMONG
                        EQUITY OFFICE PROPERTIES TRUST,
                       EOP OPERATING LIMITED PARTNERSHIP,
                          CORNERSTONE PROPERTIES INC.
                                      AND
                   CORNERSTONE PROPERTIES LIMITED PARTNERSHIP
                         DATED AS OF FEBRUARY 11, 2000
<PAGE>   26

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<C>          <S>                                                           <C>
ARTICLE 1    THE MERGERS.................................................   A-2
    1.1      Election by Limited Partners in Cornerstone Partnership to
             Exercise the Redemption Right; The Partnership Merger.......   A-2
    1.2      The Merger..................................................   A-3
    1.3      Closing.....................................................   A-3
    1.4      Effective Time..............................................   A-4
    1.5      Effect of Partnership Mergers on Agreement of Limited
             Partnership.................................................   A-4
    1.6      Effect of Merger on Declaration of Trust and Bylaws.........   A-4
    1.7      Trustees of EOP.............................................   A-4
    1.8      Effect on Shares............................................   A-5
    1.9      Effect on Partnership Interests.............................   A-5
   1.10      Exchange Ratios and Other Merger Consideration..............   A-5
   1.11      Election by Holders of Cornerstone Common Stock to Receive
             EOP Common Shares or Cash...................................   A-6
   1.12      Proration...................................................   A-7
   1.13      Partner Approval............................................   A-8
   1.14      No Appraisal Rights.........................................   A-8
   1.15      Exchange of Certificates; Pre-Closing Dividends; Fractional
             Shares......................................................   A-8
ARTICLE 2    REPRESENTATIONS AND WARRANTIES OF CORNERSTONE AND
             CORNERSTONE PARTNERSHIP.....................................  A-11
    2.1      Organization, Standing and Power............................  A-12
    2.2      Cornerstone Subsidiaries....................................  A-12
    2.3      Capital Structure...........................................  A-13
    2.4      Other Interests.............................................  A-14
    2.5      Authority; Noncontravention; Consents.......................  A-14
    2.6      SEC Documents; Financial Statements; Undisclosed
             Liabilities.................................................  A-16
    2.7      Absence of Certain Changes or Events........................  A-16
    2.8      Litigation..................................................  A-17
    2.9      Properties..................................................  A-17
   2.10      Environmental Matters.......................................  A-19
   2.11      Related Party Transactions..................................  A-20
   2.12      Employee Benefits...........................................  A-20
   2.13      Employee Policies...........................................  A-21
   2.14      Taxes.......................................................  A-22
   2.15      No Payments to Employees, Officers or Directors.............  A-23
   2.16      Broker; Schedule of Fees and Expenses.......................  A-23
   2.17      Compliance with Laws........................................  A-23
   2.18      Contracts; Debt Instruments.................................  A-23
   2.19      Opinion of Financial Advisor................................  A-25
   2.20      State Takeover Statutes.....................................  A-25
   2.21      Investment Company Act of 1940..............................  A-25
   2.22      Definition of Knowledge of Cornerstone......................  A-25
   2.23      Required Stockholder Approvals and Partner Approvals........  A-25
ARTICLE 3    REPRESENTATIONS AND WARRANTIES OF EOP AND EOP PARTNERSHIP...  A-25
    3.1      Organization, Standing and Power of EOP.....................  A-26
    3.2      EOP Subsidiaries............................................  A-26
    3.3      Capital Structure...........................................  A-26
    3.4      Other Interests.............................................  A-27
</TABLE>

                                        i
<PAGE>   27

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<C>          <S>                                                           <C>
    3.5      Authority; Noncontravention; Consents.......................  A-28
    3.6      SEC Documents; Financial Statements; Undisclosed
             Liabilities.................................................  A-29
    3.7      Absence of Certain Changes or Events........................  A-29
    3.8      Litigation..................................................  A-30
    3.9      Properties..................................................  A-30
   3.10      Environmental Matters.......................................  A-31
   3.11      Taxes.......................................................  A-32
   3.12      Brokers; Schedule of Fees and Expenses......................  A-33
   3.13      Compliance with Laws........................................  A-33
   3.14      Contracts; Debt Instruments.................................  A-33
   3.15      Opinion of Financial Advisor................................  A-33
   3.16      State Takeover Statutes.....................................  A-33
   3.17      Investment Company Act of 1940..............................  A-33
   3.18      Definition of Knowledge of EOP..............................  A-33
   3.19      Required Shareholder Approvals and Partner Approvals........  A-33
ARTICLE 4    COVENANTS...................................................  A-33
    4.1      Conduct of Cornerstone's and Cornerstone Partnership's
             Business Pending Merger.....................................  A-33
    4.2      Conduct of EOP's and EOP Partnership's Business Pending
             Merger......................................................  A-36
    4.3      No Solicitation.............................................  A-37
    4.4      Affiliates..................................................  A-39
    4.5      Other Actions...............................................  A-39
ARTICLE 5    ADDITIONAL COVENANTS........................................  A-40
    5.1      Preparation of the Form S-4 and the Proxy Statement;
             Cornerstone Stockholders Meeting, Cornerstone Unitholders
             Consent Solicitation and EOP Shareholders Meeting...........  A-40
    5.2      Access to Information; Confidentiality......................  A-42
    5.3      Commercially Reasonable Efforts; Notification...............  A-42
    5.4      Tax Matters.................................................  A-43
    5.5      Public Announcements........................................  A-44
    5.6      Listing.....................................................  A-44
    5.7      Transfer and Gains Taxes....................................  A-44
    5.8      Benefit Plans and Other Employee Arrangements...............  A-45
    5.9      Indemnification.............................................  A-46
   5.10      Declaration of Dividends and Distributions..................  A-48
   5.11      Transfer of Non-Controlled Subsidiary Voting Shares.........  A-48
   5.12      Notices.....................................................  A-49
   5.13      Resignations................................................  A-49
   5.14      Assumption of Existing Tax Protection Agreements............  A-49
   5.15      EOP Partnership Agreement...................................  A-49
   5.16      Registration Rights Agreements..............................  A-49
   5.17      Cornerstone Convertible Promissory Note.....................  A-49
ARTICLE 6    CONDITIONS..................................................  A-49
    6.1      Conditions to Each Party's Obligation to Effect the
             Mergers.....................................................  A-49
    6.2      Conditions to Obligations of EOP and EOP Partnership........  A-50
    6.3      Conditions to Obligations of Cornerstone and Cornerstone
             Partnership.................................................  A-51
ARTICLE 7    TERMINATION, AMENDMENT AND WAIVER...........................  A-52
    7.1      Termination.................................................  A-52
    7.2      Certain Fees and Expenses...................................  A-53
    7.3      Effect of Termination.......................................  A-55
    7.4      Amendment...................................................  A-55
</TABLE>

                                       ii
<PAGE>   28

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<C>          <S>                                                           <C>
    7.5      Extension; Waiver...........................................  A-55
ARTICLE 8    GENERAL PROVISIONS..........................................  A-55
    8.1      Nonsurvival of Representations and Warranties...............  A-55
    8.2      Notices.....................................................  A-55
    8.3      Interpretation..............................................  A-56
    8.4      Counterparts................................................  A-56
    8.5      Entire Agreement; No Third-Party Beneficiaries..............  A-56
    8.6      Governing Law...............................................  A-56
    8.7      Assignment..................................................  A-57
    8.8      Enforcement.................................................  A-57
    8.9      Severability................................................  A-57
   8.10      Exculpation.................................................  A-57
   8.11      Joint and Several Obligations...............................  A-57
</TABLE>

                                    EXHIBITS

Exhibit "A" -- Form of Certificate of Merger

Exhibit "B" -- Form of Maryland Articles of Merger

Exhibit "C" -- Form of Nevada Articles of Merger

Exhibit "D" -- Form of Proposed EOP Charter Amendment Relating to Certain Voting
               Requirements

Exhibit "E" -- Form of Proposed EOP Charter Amendment Relating to Domestically
               Controlled REIT Status

                                       iii
<PAGE>   29

                             INDEX OF DEFINED TERMS

<TABLE>
<S>                                                           <C>
AICPA Statement.............................................  5.1(b)
Acquisition Proposal........................................  4.3(a)(i)
Affiliate...................................................  2.11
Agreement...................................................  Preamble
Base Amount.................................................  7.2
BeaMet......................................................  3.11(b)
Break-Up Fee................................................  7.2
Break-Up Fee Tax Opinion....................................  7.2
Break-Up Expenses...........................................  7.2
Cash Election...............................................  1.11(a)
Cash Election Shares........................................  1.12(a)
Cash Fraction...............................................  1.12(b)
CERCLA......................................................  2.10(a)
Certificate of Merger.......................................  C
Certificate.................................................  1.10(b)(iv)
Closing.....................................................  1.3
Closing Date................................................  1.3
Cornerstone.................................................  Preamble
Cornerstone Acquisition Agreement...........................  7.2
Cornerstone Articles........................................  2.1
Cornerstone Bylaws..........................................  2.1
Cornerstone Common Stock....................................  1.10(b)(i)
Cornerstone Convertible Promissory Note.....................  2.3(c)
Cornerstone Disclosure Letter...............................  Art. 2
Cornerstone Financial Statement Date........................  2.7
Cornerstone Material Adverse Change.........................  2.7
Cornerstone Material Adverse Effect.........................  2.1
Cornerstone Non-controlled Subsidiary.......................  J
Cornerstone OP Unit.........................................  1.1(a)
Cornerstone Other Interests.................................  2.4
Cornerstone Partner Approvals...............................  1.13
Cornerstone Partnership.....................................  Preamble
Cornerstone Partnership Agreement...........................  1.5
Cornerstone Preferred OP Unit...............................  1.10(a)(ii)
Cornerstone Properties......................................  2.9(a)
Cornerstone Rent Roll.......................................  2.9(e)
Cornerstone SEC Documents...................................  2.6
Cornerstone 7% Preferred Stock..............................  1.10(b)(iii)
Cornerstone Stockholder Approvals...........................  2.5(a)
Cornerstone Stockholders Meeting............................  5.1(d)
Cornerstone Space Lease.....................................  2.9(e)
Cornerstone Stock Options...................................  2.3(b)
Cornerstone Stock Rights....................................  2.3(b)
Cornerstone Subsidiaries....................................  2.2(a)
Cornerstone Voting Agreement................................  K
Code........................................................  F
Commitment..................................................  4.1(i)
Common Stock Exchange Ratio.................................  1.10(b)(ii)
Confidentiality Agreement...................................  2.18(k)
Controlled Group Member.....................................  2.12
Department..................................................  1.4
</TABLE>

                                       iv
<PAGE>   30
<TABLE>
<S>                                                           <C>
DRULPA......................................................  1.1(b)
Effective Time..............................................  1.4
Electing Cornerstone OP Units...............................  1.11
Election....................................................  1.11(a)
Election Date...............................................  1.11(d)
Employee Plan...............................................  2.12
Encumbrances................................................  2.9(a)
Environmental Law...........................................  2.10(a)
Environmental Permits.......................................  2.10(b)(iv)
EOP.........................................................  Preamble
EOP Bylaws..................................................  1.6
EOP Common Share............................................  1.10(b)(ii)
EOP Counter Proposal........................................  4.3(c)
EOP Declaration of Trust....................................  1.6
EOP Disclosure Letter.......................................  Art. 3
EOP Financial Statement Date................................  3.7
EOP Material Adverse Change.................................  3.7
EOP Material Adverse Effect.................................  3.1
EOP NCS Sub.................................................  J
EOP Options.................................................  3.3(b)
EOP OP Unit.................................................  1.10(a)(i)
EOP Other Interests.........................................  3.4
EOP Partner Approvals.......................................  1.13
EOP Partnership.............................................  Preamble
EOP Partnership Agreement...................................  1.5
EOP Preferred OP Unit.......................................  1.10(a)(ii)
EOP Preferred Units.........................................  3.3(e)
EOP Preferred Shares........................................  3.3(a)
EOP Properties..............................................  3.9(a)
EOP Rent Roll...............................................  3.9(g)
EOP SEC Documents...........................................  3.6
EOP Shareholder Approvals...................................  3.5(a)
EOP Shareholders Meeting....................................  5.1(c)
EOP Space Lease.............................................  3.9(g)
EOP Subsidiaries............................................  3.1
ERISA.......................................................  2.12
Exchange Act................................................  2.6
Exchange Agent..............................................  1.15(a)
Exchange Fund...............................................  1.15(b)
Exercise....................................................  1.1(a)(i)
Final Company Dividend......................................  1.15(d)(i)
Form of Election............................................  1.11(b)
Form S-4....................................................  5.1(a)
Former Cornerstone Properties...............................  2.10(b)(ii)
GAAP........................................................  2.6
Governmental Entity.........................................  2.5(c)
Hazardous Materials.........................................  2.10
HSR Act.....................................................  2.5(c)
Indebtedness................................................  2.18(b)
Indemnification Parties.....................................  5.9(b)
Indemnified Parties.........................................  5.9(a)
Indemnifying Parties........................................  5.9(a)
Joint Proxy Statement.......................................  5.1(a)
</TABLE>

                                        v
<PAGE>   31
<TABLE>
<S>                                                           <C>
Knowledge of Cornerstone....................................  2.22
Knowledge of EOP............................................  3.18
Laws........................................................  2.5(c)
Liens.......................................................  2.2(b)
Maryland Articles of Merger.................................  D
Maximum Amount..............................................  7.2
Merger......................................................  A
Mergers.....................................................  B
Merger Consideration........................................  1.10(b)
Nevada Articles of Merger...................................  E
Non-Electing Shares.........................................  1.12(e)
NRS.........................................................  1.2
NYSE........................................................  1.15(g)(ii)
Partner Approvals...........................................  1.13
Partnership Merger..........................................  B
Payor.......................................................  7.2
Pension Plan................................................  2.12
Permitted Title Exceptions..................................  2.9(a)
Person......................................................  2.2(a)
PGGM........................................................  6.3(h)
Prohibited Transaction......................................  2.12(c)
Property Restrictions.......................................  2.9(a)
Proposed EOP Charter Amendment Relating to Domestically
  Controlled REIT Status....................................  4.2(h)
Proposed EOP Charter Amendment Relating to Certain Voting
  Requirements..............................................  4.2(h)
Proposed EOP Charter Amendments.............................  4.2(h)
Qualifying Income...........................................  7.2
Recipient...................................................  7.2
REIT........................................................  2.14(b)
REIT Requirements...........................................  7.2
Release.....................................................  2.10(a)
Rule 145 Affiliates.........................................  4.4
SEC.........................................................  2.5(c)
Section 704(c) values.......................................  5.4(b)
Securities Act..............................................  2.3(g)
Share Election..............................................  1.11(a)
Shareholder Approvals.......................................  3.5(a)
Stock Election Shares.......................................  1.12(a)
Stock Fraction..............................................  1.12(c)
Stock Purchase Agreement....................................  J
Subsidiary..................................................  2.2(a)
Substituted Option..........................................  5.8(c)
Superior Acquisition Proposal...............................  4.3(d)
Surviving Trust.............................................  1.2
Takeover Statute............................................  2.20
Taxes.......................................................  2.14(a)
Tax Protection Agreements...................................  2.18(j)
Title 3.....................................................  1.2
Title 8.....................................................  1.2
Transfer and Gains Taxes....................................  5.7
Welfare Plan................................................  2.12
1940 Act....................................................  2.21
</TABLE>

                                       vi
<PAGE>   32

                          AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February
11, 2000, by and among EQUITY OFFICE PROPERTIES TRUST, a Maryland real estate
investment trust ("EOP"), EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited
partnership ("EOP Partnership"), CORNERSTONE PROPERTIES INC., a Nevada
corporation ("Cornerstone"), and CORNERSTONE PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership ("Cornerstone Partnership").

                                   RECITALS:

     A. The Board of Trustees of EOP and the Board of Directors of Cornerstone
deem it advisable and in the best interests of their respective shareholders and
stockholders, upon the terms and subject to the conditions contained herein,
that Cornerstone shall merge with and into EOP (the "Merger").

     B. EOP, as the managing general partner of EOP Partnership, and
Cornerstone, as the sole general partner of Cornerstone Partnership, deem it
advisable and in the best interests of their respective limited partners,
subject to the conditions and other provisions contained herein, that,
immediately prior to the Merger, Cornerstone Partnership shall merge with and
into EOP Partnership, with the holders of partnership interests in Cornerstone
Partnership at the time of the Partnership Merger receiving in any event units
of limited partnership interest in EOP Partnership, as set forth herein (the
"Partnership Merger" and, together with the Merger, the "Mergers"). As an
alternative to receiving units of limited partnership interest in EOP
Partnership in connection with the Partnership Merger, limited partners in
Cornerstone Partnership (other than Cornerstone) shall have the right to elect,
effective immediately prior to the Partnership Merger, to exercise their
redemption right under the Cornerstone Partnership Agreement (as defined
herein), regardless of whether or not they would otherwise be entitled to
exercise that redemption right under the Cornerstone Partnership Agreement, and
Cornerstone shall issue shares of Cornerstone Common Stock (as defined herein)
in satisfaction of that right, thereby allowing former limited partners in
Cornerstone Partnership (other than Cornerstone) to participate in the Merger as
holders of Cornerstone Common Stock.

     C. Upon the terms and subject to the conditions set forth herein,
immediately prior to the Merger, EOP Partnership and Cornerstone Partnership
shall execute a Certificate of Merger (the "Certificate of Merger") in
substantially the form attached hereto as Exhibit A and shall file such
Certificate of Merger in accordance with Delaware law to effectuate the
Partnership Merger.

     D. Upon the terms and subject to the conditions set forth herein,
immediately following the effectiveness of the Partnership Merger, EOP and
Cornerstone shall execute Articles of Merger (the "Maryland Articles of Merger")
in substantially the form attached hereto as Exhibit B and shall file such
Maryland Articles of Merger in accordance with Maryland law to effectuate the
Merger.

     E. Upon the terms and subject to the conditions set forth herein,
immediately following the effectiveness of the Partnership Merger, EOP and
Cornerstone shall execute Articles of Merger (the "Nevada Articles of Merger")
in substantially the form attached hereto as Exhibit C and concurrently with the
filing of the Maryland Articles of Merger, shall file such Nevada Articles of
Merger in accordance with Nevada law to effectuate the Merger.

     F. For federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"), and that this Agreement shall constitute a plan
of reorganization under Section 368(a) of the Code.

     G. For federal income tax purposes, it is intended that the Partnership
Merger, regardless of form, be treated as a contribution by Cornerstone
Partnership of all of its assets to EOP Partnership in exchange for partnership
interests in EOP Partnership, as provided for herein, under Section 721 of the
Code, and a distribution of such partnership interests by Cornerstone
Partnership to its partners under Section 731 of the Code.
                                       A-1
<PAGE>   33

     H. EOP and Cornerstone have each received a fairness opinion relating to
the transactions contemplated hereby as more fully described herein.

     I. EOP, EOP Partnership, Cornerstone and Cornerstone Partnership desire to
make certain representations, warranties and agreements in connection with the
Mergers.

     J. Concurrently with the execution of this Agreement and as an inducement
to EOP and EOP Partnership to enter into this Agreement, William Wilson III and
John S. Moody, as the owners of 99% of the voting capital stock of WCP Services,
Inc., a Delaware corporation (the "Cornerstone Non-controlled Subsidiary"), have
entered into a Stock Purchase Agreement, dated as of the date hereof, relating
to the voting capital stock of the Cornerstone Non-controlled Subsidiary (the
"Stock Purchase Agreement"), providing for the sale of all of the outstanding
voting capital stock of the Cornerstone Non-controlled Subsidiary to EOP Office
Properties Management Corporation ("EOP NCS Sub") or its assigns.

     K. As an inducement to EOP to enter into this Agreement, (a) Stichting
Pensioenfonds voor de Gezondheid, Geestelijke en Maatschappelijke Belangen, a
stichting formed according to the laws of the Kingdom of The Netherlands, each
of the directors and certain executive officers of Cornerstone (and the spouses
of certain of the foregoing) and certain entities controlled by any of the
foregoing have entered into a voting agreement (each, a "Cornerstone Voting
Agreement"), pursuant to which such person or entity has agreed, among other
things, to vote his or its shares of Cornerstone Common Stock and Cornerstone OP
Units (as defined herein) to approve this Agreement, the respective Mergers and
any other matter which requires his or its vote in connection with the
transactions contemplated by this Agreement and (b) the holders of the
outstanding Cornerstone 7% Preferred Stock (as defined herein) have entered into
a stock option agreement, pursuant to which such holders have granted
Cornerstone and EOP an option to acquire, among other things, all of their
Cornerstone 7% Preferred Stock at any time prior to the Effective Time (as
defined herein) of the Merger at a per share purchase price of $18.00, together
with accrued and unpaid dividends to the Effective Time, in cash (subject to
adjustment).

     L. As an inducement to Cornerstone to enter into this Agreement, each of
the trustees and certain executive officers of EOP (and the spouses of certain
of the foregoing) and certain entities controlled by any of the foregoing have
entered into a voting agreement pursuant to which such person or entity has
agreed, among other things, to vote his or its EOP Common Shares (as defined
herein) to approve this Agreement, the Merger and any other matter which
requires his or its vote in connection with the transactions contemplated by
this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:

                                   ARTICLE 1

                                  THE MERGERS

     1.1 Election by Limited Partners in Cornerstone Partnership to Exercise the
Redemption Right; The Partnership Merger.

     (a) Notwithstanding any limitation or restriction contained in the
Cornerstone Partnership Agreement with respect to the ability of a Limited
Partner (as defined in the Cornerstone Partnership Agreement) to exercise the
Redemption Right (as defined in the Cornerstone Partnership Agreement)
(including, without limitation, any limitation or restriction contained in
Section 8.6A of the Cornerstone Partnership Agreement), every Limited Partner
shall have the right to exercise the Redemption Right by submitting to
Cornerstone Partnership (with a copy to Cornerstone) during the period between
the mailing date of the Joint Proxy Statement (as defined herein) for the
Cornerstone Stockholders Meeting (as defined herein) and 5:00 p.m., Eastern
time, on the second business day prior to the date of the Cornerstone
Stockholders Meeting a Notice of Redemption (as defined in the Cornerstone
Partnership Agreement) specifying the number of Class A Partnership Common Units
(as defined in the Cornerstone Partnership Agreement) of Cornerstone Partnership
(the "Cornerstone OP Units") which such Limited Partner desires to have

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<PAGE>   34

redeemed pursuant to Section 8.6A of the Cornerstone Partnership Agreement (as
modified by this Section 1.1(a)), which Notice of Redemption shall be
conditioned upon the closing of the Partnership Merger and can be conditional as
set forth in clause (v) below; provided, that,

          (i) with respect to each Notice of Redemption (a copy of the form of
     which shall accompany or form a part of the Form of Election (as defined
     herein)) properly submitted by a Limited Partner in accordance with this
     Section 1.1(a) (an "Exercise"), Cornerstone shall elect in accordance with
     Section 8.6B of the Cornerstone Partnership Agreement to purchase the
     Cornerstone OP Units relating to such Exercise by paying the REIT Shares
     Amount (as defined in the Cornerstone Partnership Agreement) and not the
     Cash Amount (as defined in the Cornerstone Partnership Agreement);

          (ii) notwithstanding the provisions of Section 8.6B of the Cornerstone
     Partnership Agreement, Cornerstone shall not be required to notify the
     Redeeming Partner (as defined in the Cornerstone Partnership Agreement) of
     Cornerstone's election to purchase the Cornerstone OP Units as described in
     the foregoing clause (i);

          (iii) the Specified Redemption Date (as defined in the Cornerstone
     Partnership Agreement) shall be the Closing Date (as defined herein) at a
     time prior to the consummation of the Partnership Merger;

          (iv) each Redeeming Partner shall be treated as an owner of the shares
     of Cornerstone Common Stock issued pursuant to this Agreement at the
     Effective Time (as defined herein) of the Merger and shall have the same
     right as each of the other holders of shares of Cornerstone Common Stock to
     make an Election (as defined herein) pursuant to Section 1.11 as to the
     form of consideration to be received in the Merger with respect to such
     shares of Cornerstone Common Stock; and

          (v) a Redeeming Partner shall have the option, in its discretion, to
     make its Notice of Redemption conditional upon part or all of the shares of
     Cornerstone Common Stock that would be issued pursuant thereto being
     converted solely into the right to receive cash in the Merger pursuant to
     Section 1.10(b)(i) and the procedures set forth in Sections 1.11 and 1.12,
     in which event the Notice of Redemption shall not be effective with respect
     to any Cornerstone OP Units for which the shares of Cornerstone Common
     Stock that would be received therefor would not be converted entirely into
     the right to receive cash in the Merger (and any Cornerstone OP Units not
     redeemed as a result thereof would be converted into EOP OP Units (as
     defined herein) in the Partnership Merger as set forth in Section
     1.10(a)(i)).

     (b) Upon the terms and subject to the conditions of this Agreement, and in
accordance with Title 6, Chapter 17 of the Delaware Code Annotated, as amended
(the "DRULPA"), immediately prior to the consummation of the Merger, Cornerstone
Partnership shall be merged with and into EOP Partnership, with EOP Partnership
as the surviving limited partnership or limited liability company, and with the
holders of partnership interests in Cornerstone Partnership receiving in any
event units of partnership interest in EOP Partnership, as set forth in Section
1.10.

     1.2 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with Title 3 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended ("Title 3"),
Title 8 of the Corporations and Associations Article of the Annotated Code of
Maryland, as amended ("Title 8"), and Chapter 92A of Title 7 of the Nevada
Revised Statutes Annotated (the "NRS"), immediately following the effectiveness
of the Partnership Merger, Cornerstone shall be merged with and into EOP, with
EOP surviving as a real estate investment trust (the "Surviving Trust").

     1.3 Closing. The closing of the Mergers (the "Closing") will take place
commencing at 9:00 a.m., local time, on the date to be specified by the parties,
which (subject to satisfaction or waiver of the conditions set forth in Article
6) shall be no later than the third business day after satisfaction or waiver of
the conditions set forth in Section 6.1(a) (the "Closing Date"), at the offices
of Hogan & Hartson L.L.P., 555 Thirteenth Street, N.W., Washington, D.C. 20004,
unless another date or place is agreed to in writing by the parties.
                                       A-3
<PAGE>   35

     1.4 Effective Time. As soon as practicable following the satisfaction or
waiver of the conditions set forth in Article 6, (i) EOP Partnership and
Cornerstone Partnership shall execute and file the Certificate of Merger,
executed in accordance with the DRULPA, with the Office of the Secretary of
State of the State of Delaware, and (ii) EOP and Cornerstone shall then execute
and file the Maryland Articles of Merger, executed in accordance with Title 3
and Title 8, with the State Department of Assessments and Taxation of Maryland
(the "Department"), and the Nevada Articles of Merger, executed in accordance
with Title 7 of the NRS with the Secretary of State of the State of Nevada, and
shall make all other filings and recordings required, with respect to the
Partnership Merger, under the DRULPA or, with respect to the Merger, under Title
3, Title 8 and the NRS. The Mergers shall become effective (each an "Effective
Time" and collectively the "Effective Times") at such times as EOP and
Cornerstone shall agree should be specified in the Certificate of Merger, the
Maryland Articles of Merger and the Nevada Articles of Merger (not to exceed
thirty (30) days after the Maryland Articles of Merger are accepted for record
by the Department). Unless otherwise agreed, the parties shall cause the
Effective Times to occur on the Closing Date, with not less than one hour
between the Effective Time of the Partnership Merger and the Effective Time of
the Merger.

     1.5 Effect of Partnership Merger on Agreements of Limited Partnership. The
Agreement of Limited Partnership, as amended, of EOP Partnership, as in effect
immediately prior to the Effective Time of the Partnership Merger (the "EOP
Partnership Agreement"), shall continue in full force and effect after the
Partnership Merger until further amended in accordance with applicable Delaware
law. The Agreement of Limited Partnership, as amended, of Cornerstone
Partnership, as in effect immediately prior to the Effective Time of the
Partnership Merger (the "Cornerstone Partnership Agreement") shall terminate at
the Effective Time of Partnership Merger.

     1.6 Effect of Merger on Declaration of Trust and Bylaws. The Articles of
Amendment and Restatement of Declaration of Trust, as amended, of EOP (the "EOP
Declaration of Trust") and the Bylaws of EOP (the "EOP Bylaws"), as in effect
immediately prior to the Effective Time of the Merger and, if approved by the
EOP shareholders, as amended by the Proposed EOP Charter Amendment Relating to
Domestically Controlled REIT Status (as defined herein) and the Proposed EOP
Charter Amendment Relating to Certain Voting Requirements (as defined herein),
shall continue in full force and effect after the Merger and, until further
amended in accordance with applicable Maryland law and, if approved by the EOP
shareholders, as amended by the Proposed EOP Charter Amendment Relating to
Domestically Controlled REIT Status (as defined herein) and the Proposed EOP
Charter Amendment Relating to Certain Voting Requirements (as defined herein).

     1.7 Trustees of EOP. The trustees of EOP following the Merger shall consist
of the trustees of EOP immediately prior to the Effective Time of the Merger,
who shall continue to serve for the balance of their unexpired terms or their
earlier death, resignation or removal, together with John S. Moody, William
Wilson III and Jan van der Vlist, each of whom shall, no later than the third
business day after the Effective Time of the Merger, become a trustee with terms
expiring in 2002, 2003 and 2003, respectively. Upon the expiration of the terms
of Mr. van der Vlist in 2003 and 2006, so long as PGGM and its Affiliates
continue to own in the aggregate 21,000,000 (as adjusted for stock splits,
reverse stock splits, stock dividends and similar actions) or more of the issued
and outstanding EOP Common Shares at all times up to the meeting of shareholders
at which trustees are being elected in such years, EOP shall take all action
necessary to nominate Mr. van der Vlist for re-election as a trustee of EOP for
an additional three-year term at any special or annual meeting of shareholders
at which trustees are being elected (or in connection with a written consent in
lieu of a meeting pursuant to which trustees are proposed to be elected). In the
event that Mr. Van der Vlist shall fail to stand for re-election as aforesaid
for any reason in either 2003 or 2006 or in the event of his earlier death or
resignation, and so long as PGGM and its Affiliates continue to own in the
aggregate 21,000,000 (as adjusted for stock splits, reverse stock splits, stock
dividends and similar actions) or more of the issued and outstanding EOP Common
Shares at such time, EOP shall take all action necessary to nominate a
replacement designated by PGGM, which replacement shall be subject to the
approval of EOP if such replacement is not an officer, director or employee of
PGGM, for election or re-election as a trustee of EOP for an additional
three-year term at

                                       A-4
<PAGE>   36

any special or annual meeting of shareholders at which trustees are being
elected (or in connection with a written consent in lieu of a meeting pursuant
to which trustees are proposed to be elected) or, in the case of a vacancy, at a
meeting of the Board of Trustees called for such purpose. Except as expressly
provided above in this Section 1.7, following their election as trustees, such
persons shall serve for their designated terms, subject to their earlier death,
resignation or removal.

     1.8 Effect on Shares. The effect of the Merger on the shares of capital
stock of Cornerstone shall be as provided in the Articles of Merger and in
Section 1.10 hereof. The Merger shall not change the shares of beneficial
interest of EOP outstanding immediately prior to the Merger.

     1.9 Effect on Partnership Interests. The effect of the Partnership Merger
on the partnership interests of Cornerstone Partnership shall be as provided in
the Certificate of Merger and in Section 1.10 hereof. The Partnership Merger
shall not change the partnership interests of EOP Partnership outstanding
immediately prior to the Merger.

     1.10 Exchange Ratios and Other Merger Consideration.

     (a) (i) The exchange ratio relating to the Partnership Merger shall be
0.7009 of a Class A Unit (as defined in the EOP Partnership Agreement) of EOP
Partnership ("EOP OP Unit"), for each Cornerstone OP Unit outstanding
immediately prior to the Effective Time of the Partnership Merger. The holders
of the EOP OP Units issued in the Partnership Merger (other than Cornerstone and
Subsidiaries (as defined herein) of Cornerstone) shall be entitled to redeem
such EOP OP Units immediately following the consummation of the Partnership
Merger (and thereafter) pursuant to the terms of the EOP Partnership Agreement,
except that for purposes of the exchange provisions thereof such EOP OP Units
shall be deemed to have been issued as of the date the related Cornerstone OP
Units were issued by Cornerstone Partnership (or if earlier, one year prior to
the Effective Time of the Partnership Merger), and shall be entitled to the same
rights and privileges as the holders of EOP OP Units outstanding on the date
hereof.

     (ii) The exchange ratio relating to the Partnership Merger shall be one
Class D Preferred Unit (as defined in the EOP Partnership Agreement), designated
a Class D 7.0% Cumulative Convertible Preferred Unit, of EOP Partnership ("EOP
Preferred OP Units"), for each Class A Partnership Preferred Unit (as defined in
the Cornerstone Partnership Agreement), designated a Class A 7% Cumulative
Convertible Preferred Unit of Cornerstone Partnership ("Cornerstone Preferred OP
Unit") outstanding immediately prior to the Effective Time of the Partnership
Merger. EOP, as the holder of the EOP Preferred OP Units issued in the
Partnership Merger, shall be entitled to the same rights and privileges as
Cornerstone, as the holder of the Cornerstone Preferred Units outstanding on the
date hereof.

     (b) The merger consideration to be paid to holders of capital stock of
Cornerstone in the Merger (collectively, the "Merger Consideration") is as
follows:

          (i) Each share of common stock with no par value of Cornerstone
     ("Cornerstone Common Stock") issued and outstanding immediately prior to
     the Effective Time of the Merger, which under the terms of Section 1.12 is
     to be converted into cash, shall be converted into the right to receive
     $18.00 in cash, without interest;

          (ii) Except as otherwise provided in Sections 1.10(b)(i) and 1.12, and
     subject to Section 1.15(g), each share of Cornerstone Common Stock issued
     and outstanding immediately prior to the Effective Time of the Merger
     (other than shares to be converted into the right to receive cash pursuant
     to Sections 1.10(b)(i) and 1.12) shall be converted into the right to
     receive 0.7009 of a validly issued, fully paid and nonassessable common
     share of beneficial interest, par value $.01 per share, of EOP (an "EOP
     Common Share") (the "Common Stock Exchange Ratio");

          (iii) Each share of 7.0% Cumulative Convertible Preferred Stock with
     no par value of Cornerstone ("Cornerstone 7% Preferred Stock") outstanding
     immediately prior to the Effective Time of the Merger shall be converted
     into the right to receive $18.00, together with accrued and unpaid
     dividends to the Effective Time of the Merger, in cash, without interest;
     and

                                       A-5
<PAGE>   37

          (iv) All such shares of Cornerstone Common Stock, when so converted as
     provided in Section 1.10(b)(i) or (ii), and all such shares of Cornerstone
     7% Preferred Stock, when so converted as provided in Section 1.10(b)(iii),
     shall no longer be outstanding and shall automatically be cancelled and
     retired and shall cease to exist, and each holder of a certificate (a
     "Certificate") theretofore representing any such shares shall cease to have
     any rights with respect thereto, except the right to receive, upon the
     surrender of such Certificate in accordance with Section 1.15(c), as
     applicable, (A) any dividends and other distributions in accordance with
     Section 1.15(d), (B) certificates representing the EOP Common Shares into
     which such shares of Cornerstone Common Stock are converted pursuant to
     Section 1.10(c)(ii) (if any), (C) cash into which such shares of
     Cornerstone Common Stock are converted pursuant to Section 1.10(c)(i), (D)
     cash into which such shares of Cornerstone 7% Preferred Stock are converted
     pursuant to Section 1.10(b)(iii), and (E) any cash, without interest, in
     lieu of fractional EOP Common Shares to be issued or paid in consideration
     for Cornerstone Common Stock upon the surrender of such Certificate in
     accordance with Sections 1.15(c) and 1.15(g).

     1.11 Election by Holders of Cornerstone Common Stock to Receive EOP Common
Shares or Cash. Each holder of shares of Cornerstone Common Stock (including,
without limitation, Limited Partners of Cornerstone Partnership who elect to
exercise, on a conditional or unconditional basis, the Redemption Right with
respect to all or a portion of their Cornerstone OP Units held by such Limited
Partners pursuant to Section 1.1(a) (with the Cornerstone OP Units with respect
to which such Exercise is made referred to as "Electing Cornerstone OP Units"))
shall have the right to submit a Form of Election specifying the number of
shares of Cornerstone Common Stock which such holder desires to have converted
into the right to receive EOP Common Shares in the Merger pursuant to Section
1.10(a)(ii) and the number which such holder desires to have converted into the
right to receive cash pursuant to Section 1.10(a)(i) in accordance with the
following procedures:

     (a) Each holder of shares of Cornerstone Common Stock and each holder of
Electing Cornerstone OP Units may specify in a request made in accordance with
the provisions of this Section 1.11 (an "Election") (i) the number of such
shares which such holder desires to have converted into the right to receive
cash in the Merger pursuant to Section 1.10(a)(i) (a "Cash Election") and (ii)
the number of such shares which such holder desires to have converted into the
right to receive EOP Common Shares in the Merger pursuant to Section 1.10(a)(ii)
(a "Share Election").

     (b) EOP and Cornerstone shall prepare, for use by stockholders of
Cornerstone (and each holder of Electing Cornerstone OP Units) in surrendering
Certificates representing shares of Cornerstone Common Stock, a form of election
(the "Form of Election") pursuant to which each holder of Cornerstone Common
Stock and each holder of Electing Cornerstone OP Units may make Elections. The
Form of Election shall be mailed to stockholders of record of Cornerstone as of
the record date for the Cornerstone Stockholders Meeting (as defined herein) and
to each holder of Cornerstone OP Units and shall accompany the Joint Proxy
Statement (as defined herein).

     (c) Cornerstone shall use commercially reasonable efforts to make the Form
of Election available to all persons who become stockholders of record of
Cornerstone and to all Limited Partners of Cornerstone Partnership during the
period between such record date and the second business day prior to the date of
the Cornerstone Stockholders Meeting, provided that only a Limited Partner of
Cornerstone Partnership who is a holder of Electing Cornerstone OP Units may
submit a Form of Election and such Form of Election shall apply only with
respect to shares of Cornerstone Common Stock issued to such Limited Partner
prior to the Effective Time of the Partnership Merger pursuant to the Redemption
Right as set forth in Section 1.1(a).

     (d) An Election shall have been properly made only if the Exchange Agent
(as defined herein) shall have received, by 5:00 p.m., Eastern Standard Time, on
the second business day (such time on such day being referred to herein as the
"Election Date") preceding the date of the Cornerstone Stockholders Meeting, a
Form of Election properly completed and signed (and not revoked) and accompanied
(in the case of holders of shares of Cornerstone Common Stock) by the
Certificate or Certificates representing the

                                       A-6
<PAGE>   38

shares of Cornerstone Common Stock to which such Form of Election relates, duly
endorsed in blank or otherwise in form acceptable for transfer on the books of
Cornerstone (or by an appropriate guarantee of delivery of such Certificate or
Certificates as set forth in such Form of Election from a member of any
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States, provided such Certificate or Certificates
are in fact delivered by the time set forth in such guarantee of delivery).

     (e) Any holder of record of shares of Cornerstone Common Stock (and any
holder of Electing Cornerstone OP Units) may at any time prior to the Election
Date change such holder's Election by written notice received by the Exchange
Agent at or prior to the Election Date accompanied by a properly completed Form
of Election. EOP and Cornerstone shall have the right in their sole discretion
and by mutual agreement to permit changes in Elections after the Election Date.

     (f) Any holder of record of shares of Cornerstone Common Stock (and any
holder of Electing Cornerstone OP Units) may at any time prior to the Election
Date revoke such holder's Election by written notice received by the Exchange
Agent at or prior to the Election Date or by withdrawal prior to the Election
Date of such holder's Certificates previously deposited with the Exchange Agent.
Any revocation of an Election may be withdrawn by notice of such withdrawal
delivered at or prior to the Election Date. Any such holder who shall have
deposited Certificates with the Exchange Agent shall have the right to withdraw
such Certificates by written notice received by the Exchange Agent and thereby
revoke such holder's Election as of the Election Date at any time after the
expiration of the period of 60 days following the Election Date if the Merger
shall not have been consummated prior thereto. EOP shall obtain from the
Exchange Agent an agreement to return all Forms of Election and accompanying
Certificates to the stockholders submitting the same in the event this Agreement
shall be terminated in accordance with its terms.

     (g) EOP and Cornerstone by mutual agreement shall have the right to make
rules, not inconsistent with the terms of this Agreement, governing the validity
of Forms of Election, the manner and extent to which Elections are to be taken
into account in making the determinations prescribed by Section 1.12, the
issuance and delivery of certificates for EOP Common Shares into which shares of
Cornerstone Common Stock are converted in the Merger and the payment for shares
of Cornerstone Common Stock converted into the right to receive cash in the
Merger.

     1.12 Proration. The determination of whether shares of Cornerstone Common
Stock shall be converted in the Merger into EOP Common Shares in accordance with
the Common Stock Exchange Ratio or the right to receive $18.00 in cash shall be
made as set forth in this Section 1.12.

     (a) As is more fully set forth below, 58,551,525 shares of Cornerstone
Common Stock shall be converted in the Merger into the right to receive $18.00
per share in cash (which shares of Cornerstone Common Stock are referred to as
the "Cash Election Shares"), and all shares of Cornerstone Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger in excess
of 58,551,525 shares shall be converted in the Merger into the right to receive
EOP Common Shares in accordance with the Common Stock Exchange Ratio (which
shares of Cornerstone Common Stock are referred to as the "Stock Election
Shares").

     (b) If Cash Elections are received for a number of shares of Cornerstone
Common Stock which is greater than 58,551,525 shares of Cornerstone Common
Stock, each Non-Electing Share (as defined herein) and each share of Cornerstone
Common Stock for which a Share Election has been received shall be converted in
the Merger into EOP Common Shares in accordance with the Common Stock Exchange
Ratio, and the shares of Cornerstone Common Stock for which Cash Elections have
been received shall be converted in the Merger into the right to receive cash
and EOP Common Shares in accordance with the Common Stock Exchange Ratio in the
following manner:

          each share of Cornerstone Common Stock covered by a Cash Election
     shall be converted into the right to receive (i) an amount in cash, without
     interest, equal to the product of (x) $18.00 and (y) a fraction (the "Cash
     Fraction") the numerator of which shall be 58,551,525 and the

                                       A-7
<PAGE>   39

     denominator of which shall be the aggregate number of shares of Cornerstone
     Common Stock covered by all Cash Elections, and (ii) a number of EOP Common
     Shares equal to the product of (x) the Common Stock Exchange Ratio and (y)
     a fraction equal to one minus the Cash Fraction.

     (c) If Share Elections are received for a number of shares of Cornerstone
Common Stock which is greater than the total number of Stock Election Shares
issued and outstanding immediately prior to the Effective Time of the Merger,
each Non-Electing Share and each share of Cornerstone Common Stock for which a
Cash Election has been received shall be converted in the Merger into the right
to receive $18.00 in cash, without interest, and the shares of Cornerstone
Common Stock for which Share Elections have been received shall be converted in
the Merger into EOP Shares in accordance with the Common Stock Exchange Ratio
and the right to receive cash in the following manner:

          each share of Cornerstone Common Stock covered by a Share Election
     shall be converted into the right to receive (i) a number of EOP Common
     Shares equal to the product of (x) the Common Stock Exchange Ratio and (y)
     a fraction (the "Stock Fraction"), the numerator of which shall be a number
     equal to the total number of Stock Election Shares issued and outstanding
     immediately prior to the Effective Time of the Merger and the denominator
     of which shall be the aggregate number of shares of Cornerstone Common
     Stock covered by all Share Elections, and (ii) an amount in cash, without
     interest, equal to the product of (x) $18.00 and (y) a fraction equal to
     one minus the Stock Fraction.

     (d) If Non-Electing Shares (as defined herein) are not converted under
either Section 1.12(b) or Section 1.12(c), then each Non-Electing Share shall be
converted into the right to receive EOP Common Shares and the right to receive
cash on a proportionate basis, relative to all other Non-Electing Shares, so
that the aggregate number of shares of Cornerstone Common Stock converted into
the right to receive EOP Common Shares equals, as closely as possible, the
number of Stock Election Shares, and the aggregate number of shares of
Cornerstone Common Stock converted into the right to receive cash equals, as
closely as possible, the number of Cash Election Shares.

     (e) For purposes of this Section 1.12, outstanding shares of Cornerstone as
to which an election is not in effect at the Election Date and shares as to
which an Election has been withdrawn after the 60-day period following the
Election Date and prior to the Effective Time of the Merger shall be called
"Non-Electing Shares." If EOP and Cornerstone shall determine for any reason
that any Election was not properly made with respect to shares of Cornerstone
Common Stock, such Election shall be deemed ineffective and shares of
Cornerstone Common Stock covered by such Election shall, for purposes hereof, be
deemed to be Non-Electing Shares.

     1.13 Partner Approval. Cornerstone shall seek the requisite approval of the
partners of Cornerstone Partnership of the Merger, the withdrawal of Cornerstone
as general partner and the Partnership Merger to the extent required by the
Cornerstone Partnership Agreement to effectuate the transactions contemplated by
this Agreement (collectively, the "Cornerstone Partner Approvals"). EOP shall
seek the requisite approval of the partners of EOP Partnership of the Merger and
the Partnership Merger to the extent required by the EOP Partnership Agreement
to effectuate the transactions contemplated by this Agreement (collectively, the
"EOP Partner Approvals," and together with the Cornerstone Partner Approvals,
the "Partner Approvals").

     1.14 No Appraisal Rights. The holders of Cornerstone Common Stock,
Cornerstone OP Units, EOP Common Shares and EOP OP Units are not entitled under
applicable law to appraisal or similar rights as a result of the Mergers and, in
the case of the holders of the Cornerstone 7% Preferred Stock, such holders
irrevocably have waived all such rights.

     1.15 Exchange of Certificates; Pre-Closing Dividends; Fractional Shares.

     (a) Exchange Agent. Prior to the Effective Time, EOP shall appoint
Equiserve LLC as the exchange agent, or another bank or trust company reasonably
acceptable to Cornerstone, to act as exchange agent (the "Exchange Agent") for
the exchange of the Merger Consideration upon surrender of certificates

                                       A-8
<PAGE>   40

representing issued and outstanding shares of Cornerstone Common Stock and
Cornerstone 7% Preferred Stock.

     (b) EOP to Provide Merger Consideration. EOP shall provide to the Exchange
Agent on or before the Effective Time of the Merger, for the benefit of the
holders of Cornerstone Common Stock and Cornerstone 7% Preferred Stock, the
Merger Consideration issuable in exchange for the issued and outstanding
Cornerstone Common Stock and Cornerstone 7% Preferred Stock pursuant to Section
1.10, together with any cash required to make payments in lieu of any fractional
shares pursuant to Section 1.15(g) (the "Exchange Fund"). The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by EOP, on a
daily basis. Any interest or other income resulting from such investments shall
be paid to EOP. Cornerstone shall provide to the Exchange Agent not later than
one business day prior to the Effective Time of the Merger, for the benefit of
the holders of Cornerstone Common Stock, cash payable in respect of any
dividends required pursuant to Section 1.15(d)(i) or (ii). Such cash shall be
invested in accordance with written directions delivered by Cornerstone to the
Exchange Agent not later than one business day prior to the Effective Time of
the Merger, with any cash earned on such investments to be paid to EOP as the
successor to Cornerstone in the Merger. EOP shall use commercially reasonable
efforts to cause the Exchange Agent to mail the Merger Consideration to the
holders of Cornerstone Common Stock (including to holders of Electing
Cornerstone OP Units who made an unconditional Exercise of the Redemption Right
or who made a conditional exercise thereof and who will receive cash in the
Merger, in each case who have properly submitted a Form of Election prior to the
Election Date) and Cornerstone 7% Preferred Stock not later than five business
days after the Effective Time of the Merger.

     (c) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, EOP shall use commercially reasonable efforts to cause the
Exchange Agent to mail to each holder of record of a Certificate or Certificates
which immediately prior to the Effective Time represented outstanding shares of
Cornerstone Common Stock (other than to holders of Cornerstone Common Stock who
previously surrendered with their Forms of Election their Certificates for
Cornerstone Common Stock) or Cornerstone 7% Preferred Stock Certificate whose
shares were converted into the right to receive the Merger Consideration
pursuant to Section 1.10, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in a form and have such other provisions as EOP may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration. To the extent not previously surrendered with a
Form of Election, upon surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by EOP,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration into which the shares of Cornerstone Common Stock or Cornerstone
7% Preferred Stock, as applicable, theretofore represented by such Certificate
shall have been converted pursuant to Section 1.10, together with any dividends
or other distributions to which such holder is entitled pursuant to Section
1.15(d) and cash, if any, payable in lieu of fractional shares pursuant to
Section 1.15(g), to be mailed (or made available for collection by hand if so
elected by the surrendering holder) within five business days of receipt
thereof, and the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of shares of Cornerstone Common Stock or
Cornerstone 7% Preferred Stock which is not registered in the transfer records
of Cornerstone, payment may be made to a person other than the person in whose
name the Certificate so surrendered is registered if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment either shall pay any transfer or other taxes required by
reason of such payment being made to a person other than the registered holder
of such Certificate or establish to the satisfaction of EOP that such tax or
taxes have been paid or are not applicable. Until surrendered as contemplated by
this Section 1.15, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration, without interest, into which the shares of Cornerstone
Common Stock or Cornerstone 7% Preferred Stock heretofore represented by such
Certificate shall have been converted pursuant to Section 1.10, and any
dividends or other distributions to
                                       A-9
<PAGE>   41

which such holder is entitled pursuant to Section 1.15(d). No interest will be
paid or will accrue on the Merger Consideration upon the surrender of any
Certificate or on any cash payable pursuant to Section 1.15(d) or Section
1.15(g). EOP or the Exchange Agent, as applicable, shall be entitled, in its
sole and absolute discretion, to deduct and withhold from the cash or EOP Common
Shares, or any combination thereof, that otherwise is payable pursuant to this
Agreement to any holder of shares of Cornerstone Common Stock or Cornerstone 7%
Preferred Stock such amounts as EOP or the Exchange Agent is required to deduct
and withhold with respect to the making of such payment under the Code or under
any provision of state, local or foreign tax law, provided that in determining
whether withholding under Section 1445 of the Code is required, EOP shall take
into account (and shall request the Exchange Agent to take into account) Section
1445(b)(6) of the Code and Treasury Regulations Section 1.1445-2(c)(2). For this
purpose, any EOP Common Shares deducted and withheld by EOP shall be valued at
the last trading price of the EOP Common Shares on the New York Stock Exchange
on the Effective Date of the Merger. To the extent that amounts are so withheld
by EOP or the Exchange Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Cornerstone Common Stock or Cornerstone 7% Preferred Stock, as applicable, in
respect of which such deduction and withholding was made by EOP or the Exchange
Agent.

     (d) Record Dates for Final Dividends; Distributions with Respect to
Unexchanged Shares.

          (i) To the extent necessary to satisfy the requirements of Section
     857(a)(1) of the Code for the taxable year of Cornerstone ending at the
     Effective Time of the Merger (and avoid the payment of tax with respect to
     undistributed income), Cornerstone shall declare a dividend (the "Final
     Company Dividend") to holders of shares of Cornerstone Common Stock and
     Cornerstone 7% Preferred Stock, the record date for which shall be the
     close of business on the last business day prior to the Effective Time of
     the Merger, in an amount equal to the minimum dividend sufficient to permit
     Cornerstone to satisfy such requirements. If Cornerstone determines it is
     necessary to declare the Final Company Dividend, it shall notify EOP at
     least 10 days prior to the date for the Cornerstone Stockholders Meeting,
     and EOP shall declare a dividend per share to holders of shares of EOP
     Common Shares, the record date for which shall be the close of business on
     the last business day prior to the Effective Time, in an amount per EOP
     Common Share equal to the quotient obtained by dividing (x) the Final
     Company Dividend paid by Cornerstone with respect to each share of
     Cornerstone Common Stock by (y) the Common Stock Exchange Ratio. The
     dividends payable hereunder to holders of Cornerstone Common Stock and
     Cornerstone 7% Preferred Stock shall be paid on the last business day
     immediately preceding the Closing Date.

          (ii) No dividends or other distributions with respect to EOP Common
     Shares with a record date after the Effective Time shall be paid to the
     holder of any unsurrendered Certificate with respect to the shares of EOP
     Common Shares represented thereby, and no cash payment in lieu of
     fractional shares shall be paid to any such holder pursuant to Section
     1.15(g), in each case until the surrender of such Certificate in accordance
     with this Section 1.15. Subject to the effect of applicable escheat laws,
     following surrender of any such Certificate there shall be paid to the
     holder of such Certificate, without interest, (i) at the time of such
     surrender, the amount of any cash payable pursuant to Section 1.10 and/or
     in lieu of any fractional EOP Common Shares to which such holder is
     entitled pursuant to Section 1.15(g) and (ii) if such Certificate is
     exchangeable for one or more whole EOP Common Shares, (x) at the time of
     such surrender the amount of dividends or other distributions with a record
     date after the Effective Time theretofore paid with respect to such whole
     EOP Common Shares and (y) at the appropriate payment date, the amount of
     dividends or other distributions with a record date after the Effective
     Time but prior to such surrender and with a payment date subsequent to such
     surrender payable with respect to such whole EOP Common Shares.

     (e) No Further Ownership Rights in Cornerstone Common Stock and Cornerstone
7% Preferred Stock. All Merger Consideration paid upon the surrender of
Certificates in accordance with the terms of this Section 1.15 (including any
cash paid pursuant to Section 1.15(g)) shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Cornerstone Common Stock and
Cornerstone 7% Preferred Stock, as applicable, theretofore represented by such
Certificates; provided, however, that
                                      A-10
<PAGE>   42

Cornerstone shall transfer to the Exchange Agent cash sufficient to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by Cornerstone on such
Cornerstone Common Stock or Cornerstone 7% Preferred Stock in accordance with
the terms of this Agreement or prior to the date of this Agreement and which
remain unpaid at the Effective Time and have not been paid prior to such
surrender, and there shall be no further registration of transfers on the stock
transfer books of Cornerstone of the Cornerstone Common Stock or Cornerstone 7%
Preferred Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to EOP for any reason,
they shall be canceled and exchanged as provided in this Section 1.15.

     (f) No Liability. None of Cornerstone, EOP or the Exchange Agent shall be
liable to any person in respect of any Merger Consideration or dividends
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. Any portion of the Exchange Fund delivered to the
Exchange Agent pursuant to this Agreement that remains unclaimed for 12 months
after the Effective Time shall be redelivered by the Exchange Agent to EOP, upon
demand, and any holders of Certificates who have not theretofore complied with
Section 1.15(c) shall thereafter look only to EOP for delivery of the Merger
Consideration and any unpaid dividends, subject to applicable escheat and other
similar laws.

     (g) No Fractional Shares

          (i) No certificates or scrip representing fractional EOP Common Shares
     shall be issued upon the surrender for exchange of Certificates, and such
     fractional share interests will not entitle the owner thereof to vote, to
     receive dividends or to any other rights of a shareholder of EOP.

          (ii) No fractional EOP Common Shares shall be issued pursuant to this
     Agreement. In lieu of the issuance of any fractional EOP Common Shares
     pursuant to this Agreement, each holder of Cornerstone Common Stock upon
     surrender of a Certificate for exchange shall be paid an amount in cash
     (without interest), rounded to the nearest cent, determined by multiplying
     (i) the average closing price of one EOP Common Share on the New York Stock
     Exchange on the five trading days immediately preceding the Closing Date by
     (ii) the fractional amount of 0.7009 of an EOP Common Share which such
     holder would otherwise be entitled to receive under this Section 1.15.

     (h) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by EOP or the
Exchange Agent, the posting by such person of a bond in such reasonable amount
as EOP or the Exchange Agent may direct (but consistent with the practices EOP
applies to its own shareholders) as indemnity against any claim that may be made
against them with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the EOP Common Shares or
cash to which the holders thereof are entitled pursuant to Section 1.10, any
cash payable pursuant to Section 1.15(g) to which the holders thereof are
entitled and any dividends or other distributions to which the holders thereof
are entitled pursuant to Section 1.15(d).

     (i) Applicability to Partnership Merger. Except for the provisions relating
to the Exchange Agent, certificates and the exchange procedure (which shall not
be applicable), all other provisions of this Section 1.15 shall apply to
Cornerstone Partnership, EOP Partnership, the Cornerstone OP Units and the
Cornerstone OP Preferred Units with respect to the Partnership Merger.

                                   ARTICLE 2

                 REPRESENTATIONS AND WARRANTIES OF CORNERSTONE
                          AND CORNERSTONE PARTNERSHIP

     Except as set forth in the Cornerstone SEC Documents (as defined herein) or
in the letter of even date herewith signed by the President and Chief Executive
Officer or the Chief Operating Officer of

                                      A-11
<PAGE>   43

Cornerstone and delivered to EOP prior to the execution hereof (the "Cornerstone
Disclosure Letter"), Cornerstone and Cornerstone Partnership represent and
warrant to EOP and EOP Partnership as follows:

     2.1 Organization, Standing and Power. Cornerstone has been duly organized
and is validly existing and in good standing under the laws of the State of
Nevada. Cornerstone has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
being conducted. The Cornerstone Restated Articles of Incorporation, as amended
(the "Cornerstone Articles") are in effect, and no dissolution, revocation or
forfeiture proceedings regarding Cornerstone have been commenced. Cornerstone is
duly qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed, individually or in the aggregate, would not have a material adverse
effect on the business, properties, assets, financial condition or results of
operations of Cornerstone, Cornerstone Partnership and the Cornerstone
Subsidiaries (as defined herein), taken as a whole (a "Cornerstone Material
Adverse Effect"). Cornerstone has delivered to EOP complete and correct copies
of the Cornerstone Articles and Cornerstone's Amended and Restated Bylaws (the
"Cornerstone Bylaws"), in each case, as amended or supplemented to the date of
this Agreement.

     2.2 Cornerstone Subsidiaries.

     (a) Schedule 2.2 to the Cornerstone Disclosure Letter sets forth (i) each
Subsidiary (as defined herein) of Cornerstone (the "Cornerstone Subsidiaries")
and the Cornerstone Non-controlled Subsidiary (which Cornerstone Non-controlled
Subsidiary constitutes the only entity in which Cornerstone owns a non-voting
equity interest and has no right to control except as set forth on Schedule 2.4
of the Cornerstone Disclosure Letter), (ii) the ownership interest therein of
Cornerstone, (iii) if not, directly or indirectly, wholly owned by Cornerstone,
the identity and ownership interest of each of the other owners of such
Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary, as applicable,
(iv) each office property and other commercial property owned by such
Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary, as applicable,
and (v) if not wholly owned by such Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary, as applicable, the identity and ownership interest of
each of the other owners of such property. As used in this Agreement,
"Subsidiary" of any Person (as defined herein) means any corporation,
partnership, limited liability company, joint venture, trust or other legal
entity of which such Person owns (either directly or through or together with
another Subsidiary of such Person) either (i) a general partner, managing member
or other similar interest, or (ii)(A) 10% or more of the voting power of the
voting capital stock or other equity interests, or (B) 10% or more of the
outstanding voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture or other
legal entity. As used herein, "Person" means an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity. Schedule 2.4 of the Cornerstone
Disclosure Letter sets forth a true and complete list of the equity securities
owned by Cornerstone, directly or indirectly, in any corporation, partnership,
limited liability company, joint venture or other legal entity, excluding
Cornerstone Subsidiaries and the Cornerstone Non-controlled Subsidiary.

     (b) Except as set forth in Schedule 2.2 to the Cornerstone Disclosure
Letter, (i) all of the outstanding shares of capital stock of each Cornerstone
Subsidiary and Cornerstone Non-controlled Subsidiary that is a corporation have
been duly authorized, validly issued and are (A) fully paid and nonassessable
and not subject to preemptive rights, (B) owned by Cornerstone or by another
Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary and (C) owned
free and clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens") and (ii) all
equity interests in each Cornerstone Subsidiary that is a partnership, joint
venture, limited liability company or trust which are owned by Cornerstone, by
another Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary or by
Cornerstone and another Cornerstone Subsidiary or Cornerstone Non-controlled
Subsidiary are owned free and clear of all Liens other than pledges, if any,
contained in organizational documents of such Cornerstone Subsidiary and given
to secure performance thereunder. Each Cornerstone Subsidiary and Cornerstone
Non-controlled Subsidiary that is a corporation
                                      A-12
<PAGE>   44

is duly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation and has the requisite corporate power and
authority to own, operate, lease and encumber its properties and carry on its
business as now being conducted, and each Cornerstone Subsidiary that is a
partnership, limited liability company or trust is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has the requisite power and authority to own, operate, lease and encumber
its properties and carry on its business as now being conducted. Each
Cornerstone Subsidiary and Cornerstone Non-controlled Subsidiary is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, would not reasonably be expected to have a
Cornerstone Material Adverse Effect. Complete and correct copies of the Articles
of Incorporation, Bylaws, organization documents and partnership, joint venture
and operating agreements of each Cornerstone Subsidiary and Cornerstone
Non-controlled Subsidiary, as amended to the date of this Agreement, have been
previously delivered or made available to EOP. No effective amendment has been
made to the Cornerstone Partnership Agreement since January 21, 2000.

     2.3 Capital Structure.

     (a) The authorized shares of capital stock of Cornerstone consist of
250,000,000 shares of Cornerstone Common Stock, 129,638,245 of which are issued
and 129,280,012 of which are outstanding on the date of this Agreement, and
65,000,000 shares of preferred stock with no par value, of which 3,030,303
shares of Cornerstone 7% Preferred Stock are issued and outstanding and 344,828
shares of Redeemable Preferred Stock are designated with none outstanding on the
date of this Agreement.

     (b) Set forth in Schedule 2.3(b) to the Cornerstone Disclosure Letter is a
true and complete list of the following: (i) each qualified or nonqualified
option to purchase shares of Common Stock granted under Cornerstone's 1998
Long-Term Incentive Plan or any other formal or informal arrangement
(collectively, the "Cornerstone Stock Options"); and (ii) all other warrants or
other rights to acquire Cornerstone Common Stock, all stock appreciation rights,
restricted stock, dividend equivalents, deferred compensation accounts,
performance awards, restricted stock unit awards and other awards which are
outstanding on the date of this Agreement ("Cornerstone Stock Rights"). Schedule
2.3(b) to the Cornerstone Disclosure Letter sets forth for each Cornerstone
Stock Option and Cornerstone Stock Right the name of the grantee, the date of
the grant, the number of shares of Cornerstone Common Stock subject to each
option or other award, and the exercise price per share. On the date of this
Agreement, except as set forth in this Section 2.3 or in Schedule 2.3(b) to the
Cornerstone Disclosure Letter, no shares of Cornerstone Common Stock were
outstanding or reserved for issuance.

     (c) All outstanding shares of Cornerstone Common Stock are duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of
Cornerstone having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which shareholders of
Cornerstone may vote, except for the Cornerstone convertible promissory note
dated as of January 1, 1996 which does not have voting rights but is convertible
into Cornerstone Common Stock (the "Cornerstone Convertible Promissory Note").

     (d) Other than (i) as set forth in this Section 2.3 or in Schedule 2.3(b),
2.3(c), or 2.3(d) to the Cornerstone Disclosure Letter, (ii) Cornerstone OP
Units, which may be redeemed for cash or, at the option of Cornerstone,
Cornerstone Common Stock at a rate of one share of Cornerstone Common Stock for
each Cornerstone OP Unit, (iii) shares of Cornerstone Common Stock issuable upon
the conversion of Cornerstone 7% Preferred Stock, and (iv) shares of Cornerstone
Common Stock issuable pursuant to the Cornerstone Convertible Promissory Note,
as of the date of this Agreement, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Cornerstone or any Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary is a party or by which such entity is bound,
obligating Cornerstone or any Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold,

                                      A-13
<PAGE>   45

additional shares of capital stock, voting securities or other ownership
interests of Cornerstone or any Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary or obligating Cornerstone or any Cornerstone
Subsidiary or Cornerstone Non-controlled Subsidiary to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking (other than to Cornerstone or a
Cornerstone Subsidiary or a Cornerstone Non-controlled Subsidiary).

     (e) As of the date of this Agreement, 148,735,829 Cornerstone OP Units are
validly issued and outstanding, fully paid and nonassessable and not subject to
preemptive rights, of which 129,638,245 are owned by Cornerstone and 3,030,303
Cornerstone Preferred OP Units are validly issued and outstanding, fully paid
and nonassessable and not subject to preemptive rights, all of which are owned
by Cornerstone. Schedule 2.3(e) to the Cornerstone Disclosure Schedule sets
forth the name of each holder of Cornerstone OP Units and the number of
Cornerstone OP Units owned by each such holder as of the date of this Agreement.
Except as provided in the Cornerstone Partnership Agreement or as set forth on
Schedule 2.3(d), Cornerstone Partnership has not issued or granted and is not a
party to any outstanding commitments of any kind relating to, or any presently
effective agreements or understandings with respect to, the issuance or sale of
interests in Cornerstone Partnership, whether issued or unissued, or securities
convertible or exchangeable into interests in Cornerstone Partnership.

     (f) Except for the distribution of $0.31 per share of Cornerstone Common
Stock and per Cornerstone OP Unit declared on January 20, 2000, and payable on
February 29, 2000, to holders of record on January 31, 2000, of shares of
Cornerstone Common Stock and Cornerstone OP Units, all dividends on Cornerstone
Common Stock and Cornerstone 7% Preferred Stock and all distributions on
Cornerstone OP Units, which have been declared prior to the date of this
Agreement, have been paid in full.

     (g) Set forth on Schedule 2.3(g) to the Cornerstone Disclosure Letter is a
list of each registration rights agreement or other agreement between
Cornerstone and/or Cornerstone Partnership, on the one hand, and one or more
other parties, on the other hand, which sets forth the rights of any such other
party or parties to cause the registration of any securities of Cornerstone
and/or Cornerstone Partnership pursuant to the Securities Act of 1933, as
amended (the "Securities Act").

     2.4 Other Interests. Except for interests in the Cornerstone Subsidiaries,
the Cornerstone Non-controlled Subsidiary and certain other entities as set
forth in Schedule 2.4 to the Cornerstone Disclosure Letter (the "Cornerstone
Other Interests"), none of Cornerstone, Cornerstone Partnership, any Cornerstone
Subsidiary or the Cornerstone Non-controlled Subsidiary owns directly or
indirectly any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust, limited liability
company or other entity (other than investments in short-term investment
securities). With respect to the Cornerstone Other Interests, Cornerstone
Partnership owns such interests free and clear of all Liens other than pledges,
if any, contained in organizational documents of such Cornerstone Other
Interests and given to secure performance thereunder. None of Cornerstone,
Cornerstone Partnership, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary is in material breach of any provision of any
agreement, document or contract which is of a material nature governing its
rights in or to the Cornerstone Other Interests, all of which agreements,
documents and contracts are (a) listed in Schedule 2.4 to the Cornerstone
Disclosure Letter, (b) unmodified except as described therein and (c) in full
force and effect. To the Knowledge of Cornerstone (as defined herein), the other
parties to any such agreement, document or contract which is of a material
nature are not in material breach of any of their respective obligations under
such agreements, documents or contracts.

     2.5 Authority; Noncontravention; Consents.

     (a) Cornerstone has the requisite corporate power and authority to enter
into this Agreement and, subject to the requisite Cornerstone stockholder
approval of the Merger Agreement and the Merger and any other matters reasonably
and timely requested by any other party to effectuate the transactions
contemplated by this Agreement (collectively, the "Cornerstone Stockholder
Approvals"), to consummate the transactions contemplated by this Agreement to
which Cornerstone is a party. The execution and delivery of this Agreement by
Cornerstone and the consummation by Cornerstone of the transactions contemplated
by this Agreement to which Cornerstone is a party have been duly authorized by
all
                                      A-14
<PAGE>   46

necessary action on the part of Cornerstone, except for and subject to the
Cornerstone Stockholder Approvals and the Cornerstone Partner Approvals. This
Agreement has been duly executed and delivered by Cornerstone and constitutes a
valid and binding obligation of Cornerstone, enforceable against Cornerstone in
accordance with and subject to its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.

     (b) Cornerstone Partnership has the requisite partnership power and
authority to enter into this Agreement and, subject to the requisite Cornerstone
Partner Approvals, to consummate the transactions contemplated by this Agreement
to which Cornerstone Partnership is a party. The execution and delivery of this
Agreement by Cornerstone Partnership and the consummation by Cornerstone
Partnership of the transactions contemplated by this Agreement to which
Cornerstone Partnership is a party have been duly authorized by all necessary
action on the part of Cornerstone Partnership, except for and subject to the
Cornerstone Stockholder Approvals and the Cornerstone Partner Approvals. This
Agreement has been duly executed and delivered by Cornerstone Partnership and
constitutes a valid and binding obligation of Cornerstone Partnership,
enforceable against Cornerstone Partnership in accordance with and subject to
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.

     (c) Except as set forth in Schedule 2.5(c)(1) to the Cornerstone Disclosure
Letter, the execution and delivery of this Agreement by Cornerstone do not, and
the consummation of the transactions contemplated by this Agreement to which
Cornerstone is a party and compliance by Cornerstone with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any material obligation or
to material loss of a benefit under, or result in the creation of any Lien upon
any of the properties or assets of Cornerstone or any Cornerstone Subsidiary
under, (i) the Cornerstone Articles or Cornerstone Bylaws or the comparable
charter or organizational documents or partnership, operating, or similar
agreement (as the case may be) of any Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary, each as amended or supplemented, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, merger or other acquisition
agreement, reciprocal easement agreement, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Cornerstone or any
Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary or their
respective properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation (collectively, "Laws")
applicable to Cornerstone or any Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary, or their respective properties or assets, other than,
in the case of clause (ii) or (iii), any such conflicts, violations, defaults,
rights, loss or Liens that individually or in the aggregate would not (x) have a
Cornerstone Material Adverse Effect or (y) prevent the consummation of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, any federal,
state or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to Cornerstone or any
Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary in connection
with the execution and delivery of this Agreement by Cornerstone or the
consummation by Cornerstone of the transactions contemplated by this Agreement,
except for (i) the filing with the Securities and Exchange Commission (the
"SEC") of the Joint Proxy Statement (as defined herein), (ii) the acceptance for
record of the Maryland Articles of Merger by the Department, (iii) the filing of
the Nevada Articles of Merger with the Secretary of State of the State of
Nevada, (iv) the filing of the Certificate of Merger with the Office of the
Secretary of State of the State of Delaware and (v) such other consents,
approvals, orders, authorizations, registrations, declarations and filings (A)
as are set forth in Schedule 2.5(c)(2) to the Cornerstone Disclosure Letter, (B)
as may be required under (w) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (x) laws requiring transfer, recordation or
gains tax filings, (y) federal, state or local environmental laws or (z) the
"blue sky" laws of various states, to the extent applicable or (C) which, if not
obtained or made, would not prevent or delay in any material respect the
consummation of any of the transactions contemplated by this Agreement or
otherwise prevent Cornerstone from performing its obligations under
                                      A-15
<PAGE>   47

this Agreement in any material respect or reasonably be expected to have,
individually or in the aggregate, a Cornerstone Material Adverse Effect.

     2.6 SEC Documents; Financial Statements; Undisclosed
Liabilities.  Cornerstone has filed all required reports, schedules, forms,
statements and other documents with the SEC since January 1, 1997 through the
date hereof (the "Cornerstone SEC Documents"). Schedule 2.6(a) to the
Cornerstone Disclosure Letter contains a complete list of all Cornerstone SEC
Documents filed by Cornerstone with the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), between January 1, 1997 and the date of
this Agreement. All of the Cornerstone SEC Documents (other than preliminary
material), as of their respective filing dates, complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act and, in each case, the rules and regulations promulgated thereunder
applicable to such Cornerstone SEC Documents. None of the Cornerstone SEC
Documents at the time of filing contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except to the extent such statements
have been modified or superseded by later Cornerstone SEC Documents filed and
publicly available prior to the date of this Agreement. The consolidated
financial statements of Cornerstone included in the Cornerstone SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by the applicable rules and regulations of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly presented in all material respects, in accordance with the
applicable requirements of GAAP and the applicable rules and regulations of the
SEC, the consolidated financial position of Cornerstone and its Subsidiaries
taken as a whole, as of the dates thereof and the consolidated results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set forth
in Schedule 2.6(b) to the Cornerstone Disclosure Letter, Cornerstone has no
Subsidiaries which are not consolidated for accounting purposes. Except for
liabilities and obligations set forth in the Cornerstone SEC Documents or in
Schedule 2.6(c) to the Cornerstone Disclosure Letter, none of Cornerstone, any
Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a consolidated balance sheet
of Cornerstone or in the notes thereto and which, individually or in the
aggregate, would have a Cornerstone Material Adverse Effect.

     2.7 Absence of Certain Changes or Events. Except as disclosed in the
Cornerstone SEC Documents or in Schedule 2.7 to the Cornerstone Disclosure
Letter, since the date of the most recent audited financial statements included
in Cornerstone SEC Documents (the "Cornerstone Financial Statement Date"),
Cornerstone, its Subsidiaries and the Cornerstone Non-controlled Subsidiary have
conducted their business only in the ordinary course (taking into account prior
practices, including the acquisition and disposition of properties and issuance
of securities) and there has not been (a) any material adverse change in the
business, financial condition or results of operations of Cornerstone and its
Subsidiaries taken as a whole (a "Cornerstone Material Adverse Change"), nor has
there been any occurrence or circumstance that with the passage of time would
reasonably be expected to result in a Cornerstone Material Adverse Change, (b)
except for regular quarterly distributions not in excess of $0.31 per share of
Cornerstone Common Stock or Cornerstone OP Unit and except for regular annual
distributions not in excess of $1.155 per share of Cornerstone 7% Preferred
Stock (or, in each case, with respect to the period commencing on the date
hereof and ending on the Closing Date, distributions as necessary to maintain
REIT (as defined herein) status), in each case with customary record and payment
dates, any authorization, declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to the
Cornerstone Common Stock, the Cornerstone OP Units or the Cornerstone 7%
Preferred Stock, (c) any split, combination or reclassification of the
Cornerstone Common Stock, the Cornerstone OP Units or the Cornerstone 7%
Preferred Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for, or giving the
right to acquire by exchange or exercise, shares of stock of Cornerstone or
partnership interests in Cornerstone Partnership or any issuance
                                      A-16
<PAGE>   48

of an ownership interest in, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary, (d) any damage, destruction or loss, whether or not
covered by insurance, that has or would have a Cornerstone Material Adverse
Effect, (e) any change in accounting methods, principles or practices by
Cornerstone or any Cornerstone Subsidiary or the Cornerstone Non-controlled
Subsidiary materially affecting its assets, liabilities or business, except
insofar as may have been disclosed in Cornerstone SEC Documents or required by a
change in GAAP, or (f) any amendment of any employment, consulting, severance,
retention or any other agreement between Cornerstone and any officer or director
of Cornerstone.

     2.8 Litigation. Except as disclosed in the Cornerstone SEC Documents or in
Schedule 2.8 to the Cornerstone Disclosure Letter, and other than personal
injury and other routine tort litigation arising from the ordinary course of
operations of Cornerstone, the Cornerstone Subsidiaries and the Cornerstone Non-
controlled Subsidiary (a) which are covered by adequate insurance subject to a
reasonable deductible or retention limit or (b) for which all material costs and
liabilities arising therefrom are reimbursable pursuant to common area
maintenance or similar agreements, there is no suit, action or proceeding
pending (in which service of process has been received by an employee of
Cornerstone, a Cornerstone Subsidiary or a Cornerstone Non-controlled
Subsidiary) or, to the Knowledge of Cornerstone (as hereinafter defined),
threatened in writing against or affecting Cornerstone, or any Cornerstone
Subsidiary or Cornerstone Non-controlled Subsidiary that, individually or in the
aggregate, would reasonably be expected to (i) have a Cornerstone Material
Adverse Effect or (ii) prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any court or Governmental Entity or arbitrator outstanding
against Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary having, or which, insofar as reasonably can be
foreseen, in the future would have, any such effect. Notwithstanding the
foregoing, (y) Schedule 2.8 to the Cornerstone Disclosure Letter sets forth each
and every material uninsured claim, equal employment opportunity claim and claim
relating to sexual harassment and/or discrimination pending or, to the Knowledge
of Cornerstone, threatened as of the date hereof, and (z) no claim has been made
under any directors' and officers' liability insurance policy maintained at any
time by Cornerstone, any of the Cornerstone Subsidiaries or the Cornerstone
Non-controlled Subsidiary.

     2.9 Properties.

     (a) Except as provided in Schedule 2.2 or Schedule 2.9(a) to the
Cornerstone Disclosure Letter, Cornerstone or the Cornerstone Subsidiary or
Cornerstone Non-controlled Subsidiary set forth on Schedule 2.2 to the
Cornerstone Disclosure Letter owns fee simple title to or holds a leasehold
interest in each of the real properties identified in Schedule 2.2 to the
Cornerstone Disclosure Letter (the "Cornerstone Properties"), which are all of
the real estate properties owned by them, in each case (except for the Permitted
Title Exceptions (as defined herein)) free and clear of liens, mortgages or
deeds of trust, claims against title, charges which are liens, security
interests or other encumbrances on title ("Encumbrances"). Schedule 2.2 to the
Cornerstone Disclosure Letter further identifies which of the Cornerstone
Properties are owned in fee simple by Cornerstone or the Cornerstone Subsidiary
or the Cornerstone Non-controlled Subsidiary and which of the Cornerstone
Properties are subject to a ground lease. Except as set forth in Schedule 2.2 to
the Cornerstone Disclosure Letter, no other Person has any ownership interest in
any of the Cornerstone Properties, and any such ownership interest so scheduled
does not materially detract from the value of the Cornerstone Subsidiary's or
Cornerstone Non-controlled Subsidiary's (as the case may be) interest in, or
materially interfere with the present use of, any of the Cornerstone Properties
subject thereto or affected thereby. Except as set forth in Schedule 2.9(a) to
the Cornerstone Disclosure Letter, none of the Cornerstone Properties is subject
to any restriction on the sale or other disposition thereof or on the financing
or release of financing thereon. The Cornerstone Properties are not subject to
any rights of way, written agreements, laws, ordinances and regulations
affecting building use or occupancy, or reservations of an interest in title
(collectively, "Property Restrictions") or Encumbrances, except for the
following (collectively, the "Permitted Title Exceptions") (i) Property
Restrictions and Encumbrances set forth in the Cornerstone Disclosure Letter,
(ii) Property Restrictions imposed or promulgated by law or any governmental
body or authority with respect to real property,

                                      A-17
<PAGE>   49

including zoning regulations, which do not materially adversely affect the
current use of any Cornerstone Property, (iii) Property Restrictions and
Encumbrances disclosed on existing title reports or policies or existing surveys
or subsequently granted by Cornerstone or the Cornerstone Subsidiary or
Cornerstone Non-controlled Subsidiary, which Property Restrictions and
Encumbrances, in any event, do not materially detract from the value of, or
materially interfere with the present use of, any of the Cornerstone Properties
subject thereto or affected thereby and (iv) liens for real estate taxes not yet
due and payable, mechanics', carriers', workmen's, repairmen's liens and other
Encumbrances and Property Restrictions, if any, which, individually or in the
aggregate, do not materially detract from the value of or materially interfere
with the present use of any of the Cornerstone Properties subject thereto or
affected thereby. Schedule 2.9(a) to the Cornerstone Disclosure Letter lists
each of the Cornerstone Properties which are under development as of the date of
this Agreement and describes the status of such development as of the date
hereof.

     (b) Except as provided in Schedule 2.2 or Schedule 2.9(b) to the
Cornerstone Disclosure Letter, valid policies of title insurance or fully-paid
and enforceable commitments therefor have been issued insuring the applicable
Cornerstone Subsidiary's or Cornerstone Non-controlled Subsidiary's (as the case
may be) fee simple title or leasehold estate, as the case may be, to the
Cornerstone Properties owned by it in amounts approximately equal to the
purchase price therefor paid by such Cornerstone Subsidiary or Cornerstone
Non-controlled Subsidiary, subject only to the matters disclosed above and in
the Cornerstone Disclosure Letter. Such policies are, at the date hereof, in
full force and effect. No claim has been made against any such policy.

     (c) Except as provided in Schedule 2.9(c) to the Cornerstone Disclosure
Letter, Cornerstone has no Knowledge (i) that, any certificate, permit or
license from any governmental authority having jurisdiction over any of the
Cornerstone Properties or any agreement, easement or other right which is
necessary to permit the lawful use and operation of the buildings and
improvements on any of the Cornerstone Properties or which is necessary to
permit the lawful use and operation of all driveways, roads and other means of
egress and ingress to and from any of the Cornerstone Properties has not been
obtained and is not in full force and effect, or of any pending threat of
modification or cancellation of any of the same which would have a material
adverse effect on such Cornerstone Property, (ii) of any written notice of any
violation of any federal, state or municipal law, ordinance, order, regulation
or requirement affecting any of the Cornerstone Properties issued by any
governmental authority which would have a material adverse effect on such
Cornerstone Property, (iii) of any structural defects relating to any
Cornerstone Property which would have a material adverse effect on such
Cornerstone Property, (iv) of any Cornerstone Property whose building systems
are not in working order so as to have a material adverse effect on such
Cornerstone Property, or (v) of any physical damage to any Cornerstone Property
which would have a material adverse effect on such Cornerstone Property for
which there is no insurance in effect covering the cost of the restoration.

     (d) None of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary has received any written or published notice to the
effect that (i) any condemnation or rezoning proceedings are pending or
threatened with respect to any of the Cornerstone Properties or (ii) any zoning,
building or similar law, code, ordinance, order or regulation is or will be
violated by the continued maintenance, operation or use of any buildings or
other improvements on any of the Cornerstone Properties or by the continued
maintenance, operation or use of the parking areas which would have a material
adverse effect on such Cornerstone Property. Except as set forth in Schedule
2.9(d) to the Cornerstone Disclosure Letter, all work required to be performed,
payments required to be made and actions required to be taken prior to the date
hereof pursuant to any agreement entered into with a governmental body or
authority in connection with a site approval, zoning reclassification or other
similar action relating to any Cornerstone Properties (e.g., Local Improvement
District, Road Improvement District, Environmental Mitigation) have been
performed, paid or taken, as the case may be, and Cornerstone has no Knowledge
of any planned or proposed work, payments or actions that may be required after
the date hereof pursuant to such agreements, except as set forth in development
or operating budgets for such Cornerstone Properties delivered to EOP and EOP
Partnership prior to the date hereof

                                      A-18
<PAGE>   50

and other than those which would not reasonably be expected to have a material
adverse effect on any of Cornerstone or the Cornerstone Subsidiaries or the
Cornerstone Non-controlled Subsidiary.

     (e) The rent rolls previously provided by Cornerstone to EOP (the
"Cornerstone Rent Roll") list each Cornerstone Space Lease (as defined herein)
in effect as of the dates set forth therein, none of which are earlier than
December 31, 1999. "Cornerstone Space Lease" means each lease or other right of
occupancy affecting or relating to a property in which Cornerstone Partnership
(or an entity in which it directly or indirectly has an interest) is the
landlord, either pursuant to the terms of the lease agreement or as successor to
any prior landlord, but excluding any ground lease. Cornerstone has made
available to EOP true, correct and complete copies of all Cornerstone Space
Leases, including all amendments, modifications, supplements, renewals,
extensions and guarantees related thereto, as of the date hereof. Except for
discrepancies that, either individually or in the aggregate, would not
reasonably be expected to have a Cornerstone Material Adverse Effect, all
information set forth in the Cornerstone Rent Roll is true, correct and complete
as of the date thereof. Except as set forth in a delinquency report made
available to EOP, none of Cornerstone, any Cornerstone Subsidiary or the
Cornerstone Non-controlled Subsidiary, on the one hand, nor, to the knowledge of
Cornerstone or Cornerstone Partnership, any other party, on the other hand, is
in monetary default under any Cornerstone Space Lease, except for such defaults
that would not reasonably be expected to have a Cornerstone Material Adverse
Effect.

     2.10 Environmental Matters.

     (a) "Environmental Law" shall mean all applicable Laws relating to the
protection of human health or safety and natural resources or the environment,
including, without limitation, Laws relating to the use, manufacturing,
generation, recycling, reuse, sale, storage, handling, transport, treatment or
disposal of any Hazardous Materials (including the Comprehensive Environmental
Response, Compensation, and Liability Act, as amended, 42 U.S.C. sec.sec. 9601
et seq. ("CERCLA")). "Hazardous Materials" shall mean substances, wastes or
materials listed, regulated or defined under any Environmental Law, and shall
include "hazardous wastes," "hazardous substances," "hazardous materials,"
petroleum or any fraction thereof, asbestos, lead-paint, urea-formaldehyde, and
polychlorinated biphenyls. "Release" shall have the meaning set forth in Section
101 of CERCLA, without regard to the exclusions set forth therein.

     (b) Except as disclosed in the Cornerstone SEC Documents or in Schedule
2.10(a) to the Cornerstone Disclosure Letter,

          (i) none of Cornerstone, any of the Cornerstone Subsidiaries or the
     Cornerstone Non-controlled Subsidiary or, to Cornerstone's Knowledge, any
     other Person has caused or permitted the presence of any Hazardous
     Materials at, on or under any of the Cornerstone Properties and none of
     Cornerstone, any of the Cornerstone Subsidiaries or the Cornerstone
     Non-controlled Subsidiary has any knowledge of the presence of any
     Hazardous Materials at, on or under any of the Cornerstone Properties, in
     each of the foregoing cases, such that the presence of such Hazardous
     Materials (including the presence of asbestos in any buildings or
     improvements at the Cornerstone Properties) would, individually or in the
     aggregate, reasonably be expected to have a Cornerstone Material Adverse
     Effect;

          (ii) except in accordance with the Environmental Permits (as defined
     herein) there have been no Releases of Hazardous Materials at, on, under or
     from (A) the Cornerstone Properties or (B) any real property previously
     owned, operated or leased by Cornerstone, the Cornerstone Subsidiaries, or
     the Cornerstone Non-controlled Subsidiary (the "Former Cornerstone
     Properties") during the period of such ownership, operation or tenancy, and
     none of Cornerstone, any of the Cornerstone Subsidiaries or the Cornerstone
     Non-controlled Subsidiary has any knowledge of any Releases of Hazardous
     Materials having occurred or presently occurring at, on, under or from the
     Cornerstone Properties or the Former Cornerstone Properties, which would,
     individually or in the aggregate, reasonably be expected to have a
     Cornerstone Material Adverse Effect;

          (iii) Cornerstone, the Cornerstone Subsidiaries and the Cornerstone
     Non-controlled Subsidiary have not failed to comply with all Environmental
     Laws, and none of Cornerstone, any of the Cornerstone Subsidiaries or the
     Cornerstone Non-controlled Subsidiary has any liability under the

                                      A-19
<PAGE>   51

     Environmental Laws, except to the extent that any such failure to comply or
     any such liability, individually or in the aggregate, would not reasonably
     be expected to have a Cornerstone Material Adverse Effect; and

          (iv) Cornerstone, the Cornerstone Subsidiaries and the Cornerstone
     Non-controlled Subsidiary have been duly issued, and currently have and
     will maintain through the Closing Date, all permits, licenses, certificates
     and approvals required under any Environmental Law (collectively, the
     "Environmental Permits") necessary to operate their businesses as currently
     operated except where the failure to obtain and maintain such Environmental
     Permit would not have a material adverse effect on the Cornerstone
     Property. Cornerstone, the Cornerstone Subsidiaries and the Cornerstone
     Non-controlled Subsidiary have timely filed applications for all
     Environmental Permits. All of the Environmental Permits are transferable
     and none require consent, notification or other action to remain in full
     force and effect following consummation of the transactions contemplated
     hereby.

     (c) Cornerstone has previously delivered or made available to EOP complete
copies of all material information, documents and reports, including, without
limitation, environmental investigations and testing or analysis that are in the
possession or control of any of Cornerstone, the Cornerstone Subsidiaries and
the Cornerstone Non-controlled Subsidiary and which relate to compliance with
Environmental Laws by any of them or to the past or current environmental
condition of the Cornerstone Properties.

     2.11 Related Party Transactions. Set forth in Schedule 2.11 to the
Cornerstone Disclosure Letter is a list of all material arrangements, agreements
and contracts entered into by Cornerstone, any Cornerstone Subsidiary and the
Cornerstone Non-controlled Subsidiary with (a) any investment banker or
financial advisor, (b) any person who is an officer, director or Affiliate (as
defined herein) of Cornerstone or any Subsidiary or the Cornerstone
Non-controlled Subsidiary, any relative of any of the foregoing or any entity of
which any of the foregoing is an Affiliate or (c) any person who acquired
Cornerstone Common Stock, Cornerstone OP Units or Cornerstone 7% Preferred Stock
in a private placement, in each case which remain in effect and are not
otherwise disclosed in the SEC Documents. Such documents, copies of all of which
have previously been delivered or made available to EOP, are listed in Schedule
2.11 to the Cornerstone Disclosure Letter. As used in this Agreement, the term
"Affiliate" shall have the same meaning as such term is defined in Rule 405
promulgated under the Securities Act.

     2.12 Employee Benefits. As used herein, the term "Employee Plan" includes
any pension, retirement, savings, disability, medical, dental, health, life,
death benefit, group insurance, profit sharing, deferred compensation, stock
option, bonus, incentive, vacation pay, tuition reimbursement, severance pay, or
other employee benefit plan, trust, agreement, contract, agreement, policy or
commitment (including, without limitation, any pension plan, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder ("ERISA") ("Pension Plan"),
and any welfare plan as defined in Section 3(1) of ERISA ("Welfare Plan")),
whether any of the foregoing is funded, insured or self-funded, written or oral,
(i) sponsored or maintained by Cornerstone, any Cornerstone Subsidiary or the
Cornerstone Non-controlled Subsidiary (each, a "Controlled Group Member") and
covering any Controlled Group Member's active or former employees (or their
beneficiaries), (ii) to which any Controlled Group Member is a party or by which
any Controlled Group Member (or any of the rights, properties or assets thereof)
is bound or (iii) with respect to which any current Controlled Group Member may
otherwise have any material liability (whether or not such Controlled Group
Member still maintains such Employee Plan). Each Employee Plan is listed on
Schedule 2.12 to the Cornerstone Disclosure Letter. Except as disclosed in
Schedule 2.12 to the Cornerstone Disclosure Letter, with respect to the Employee
Plans:

     (a) No Controlled Group Member has any continuing liability under any
Welfare Plan which provides for continuing benefits or coverage for any
participant or any beneficiary of a participant after such participant's
termination of employment, except as may be required by Section 4980B of the
Code or Section 601 (et seq.) of ERISA, or under any applicable state law, and
at the expense of the participant or the beneficiary of the participant.

                                      A-20
<PAGE>   52

     (b) Each Employee Plan complies in all material respects with the
applicable requirements of ERISA and any other applicable law governing such
Employee Plan, and, to the Knowledge of Cornerstone, each Employee Plan has at
all times been properly administered in all material respects in accordance with
all such requirements of law, and in accordance with its terms and the terms of
any applicable collective bargaining agreement to the extent consistent with all
such requirements of law. Each Pension Plan which is intended to be qualified is
qualified under Section 401(a) of the Code, has received a favorable
determination letter from the IRS stating that such Plan meets the requirements
of Section 401(a) of the Code and that the trust associated with such Plan is
tax-exempt under Section 501(a) of the Code and, to the Knowledge of
Cornerstone, no event has occurred which would jeopardize the qualified status
of any such plan or the tax exempt status of any such trust under Sections
401(a) and Section 501(a) of the Code, respectively. No lawsuits, claims (other
than routine claims for benefits) or complaints to, or by, any person or
governmental entity have been filed, are pending or, to the Knowledge of
Cornerstone, threatened with respect to any Employee Plan and, to the Knowledge
of Cornerstone, there is no fact or contemplated event which would be expected
to give rise to any such lawsuit, claim (other than routine claims for benefits)
or complaint with respect to any Pension Plan. Without limiting the foregoing,
the following are true with respect to each Employee Plan:

          (i) all Controlled Group Members have complied in all material
     respects with the reporting and disclosure requirements of ERISA, the Code,
     or both, with respect to each Employee Plan and no Controlled Group Member
     has incurred any material liability in connection with such reporting or
     disclosure;

          (ii) all contributions and payments with respect to Employee Plans
     that are required to be made by a Controlled Group Member with respect to
     periods ending on or before the Closing Date (including periods from the
     first day of the current plan or policy year to the Closing Date) have
     been, or will be, made or accrued before the Closing Date in accordance
     with the appropriate plan document, actuarial report, collective bargaining
     agreements or insurance contracts or arrangements or as otherwise required
     by ERISA or the Code; and

          (iii) with respect to each such Employee Plan, to the extent
     applicable, Cornerstone has delivered to or has made available to EOP true
     and complete copies of (A) plan documents, or any and all other documents
     that establish the existence of the plan, trust, arrangement, contract,
     policy or commitment and all amendments thereto, (B) the most recent
     determination letter, if any, received from the IRS, (C) the three most
     recent Form 5500 Annual Reports (and all schedules and reports relating
     thereto) and actuarial reports and (D) all related trust agreements,
     insurance contract or other funding agreements that implement each such
     Employee Plan.

     (c) With respect to each Employee Plan, to the Knowledge of Cornerstone,
there has not occurred, and no person or entity is contractually bound to enter
into, any "prohibited transaction" within the meaning of Section 4975(c) of the
Code or Section 406 of ERISA, which transaction is not exempt under Section
4975(d) of the Code or Section 408 of ERISA and which could subject Cornerstone
or any Controlled Group Member to material liability.

     (d) No Controlled Group Member has maintained or been obligated to
contribute to any Employee Plan subject to Code Section 412 or Title IV of
ERISA. No Employee Plan subject to Code Section 412 or Title IV of ERISA has
been terminated.

     (e) With respect to each Pension Plan maintained by any Controlled Group
Member, such Plan provides the Plan Sponsor the authority to amend or terminate
the Plan at any time, subject to applicable requirements of ERISA and the Code.

     2.13 Employee Policies. The employee handbooks of Cornerstone, the
Cornerstone Subsidiaries and the Cornerstone Non-controlled Subsidiary currently
in effect are attached as Schedule 2.13 to the Cornerstone Disclosure Letter and
fairly and accurately summarize all material employee policies, vacation
policies and payroll policies.

                                      A-21
<PAGE>   53

     2.14 Taxes.

     (a) Each of Cornerstone, the Cornerstone Subsidiaries and the Cornerstone
Non-controlled Subsidiary (A) has filed all Tax returns and reports required to
be filed by it (after giving effect to any filing extension properly granted by
a Governmental Entity having authority to do so) and all such returns and
reports are accurate and complete in all material respects, (B) has paid (or
Cornerstone has paid on its behalf) all Taxes (as defined herein) shown on such
returns and reports as required to be paid by it, and (C) has complied in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes (including, without limitation, withholding
of Taxes pursuant to Sections 1441, 1442, 1445, 3121, and 3402 of the Code or
similar provisions under any foreign laws) and has, within the time period
prescribed by law, withheld and paid over to the proper governmental entities
all amounts required to be so withheld and paid over under applicable laws and
regulations, except, with respect to all of the foregoing, where the failure to
file such tax returns and reports or failure to pay such Taxes or failure to
comply with such withholding requirements would not reasonably be expected to
have a Cornerstone Material Adverse Effect. The most recent audited financial
statements contained in the Cornerstone SEC Documents reflect an adequate
reserve for all material Taxes payable by Cornerstone, the Cornerstone
Subsidiaries and the Cornerstone Non-controlled Subsidiary for all taxable
periods and portions thereof through the date of such financial statements.
Since the Cornerstone Financial Statement Date, Cornerstone has incurred no
liability for Taxes under Sections 857(b), 860(c) or 4981 of the Code, including
without limitation any Tax arising from a prohibited transaction described in
Section 857(b)(6) of the Code, and none of Cornerstone, any Cornerstone
Subsidiary or the Cornerstone Non-controlled Subsidiary has incurred any
material liability for Taxes other than in the ordinary course of business. No
event has occurred, and no condition or circumstance exists, which presents a
material risk that any material Tax described in the preceding sentences will be
imposed upon Cornerstone, any Cornerstone Subsidiary, or the Cornerstone
Non-controlled Subsidiary. None of Cornerstone, any Cornerstone Subsidiary or
the Cornerstone Non-controlled Subsidiary is the subject of any audit,
examination, or other proceeding in respect of federal income Taxes, and to
Cornerstone's Knowledge, no audit, examination or other proceeding in respect of
federal income Taxes involving any of Cornerstone, any Cornerstone Subsidiary,
or the Cornerstone Non-controlled Subsidiary is being considered by any Tax
authority. To the Knowledge of Cornerstone, no deficiencies for any Taxes have
been proposed, asserted or assessed against Cornerstone, any Cornerstone
Subsidiary or the Cornerstone Non-controlled Subsidiary, and no requests for
waivers of the time to assess any such Taxes are pending. As used in this
Agreement, "Taxes" shall include all taxes, charges, fees, levies and other
assessments, including, without limitation, income, gross receipts, excise,
property, sales, withholding (including, without limitation, dividend
withholding and withholding required pursuant to Sections 1445 and 1446 of the
Code), social security, occupation, use, service, license, payroll, franchise,
transfer and recording taxes, fees and charges, including estimated taxes,
imposed by the United States or any taxing authority (domestic or foreign),
whether computed on a separate, consolidated, unitary, combined or any other
basis, and any interest, fines, penalties or additional amounts attributable to,
or imposed upon, or with respect to any such taxes, charges, fees, levies or
other assessments.

     (b) Cornerstone (i) for all taxable years for which the Internal Revenue
Service could assert a tax liability, has been subject to taxation as a real
estate investment trust (a "REIT") within the meaning of Section 856 of the Code
and has satisfied all requirements to qualify as a REIT for all such years, (ii)
has operated since December 31, 1999 to the date of this representation, and
intends to continue to operate, in such a manner as to qualify as a REIT for the
taxable year ending on the earlier of December 31, 2000 or the Closing Date and,
if later, for the taxable year of Cornerstone ending on the Closing Date, and
(iii) has not taken or omitted to take any action which would reasonably be
expected to result in a challenge to its status as a REIT and, to Cornerstone's
Knowledge, no such challenge is pending or threatened. Each Cornerstone
Subsidiary which is a partnership, joint venture or limited liability company
(i) has been since its formation and continues to be treated for federal income
tax purposes as a partnership and not as a corporation or an association taxable
as a corporation and (ii) has not since the later of its formation or the
acquisition by Cornerstone of a direct or indirect interest therein, owned any
assets (including, without limitation, securities) that would cause Cornerstone
to violate Section
                                      A-22
<PAGE>   54

856(c)(4) of the Code. Cornerstone Partnership is not a publicly-traded
partnership within the meaning of Section 7704(b) of the Code that is taxable as
a corporation pursuant to Section 7704(a) of the Code. Each Cornerstone
Subsidiary which is a corporation has been since its formation a qualified REIT
subsidiary under Section 856(i) of the Code. Neither Cornerstone nor any
Cornerstone Subsidiary holds any asset (x) the disposition of which would be
subject to rules similar to Section 1374 of the Code as a result of an election
under IRS Notice 88-19 or Temporary Treas. Reg. sec.1.337(d)-5T or (y) which is
subject to a consent filed pursuant to Section 341(f) of the Code and the
regulations thereunder.

     2.15 No Payments to Employees, Officers or Directors. Schedule 2.15 to the
Cornerstone Disclosure Letter contains a true and complete list of all
arrangements, agreements or plans pursuant to which cash and non-cash payments
which will become payable (and the maximum aggregate amount which may be payable
thereunder) to each employee, officer or director of Cornerstone, any
Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary as a result
of the Merger or a termination of service subsequent to the consummation of the
Merger. Except as described in Schedule 2.15 to the Cornerstone Disclosure
Letter, or as otherwise provided for in this Agreement, there is no employment
or severance contract, or other agreement requiring payments, cancellation of
indebtedness or other obligation to be made on a change of control or otherwise
as a result of the consummation of any of the transactions contemplated by this
Agreement or as a result of a termination of service subsequent to the
consummation of any of the transactions contemplated by this Agreement, with
respect to any employee, officer or director of Cornerstone, any Cornerstone
Subsidiary or the Cornerstone Non-controlled Subsidiary. There is no agreement
or arrangement with any employee, officer or other service provider under which
Cornerstone, any Cornerstone Subsidiary or any Cornerstone Non-controlled
Subsidiary has agreed to pay any tax that might be owed under Section 4999 of
the Code with respect to payments to such individuals.

     2.16 Broker; Schedule of Fees and Expenses. No broker, investment banker,
financial advisor or other person, other than Lazard Freres & Co. L.L.C. the
fees and expenses of which are described in the engagement letter dated January
28, 2000, between Lazard Freres & Co. L.L.C. and Cornerstone, a true, correct
and complete copy of which has previously been given to EOP, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of Cornerstone or any Cornerstone Subsidiary.

     2.17 Compliance with Laws. None of Cornerstone, any Cornerstone Subsidiary
or the Cornerstone Non-controlled Subsidiary has violated or failed to comply
with any statute, law, ordinance, regulation, rule, judgment, decree or order of
any Governmental Entity applicable to its business, properties or operations,
except to the extent that such violation or failure would not reasonably be
expected to have a Cornerstone Material Adverse Effect.

     2.18 Contracts; Debt Instruments.

     (a) None of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary has received a written notice that it is in violation
of or in default under (nor to the Knowledge of Cornerstone does there exist any
condition which upon the passage of time or the giving of notice or both would
cause such a violation of or default under) any material loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other material contract, agreement, arrangement or
understanding, to which it is a party or by which it or any of its properties or
assets is bound, nor to the Knowledge of Cornerstone does such a violation or
default exist, except to the extent that such violation or default, individually
or in the aggregate, would not reasonably be expected to have a Cornerstone
Material Adverse Effect.

     (b) Except for any of the following expressly identified in Cornerstone SEC
Documents, Schedule 2.18(b) to the Cornerstone Disclosure Letter sets forth a
list of each material loan or credit agreement, note, bond, mortgage, indenture
and any other agreement or instrument pursuant to which any Indebtedness (as
defined herein) of Cornerstone, the Cornerstone Subsidiaries and the Cornerstone
Non-controlled Subsidiary, other than Indebtedness payable to Cornerstone, a
Cornerstone Subsidiary or a Cornerstone Non-controlled Subsidiary, is
outstanding or may be incurred. For purposes of this Section 2.18,
"Indebtedness" shall mean (i) indebtedness for borrowed money, whether secured
or unsecured,
                                      A-23
<PAGE>   55

(ii) obligations under conditional sale or other title retention agreements
relating to property purchased by such person, (iii) capitalized lease
obligations, (iv) obligations under interest rate cap, swap, collar or similar
transaction or currency hedging transactions (valued at the termination value
thereof) and (v) guarantees of any such indebtedness of any other person.

     (c) To the extent not set forth in response to the requirements of Section
2.18(b), Schedule 2.18(c) to the Cornerstone Disclosure Letter sets forth each
interest rate cap, interest rate collar, interest rate swap, currency hedging
transaction, and any other agreement relating to a similar transaction to which
Cornerstone, any Cornerstone Subsidiary or the Cornerstone Non-controlled
Subsidiary is a party or an obligor with respect thereto.

     (d) Except as set forth in Schedule 2.18(d) of the Cornerstone Disclosure
Letter, none of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary is a party to any agreement which would restrict any
of them from prepaying any of their Indebtedness without penalty or premium at
any time or which requires any of them to maintain any amount of Indebtedness
with respect to any of the Cornerstone Properties.

     (e) Except as set forth in Schedule 2.18(e) to the Cornerstone Disclosure
Letter, none of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary is a party to any agreement relating to the management
of any Cornerstone Property by any Person other than Cornerstone, a Cornerstone
Subsidiary or a Cornerstone Non-controlled Subsidiary.

     (f) None of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary is a party to any agreement pursuant to which
Cornerstone, any Cornerstone Subsidiary or the Cornerstone Non-controlled
Subsidiary manages or provides services with respect to any real properties
other than Cornerstone Properties, except for the agreements described in
Schedule 2.18(f) to the Cornerstone Disclosure Letter.

     (g) Cornerstone has delivered to EOP prior to the date of this Agreement a
true and complete capital budget for the year 2000 relating to budgeted capital
improvements and development. Schedule 2.18(g) to the Cornerstone Disclosure
Letter lists all material agreements entered into by Cornerstone, each of the
Cornerstone Subsidiaries and the Cornerstone Non-controlled Subsidiary relating
to the development or construction of, or additions or expansions to, any
Cornerstone Real Properties (or any properties with respect to which Cornerstone
has executed as of the date of this Agreement a purchase agreement or other
similar agreement) which are currently in effect and under which Cornerstone or
any of the Cornerstone Subsidiaries or the Cornerstone Non-controlled Subsidiary
currently has, or expects to incur, an obligation in excess of $250,000 in the
aggregate. True, correct and complete copies of such agreements have previously
been delivered or made available to EOP.

     (h) Schedule 2.18(h) to the Cornerstone Disclosure Letter lists all
agreements entered into by Cornerstone, any Cornerstone Subsidiary or the
Cornerstone Non-controlled Subsidiary providing for the sale of, or option to
sell, any Cornerstone Properties or the purchase of, or option to purchase, by
Cornerstone, any Cornerstone Subsidiary or the Cornerstone Non-controlled
Subsidiary, on the one hand, or the other party thereto, on the other hand, any
real estate which are currently in effect.

     (i) Except as set forth in Schedule 2.18(i) to the Cornerstone Disclosure
Letter, none of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary has any material continuing contractual liability (A)
for indemnification or otherwise under any agreement relating to the sale of
real estate previously owned, whether directly or indirectly, by Cornerstone,
any Cornerstone Subsidiary or Cornerstone Non-controlled Subsidiary or (B) to
pay any additional purchase price for any of the Cornerstone Properties.

     (j) Except as set forth in Schedule 2.18(j) to the Cornerstone Disclosure
Letter, none of Cornerstone, any Cornerstone Subsidiary or the Cornerstone
Non-controlled Subsidiary has entered into or is subject, directly or
indirectly, to any "Tax Protection Agreements." As used herein, a Tax Protection
Agreement is an agreement, oral or written, (A) that has as one of its purposes
to permit a person or entity to take the position that such person or entity
could defer federal taxable income that otherwise
                                      A-24
<PAGE>   56

might have been recognized upon a transfer of property to the Cornerstone
Partnership or any other Cornerstone Subsidiary that is treated as a partnership
for federal income tax purposes, and that (i) prohibits or restricts in any
manner the disposition of any assets of Cornerstone, any Cornerstone Subsidiary
or the Cornerstone Non-controlled Subsidiary, (ii) requires that Cornerstone,
any Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary
maintain, or put in place, or replace, indebtedness, whether or not secured by
one or more of the Cornerstone Properties, or (iii) requires that Cornerstone,
any Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary offer to
any person or entity at any time the opportunity to guarantee or otherwise
assume, directly or indirectly (including, without limitation, through a
"deficit restoration obligation," indemnification agreement or other similar
arrangement), the risk of loss for federal income tax purposes for indebtedness
or other liabilities of Cornerstone, any Cornerstone Subsidiary or the
Cornerstone Non-controlled Subsidiary, (B) that specifies or relates to a method
of taking into account book-tax disparities under Section 704(c) of the Code
with respect to one or more assets of Cornerstone or a Cornerstone Subsidiary,
or (C) that requires a particular method for allocating one or more liabilities
of Cornerstone or any Cornerstone Subsidiary under Section 752 of the Code. None
of Cornerstone, any Cornerstone Subsidiary or the Cornerstone Non-controlled
Subsidiary is in violation of or in default under any Tax Protection Agreement.

     (k) Except as set forth in Schedule 2.18(k) to the Cornerstone Disclosure
Letter and for the Confidentiality Agreement, dated January 13, 2000 between
Cornerstone and EOP (the "Confidentiality Agreement") and other confidentiality
agreements entered into in the ordinary course of business, neither Cornerstone
nor any Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary is a
party to any confidentiality, standstill, lock-up or voting agreement.

     2.19 Opinion of Financial Advisor. Cornerstone has received the written
opinion of Lazard Freres & Co. L.L.C. Cornerstone's financial advisor, to the
effect that the proposed consideration to be received by the holders of
Cornerstone Common Stock is fair to such holders from a financial point of view.

     2.20 State Takeover Statutes. Cornerstone has taken all action necessary to
exempt the transactions contemplated by this Agreement between EOP and
Cornerstone and its Affiliates from the operation of any "fair price,"
"moratorium," "control share acquisition" or any other anti-takeover statute or
similar statute enacted under the laws of the State of Nevada and the State of
Delaware or federal laws of the United States or similar statute or regulation
(a "Takeover Statute").

     2.21 Investment Company Act of 1940. None of Cornerstone, any Cornerstone
Subsidiary or the Cornerstone Non-controlled Subsidiary is, or at the Effective
Time will be, required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").

     2.22 Definition of "Knowledge of Cornerstone". As used in this Agreement,
the phrase "Knowledge of Cornerstone" (or words of similar import) means the
actual knowledge of those individuals identified in Schedule 2.22 to the
Cornerstone Disclosure Letter.

     2.23 Required Stockholder Approvals and Partner Approvals. The affirmative
vote of the holders of at least a majority of the outstanding Cornerstone Common
Stock and the holders of at least a majority of the outstanding Cornerstone 7%
Preferred Stock are the only votes of the holders of any class or series of
Cornerstone capital stock necessary or required under this Agreement or under
applicable law to approve the Merger and this Agreement. The approval of
Cornerstone and the affirmative vote of at least a majority of all Cornerstone
limited partner interests entitled to be cast, voting in accordance with the
Cornerstone Partnership Agreement, is the only vote of the holders of any class
or series of Cornerstone Partnership's partnership interests necessary or
required under this Agreement or under applicable law to approve the Merger, the
withdrawal of Cornerstone as general partner and the Partnership Merger.

                                   ARTICLE 3

           REPRESENTATIONS AND WARRANTIES OF EOP AND EOP PARTNERSHIP

     Except as set forth in the EOP SEC Documents (as defined herein) or in the
letter of even date herewith signed by the President or an Executive Vice
President of EOP and delivered to Cornerstone

                                      A-25
<PAGE>   57

prior to the execution hereof (the "EOP Disclosure Letter"), EOP and EOP
Partnership represent and warrant to Cornerstone and Cornerstone Partnership as
follows:

     3.1 Organization, Standing and Power of EOP. EOP is a real estate
investment trust duly organized, validly existing and in good standing under the
laws of Maryland and has all requisite power and authority to own, operate,
lease and encumber its properties and carry on its business as now being
conducted. EOP is duly qualified or licensed to do business as a foreign trust
and is in good standing in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the business, properties, assets,
financial condition or results of operations of EOP and the Subsidiaries of EOP
(collectively, "EOP Subsidiaries"), taken as a whole (an "EOP Material Adverse
Effect"). EOP has delivered to Cornerstone complete and correct copies of the
EOP Declaration of Trust (as the same is proposed to be modified by each of the
Proposed EOP Charter Amendments (as defined herein)) and the EOP Bylaws, as
amended or supplemented to the date of this Agreement.

     3.2 EOP Subsidiaries.

     (a) Schedule 3.2(a) to the EOP Disclosure Letter sets forth (i) each EOP
Subsidiary and each entity in which EOP holds non-voting equity securities (but
no voting equity securities) (collectively, the "EOP Non-controlled
Subsidiaries"), (ii) the ownership interest therein of EOP, (iii) if not wholly
owned by EOP, the identity and ownership interest of each of the other owners of
such EOP Subsidiary, (iv) each office property and other commercial property
owned by such Subsidiary, and (v) if not wholly owned by such Subsidiary, the
identity and ownership interest of each of the other owners of such property.

     (b) Except as set forth in Schedule 3.2(b) to the EOP Disclosure Letter,
(i) all the outstanding shares of capital stock of each EOP Subsidiary and each
EOP Non-controlled Subsidiary that is a corporation have been duly authorized,
validly issued and are (A) fully paid and nonassessable and not subject to
preemptive rights, (B) owned by EOP or by another EOP Subsidiary and (C) owned
free and clear of all Liens and (ii) all equity interests in each EOP Subsidiary
that is a partnership, joint venture, limited liability company or trust which
are owned by EOP, by another EOP Subsidiary or by EOP and another EOP Subsidiary
are owned free and clear of all Liens other than pledges, if any, contained in
organizational documents of such EOP Subsidiary and given to secure performance
thereunder. Each EOP Subsidiary that is a corporation is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
being conducted, and each EOP Subsidiary that is a partnership, limited
liability company or trust is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has the
requisite power and authority to own, operate, lease and encumber its properties
and carry on its business as now being conducted. Each EOP Subsidiary is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, would not reasonably be expected to have an
EOP Material Adverse Effect. Complete and correct copies of the Articles of
Incorporation, Bylaws, organization documents and partnership, joint venture and
operating agreements of each EOP Subsidiary, as amended to the date of this
Agreement, have been previously delivered or made available to Cornerstone. No
effective amendment has been made to the EOP Partnership Agreement since January
31, 2000.

     3.3 Capital Structure.

     (a) The authorized shares of beneficial interest of EOP consist of
750,000,000 EOP Common Shares, 248,812,828 of which were issued and outstanding
as of January 31, 2000, and 100,000,000 preferred shares of beneficial interest,
18,562,900 of which were issued or outstanding as of January 31, 2000
(collectively, the "EOP Preferred Shares").

                                      A-26
<PAGE>   58

     (b) Set forth in Schedule 3.3(b) to the EOP Disclosure Letter is a true and
complete list of the following: (i) each qualified or nonqualified option to
purchase EOP's shares of beneficial interest granted under the Employee Share
Option and Restricted Share Plan or any other formal or informal arrangement
(collectively, the "EOP Options"); and (ii) all other warrants or other rights
to acquire EOP's shares of beneficial interest, all share appreciation rights,
phantom shares, dividend equivalents, performance units and performance shares
which are outstanding on the date of this Agreement. Schedule 3.3(b) to the EOP
Disclosure Letter sets forth the EOP Options granted to EOP's Chief Executive
Officer and four other most highly compensated officers, the date of each grant,
the status of each EOP Option as qualified or nonqualified under Section 422 of
the Code, the number of EOP Common Shares subject to each EOP Option, the number
and type of EOP's Common Shares subject to EOP Options that are currently
exercisable, the exercise price per share, and the number and type of such
shares subject to share appreciation rights. On the date of this Agreement,
except as set forth in this Section 3.3 or in Schedule 3.3(b) to the EOP
Disclosure Letter, no shares of beneficial interest of EOP were outstanding or
reserved for issuance (except for EOP Common Shares reserved for issuance upon
redemption of EOP OP Units).

     (c) All outstanding shares of beneficial interest of EOP are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other indebtedness
of EOP having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which shareholders of EOP
may vote.

     (d) Except (i) as set forth in this Section 3.3 or in Schedule 3.3(d) to
the EOP Disclosure Letter and (ii) EOP OP Units, which may be redeemed for EOP
Common Shares, as of the date of this Agreement, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which EOP or any EOP Subsidiary is a
party or by which such entity is bound, obligating EOP or any EOP Subsidiary to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of beneficial interest, voting securities or other ownership interests of
EOP or any EOP Subsidiary or obligating EOP or any EOP Subsidiary to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking (other than to EOP or an EOP
Subsidiary).

     (e) As of January 31, 2000, 282,476,889 EOP OP Units, 8,000,000 8.98%
Series A Preferred Units of Limited Partnership Interest, 6,000,000 5.25% Series
B Preferred Units of Limited Partnership Interest, and 4,562,900 8 5/8% Series C
Preferred Units of Limited Partnership Interest (collectively, the "EOP
Preferred Units") are validly issued and outstanding, fully paid and
nonassessable and not subject to preemptive rights, of which 248,812,828 EOP OP
Units and all of the EOP Preferred Units are owned by EOP and EOP Subsidiaries.
Schedule 3.3(e) to the EOP Disclosure Schedule sets forth the name of each
holder of EOP OP Units and the number of EOP OP Units owned by each such holder
as of the date of this Agreement. The EOP OP Units and EOP Preferred Units are
subject to no restrictions except as set forth in the EOP Partnership Agreement.
EOP Partnership has not issued or granted and is not a party to any outstanding
commitments of any kind relating to, or any presently effective agreements or
understandings with respect to, interests in EOP Partnership, whether issued or
unissued, or securities convertible or exchangeable into interests in EOP
Partnership.

     (f) All dividends on EOP Common Shares and all distributions on EOP OP
Units and EOP Preferred Units, which have been declared prior to the date of
this Agreement have been paid in full, except that the dividends payable on EOP
Common Shares (along with the corresponding distributions payable on EOP OP
Units) which were declared on February 1, 2000 and are payable on April 14, 2000
have not yet been paid.

     (g) The EOP Common Shares and the EOP Preferred Shares to be issued by EOP,
and the EOP OP Units to be issued by the EOP Partnership pursuant to this
Agreement have been duly authorized for issuance, and upon issuance will be duly
and validly issued, fully paid and nonassessable.

     3.4 Other Interests. Except for interests in the EOP Subsidiaries and
certain other entities as set forth in Schedule 3.2(a), 3.2(b) or 3.4(a) to the
EOP Disclosure Letter (the "EOP Other Interests"), neither

                                      A-27
<PAGE>   59

EOP nor any of its Subsidiaries owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or other entity (other than investments in short-term
investment securities). With respect to such other interests, EOP or EOP
Partnership is a partner or shareholder in good standing, and owns such
interests free and clear of all Liens other than pledges, if any, contained in
organizational documents of such EOP Other Interests and given to secure
performance. Neither EOP nor any of the EOP Subsidiaries is in breach of any
provision of any agreement, document or contract governing its rights in or to
the interests owned or held by it, all of which agreements, documents and
contracts are (a) listed in Schedule 3.4(b) to the EOP Disclosure Letter (or
disclosed in the EOP SEC Documents (as defined herein)), (b) unmodified except
as described therein and (c) in full force and effect. To the Knowledge of EOP
(as defined herein), the other parties to any such agreement, document or
contract which is of a material nature are not in breach of any of their
respective obligations under such agreements, documents or contracts.

     3.5 Authority; Noncontravention; Consents.

     (a) EOP has the requisite power and authority to enter into this Agreement
and, subject to the requisite shareholder approval of the Merger (the "EOP
Shareholder Approvals" and, together with the Cornerstone Stockholder Approvals,
the "Shareholder Approvals"), to consummate the transactions contemplated by
this Agreement to which EOP is a party. The execution and delivery of this
Agreement by EOP and the consummation by EOP of the transactions contemplated by
this Agreement to which EOP is a party have been duly authorized by all
necessary action on the part of EOP, except for and subject to the EOP
Shareholder Approvals and the requisite approval, if any is required, of the
partners of EOP Partnership. This Agreement has been duly executed and delivered
by EOP and constitutes a valid and binding obligation of EOP, enforceable
against EOP in accordance with and subject to its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.

     (b) EOP Partnership has the requisite partnership power and, subject to the
requisite partner approval of the Partnership Merger (if any), authority to
enter into this Agreement and to consummate the transactions contemplated by
this Agreement to which EOP Partnership is a party. The execution and delivery
of this Agreement by EOP Partnership and the consummation by EOP Partnership of
the transactions contemplated by this Agreement to which EOP Partnership is a
party have been duly authorized by all necessary action on the part of EOP
Partnership, except for and subject to the EOP Partnership Approvals. This
Agreement has been duly executed and delivered by EOP Partnership and
constitutes a valid and binding obligation of EOP Partnership, enforceable
against EOP Partnership in accordance with and subject to its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.

     (c) Except as set forth in Schedule 3.5(c)(1) to the EOP Disclosure Letter,
the execution and delivery of this Agreement by EOP and EOP Partnership do not,
and the consummation of the transactions contemplated by this Agreement to which
EOP or EOP Partnership is a party and compliance by EOP or EOP Partnership with
the provisions of this Agreement will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any material obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of EOP or any EOP
Subsidiary under, (i) the EOP Declaration of Trust or the EOP Bylaws or the
comparable charter or organizational documents or partnership, operating or
similar agreement (as the case may be) of any other EOP Subsidiary, each as
amended or supplemented to the date of this Agreement, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, reciprocal easement agreement, lease
or other agreement, instrument, permit, concession, franchise or license
applicable to EOP or any EOP Subsidiary or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to in
the following sentence, any Laws applicable to EOP or any EOP Subsidiary or
their respective properties or assets, other than, in the case of clause (ii) or
(iii), any such conflicts, violations, defaults, rights, loss or Liens that
individually or in the aggregate would not (x) reasonably be expected to have an
EOP Material Adverse Effect or (y) prevent the consummation of the transactions
contemplated by this
                                      A-28
<PAGE>   60

Agreement. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to EOP or any EOP Subsidiary in connection with the execution and
delivery of this Agreement or the consummation by EOP of any of the transactions
contemplated by this Agreement, except for (i) the filing with the SEC of (x)
the Form S-4 (as defined herein) and (y) such reports under Section 13 (a) of
the Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (ii) the acceptance for record of
the Articles of Merger by the Department, (iii) the filing of the Certificate of
Merger with the Office of the Secretary of State of the State of Delaware, (iv)
such filings as may be required in connection with the payment of any transfer
and gains taxes and (v) such other consents, approvals, orders, authorizations,
registrations, declarations and filings (A) as are set forth in Schedule
3.5(c)(2) to the EOP Disclosure Letter or (B) as may be required under (x)
federal, state or local environmental laws or (y) the "blue sky" laws of various
states, to the extent applicable, or (C) which, if not obtained or made, would
not prevent or delay in any material respect the consummation of any of the
transactions contemplated by this Agreement or otherwise prevent EOP from
performing its obligations under this Agreement in any material respect or
reasonably be expected to have, individually or in the aggregate, an EOP
Material Adverse Effect.

     3.6 SEC Documents; Financial Statements; Undisclosed Liabilities. EOP and
EOP Partnership have filed all required reports, schedules, forms, statements
and other documents with the SEC since July 8, 1997 and November 19, 1997,
respectively, through the date hereof (the "EOP SEC Documents"). Schedule 3.6(a)
to the EOP Disclosure Letter contains a complete list of all EOP SEC Documents
filed by EOP and EOP Partnership with the SEC under the Exchange Act on or prior
to the date of this Agreement. All of the EOP SEC Documents (other than
preliminary material), as of their respective filing dates, complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act and, in each case, the rules and regulations promulgated thereunder
applicable to such EOP SEC Documents. None of the EOP SEC Documents at the time
of filing contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except to the extent such statements have been modified or
superseded by later EOP SEC Documents filed and publicly available prior to the
date of this Agreement. The consolidated financial statements of EOP and the EOP
Subsidiaries included in the EOP SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of unaudited statements, as permitted
by the applicable rules and regulations of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly presented in all material respects, in accordance with the
applicable requirements of GAAP and the applicable rules and regulations of the
SEC, the consolidated financial position of EOP and the EOP Subsidiaries, taken
as a whole, as of the dates thereof and the consolidated results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except for liabilities and
obligations set forth in the EOP SEC Documents or in Schedule 3.6(b) to the EOP
Disclosure Letter, neither EOP nor any EOP Subsidiary has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by GAAP to be set forth on a consolidated balance sheet of EOP or in
the notes thereto and which, individually or in the aggregate, would reasonably
be expected to have an EOP Material Adverse Effect.

     3.7 Absence of Certain Changes or Events. Except as disclosed in the EOP
SEC Documents or in Schedule 3.7 to the EOP Disclosure Letter, since the date of
the most recent audited financial statements included in the EOP SEC Documents
(the "EOP Financial Statement Date"), EOP and the EOP Subsidiaries have
conducted their business only in the ordinary course (taking into account prior
practices, including the acquisition of properties and issuance of securities)
and there has not been (a) any material adverse change in the business,
financial condition or results of operations of EOP and the EOP Subsidiaries
taken as a whole (a "EOP Material Adverse Change"), nor has there been any
occurrence or circumstance that with the passage of time would reasonably be
expected to result in an EOP Material Adverse Change, (b) except for regular
quarterly distributions not in excess of $0.42 per EOP Common
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Share or EOP OP Unit or the stated distribution rate for each EOP Preferred
Share or EOP Preferred Unit, subject to rounding adjustments as necessary and
with customary record and payment dates, any authorization, declaration, setting
aside or payment of any dividend or other distribution (whether in cash, shares
or property) with respect to EOP Common Shares, EOP OP Units, EOP Preferred
Shares or EOP Preferred Units, (c) any split, combination or reclassification of
any of EOP's shares of beneficial interest, (d) any damage, destruction or loss,
whether or not covered by insurance, that has or would reasonably be expected to
have an EOP Material Adverse Effect or (e) any change made prior to the date of
this Agreement in accounting methods, principles or practices by EOP or any EOP
Subsidiary materially affecting its assets, liabilities or business, except
insofar as may have been disclosed in the EOP SEC Documents or required by a
change in GAAP.

     3.8 Litigation. Except as disclosed in the EOP SEC Documents or in Schedule
3.8 to the EOP Disclosure Letter, and other than personal injury and other
routine tort litigation arising from the ordinary course of operations of EOP
and the EOP Subsidiaries (a) which are covered by adequate insurance subject to
a reasonable deductible or retention limit or (b) for which all material costs
and liabilities arising therefrom are reimbursable pursuant to common area
maintenance or similar agreements, there is no suit, action or proceeding
pending (in which service of process has been received by an employee of EOP or
an EOP Subsidiary) or, to the Knowledge of EOP (as defined herein), threatened
in writing against or affecting EOP or any EOP Subsidiary that, individually or
in the aggregate, would reasonably be expected to (i) have an EOP Material
Adverse Effect or (ii) prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against EOP
or any EOP Subsidiary having, or which, insofar as reasonably can be foreseen,
in the future would have, any such effect.

     3.9 Properties.

     (a) Except as set forth in Schedule 3.9(a) to the EOP Disclosure Letter,
EOP or one of the EOP Subsidiaries owns fee simple title to each of the real
properties listed in the EOP SEC Filings as owned by it (the "EOP Properties"),
except where the failure to own such title would not have an EOP Material
Adverse Effect.

     (b) The EOP Properties are not subject to any Encumbrances or Property
Restrictions which reasonably could be expected to cause an EOP Material Adverse
Effect.

     (c) Valid policies of title insurance or fully-paid and enforceable
commitments therefor have been issued insuring EOP's or the applicable EOP
Subsidiary's fee simple title or leasehold estate, as the case may be, to the
EOP Properties in amounts which are, except in the case of San Felipe Plaza, at
least equal to the purchase price thereof paid by EOP or the applicable EOP
Subsidiaries therefor, except where the failure to obtain such title insurance
would not reasonably be expected to have an EOP Material Adverse Effect.

     (d) EOP has no Knowledge (i) that it has failed to obtain a certificate,
permit or license from any governmental authority having jurisdiction over any
of the EOP Properties where such failure would reasonably be expected to have an
EOP Material Adverse Effect or of any pending threat of modification or
cancellation of any of the same which would reasonably be expected to have an
EOP Material Adverse Effect, (ii) of any written notice of any violation of any
federal, state or municipal law, ordinance, order, rule, regulation or
requirement affecting any of the EOP Properties issued by any governmental
authorities which would reasonably be expected to have an EOP Material Adverse
Effect or (iii) of any structural defects relating to EOP Properties, EOP
Properties whose building systems are not in working order, physical damage to
any EOP Property for which there is no insurance in effect covering the cost of
restoration, any current renovation or uninsured restoration, except such
structural defects, building systems not in working order, physical damage,
renovation and restoration which, in the aggregate, would not reasonably be
expected to have an EOP Material Adverse Effect.

     (e) Except as set forth in Schedule 3.9(e) to the EOP Disclosure Letter,
neither EOP nor any of the EOP Subsidiaries has received any written or
published notice to the effect that (i) any condemnation or

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rezoning proceedings are pending or threatened with respect to any of the EOP
Properties or (ii) any zoning, building or similar law, code, ordinance, order
or regulation is or will be violated by the continued maintenance, operation or
use of any buildings or other improvements on any of the EOP Properties or by
the continued maintenance, operation or use of the parking areas, other than
such notices which, in the aggregate, would not reasonably be expected to have
an EOP Material Adverse Effect.

     (f) Except as set forth on Schedule 3.9(f) to the EOP Disclosure Letter,
all work to be performed, payments to be made and actions to be taken by EOP or
the EOP Subsidiaries prior to the date hereof pursuant to any agreement entered
into with a governmental body or authority in connection with a site approval,
zoning reclassification or similar action relating to any EOP Properties (e.g.,
Local Improvement District, Road Improvement District, Environmental
Mitigation), has been performed, paid or taken, as the case may be, except where
the failure to do so would, in the aggregate, not reasonably be expected to have
an EOP Material Adverse Effect, and EOP has no Knowledge of any planned or
proposed work, payments or actions that may be required after the date hereof
pursuant to such agreements.

     (g) The rent roll previously provided by EOP to Cornerstone (the "EOP Rent
Roll") lists each EOP Space Lease (as defined herein) in effect as of the
respective dates indicated in the EOP Rent Roll. "EOP Space Lease" means each
lease or other right of occupancy affecting or relating to a property in which
EOP Partnership (or an entity in which it directly or indirectly has an
interest) is the landlord, either pursuant to the terms of the lease agreement
or as successor to any prior landlord, but excluding any ground lease. EOP has
made available to Cornerstone true, correct and complete copies of all EOP Space
Leases, including all amendments, modifications, supplements, renewals,
extensions and guarantees related thereto, as of the date hereof. Except for
discrepancies that, either individually or in the aggregate, would not
reasonably be expected to have an EOP Material Adverse Effect, all information
set forth in the EOP Rent Roll is true, correct, and complete as of the date
thereof. Except as set forth in a delinquency report made available to
Cornerstone, neither EOP nor any EOP Subsidiary, on the one hand, nor, to the
Knowledge of EOP or EOP Partnership, any other party, on the other hand, is in
monetary default under any EOP Space Lease, except for such defaults that would
not reasonably be expected to have an EOP Material Adverse Effect.

     3.10 Environmental Matters.

     Except as disclosed in the EOP SEC Documents,

     (i) none of EOP, any of the EOP Subsidiaries or, to EOP's Knowledge, any
other Person has caused or permitted the presence of any Hazardous Materials at,
on or under any of the EOP Properties, such that the presence of such Hazardous
Materials (including the presence of asbestos in any buildings or improvements
at the EOP Properties) would, individually or in the aggregate, reasonably be
expected to have an EOP Material Adverse Effect;

     (ii) except in accordance with the Environmental Permits, there have been
no Releases of Hazardous Materials at, on, under or from (A) the EOP Properties,
or (B) any real property formerly owned, operated or leased by EOP or the EOP
Subsidiaries during the period of such ownership, operation or tenancy, which
would, individually or in the aggregate, reasonably be expected to have an EOP
Material Adverse Effect;

     (iii) EOP and the EOP Subsidiaries have not failed to comply in any
material respect with all Environmental Laws, and neither EOP nor any of the EOP
Subsidiaries has any liability under the Environmental Laws, except to the
extent such failure to comply or any such liability, individually or in the
aggregate, would not reasonably be expected to have an EOP Material Adverse
Effect; and

     (iv) EOP and the EOP Subsidiaries have been duly issued, and currently have
and will maintain through the Closing Date, all Environmental Permits except
where the failure to obtain and maintain such Environmental Permits would not
have a material adverse effect on the EOP Property necessary to operate their
businesses as currently operated. EOP and the EOP Subsidiaries have timely filed
applications for all Environmental Permits.

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<PAGE>   63

     3.11 Taxes.

     (a) Each of EOP and the EOP Subsidiaries (i) has filed all Tax returns and
reports required to be filed by it (after giving effect to any filing extension
properly granted by a Governmental Entity having authority to do so), and all
such returns and reports are accurate and complete in all material respects,
(ii) has paid (or EOP has paid on its behalf) all Taxes shown on such returns
and reports as required to be paid by it and (iii) has complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes (including, without limitation, withholding of Taxes
pursuant to Sections 1441, 1442, 1445, 3121, and 3402 of the Code or similar
provisions under any foreign laws) and has, within the time period prescribed by
law, withheld and paid over to the proper governmental entities all amounts
required to be so withheld and paid over under applicable laws and regulations,
except, with respect to all of the foregoing, where the failure to file such tax
returns or reports or failure to pay such Taxes or failure to comply with such
requirements would not reasonably be expected to have an EOP Material Adverse
Effect. The most recent audited financial statements contained in the EOP SEC
Documents reflect an adequate reserve for all material Taxes payable by EOP and
the EOP Subsidiaries for all taxable periods and portions thereof through the
date of such financial statements. Since the EOP Financial Statement Date, EOP
has incurred no liability for Taxes under Sections 857(b), 860(c) or 4981 of the
Code, including without limitation any Tax arising from a prohibited transaction
described in Section 857(b)(6) of the Code, and neither EOP nor any EOP
Subsidiary has incurred any material liability for Taxes other than in the
ordinary course of business. No event has occurred, and no condition or
circumstance exists, which presents a material risk that any material Tax
described in the preceding sentence will be imposed upon EOP or any EOP
Subsidiary. Neither EOP nor any EOP Subsidiary is the subject of any audit,
examination, or other proceeding in respect of federal income Taxes, and to
EOP's Knowledge, no audit, examination or other proceeding in respect of federal
income Taxes involving any of EOP or any EOP Subsidiary is being considered by
any Tax authority. To the Knowledge of EOP, no deficiencies for any Taxes have
been proposed, asserted or assessed against EOP or any of the EOP Subsidiaries,
and no requests for waivers of the time to assess any such Taxes are pending.

     (b) EOP (i) for all taxable years commencing with 1997, which is the first
year of EOP's existence for federal income tax purposes, through December 31,
1999, has been subject to taxation as a REIT within the meaning of Section 856
of the Code and has qualified as a REIT for all such years, (ii) has operated
since December 31, 1999 to the date of this representation, and intends to
continue to operate, in such a manner as to qualify as a REIT for the taxable
year that includes the Closing Date and (iii) has not taken or omitted to take
any action which would reasonably be expected to result in a challenge to its
status as a REIT and, to EOP's Knowledge, no such challenge is pending or
threatened. BeaMetFed, Inc. ("BeaMet") (i) for all taxable years commencing with
1997 through December 31, 1999 has been subject to taxation as a REIT within the
meaning of Section 856 of the Code and has qualified as a REIT for all such
years, (ii) has operated since December 31, 1999 to the date of this
representation, and intends to continue to operate, in such a manner as to
qualify as a REIT for the taxable year that includes the Closing Date and (iii)
has not taken or omitted to take any action which would reasonably be expected
to result in a challenge to its status as a REIT and, to EOP's Knowledge, no
such challenge is pending or threatened. Each EOP Subsidiary which is a
partnership, joint venture or limited liability company (i) has been treated
since its formation and continues to be treated for federal income tax purposes
as a partnership and not as a corporation or as an association taxable as a
corporation and (ii) has not since the later of its formation or the acquisition
by EOP of a direct or indirect interest therein, owned any assets (including,
without limitation, securities) that would cause EOP to violate Section
856(c)(4) of the Code. EOP Partnership is not a publicly-traded partnership
within the meaning of Section 7704(b) of the Code that is taxable as a
corporation pursuant to Section 7704(a) of the Code. Each EOP Subsidiary which
is a corporation has been since its formation a qualified REIT subsidiary under
Section 856(i) of the Code. Except as set forth in Schedule 3.11 to the EOP
Disclosure Letter, neither EOP nor any EOP Subsidiary holds any asset (x) the
disposition of which would be subject to rules similar to Section 1374 of the
Code as a result of an election under IRS Notice 88-19 or Temporary Treas. Reg.
sec.1.337(d)-5T or (y) which is subject to a consent filed pursuant to Section
341(f) of the Code and the regulations thereunder.
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<PAGE>   64

     (c) To EOP's knowledge, as of the date hereof, EOP is a
"domestically-controlled REIT" within the meaning of Section 897(h)(4)(B) of the
Code.

     3.12 Brokers; Schedule of Fees and Expenses. No broker, investment banker,
financial advisor or other person, other than J.P. Morgan & Co. Incorporated,
the fees and expenses of which will be paid by EOP and are described in the
engagement letters between J.P. Morgan & Co. Incorporated and EOP, a true,
correct and complete copy of which has previously been given to Cornerstone, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of EOP or any EOP Subsidiary.

     3.13 Compliance with Laws. Neither EOP nor any of the EOP Subsidiaries has
violated or failed to comply with any statute, law, ordinance, regulation, rule,
judgment, decree or order of any Governmental Entity applicable to its business,
properties or operations, except to the extent that such violation or failure
would not reasonably be expected to have an EOP Material Adverse Effect.

     3.14 Contracts; Debt Instruments. Neither EOP nor any EOP Subsidiary has
received a written notice that EOP or any EOP Subsidiary is in violation of or
in default under (nor to the Knowledge of EOP does there exist any condition
which upon the passage of time or the giving of notice or both would cause such
a violation of or default under) any material loan or credit agreement, note,
bond, mortgage, indenture, lease, permit, concession, franchise, license or any
other material contract, agreement, arrangement or understanding, to which it is
a party or by which it or any of its properties or assets is bound, nor to the
Knowledge of EOP does such a violation or default exist, except to the extent
such violation or default, individually or in the aggregate, would not
reasonably be expected to have an EOP Material Adverse Effect, except as set
forth in the EOP SEC Documents or in Schedule 3.14 to the EOP Disclosure Letter.

     3.15 Opinion of Financial Advisor. EOP has received the opinion of J.P.
Morgan & Co. Incorporated, EOP's financial advisor, to the effect that the
consideration to be paid by EOP in connection with the Merger is fair, from a
financial point of view, to EOP.

     3.16 State Takeover Statutes. EOP has taken all action necessary to exempt
transactions between EOP and Cornerstone and its Affiliates from the operation
of Takeover Statutes.

     3.17 Investment Company Act of 1940. Neither EOP nor any of the EOP
Subsidiaries is, or at the Effective Time will be, required to be registered
under the 1940 Act.

     3.18 Definition of "Knowledge of EOP". As used in this Agreement, the
phrase "Knowledge of EOP" (or words of similar import) means the actual
knowledge of those individuals identified in Schedule 3.19 to the EOP Disclosure
Letter.

     3.19 Required Shareholder Approvals and Partner Approvals. The affirmative
vote of the holders of not less than a majority of all votes entitled to be cast
by holders of EOP Common Shares, and the affirmative vote of the partners of EOP
Partnership holding at least a majority of the outstanding EOP Partnership
interests (including partnership interests held by EOP), are the only votes of
the holders of any class or series of EOP capital shares necessary or required
under this Agreement or under applicable law to approve the Merger and this
Agreement. The approval of the Partnership Merger by EOP is the only vote
necessary or required under this Agreement or under applicable law to approve
the Partnership Merger and this Agreement.

                                   ARTICLE 4

                                   COVENANTS

     4.1 Conduct of Cornerstone's and Cornerstone Partnership's Business Pending
Merger. During the period from the date of this Agreement to the Effective
Times, except as consented to in writing by EOP or as expressly provided for in
this Agreement, Cornerstone and Cornerstone Partnership shall, and shall cause
(or, in the case of Cornerstone Subsidiaries and the Cornerstone Non-controlled
Subsidiary that

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<PAGE>   65

Cornerstone or Cornerstone Partnership do not control, shall use commercially
reasonable efforts to cause) each of the Cornerstone Subsidiaries and
Cornerstone Non-controlled Subsidiary to:

     (a) conduct its business only in the usual, regular and ordinary course and
in substantially the same manner as heretofore conducted;

     (b) preserve intact its business organizations and goodwill and use
commercially reasonable efforts to keep available the services of its officers
and employees;

     (c) confer on a regular basis with one or more representatives of EOP to
report operational matters of materiality and, subject to Section 4.3, any
proposals to engage in material transactions;

     (d) promptly notify EOP of any material emergency or other material change
in the condition (financial or otherwise), business, properties, assets,
liabilities or the normal course of its businesses or in the operation of its
properties, or of any material governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated);

     (e) promptly deliver to EOP true and correct copies of any report,
statement or schedule filed with the SEC subsequent to the date of this
Agreement;

     (f) maintain its books and records in accordance with GAAP consistently
applied and not change in any material manner any of its methods, principles or
practices of accounting in effect at the Cornerstone Financial Statement Date,
except as may be required by the SEC, applicable law or GAAP;

     (g) duly and timely file all reports, tax returns and other documents
required to be filed with federal, state, local and other authorities, subject
to extensions permitted by law, provided Cornerstone notifies EOP that it is
availing itself of such extensions and provided such extensions do not adversely
affect Cornerstone's status as a qualified REIT under the Code;

     (h) not make or rescind any express or deemed election relative to Taxes
(unless required by law or necessary to preserve Cornerstone's status as a REIT
or the status of any Cornerstone Subsidiary as a partnership for federal income
tax purposes or as a qualified REIT subsidiary under Section 856(i) of the Code,
as the case may be);

     (i) not (A) acquire, enter into any option to acquire, or exercise an
option or other right or election or enter into any other commitment or
contractual obligation (each, a "Commitment") for the acquisition of any real
property or, except as permitted in a budget approved in writing by EOP, other
transaction (other than Commitments referred to in Schedule 4.1(i) to the
Cornerstone Disclosure Letter) involving in excess of $100,000, encumber assets
or commence construction of, or enter into any Commitment to develop or
construct other real estate projects, except in the ordinary course of its
office property business, including leasing activities pursuant to EOP-approved
guidelines (B) incur or enter into any Commitment to incur additional
indebtedness (secured or unsecured) except for working capital under its
revolving line(s) of credit and Commitments for indebtedness described on
Schedule 4.1(i) to the Cornerstone Disclosure Letter or (C) modify, amend or
terminate, or enter into any Commitment to modify, amend or terminate, any
indebtedness (secured or unsecured) in existence as of the date hereof;

     (j) not amend the Cornerstone Articles or the Cornerstone Bylaws, or the
articles or certificate of incorporation, bylaws, code of regulations,
partnership agreement, operating agreement or joint venture agreement or
comparable charter or organization document of any Cornerstone Subsidiary or
Cornerstone Non-controlled Subsidiary;

     (k) make no change in the number of shares of capital stock or units of
limited partnership interest issued and outstanding, other than pursuant to (i)
the exercise of options disclosed in Schedule 2.3 to the Cornerstone Disclosure
Letter, (ii) the conversion of the Cornerstone 7% Preferred Stock or the
Cornerstone Convertible Promissory Note if required by their terms, (iii) the
redemption of Cornerstone OP Units under existing contracts described on
Schedule 2.18, (iv) the redemption of Cornerstone OP Units pursuant to Section
1.1 of this Agreement, (v) the redemption of Cornerstone OP Units under the

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<PAGE>   66

Cornerstone Partnership Agreement solely for shares of Cornerstone Common Stock,
or (vi) Cornerstone OP Units issuable upon the exercise of the First and Howard
option;

     (l) grant no options or other right or commitment relating to its shares of
capital stock or units of limited partnership interest or any security
convertible into its shares of capital stock or units of limited partnership
interest, or any security the value of which is measured by shares of beneficial
interest, or any security subordinated to the claim of its general creditors
and, other than or pursuant to Section 5.8(c) or (d) of this Agreement, not
amend or waive any rights under any of the Cornerstone Stock Options or
Cornerstone Stock Rights;

     (m) except as provided in Section 5.10 and in connection with the use of
Cornerstone Common Stock to pay the exercise price or tax withholding in
connection with equity-based employee benefit plans by the participants therein,
not (i) authorize, declare, set aside or pay any dividend or make any other
distribution or payment with respect to any Cornerstone Common Stock,
Cornerstone 7% Preferred Stock or Cornerstone OP Units or (ii) directly or
indirectly redeem, purchase or otherwise acquire any shares of capital stock or
units of partnership interest or any option, warrant or right to acquire, or
security convertible into, shares of capital stock or units of partnership
interest of Cornerstone, except for (A) deemed transfers of Cornerstone excess
shares required under Article 8 of the Cornerstone Articles in order to preserve
the status of Cornerstone as a REIT under the Code or Article 9 of the
Cornerstone Articles, and (B) redemptions of Cornerstone OP Units, whether or
not outstanding on the date of this Agreement, under the Cornerstone Partnership
Agreement in which solely Cornerstone Common Stock is utilized;

     (n) not sell, lease, mortgage, subject to Lien or otherwise dispose of any
of the Cornerstone Properties, except in connection with a transaction that is
permitted by Section 4.1(i), that is made in the ordinary course of business and
is the subject of a binding contract in existence on the date of this Agreement
and disclosed in Schedule 2.18 to the Cornerstone Disclosure Letter or in
connection with a transaction that is permitted by the leasing guidelines set
forth on Schedule 4.1(n) to the Cornerstone Disclosure Letter;

     (o) not sell, lease, mortgage, subject to Lien or otherwise dispose of any
of its personal property or intangible property, except in the ordinary course
of business and is not material, individually or in the aggregate;

     (p) not make any loans, advances or capital contributions to, or
investments in, any other Person, other than loans, advances and capital
contributions to Cornerstone Subsidiaries or the Cornerstone Non-controlled
Subsidiary in existence on the date hereof and ordinary course expense advances
to employees and except in connection with a transaction permitted by Section
4.1(i), and not enter into any new, or amend or supplement any existing,
contract, lease or other agreement with the Cornerstone Non-controlled
Subsidiary;

     (q) not pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of liabilities
reflected or reserved against in, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) furnished to EOP or
incurred in the ordinary course of business consistent with past practice;

     (r) not guarantee the indebtedness of another Person, enter into any "keep
well" or other agreement to maintain any financial statement condition of
another Person or enter into any arrangement having the economic effect of any
of the foregoing;

     (s) except as disclosed in Schedule 4.1(s) of the Cornerstone Disclosure
Letter, not enter into any Commitment with any officer, director or Affiliate of
Cornerstone or any of the Cornerstone Subsidiaries or the Cornerstone
Non-controlled Subsidiary or any material Commitment with any consultant;

     (t) except as disclosed in Schedule 4.1(t) of the Cornerstone Disclosure
Letter, not increase any compensation or enter into or amend any employment
agreement described in Schedule 2.18 to the

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<PAGE>   67

Cornerstone Disclosure Letter with any of its officers, directors or employees
earning more than $100,000 per annum, other than as required by any contract or
Plan or in accordance with waivers by employees of benefits under such
agreements;

     (u) not adopt any new employee benefit plan or amend any existing plans or
rights;

     (v) not settle any stockholder derivative or class action claims arising
out of or in connection with any of the transactions contemplated by this
Agreement;

     (w) not change the ownership of any of its Subsidiaries or the Cornerstone
Non-controlled Subsidiary, except changes which arise as a result of the
acquisition of Cornerstone OP Units in exchange for Cornerstone Common Stock
pursuant to exercise of the Cornerstone OP Unit redemption right under Section
8.6 of the Cornerstone Partnership Agreement;

     (x) not accept a promissory note in payment of the exercise price payable
under any option to purchase shares of Cornerstone Common Stock;

     (y) not enter into any Tax Protection Agreement;

     (z) not settle or compromise any material federal, state, local or foreign
tax liability; and

     (aa) not authorize, recommend, propose or announce an intention to do any
of the foregoing prohibited actions, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing prohibited actions.

     4.2 Conduct of EOP's and EOP Partnership's Business Pending Merger.  During
the period from the date of this Agreement to the Effective Times, except as
consented to in writing by Cornerstone or as expressly provided for in this
Agreement, EOP and EOP Partnership shall, and shall cause (or, in the case of
Cornerstone Subsidiaries that Cornerstone or Cornerstone Partnership do not
control, shall use commercially reasonable efforts to cause) each of the EOP
Subsidiaries to:

     (a) preserve intact its business organizations and goodwill and use
commercially reasonable efforts to keep available the services of its officers
and employees;

     (b) confer on a regular basis with one or more representatives of
Cornerstone to report operational matters of materiality which would reasonably
be expected to have an EOP Material Adverse Effect;

     (c) promptly notify Cornerstone of any material emergency or other material
change in the condition (financial or otherwise), business, properties, assets,
liabilities, prospects or the normal course of its businesses or in the
operation of its properties, or of any material governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated);

     (d) promptly deliver to Cornerstone true and correct copies of any report,
statement or schedule filed with the SEC subsequent to the date of this
Agreement;

     (e) maintain its books and records in accordance with GAAP consistently
applied and not change in any material manner any of its methods, principles or
practices of accounting in effect at the EOP Financial Statement Date, except as
may be required by the SEC, applicable law or GAAP;

     (f) duly and timely file all reports, tax returns and other documents
required to be filed with federal, state, local and other authorities, subject
to extensions permitted by law, provided such extensions do not adversely affect
EOP's status as a qualified REIT under the Code;

     (g) not make or rescind any express or deemed election relative to Taxes
(unless required by law or necessary to preserve EOP's status as a REIT or the
status of any EOP Subsidiary as a partnership for federal income tax purposes or
as a qualified REIT subsidiary under Section 856(i) of the Code, as the case may
be);

     (h) not amend the EOP Declaration of Trust, the EOP Bylaws or the EOP
Partnership Agreement (except for the Proposed EOP Charter Relating to Voting
Requirements, the Proposed EOP Charter Amendment Relating to Domestically
Controlled REIT Status (as defined herein), the proposed

                                      A-36
<PAGE>   68

amendment to Section 7.4 of the EOP Partnership Agreement, the amendments to the
EOP Partnership Agreement described in Section 5.4(c), the filing of Articles
Supplementary to elect to be subject to the provisions of Section 3-804(c) of
the Maryland General Corporation Law and to the extent necessary to reflect the
admission of additional limited partners and other amendments in connection
therewith that can be made by EOP without a vote of limited partners and that
will not, individually or in the aggregate, materially adversely affect the
rights or obligations of holders of EOP OP Units); as used herein, (i) "Proposed
EOP Charter Amendment Relating to Certain Voting Requirements" means the
proposed amendment to EOP's Declaration of Trust, substantially the form
attached hereto as Exhibit D, which has been approved by the Board of Trustees
of EOP and is proposed to be submitted to a vote of the shareholders of EOP,
(ii) "Proposed EOP Charter Amendment Relating to Domestically Controlled REIT
Status" means the proposed amendment to EOP's Declaration of Trust,
substantially the form attached hereto as Exhibit E, which has been approved by
the Board of Trustees of EOP and is proposed to be submitted to a vote of the
shareholders of EOP at the EOP Shareholders Meeting (as defined below) and (iii)
"Proposed EOP Charter Amendments" means, collectively, the Proposed EOP Charter
Relating to Voting Requirements and the Proposed EOP Charter Amendment Relating
to Domestically Controlled REIT Status;

     (i) except as provided in Section 5.10 hereof and in connection with the
use of EOP Common Shares to pay the exercise price or tax withholding in
connection with equity-based employee benefit plans by the participants therein,
not (i) authorize, declare, set aside or pay any dividend or make any other
distribution or payment with respect to any EOP Common Shares or EOP OP Units or
(ii) directly or indirectly redeem, purchase or otherwise acquire any shares of
capital stock, membership interests or units of partnership interest or any
option, warrant or right to acquire, or security convertible into, shares of
capital stock, membership interests, or units of partnership interest of EOP,
except for (A) redemptions of EOP Common Shares required under Section 7.3.6 of
the EOP Declaration of Trust in order to preserve the status of EOP as a REIT
under the Code, (B) redemptions of EOP OP Units, whether or not outstanding on
the date of this Agreement, under the EOP Partnership Agreement in which EOP
Common Shares are utilized, and (C) repurchases of EOP Common Shares pursuant to
its publicly announced share repurchase program;

     (j) not (A) enter into or agree to effect any merger, acquisition,
consolidation, reorganization or other business combination with any third party
in which EOP is not the surviving party thereto or (B) enter into or agree to
effect any merger, acquisition, exchange offer or other business combination
with a third party in which EOP is the surviving party that would result in the
issuance of equity securities representing in excess of 20% of the outstanding
EOP Common Shares on the date any such business combination is entered into or
agreed to unless, in either such case, such business combination is approved by
Cornerstone, which approval shall not be unreasonably withheld or delayed, or
the business combination agreement provides that the required vote of EOP
shareholders for approval of such business combination is no less than the
affirmative vote of holders of EOP Common Shares representing more than 50% of
the sum of (x) the number of EOP Common Shares outstanding at the time of such
approval plus (y) 50,000,000; and

     (k) not authorize, recommend, propose or announce an intention to do any of
the foregoing prohibited actions, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing prohibited actions.

     4.3 No Solicitation.

     (a) Prior to the Effective Time of the Merger, Cornerstone agrees, for
itself and in its capacity as the sole general partner of the Cornerstone
Partnership, that:

          (i) none of it, Cornerstone Partnership, any Cornerstone Subsidiary or
     the Cornerstone Non-controlled Subsidiary shall invite, initiate, solicit
     or encourage, directly or indirectly, any inquiries, proposals, discussions
     or negotiations or the making or implementation of any proposal or offer
     (including, without limitation, any proposal or offer to its stockholders)
     with respect to a merger, acquisition, tender offer, exchange offer,
     transaction resulting in the issuance of securities representing 10% or
     more of the outstanding equity securities of Cornerstone or Cornerstone
     Partnership,
                                      A-37
<PAGE>   69

     consolidation, business combination, recapitalization, liquidation,
     dissolution, share exchange, business combination, sale, lease, exchange,
     mortgage, pledge, transfer or other disposition of 10% or more of the
     assets or equity securities (including, without limitation, partnership
     interests and units) of Cornerstone or Cornerstone Partnership, other than
     the Mergers (any such proposal or offer being hereinafter referred to as an
     "Acquisition Proposal"), or engage in any discussions or negotiations with
     or provide any confidential or non-public information or data to, any
     person relating to, or that may reasonably be expected to lead to, an
     Acquisition Proposal, or enter into any letter of intent, agreement in
     principle or agreement relating to an Acquisition Proposal, or propose
     publicly to agree to do any of the foregoing, or otherwise facilitate any
     effort or attempt to make or implement an Acquisition Proposal;

          (ii) none of it, Cornerstone Partnership, any Cornerstone Subsidiary
     or the Cornerstone Non-controlled Subsidiary will permit any officer,
     director, employee, affiliate, agent, investment banker, financial advisor,
     attorney, accountant, broker, finder, consultant or other agent or
     representative of Cornerstone to engage in any of the activities described
     in Section 4.3(a);

          (iii) it, Cornerstone Partnership and the Cornerstone Subsidiaries and
     Cornerstone Non-controlled Subsidiary will immediately cease and cause to
     be terminated any existing activities, discussions or negotiations with any
     parties conducted heretofore with respect to any of the foregoing and will
     take the necessary steps to inform the individuals or entities referred to
     in Section 4.3(b) of the obligations undertaken in this Section 4.3; and

          (iv) it will notify EOP promptly (but in any event within 24 hours) if
     Cornerstone, Cornerstone Partnership, any Cornerstone Subsidiary, the
     Cornerstone Non-controlled Subsidiary or any individual or entity referred
     to in Section 4.3(b) receives any such inquiries or proposals, or any
     requests for such information, or if any such negotiations or discussions
     are sought to be initiated or continued with it, and include in such notice
     the identity of the Person making such inquiry, proposal or request, the
     material terms of such inquiry, proposal or request and, if in writing,
     shall promptly deliver to EOP a copy of such inquiry, proposal or request
     along with all other related documentation and correspondence;

     (b) Notwithstanding Section 4.3(a), the Board of Directors of Cornerstone
(including with respect to Cornerstone's capacity as the sole general partner of
Cornerstone Partnership) shall not be prohibited from furnishing information to
or entering into discussions or negotiations with, any person or entity that
makes an unsolicited bona fide written Acquisition Proposal, if, and only to the
extent that (i) a majority of the Board of Directors of Cornerstone determines
in good faith, after consultation with its outside counsel, that such action is
required for the Board of Directors of Cornerstone to comply with its fiduciary
duties to stockholders imposed by applicable law, (ii) prior to furnishing such
information to, or entering into discussions or negotiations with, such person
or entity, Cornerstone provides written notice to EOP to the effect that it is
furnishing information to, or entering into discussions with such person or
entity and (iii) Cornerstone enters into a confidentiality agreement with such
Person on terms in the aggregate not more favorable to such Person than the
terms of the Confidentiality Agreement.

     (c) Notwithstanding anything to the contrary set forth in Section 4.3(a) or
4.3(b), in the event that an Acquisition Proposal constitutes a Superior
Acquisition Proposal (as defined herein), nothing contained in this Section 4.3
shall prohibit the Board of Directors of Cornerstone from withdrawing,
modifying, amending or qualifying its recommendation of this Agreement and the
Merger as required under Section 5.1(d) hereof and recommending such Superior
Acquisition Proposal to its stockholders: (i) if but only if, Cornerstone: (A)
complies fully with this Section 4.3 and (B) provides EOP with at least three
(3) business days' prior written notice of its intent to withdraw, modify, amend
or qualify its recommendation of this Merger Agreement and the Merger, (ii) if,
in the event that during such three (3) business days EOP makes a counter
proposal to such Superior Acquisition Proposal (any such counter proposal being
referred to in this Agreement as the "EOP Counter Proposal"), Cornerstone's
Board of Directors in good faith, taking into account the advice of its outside
financial advisors of nationally recognized reputation, determines (A) that the
EOP Counter Proposal is not at least as favorable to Cornerstone's stockholders
as the Superior Acquisition Proposal, from a financial point of view, and

                                      A-38
<PAGE>   70

(B) the EOP Counter Proposal is not at least as favorable generally to
Cornerstone's stockholders (taking into account all financial and strategic
considerations and other relevant factors, including relevant legal, financial,
regulatory and other aspects of such proposals, and the conditions, prospects
and time required for completion of such proposal), and (iii) Cornerstone shall
have terminated this Agreement in accordance with Section 7.1(h).

     (d) For all purposes of this Agreement, "Superior Acquisition Proposal"
means a bona fide written proposal made by a third party to acquire, directly or
indirectly, Cornerstone and/or Cornerstone Partnership pursuant to a tender or
exchange offer, merger, share exchange, consolidation or sale of all or
substantially all of the assets of Cornerstone, Cornerstone Partnership, and the
Cornerstone Subsidiaries or otherwise (i) on terms which a majority of the Board
of Directors of Cornerstone determines in good faith, (A) taking into account
the advice of Cornerstone's financial advisors of nationally recognized
reputation, are superior, from a financial point of view, to Cornerstone's
stockholders to those provided for in the Merger and (B) to be more favorable
generally to Cornerstone's stockholders (taking into account all financial and
strategic considerations and other relevant factors, including relevant legal,
financial, regulatory and other aspects of such proposals, and the conditions,
prospects and time required for completion of such proposal), (ii) for which
financing, to the extent required, is then fully committed and capable of being
obtained and (iii) which the Board of Directors of Cornerstone determines in
good faith is reasonably capable of being consummated.

     (e) Any disclosure that the Board of Directors of Cornerstone may be
compelled to make with respect to the receipt of an Acquisition Proposal in
order to comply with its duties to shareholders imposed by applicable law or
Rule 14d-9 or 14e-2 of the Exchange Act will not constitute a violation of this
Section 4.3.

     (f) Nothing in this Section 4.3 shall (i) permit Cornerstone to terminate
this Agreement (except as expressly provided in Article 7) or (ii) affect any
other obligations of Cornerstone under this Agreement.

     4.4 Affiliates. Prior to the Effective Time of the Merger, Cornerstone
shall cause to be prepared and delivered to EOP a list (reasonably satisfactory
to counsel for EOP) identifying all persons who, at the time of the Cornerstone
Stockholders Meeting and the EOP Shareholders Meeting, may be deemed to be
"affiliates" of Cornerstone or Cornerstone Partnership as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act (the "Rule 145
Affiliates"). Cornerstone shall use its commercially reasonable efforts to cause
each person who is identified as a Rule 145 Affiliate in such list to deliver to
EOP on or prior to the Effective Time a written agreement, in the form
previously approved by the parties hereto, that such Rule 145 Affiliate will not
sell, pledge, transfer or otherwise dispose of any EOP Common Shares and EOP OP
Units issued to such Rule 145 Affiliate pursuant to the Merger, except pursuant
to an effective registration statement under the Securities Act or in compliance
with paragraph (d) of Rule 145 or as otherwise permitted by the Securities Act.
EOP shall be entitled to place legends as specified in such written agreements
on the certificates representing any EOP Common Shares to be received pursuant
to the terms of this Agreement by such Rule 145 Affiliates who have executed
such agreements and to issue appropriate stop transfer instructions to the
transfer agent for the EOP Common Shares and EOP OP Units issued to such Rule
145 Affiliates, consistent with the terms of such agreements. EOP and EOP OP
shall timely file the reports required to be filed by it under the Exchange Act
and the rules and regulations adopted by the SEC thereunder, and it will take
such further action as any Rule 145 Affiliate of Cornerstone or EOP may
reasonably request, all to the extent required from time to time to enable such
Rule 145 Affiliate to sell shares of beneficial interest of EOP received by such
Rule 145 Affiliate in the Merger without registration under the Securities Act
pursuant to (i) Rule 145(d)(1) under the Securities Act, as such rule may be
amended from to time, or (ii) any successor rule or regulation hereafter adopted
by the SEC.

     4.5 Other Actions. Each of Cornerstone and Cornerstone Partnership, on the
one hand, and EOP and EOP Partnership, on the other hand, shall not take, and
shall use commercially reasonable efforts to cause their respective Subsidiaries
not to take, any action that would result in (i) any of the representations and
warranties of such party (without giving effect to any "knowledge"
qualification) set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and

                                      A-39
<PAGE>   71

warranties (without giving effect to any "knowledge" qualification) that are not
so qualified becoming untrue in any material respect or (iii) except as
contemplated by Section 4.3, any of the conditions to the Merger set forth in
Article 6 not being satisfied.

                                   ARTICLE 5

                              ADDITIONAL COVENANTS

     5.1 Preparation of the Form S-4 and the Proxy Statement; Cornerstone
Stockholders Meeting, Cornerstone Unitholders Consent Solicitation and EOP
Shareholders Meeting.

     (a) As promptly as practicable after execution of this Agreement, (i) each
of Cornerstone and EOP shall prepare and file with the SEC (with appropriate
requests for confidential treatment, unless the parties hereto otherwise agree)
under the Exchange Act, one or more joint proxy statements/prospectuses, forms
of proxies and information statements (such joint proxy
statement(s)/prospectus(es) and information statements together with any
amendments to supplements thereto, the "Joint Proxy Statement") relating to the
stockholder meeting of Cornerstone and the shareholder meeting of EOP, the vote
of the stockholders of Cornerstone with respect to this Agreement and the
shareholders of EOP with respect to the Merger and the Proposed EOP Charter
Amendment Relating to Domestically Controlled REIT Status, and the consent, if
any, of partners of Cornerstone Partnership and EOP Partnership in connection
with any required Partner Approvals and (ii) in connection with the clearance by
the SEC of the Joint Proxy Statement, EOP and Cornerstone, if applicable, shall
prepare and file with the SEC under the Securities Act one or more registration
statements on Form S-4 (such registration statements, together with any
amendments or supplements thereto, the "Form S-4"), in which the Joint Proxy
Statement will be included, as one or more prospectuses in connection with the
registration under the Securities Act of the EOP Common Shares and EOP OP Units
to be distributed to the holders of Cornerstone Common Stock and Cornerstone OP
Units in the Mergers. The respective parties will cause the Proxy Statement and
the Form S-4 to comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and regulations
thereunder. Each of Cornerstone, Cornerstone Partnership, EOP and EOP
Partnership shall furnish all information about itself and its business and
operations and all necessary financial information to the other as the other may
reasonably request in connection with the preparation of the Joint Proxy
Statement and the Form S-4. EOP and Cornerstone, if applicable, shall use its
commercially reasonable efforts, and Cornerstone will cooperate with it, to have
the Form S-4 declared effective by the SEC as promptly as practicable (including
clearing the Proxy Statement with the SEC. Each of Cornerstone and Cornerstone
Partnership, on the one hand, and EOP and EOP Partnership, on the other hand,
agree promptly to correct any information provided by it for use in the Joint
Proxy Statement and the Form S-4 if and to the extent that such information
shall have become false or misleading in any material respect, and each of the
parties hereto further agrees to take all steps necessary to amend or supplement
the Joint Proxy Statement and the Form S-4 and to cause the Joint Proxy
Statement and the Form S-4 as amended or supplemented to be filed with the SEC
and to be disseminated to their respective stockholders and shareholders and
partners, in each case as and to the extent required by applicable federal and
state securities laws. Each of Cornerstone, Cornerstone Partnership, EOP and EOP
Partnership agrees that the information provided by it for inclusion in the
Joint Proxy Statement or the Form S-4 and each amendment or supplement thereto,
at the time of mailing thereof and at the time of the respective meetings of
stockholders and shareholders of Cornerstone and EOP and at the time of the
respective taking of consents, if any, of partners of Cornerstone Partnership
and EOP Partnership, will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. EOP will advise and deliver copies (if any) to
Cornerstone, promptly after it receives notice thereof, of any request by the
SEC for amendment of the Joint Proxy Statement or the Form S-4 or comments
thereon and responses thereto or requests by the SEC for additional information
(regardless of whether such requests relate to EOP or EOP Partnership, on the
one hand, and Cornerstone or Cornerstone Partnership, on the other hand), and
EOP shall promptly notify Cornerstone, and Cornerstone shall promptly notify
EOP, if applicable, of (i) the time

                                      A-40
<PAGE>   72

when the Form S-4 has become effective, (ii) the filing of any supplement or
amendment thereto, (iii) the issuance of any stop order, and (iv) the suspension
of the qualification and registration of the EOP Common Shares and EOP OP Units
issuable in connection with the Mergers.

     (b) Each of Cornerstone, Cornerstone Partnership, EOP and EOP Partnership
shall use its commercially reasonable efforts to timely mail the joint proxy
statement/prospectus contained in the Form S-4 to its stockholders or
shareholders. It shall be a condition to the mailing of the joint proxy
statement/prospectus that (i) EOP and EOP Partnership shall have received a
"comfort" letter from PricewaterhouseCoopers LLP, independent public accountants
for Cornerstone and Cornerstone Partnership, of the kind contemplated by the
Statement of Auditing Standards with respect to Letters to Underwriters
promulgated by the American Institute of Certified Public Accountants (the
"AICPA Statement"), dated as of the date on which the Form S-4 shall become
effective and as of the Effective Time, addressed to EOP and EOP Partnership, in
form and substance reasonably satisfactory to EOP and EOP Partnership,
concerning the procedures undertaken by PricewaterhouseCoopers LLP with respect
to the financial statements and information of Cornerstone and Cornerstone
Partnership and their subsidiaries and the Cornerstone Non-controlled Subsidiary
contained in the Form S-4 and the other matters contemplated by the AICPA
Statement and otherwise customary in scope and substance for letters delivered
by independent public accountants in connection with transactions such as those
contemplated by this Agreement and (ii) Cornerstone shall have received a
"comfort" letter from Ernst & Young LLP, independent public accountants for EOP
and EOP Partnership, of the kind contemplated by the AICPA Statement, dated as
of the date on which the Form S-4 shall become effective and as of the Effective
Time, addressed to Cornerstone and Cornerstone Partnership, in form and
substance reasonably satisfactory to Cornerstone, concerning the procedures
undertaken by Ernst & Young LLP with respect to the financial statements and
information of EOP, EOP Partnership and their subsidiaries contained in the Form
S-4 and the other matters contemplated by the AICPA Statement and otherwise
customary in scope and substance for letters delivered by independent public
accountants in connection with transactions such as those contemplated by this
Agreement.

     (c) EOP will duly call and give notice of and, as soon as practicable
following the date of this Agreement (but in no event sooner than 20 business
days following the date the Joint Proxy Statement is mailed to the shareholders
of EOP), convene and hold a meeting of its shareholders (the "EOP Shareholders
Meeting") for the purpose of obtaining the EOP Shareholder Approvals. EOP shall,
through its Board of Trustees, recommend to its shareholders approval of this
Agreement, the Merger and the transactions contemplated by this Agreement.

     (d) Cornerstone will duly call and give notice of and, as soon as
practicable following the date of this Agreement (but in no event sooner than 20
business days following the date the Joint Proxy Statement is mailed to the
stockholders of Cornerstone), convene and hold a meeting of its stockholders
(the "Cornerstone Stockholders Meeting") for the purpose of obtaining the
Cornerstone Stockholder Approvals. Cornerstone shall, through its Board of
Directors, recommend to its stockholders approval of this Agreement, the Merger
and the transactions contemplated by this Agreement and include such
recommendation in the Proxy Statement; provided, however, that prior to the
Cornerstone Stockholders Meeting, such recommendation may be withdrawn,
modified, amended or qualified if and only to the extent permitted by Section
4.3(c) hereof.

     (e) EOP and Cornerstone shall use their commercially reasonable efforts to
convene their respective shareholder and stockholder meetings on the same day,
which day, subject to the provisions of Sections 5.1(c), 5.1(d) and 5.3, shall
be a day not later than 60 days after the date the Joint Proxy Statement is
mailed.

     (f) If on the date for the EOP Shareholders Meeting and Cornerstone
Stockholders Meeting established pursuant to Section 5.1(e) of this Agreement,
either EOP or Cornerstone has not received duly executed proxies for a
sufficient number of votes to approve the Merger, then both parties shall
recommend the adjournment of their respective shareholders and stockholders
meetings until one or more dates not later than the date 10 days after the
originally scheduled date of the shareholders meetings.

                                      A-41
<PAGE>   73

     (g) Cornerstone shall request written consents for approval by the limited
partners of Cornerstone Partnership of each of the matters described in the
definition of Cornerstone Partner Approvals. Cornerstone hereby agrees to vote
in favor of or consent to, as applicable, the Partnership Merger, to the extent
approval thereof is required by the Cornerstone Partnership Agreement.
Cornerstone shall recommend to the limited partners of Cornerstone Partnership
that they approve such matters. EOP shall request written consents, if any is
required, by the limited partners, of EOP Partnership of each of the matters
described in the definition of EOP Partner Approvals. EOP hereby agrees to vote,
if any is required, in favor of such matters and to recommend to the limited
partners of EOP Partnership that they approve such matters.

     5.2 Access to Information; Confidentiality. Subject to the requirements of
confidentiality agreements with third parties in existence on the date hereof,
each of the parties shall, and shall cause each of its Subsidiaries (and, in the
case of Cornerstone, the Cornerstone Non-controlled Subsidiary) to, afford to
the other parties and to the officers, employees, accountants, counsel,
financial advisors and other representatives of such other parties, reasonable
access during normal business hours prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records and,
during such period, each of the parties shall, and shall cause each of its
Subsidiaries (and, in the case of Cornerstone, the Cornerstone Non-controlled
Subsidiary) to, furnish promptly to the other parties (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (b)
all other information concerning its business, properties and personnel as such
other party may reasonably request. Each of the parties shall, and shall cause
its Subsidiaries (and in the case of Cornerstone, the Cornerstone Non-controlled
Subsidiary) to, use commercially reasonable efforts to cause its officers,
employees, accountants, counsel, financial advisors and other representatives
and affiliates to, hold any nonpublic information in confidence in accordance
with the Confidentiality Agreement, which shall remain in full force and effect
pursuant to the terms thereof, notwithstanding the execution and delivery of
this Agreement or the termination hereof.

     5.3 Commercially Reasonable Efforts; Notification.

     (a) Subject to the terms and conditions herein provided, each of the
parties shall: (i) use commercially reasonable efforts to cooperate with one
another in (A) determining which filings are required to be made prior to the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, governmental or
regulatory authorities of the United States, the several states and foreign
jurisdictions and any third parties in connection with the execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby, including, without limitation, any filing under the HSR
Act, and (B) timely making all such filings and timely seeking all such
consents, approvals, permits and authorizations; (ii) use commercially
reasonable efforts (other than the payment of money which is not contractually
required to be paid) to obtain in writing any consents required from third
parties to effectuate the Mergers, such consents to be in form reasonably
satisfactory to each of the parties (including, without limitation, taking the
actions contemplated under Schedule 5.3(a)(ii)); and (iii) use commercially
reasonable efforts to take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after the Effective Time any further action is necessary or
desirable to carry out the purpose of this Agreement, each party shall take all
such necessary action.

     (b) Cornerstone and Cornerstone Partnership shall use commercially
reasonable efforts to obtain from PricewaterhouseCoopers LLP access to all work
papers relating to audits of Cornerstone and Cornerstone Partnership performed
by PricewaterhouseCoopers LLP, and the continued cooperation of
PricewaterhouseCoopers LLP with regard to the preparation of consolidated
financial statements for the Surviving Trust.

     (c) Cornerstone and Cornerstone Partnership shall give prompt notice to EOP
and EOP Partnership, and EOP and EOP Partnership shall give prompt notice to
Cornerstone and Cornerstone Partnership, (i) if any representation or warranty
made by it contained in this Agreement that is qualified as to

                                      A-42
<PAGE>   74

materiality becomes untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becomes untrue or inaccurate
in any material respect or (ii) of the failure by it to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.

     5.4 Tax Matters.

     (a) Each of EOP and Cornerstone shall use its commercially reasonable
efforts before and after the Effective Time to cause the Merger to qualify as a
reorganization under the provisions of Sections 368(a) of the Code and to obtain
the opinions of counsel referred to in Sections 6.2(e) and 6.3(e).

     (b) Unless, and only to the extent, expressly provided otherwise in the Tax
Protection Agreements described in Schedule 2.18(j) to the Cornerstone
Disclosure Letter to be assumed by EOP pursuant to Section 5.14, EOP Partnership
and its Subsidiaries shall use the "traditional method" under Treasury
Regulations Section 1.704-3(b) for purposes of making allocations under Section
704(c) of the Code with respect to the properties of Cornerstone Partnership and
its Subsidiaries acquired in the Partnership Merger to take into account
differences as of the Effective Time of the Partnership Merger between the
adjusted tax bases of such properties and their respective fair market values
(referred to as the "Section 704(c) values"), with no curative allocations to
offset the effect of the "ceiling rule." EOP Partnership and Cornerstone
Partnership shall negotiate in good faith to agree upon the "Section 704(c)
values" of the properties of Cornerstone Partnership and its Subsidiaries as of
the Effective Time of the Partnership Merger. Unless, and only to the extent,
expressly provided otherwise in the Tax Protection Agreements described in
Schedule 2.18(j) to the Cornerstone Disclosure Letter to be assumed by EOP
pursuant to Section 5.14, EOP Partnership and its Subsidiaries shall determine
in their reasonable discretion the method to be used for allocating "excess
nonrecourse liabilities" of EOP Partnership pursuant to Treasury Regulations
Section 1.752-3(a)(3) following the Closing Date, provided that (i) EOP
Partnership shall not use with respect to the former limited partners in
Cornerstone Partnership a method that is less favorable than the method used by
EOP Partnership with respect to the other limited partners of EOP Partnership
who are not parties to an express agreement specifying a particular method to be
used for such purposes, and (ii) in the case of a Cornerstone Partner who, prior
to the Partnership Merger, had been specially allocated a portion of a
Cornerstone Partnership nonrecourse liability secured by a property with respect
to which such Cornerstone Partner has a built-in gain under Section 704(c) of
the Code to take into account such Cornerstone Partner's share of such built-in
gain that was not taken into account in making the allocation of such liability
under Treasury Regulation Section 1.752-3(a)(2), EOP Partnership shall continue
such method of allocating such liability following the Merger.

     (c) EOP Partnership shall amend the EOP Partnership Agreement at or prior
to the Effective Time of the Partnership Merger to incorporate provisions
relating to the restoration of deficit capital accounts that will permit each
limited partner of Cornerstone Partnership who has entered into an agreement
with Cornerstone Partnership prior to the Partnership Merger relating to the
restoration of deficit capital accounts to continue to be obligated to restore
any deficit in its capital account in EOP Partnership in an amount that is not
less than the maximum potential amount that such limited partner was obligated
to restore to Cornerstone Partnership immediately prior to the Effective Time of
the Partnership Merger. Such deficit capital account restoration provisions to
be incorporated in the EOP Partnership Agreement shall be in substantially the
form of the deficit capital account restoration provisions incorporated in the
Cornerstone Partnership Agreement pursuant to the Fourth Amendment of Agreement
of Limited Partnership of Cornerstone Properties Limited Partnership, with such
changes thereto as shall be approved by Cornerstone Partnership, provided,
however, that except as set forth in the next sentence below or in the Tax
Protection Agreements listed on Schedule 2.18(j) to the Cornerstone Disclosure
Letter, no Cornerstone Partner shall have the right to increase the amount of
its deficit restoration obligation following the Partnership Merger to an amount
in excess of the maximum potential amount that such limited partner was
obligated to restore to Cornerstone Partnership immediately prior to the
Effective Time of the Partnership Merger. Notwithstanding the proviso in the
immediately preceding sentence, the
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<PAGE>   75

Cornerstone Partners as a group shall have the right, at any time following the
Merger and without the consent of EOP, to increase their maximum potential
deficit restoration obligations as a group (as determined immediately prior to
the Merger) by an aggregate amount of up to $50 million, reduced by the amount
of any increase therein that shall occur under the Cornerstone Partnership
Agreement during the period commencing on the date hereof and ending immediately
prior to the Effective Time of the Partnership Merger. Any election to increase
or to take on a deficit restoration obligation election permitted under a Tax
Protection Agreement listed on Schedule 2.18(j) to the Cornerstone Disclosure
Letter shall not be taken into account in applying the foregoing $50 million
limitation. Notwithstanding any the foregoing, EOP Partnership shall not be
obligated to maintain any level of partnership recourse debt in excess of the
amounts otherwise specifically required to be maintained under the Tax
Protection Agreements listed on Schedule 2.18(j) to the Cornerstone Disclosure
Letter. In addition, the amendment to the EOP Partnership Agreement will contain
a provision to the effect that (i) EOP Partnership will consider in good faith a
request from a former Cornerstone Partner to increase the amount of its deficit
restoration obligation from time to time after the Partnership Merger if the
former Cornerstone Partner shall provide information from its professional tax
advisor satisfactory to EOP Partnership showing that, in the absence of such an
increase, such former Cornerstone Partner would not likely be allocated from EOP
Partnership sufficient indebtedness under Section 752 of the Code and the
at-risk provisions under Section 465 of the Code to avoid the recognition of
gain (other than gain required to be recognized by reason of actual cash
distributions from EOP Partnership following the Partnership Merger); (ii) EOP
Partnership and its professional tax advisors will cooperate in good faith with
the former Cornerstone Partner and its professional tax advisor to provide such
information regarding the allocation of the EOP Partnership liabilities and the
nature of such liabilities as is reasonably necessary in order to determine the
former Cornerstone Partner's adjusted tax basis in its EOP OP Units and at-risk
amount; (iii) in deciding whether or not to grant such request, EOP Partnership
shall be entitled to take into account all factors related to EOP Partnership,
including, without limitation, the existing and anticipated debt structure of
EOP Partnership, the tax situations of other holders of EOP OP Units and the
effect that such a deficit restoration commitment might have on their tax
situation, and the anticipated term long term business needs of EOP; (iv) in no
event shall EOP Partnership be required to incur additional indebtedness that
would be considered a "recourse liability" for purposes of Section 752 of the
Code to facilitate such additional deficit capital account restoration
commitments; and (v) EOP Partnership's only obligation shall be to act in good
faith, and a former Cornerstone Partner's exclusive remedy under such provision
would be an action for specific performance, with no entitlement to monetary
damages.

     5.5 Public Announcements. Each party will consult with each other party
before issuing, and provide each other the opportunity to review and comment
upon, any press release or other written public statements, including, without
limitation, any press release or other written public statement which address in
any manner the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such written public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement will be in the form
agreed to by the parties prior to the execution of this Agreement.

     5.6 Listing. EOP shall use commercially reasonable efforts to cause the EOP
Common Shares to be issued in the Merger, and the EOP Common Shares reserved for
issuance upon redemption of EOP OP Units issued in the Partnership Merger, to be
approved for listing on the NYSE, subject to official notice of issuance, prior
to the Effective Time.

     5.7 Transfer and Gains Taxes. Each party shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement (together with
any related interests, penalties or additions to tax, "Transfer and Gains
Taxes"). From and after the Effective Time, EOP shall pay or cause EOP Operating
Partnership, as

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appropriate, to pay or cause to be paid, without deduction or withholding from
any amounts payable to the holders of EOP Common Shares or EOP OP Units, as
applicable, all Transfer and Gains Taxes (which term shall not in any event be
construed to include for these purposes any Tax imposed under the Code).

     5.8 Benefit Plans and Other Employee Arrangements.

     (a) Benefit Plans. After the Effective Time, all employees of Cornerstone
who are employed by the Surviving Trust shall, at the option of the Surviving
Trust, either continue to be eligible to participate in an "employee benefit
plan", as defined in Section 3(3) of ERISA, of Cornerstone which is, at the
option of the Surviving Trust, continued by the Surviving Trust, or
alternatively shall be eligible to participate in the same manner as other
similarly situated employees of the Surviving Trust who were formerly employees
of EOP in any "employee benefit plan," as defined in Section 3(3) of ERISA,
sponsored or maintained by the Surviving Trust after the Effective Time. With
respect to each such employee benefit plan, service with Cornerstone or any
Cornerstone Subsidiary (as applicable) and the predecessor of any of them shall
be included for purposes of determining eligibility to participate, vesting (if
applicable) and determination of the level of entitlement to, benefits under
such employee benefit plan. EOP shall, or shall cause the Surviving Trust and
its Subsidiaries to, (i) waive all limitations, as to preexisting conditions
exclusions and waiting periods with respect to participation and coverage
requirements applicable to all employees of Cornerstone who are employed by the
Surviving Trust under any welfare plan that such employees may be eligible to
participate in after the Effective Time, other than limitations or waiting
periods that are already in effect with respect to such employees and that have
not been satisfied as of the Effective Time under any welfare plan maintained
for such employees immediately prior to the Effective Time, and (ii) provide
each such employee of Cornerstone who is employed by the Surviving Trust with
credit for any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time.

     (b) Stock Option and Restricted Stock Plans. The stock option plans or
programs of Cornerstone and the restricted stock plans or programs of
Cornerstone shall be discontinued.

     (c) Cornerstone Stock Options. As of the Effective Time, each outstanding
Cornerstone Stock Option shall, whether or not then vested or exercisable,
effective as of the Effective Time, become fully exercisable and vested and each
such Cornerstone Stock Option shall be automatically converted at the Effective
Time into an option (a "Substituted Option") to purchase a number of shares of
EOP Common Shares equal to the number of shares of Cornerstone Common Stock that
could have been purchased (assuming full vesting) under such Cornerstone Stock
Option multiplied by 0.7009 (rounded down to the nearest whole number of shares
of Cornerstone Common Stock) at an exercise price per share of EOP Common Shares
equal to the per-share option exercise price specified in the Cornerstone Stock
Option divided by 0.7009 (rounded up to the nearest whole cent). Such
Substituted Option shall otherwise be subject to the same terms and conditions
as such Cornerstone Stock Option. For purposes of expiration and otherwise, the
date of grant of the Substituted Option shall be the date on which the
corresponding Cornerstone Stock Option was granted. If the holder of such
Cornerstone Stock Option surrenders such option after the Effective Time and
prior to 11:59 p.m., Eastern Time, on the second business day immediately
following the Effective Time, EOP shall, subject to reduction for required
withholding taxes, pay to each such holder of Cornerstone Stock Options an
amount in cash in respect thereof equal to the product of (i) the excess, if
any, of $18.00 over the exercise price of such Cornerstone Stock Option and (ii)
the number of shares of Cornerstone Common Stock subject thereto. At the
Effective Time, (i) all references in the related stock option agreements to
Cornerstone shall be deemed to refer to EOP and (ii) EOP shall assume all of
Cornerstone's obligations with respect to Cornerstone Stock Options as so
amended. As promptly as reasonably practicable after the Effective Time, EOP
shall issue to each holder of an outstanding Cornerstone Stock Option a document
evidencing the foregoing assumption by EOP.

     In respect of each Cornerstone Stock Option assumed by EOP and converted
into a Substituted Option, and the EOP Common Shares underlying such Substituted
Option, EOP shall, as soon as

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practicable after the Effective Time, file and keep current a Registration
Statement on Form S-8 or other appropriate registration statement for as long as
Substituted Options remain outstanding.

     (d) Restricted Stock. All unvested shares of restricted stock of
Cornerstone set forth in Schedule 5.8(d) of the Cornerstone Disclosure Schedule,
shall, by virtue of this Agreement and without further action of Cornerstone,
EOP or the holder of such shares of restricted stock, to the extent required in
the plan, agreement or instrument pursuant to which such shares of restricted
stock were granted, vest and become free of all restrictions immediately prior
to the Effective Time and shall be converted into the Merger Consideration
pursuant to Section 1.10.

     (e) Retention Agreements and Retention Plan. From and after the Effective
Time, EOP or EOP Partnership shall assume the obligations of Cornerstone under
the Retention Agreements and the Cornerstone retention plan set forth on
Schedule 5.9(e) of the Cornerstone Disclosure Letter. The transactions
contemplated by this Agreement shall be deemed a "Change in Control" for
purposes of such agreements, and EOP shall perform the obligations of
Cornerstone under such agreements and plan in accordance with the terms thereof.

     (f) Withholding. To the extent required by applicable law, Cornerstone
shall require each employee who exercises a Cornerstone Stock Option or who
receives Cornerstone Common Stock pursuant to any existing commitment to pay to
Cornerstone in cash or Cornerstone Common Stock an amount sufficient to satisfy
in full Cornerstone's obligation to withhold Taxes incurred by reason of such
exercise or issuance (unless and to the extent such withholding is satisfied
pursuant to the provision regarding withholding in Section 1.15(c)).

     5.9 Indemnification.

     (a) From and after the Effective Time, EOP and EOP Partnership
(collectively, the "Indemnifying Parties") shall provide exculpation and
indemnification for each person who is now or has been at any time prior to the
date hereof or who becomes prior to the Effective Time of the Merger, an officer
or director of Cornerstone or any Cornerstone Subsidiary (the "Indemnified
Parties") which is the same as the exculpation and indemnification provided to
the Indemnified Parties by Cornerstone and the Cornerstone Subsidiaries
immediately prior to the Effective Time of the Merger in its charter, Bylaws or
in its partnership, operating or similar agreement, as in effect on the date
hereof.

     (b) In addition to the rights provided in Section 5.9(a) above, in the
event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, including, without
limitation, any action by or on behalf of any or all security holders of
Cornerstone or EOP, or any Cornerstone Subsidiary or EOP Subsidiary, or by or in
the right of Cornerstone or EOP, or any Cornerstone Subsidiary or EOP
Subsidiary, or any claim, action, suit, proceeding or investigation in which any
person who is now, or has been, at any time prior to the date hereof, or who
becomes prior to the Effective Time of the Merger, an officer, employee or
director of Cornerstone or any Cornerstone Subsidiary (the "Indemnification
Parties") is, or is threatened to be, made a party based in whole or in part on,
or arising in whole or in part out of, or pertaining to (i) the fact that he is
or was an officer, employee or director of Cornerstone or any of the Cornerstone
Subsidiaries or any action or omission by such person in his capacity as a
director, or (ii) this Agreement or the transactions contemplated by this
Agreement, whether in any case asserted or arising before or after the Effective
Time of the Merger, the Indemnifying Parties shall, from and after the Effective
Time of the Merger, indemnify and hold harmless, as and to the full extent
permitted by applicable law, each Indemnification Party against any losses,
claims, liabilities, expenses (including reasonable attorneys' fees and
expenses), judgments, fines and amounts paid in settlement in accordance
herewith in connection with any such threatened or actual claim, action, suit,
proceeding or investigation. Any Indemnification Party proposing to assert the
right to be indemnified under this Section 5.9(b) shall, promptly after receipt
of notice of commencement of any action against such Indemnification Party in
respect of which a claim is to be made under this Section 5.9(b) against the
Indemnifying Parties, notify the Indemnifying Parties of the commencement of
such action, enclosing a copy of all papers served; provided, however, that the
failure to provide such notice shall not affect the obligations of the
Indemnifying Parties except to the extent such failure to notify
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materially prejudices the Indemnifying Parties' ability to defend such claim,
action, suit, proceeding or investigation; and provided, further, however, that,
in the case of any action pending at the Effective Time of the Merger,
notification pursuant to this Section 5.9(b) shall be received by EOP prior to
such Effective Time. If any such action is brought against any of the
Indemnification Parties and such Indemnification Parties notify the Indemnifying
Parties of its commencement, the Indemnifying Parties will be entitled to
participate in and, to the extent that they elect by delivering written notice
to such Indemnification Parties promptly after receiving notice of the
commencement of the action from the Indemnification Parties, to assume the
defense of the action and after notice from the Indemnifying Parties to the
Indemnification Parties of their election to assume the defense, the
Indemnifying Parties will not be liable to the Indemnification Parties for any
legal or other expenses except as provided below. If the Indemnifying Parties
assume the defense, the Indemnifying Parties shall have the right to settle such
action without the consent of the Indemnification Parties; provided, however,
that the Indemnifying Parties shall be required to obtain such consent (which
consent shall not be unreasonably withheld) if the settlement includes any
admission of wrongdoing on the part of the Indemnification Parties or any decree
or restriction on the Indemnification Parties; provided, further, that no
Indemnifying Parties, in the defense of any such action shall, except with the
consent of the Indemnification Parties (which consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnification Parties of a release from all liability with
respect to such action. The Indemnification Parties will have the right to
employ their own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such Indemnification Parties
unless (i) the employment of counsel by the Indemnification Parties has been
authorized in writing by the Indemnifying Parties, (ii) the Indemnification
Parties have reasonably concluded (based on written advice of counsel to the
Indemnification Parties) that there may be legal defenses available to them that
are different from or in addition to and inconsistent with those available to
the Indemnifying Parties, (iii) a conflict or potential conflict exists (based
on written advice of counsel to the Indemnification Parties) between the
Indemnification Parties and the Indemnifying Parties (in which case the
Indemnifying Parties will not have the right to direct the defense of such
action on behalf of the Indemnification Parties) or (iv) the Indemnifying
Parties have not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action from the Indemnification Parties, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
Indemnifying Parties and shall promptly be paid by each Indemnifying Party as
they become due and payable in advance of the final disposition of the claim,
action, suit, proceeding or investigation to the fullest extent and in the
manner permitted by law; provided, however, that in no event shall any
contingent fee arrangement be considered reasonable. Notwithstanding the
foregoing, the Indemnifying Parties shall not be obligated to advance any
expenses or costs prior to receipt of an undertaking by or on behalf of the
Indemnification Party to repay any expenses advanced if it shall ultimately be
determined that the Indemnification Party is not entitled to be indemnified
against such expense. It is understood that the Indemnifying Parties shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm admitted to practice in such jurisdiction at any
one time for all such Indemnification Parties unless (a) the employment of more
than one counsel has been authorized in writing by the Indemnifying Parties, (b)
any of the Indemnification Parties have reasonably concluded (based on written
advice of counsel to the Indemnification Parties) that there may be legal
defenses available to them that are different from or in addition to and
inconsistent with those available to other Indemnification Parties or (c) a
conflict or potential conflict exists (based on written advice of counsel to the
Indemnification Parties) between any of the Indemnification Parties and the
other Indemnification Parties, in each case of which the Indemnifying Parties
shall be obligated to pay the reasonable fees and expenses of such additional
counsel or counsels. Notwithstanding anything to the contrary set forth in this
Agreement, the Indemnifying Parties (i) shall not be liable for any settlement
effected without their prior written consent and (ii) shall not have any
obligation hereunder to any Indemnification Party to the extent that a court of
competent jurisdiction shall determine in a final and non-appealable order that
such indemnification is prohibited by applicable law. In the event of a final
and non-appealable determination
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by a court that any payment of expenses is prohibited by applicable law, the
Indemnification Parties shall promptly refund to the Indemnifying Parties the
amount of all such expenses theretofore advanced pursuant hereto.

     (c) At or prior to the Effective Time of the Merger, EOP shall purchase
directors' and officers' liability insurance covering acts or omissions
occurring prior to the Effective Time of the Merger for a period of six years
with respect to those persons who are currently covered by Cornerstone's
directors' and officers' liability insurance policy on terms with respect to
such coverage and amount no less favorable to Cornerstone's directors and
officers currently covered by such insurance than those of such policy in effect
on the date hereof.

     (d) This Section 5.9 is intended for the irrevocable benefit of, and to
grant third-party rights to, the Indemnified Parties, the Indemnification
Parties and their successors, assigns and heirs and shall be binding on all
successors and assigns of EOP and EOP Operating Partnership. Each of the
Indemnified Parties and the Indemnification Parties shall be entitled to enforce
the covenants contained in this Section 5.9 and EOP and EOP Partnership
acknowledge and agree that each Indemnified Party and Indemnification Party
would suffer irreparable harm and that no adequate remedy at law exists for a
breach of such covenants and such Indemnified Party or such Indemnification
Party shall be entitled to injunctive relief and specific performance in the
event of any breach of any provision in this Section 5.9.

     (e) If EOP or EOP Partnership or any of its respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in each such case the successors and assigns of such
entity shall assume the obligations set forth in this Section 5.9, which
obligations are expressly intended to be for the irrevocable benefit of, and
shall be enforceable by, each director and officer covered hereby.

     5.10 Declaration of Dividends and Distributions. From and after the date of
this Agreement, neither Cornerstone nor EOP shall make any dividend or
distribution to its respective stockholders or shareholders without the prior
written consent of the other party; provided, however, the written consent of
the other party shall not be required for the authorization and payment of (a)
distributions at their respective stated dividend or distribution rates with
respect to EOP Preferred Shares or Cornerstone 7% Preferred Stock, (b) quarterly
distribution with respect to the Cornerstone Common Stock of up to $0.24 per
share for the quarter ending March 31, 2000 and up to $0.31 per share thereafter
and (c) quarterly distributions with respect to the EOP Common Share of up to
$0.42 per share for the quarter ending March 31, 2000 and for each quarter
thereafter; provided, however, except for the record date previously set on
January 31, 2000, the record date for each distribution with respect to the
Cornerstone Common Stock shall be the same date as the record date for the
quarterly distribution for the EOP Common Shares, as provided to Cornerstone by
notice not less than twenty (20) business days prior to the record date for any
quarterly EOP distribution. From and after the date of this Agreement,
Cornerstone Partnership shall not make any distribution to the holders of
Cornerstone OP Units except a distribution per Cornerstone OP Unit in the same
amount as a dividend per share of Cornerstone Common Stock permitted pursuant to
this Section 5.10, with the same record and payment dates as such dividend on
the Cornerstone Common Stock. The foregoing restrictions shall not apply,
however, to the extent a distribution (or an increase in a distribution) by
Cornerstone or EOP is necessary for Cornerstone or EOP, as applicable, to
maintain REIT status, avoid the incurrence of any taxes under Section 857 of the
Code, avoid the imposition of any excise taxes under Section 4981 of the Code,
or avoid the need to make one or more extraordinary or disproportionately larger
distributions to meet any of the three preceding objectives.

     5.11 Transfer of Non-Controlled Subsidiary Voting Shares. At the Closing
and pursuant to the Stock Purchase Agreement, each of the holders of voting
capital stock of the Cornerstone Non-controlled Subsidiary (other than
Cornerstone Partnership, to the extent it owns any such voting capital stock)
shall transfer to EOP NCS Sub or such person or persons as EOP NCS Sub shall
designate by written notice delivered to them prior to the Closing, all of the
shares of each such Company owned by them, constituting all the outstanding
shares of such companies which are not owned by Cornerstone Partnership,

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for an aggregate consideration in an amount equal to the purchase price set
forth in the Stock Purchase Agreement. EOP shall use commercially reasonable
efforts to cause EOP NCS Sub to perform its obligations under the Stock Purchase
Agreement

     5.12 Notices. EOP shall provide such notice to its preferred shareholders
of the Merger as is required under Maryland law or the EOP Declaration of Trust.

     5.13 Resignations. On the Closing Date, Cornerstone shall cause the
directors and officers of Cornerstone and of each of the Cornerstone
Subsidiaries to submit their resignations from such positions, effective as of
the Effective Time of the Merger.

     5.14 Assumption of Existing Tax Protection Agreements. Effective as of the
Effective Time of the Partnership Merger, EOP and EOP Partnership shall assume
the obligations of Cornerstone, Cornerstone Partnership and/or the applicable
Cornerstone Subsidiary, as the case may be, under the Tax Protection Agreements
as described in Schedule 2.18(j) to the Cornerstone Disclosure Letter.
Immediately prior to the Effective Time of the Partnership Merger, EOP and EOP
Partnership shall enter into agreements with Cornerstone and Cornerstone
Partnership, for the benefit of and enforceable by the individuals and entities
who are intended to be protected by the provisions of the Tax Protection
Agreements, confirming such assumption effective as of the Effective Time of the
Partnership Merger.

     5.15 EOP Partnership Agreement. At the Closing, EOP Partnership shall
assume and perform any obligations that Cornerstone Partnership or any
Cornerstone Subsidiary has immediately prior to the Effective Time to issue
securities in accordance with the terms of any partnership or other agreement to
which Cornerstone Partnership or such Cornerstone Subsidiary is a party and that
are described on Schedule 5.15, in the same manner and to the same extent that
Cornerstone Partnership or such Cornerstone Subsidiary would be required to
perform such obligation if no Merger had been consummated.

     5.16 Registration Rights Agreements. At the Closing, (a) Cornerstone shall
assign and EOP shall assume by appropriate instrument the Registration Rights
Agreements described on Schedule 5.16 to the Cornerstone Disclosure Letter, and
(b) Cornerstone shall assign and EOP shall assume the obligations of Cornerstone
under the Amended and Restated Registration Rights and Voting Agreement dated
December 16, 1998 between Cornerstone, PGGM and Dutch Institutional Holding
Company, Inc., as and to the extent set forth in PGGM's Cornerstone Voting
Agreement.

     5.17 Cornerstone Convertible Promissory Note. Following the Effective Time
of the Mergers, the holders of the Cornerstone Convertible Promissory Note shall
have the right to obtain upon the exercise of its conversion rights pursuant to
such Cornerstone Convertible Promissory Note, in lieu of each share of
Cornerstone Common Stock theretofor issuable upon exercise of such conversion
rights, EOP Common Shares that it would have owned immediately after the Merger
if it had converted the Cornerstone Convertible Promissory Note immediately
before the Effective Time of the Merger.

                                   ARTICLE 6

                                   CONDITIONS

     6.1 Conditions to Each Party's Obligation to Effect the Mergers. The
obligations of each party to effect the Mergers and to consummate the other
transactions contemplated by this Agreement to occur on the Closing Date shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:

     (a) Shareholder and Partner Approvals. The Cornerstone Stockholder
Approvals, the EOP Shareholder Approvals and the Partner Approvals shall have
been obtained.

     (b) HSR Act. The waiting period (and any extension thereof) applicable to
the Partnership Merger, the Merger or the transactions contemplated by the Stock
Purchase Agreement under the HSR Act, if

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applicable to the Partnership Merger, the Merger or and the transactions
contemplated by the Stock Purchase Agreement, shall have expired or been
terminated.

     (c) Listing of Shares. The NYSE shall have approved for listing the EOP
Common Shares to be issued in the Merger and the EOP Common Shares reserved for
issuance upon redemption of EOP OP Units issued in the Partnership Merger,
subject to official notice of issuance.

     (d) Form S-4. The Form S-4 shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceedings by the SEC
seeking a stop order.

     (e) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Mergers or any of the other transactions contemplated hereby
shall be in effect.

     (f) Blue Sky Laws. EOP and EOP Partnership shall have received all state
securities or "blue sky" permits and other authorizations necessary to issue the
EOP Common Shares and EOP OP Units issuable in the Mergers.

     6.2 Conditions to Obligations of EOP and EOP Partnership. The obligations
of EOP and EOP Partnership to effect the Mergers and to consummate the other
transactions contemplated to occur on the Closing Date are further subject to
the following conditions, any one or more of which may be waived by EOP:

     (a) Representations and Warranties. Each of the representations and
warranties of Cornerstone and Cornerstone Partnership set forth in this
Agreement, disregarding all qualifications and exceptions contained therein
relating to materiality or Cornerstone Material Adverse Effect, shall be true
and correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (except to the extent that such
representations and warranties are expressly limited by their terms to another
date, in which case such representations and warranties shall be true and
correct as of such other date), except where the failure of such representations
and warranties to be true and correct would not, individually or in the
aggregate, reasonably be expected to have a Cornerstone Material Adverse Effect;
and EOP shall have received a certificate (which certificate may be qualified by
Knowledge to the same extent as the representations and warranties of
Cornerstone and Cornerstone Partnership contained herein are so qualified)
signed on behalf of Cornerstone by the chief executive officer or the chief
financial officer of Cornerstone, in such capacity, to such effect.

     (b) Performance of Obligations of Cornerstone and Cornerstone
Partnership.  Cornerstone and Cornerstone Partnership shall have performed in
all material respects all obligations required to be performed by them under
this Agreement at or prior to the Effective Time, and EOP shall have received a
certificate signed on behalf of Cornerstone by the chief executive officer or
the chief operating officer of Cornerstone, in such capacity, to such effect.

     (c) Material Adverse Change. Since the date of this Agreement, there shall
have been no Cornerstone Material Adverse Change and EOP shall have received a
certificate of the chief executive officer or chief operating officer of
Cornerstone, in such capacity, certifying to such effect.

     (d) Tax Opinions Relating to REIT Status and Partnership Status. EOP shall
have received (i) an opinion of King & Spalding or other counsel to Cornerstone
reasonably satisfactory to EOP, dated as of the Closing Date, to the effect
that, commencing with its taxable year ended December 31, 1997, (x) Cornerstone
was organized and has operated in conformity with the requirements for
qualification as a REIT under the Code, and (y) Cornerstone Partnership has been
during and since December 23, 1997, and continues to be, treated for federal
income tax purposes as a partnership and not as a corporation or association
taxable as a corporation (with customary exceptions, assumptions and
qualifications and based upon customary representations) and (ii) an opinion of
Hogan & Hartson L.L.P. or other counsel to EOP reasonably satisfactory to
Cornerstone, dated as of the Closing Date, to the effect that, commencing with
its taxable year ended December 31, 1997, EOP was organized and has operated in
conformity with the

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requirements for qualification as a REIT under the Code and that, after giving
effect to the Merger, EOP's proposed method of operation will enable it to
continue to meet the requirements for qualification and taxation as a REIT under
the Code (with customary exceptions, assumptions and qualifications and based
upon customary representations and based upon and subject to the opinion of
counsel to Cornerstone described in clause (i) above).

     (e) Tax Opinion Relating to the Merger. EOP shall have received an opinion
dated the Closing Date from Hogan & Hartson L.L.P. or other counsel reasonably
satisfactory to EOP, based upon customary certificates and letters, which
letters and certificates are to be in a form to be agreed upon by the parties
and dated the Closing Date, to the effect that the Merger will qualify as a
reorganization under the provisions of Section 368(a) of the Code.

     (f) "Comfort" Letter. EOP and EOP Partnership shall have received a
"comfort" letter from PricewaterhouseCoopers LLP, as described in Section
5.1(b).

     (g) Noncompetition Agreements. Each of William Wilson III and John S. Moody
shall have entered into noncompetition and confidentiality agreements
substantially in the forms set forth in Schedule 6.2(g) hereto.

     6.3 Conditions to Obligations of Cornerstone and Cornerstone
Partnership.  The obligations of Cornerstone and Cornerstone Partnership to
effect the Mergers and to consummate the other transactions contemplated to
occur on the Closing Date is further subject to the following conditions, any
one or more of which may be waived by Cornerstone:

     (a) Representations and Warranties. Each of the representations and
warranties of EOP and EOP Partnership set forth in this Agreement, disregarding
all qualifications and exceptions contained therein relating to materiality or
EOP Material Adverse Effect, shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date (except to the extent that such representations and warranties are
expressly limited by their terms to another date, in which case such
representations and warranties shall be true and correct as of such other date),
except where the failure of such representations and warranties to be true and
correct would not, individually or in the aggregate, reasonably be expected to
have a EOP Material Adverse Effect; and Cornerstone shall have received a
certificate (which certificate may be qualified by Knowledge to the same extent
as the representations and warranties of EOP and EOP Partnership contained
herein are so qualified) signed on behalf of EOP by the chief executive officer
or the chief financial officer of EOP, in such capacity, to such effect.

     (b) Performance of Obligations of EOP and EOP Partnership. EOP and EOP
Partnership shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Effective
Time, and Cornerstone shall have received a certificate of EOP signed on behalf
of EOP by a duly authorized executive officer of EOP, in such capacity, to such
effect.

     (c) Material Adverse Change. Since the date of this Agreement, there shall
have been no EOP Material Adverse Change and Cornerstone shall have received a
certificate of a duly authorized executive officer of EOP, in such capacity,
certifying to such effect.

     (d) Tax Opinions Relating to REIT Status and Partnership Status.
Cornerstone shall have received the opinion of Hogan & Hartson L.L.P. or other
counsel to EOP reasonably satisfactory to Cornerstone, dated as of the Closing
Date, that, commencing with its taxable year ended December 31, 1997, (i) EOP
was organized and has operated in conformity with the requirements for
qualification as a REIT under the Code and that, after giving effect to the
Merger, EOP's proposed method of operation will enable it to continue to meet
the requirements for qualification and taxation as a REIT under the Code (with
customary exceptions, assumptions and qualifications and based upon customary
representations and based upon and subject to the opinion of counsel to
Cornerstone described in Section 6.2(d) of this Agreement), (ii) BeaMet was
organized and has operated in conformity with the requirements for qualification
as a REIT under the Code (with customary exceptions, assumptions and
qualifications and based upon customary representations), and (iii) EOP
Partnership has been during and since 1997, and continues to
                                      A-51
<PAGE>   83

be, treated for federal income tax purposes as a partnership and not as a
corporation or association taxable as a corporation (with customary exceptions,
assumptions and qualifications and based upon customary representations).

     (e) Tax Opinion Relating to the Merger. Cornerstone shall have received an
opinion dated the Closing Date from King & Spalding or other counsel reasonably
satisfactory to Cornerstone, based upon customary certificates and letters,
which letters and certificates are to be in a form to be agreed upon by the
parties and dated the Closing Date, to the effect that the Merger will qualify
as a reorganization under the provisions of Section 368(a) of the Code.

     (f) Proposed EOP Charter Amendment Relating to Domestically Controlled REIT
Status. The EOP Shareholders shall have approved the Proposed EOP Charter
Amendment Relating to Domestically Controlled REIT Status at the EOP
Shareholders Meeting.

     (g) "Comfort" Letter. Cornerstone and Cornerstone Partnership shall have
received a "comfort" letter from Ernst & Young LLP, as described in Section
5.1(b).

     (h) Certificate Regarding "Domestically Controlled REIT" Status to PGGM.
EOP shall have delivered to Stichting Pensioenfonds voor de Gezondheid,
Geestelijke en Maatschappelijke Belangen ("PGGM") a certification dated within
fifteen (15) days of the Closing Date that to EOP's knowledge, after reasonable
inquiry, EOP is a "domestically controlled REIT" within the meaning of Section
897(h)(4)(B) of the Code as of the date thereof. For purposes of such
certification, reasonable inquiry shall include (but not necessarily be limited
to) review of all Schedule 13D and 13G filings made under the Exchange Act with
the SEC with respect to EOP, all IRS Form 1042 filings made by or on behalf of
EOP, the list of EOP's registered shareholders as of a date within 60 days of
such certificate (and to the extent reasonably available, as of a date within 60
days of the end of each of 1997, 1998, and 1999), a list of "non-objecting
beneficial owners" of shares of EOP obtained as of a date within 60 days of such
certificate (and to the extent reasonably available, as of a date within 60 days
of the end of each of 1997, 1998, and 1999), and a report of a shareholder
tracking service obtained within 60 days of such certificate (together with such
other reports as are in the possession of EOP). Such certificate shall be
accompanied by copies of information that has been obtained or relied upon by
EOP for purposes of such certificate, provided that PGGM shall have executed an
agreement with EOP to treat such information as confidential and to use such
information solely for the purposes of evaluating the accuracy of such
certification.

                                   ARTICLE 7

                       TERMINATION, AMENDMENT AND WAIVER

     7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time of the Partnership Merger, whether such action occurs before or
after any of the Cornerstone Stockholder Approvals, the EOP Shareholder
Approvals or either of the Cornerstone Partner Approvals are obtained:

     (a) by mutual written consent duly authorized by the Board of Trustees of
EOP and the Board of Directors of Cornerstone;

     (b) by EOP, upon a breach of or failure to perform any representation,
warranty, covenant, obligation or agreement on the part of Cornerstone or
Cornerstone Partnership set forth in this Agreement, or if any representation or
warranty of Cornerstone or Cornerstone Partnership shall become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b), as the case may be, would be incapable of being satisfied by December
31, 2000 (or as otherwise extended);

     (c) by Cornerstone, upon a breach of any representation, warranty, covenant
obligation or agreement on the part of EOP or EOP Partnership set forth in this
Agreement, or if any representation or warranty of EOP or EOP Partnership shall
become untrue, in either case such that the conditions set forth in Section
6.3(a) or Section 6.3(b), as the case may be, would be incapable of being
satisfied by December 31, 2000 (or as otherwise extended);

                                      A-52
<PAGE>   84

     (d) by either EOP or Cornerstone, if any judgment, injunction, order,
decree or action by any Governmental Entity of competent authority preventing
the consummation of either of the Mergers shall have become final and
non-appealable;

     (e) by either EOP or Cornerstone, if the Mergers shall not have been
consummated before December 31, 2000; provided, however, that a party may not
terminate pursuant to this clause (e) if the terminating party shall have
breached in any material respect its obligations under this Agreement in any
manner that shall have caused either of the Mergers not to have been consummated
by such date;

     (f) by either EOP or Cornerstone (unless Cornerstone or Cornerstone
Partnership is in breach in any material respect of its obligations under
Section 5.1) if, upon a vote at a duly held Cornerstone Stockholders Meeting or
any adjournment thereof, the Cornerstone Stockholder Approvals shall not have
been obtained as contemplated by Section 5.1 or if the Cornerstone Partner
Approvals have not been obtained as contemplated by Section 5.1;

     (g) by either Cornerstone or EOP (unless EOP or EOP Partnership is in
breach in any material respect of its obligations under Section 5.1 if, upon a
vote at a duly held EOP Shareholders Meeting or any adjournment thereof, the EOP
Shareholder Approvals shall not have been obtained as contemplated by Section
5.1 or if the EOP Partner Approvals have not been obtained as contemplated by
Section 5.1;

     (h) by Cornerstone (i) if the Board of Directors of Cornerstone shall have
withdrawn, modified, amended or qualified in any manner adverse to EOP its
approval or recommendation of either of the Merger or this Agreement in
connection with, or approved or recommended, any Superior Acquisition Proposal,
or, (ii) in order to enter into a binding written agreement with respect to a
Superior Acquisition Proposal, provided that, in each case, Cornerstone shall
have complied with the terms of Section 4.3 and, prior to terminating pursuant
to this Section 7.1(h), has paid to EOP Partnership the Break-Up Fee (as defined
herein) as provided by Section 7.2 hereof; and

     (i) by EOP, if (1) the Board of Directors of Cornerstone shall have failed
to recommend or withdrawn, modified, amended or qualified, or proposed publicly
not to recommend or to withdraw, modify, amend or qualify, in any manner adverse
to EOP its approval or recommendation of either of the Mergers or this Agreement
or approved or recommended any Superior Acquisition Proposal, (2) following the
announcement or receipt of an Acquisition Proposal, Cornerstone shall have
failed to call the Cornerstone Stockholders Meeting in accordance with Section
5.1(a) or failed to prepare and mail to its stockholders the Joint Proxy
Statement in accordance with Section 5.1(a) or 5.1(b), or (3) the Board of
Directors of Cornerstone or any committee thereof shall have resolved to do any
of the foregoing.

     7.2 Certain Fees and Expenses. If this Agreement shall be terminated (i)
pursuant to Section 7.1(h), 7.1(i)(1) or 7.1(i)(3), then Cornerstone and
Cornerstone Partnership thereupon shall pay to EOP Partnership a fee equal to
the Break-Up Fee (as defined herein), and (ii) pursuant to Section 7.1(b) or
7.1(f), then Cornerstone and Cornerstone Partnership shall pay to EOP
Partnership (provided that Cornerstone was not entitled to terminate this
Agreement pursuant to Section 7.1(c) at the time of such termination) an amount
equal to the Break-Up Expenses (as defined herein). If this Agreement shall be
terminated pursuant to Section 7.1(c) or 7.1(g), then EOP and EOP Partnership
shall pay to Cornerstone Partnership (provided that EOP was not entitled to
terminate this Agreement pursuant to Section 7.1(b) at the time of such
termination) an amount equal to the Break-Up Expenses. If this Agreement shall
be terminated pursuant to Section 7.1(b), 7.1(d) (if primarily resulting from
any action or inaction of Cornerstone, Cornerstone Partnership or any
Cornerstone Subsidiary or the Cornerstone Non-controlled Subsidiary), 7.1(e),
7.1(f), 7.1(i)(2) and prior to the time of such termination an Acquisition
Proposal has been received by Cornerstone or Cornerstone Partnership, and either
prior to the termination of this Agreement or within twelve (12) months
thereafter, Cornerstone or Cornerstone Partnership enters into any written
agreement to consummate a transaction or series of transactions which, had such
agreement been proposed or negotiated during the term of this Agreement, would
have constituted an Acquisition Proposal pursuant to Section 4.3 (each, a
"Cornerstone Acquisition Agreement"), which is subsequently consummated (whether
or not any Cornerstone Acquisition Agreement relates to the same Acquisition

                                      A-53
<PAGE>   85

Proposal which had been received at the time of the termination of this
Agreement), then Cornerstone and Cornerstone Partnership shall pay the Break-Up
Fee to EOP Partnership.

     The payment of the Break-Up Fee shall be compensation for the loss suffered
by EOP and EOP Partnership as a result of the failure of the Mergers to be
consummated (including, without limitation, opportunity costs and out-of-pocket
costs and expenses) and to avoid the difficulty of determining damages under the
circumstances. The Break-Up Fee shall be paid by Cornerstone and Cornerstone
Partnership to EOP Partnership, or the Break-Up Expenses shall be paid by
Cornerstone and Cornerstone Partnership to EOP Partnership or EOP Partnership to
Cornerstone Partnership (as applicable), in immediately available funds within
two (2) business days after the date the event giving rise to the obligation to
make such payment occurred (except as otherwise provided in Section 7.1(h) or
7.1(i)). Cornerstone acknowledges that the agreements contained in this Section
7.2 are integral parts of this Agreement; accordingly, if Cornerstone and
Cornerstone Partnership fail to promptly pay the Break-Up Fee or Break-Up
Expenses due pursuant to this Section 7.2 and, in order to obtain payment, EOP
commences a suit which results in a judgment against Cornerstone or Cornerstone
Partnership for any amounts owed pursuant to this Section 7.2, Cornerstone and
Cornerstone Partnership shall pay to EOP its costs and expenses (including
attorneys' fees and expenses) in connection with such suit, together with
interest on the amount owed at the rate on six-month U.S. Treasury obligations
in effect on the date such payment was required to be made plus 300 basis
points.

     As used in this Agreement, "Break-Up Fee" shall be an amount equal to the
lesser of (i) $100,000,000 less Break-Up Expenses paid or payable under this
Section 7.2 (the "Base Amount") and (ii) the sum of (A) the maximum amount that
can be paid to EOP Partnership without causing EOP to fail to meet the
requirements of Sections 856(c)(2) and (3) of the Code determined as if the
payment of such amount did not constitute income described in Sections
856(c)(2)(A)-(H) and 856(c)(3)(A)-(I) of the Code ("Qualifying Income"), as
determined by independent accountants to EOP, and (B) in the event EOP receives
a letter from outside counsel (the "Break-Up Fee Tax Opinion") indicating that
EOP has received a ruling from the IRS holding that EOP Partnership's receipt of
the Base Amount would either constitute Qualifying Income or would be excluded
from gross income of EOP within the meaning of Sections 856(c)(2) and (3) of the
Code (the "REIT Requirements") or that the receipt by EOP Partnership of the
remaining balance of the Base Amount following the receipt of and pursuant to
such ruling would not be deemed constructively received prior thereto, the Base
Amount less the amount payable under clause (A) above. Cornerstone's and
Cornerstone Partnership's obligation to pay any unpaid portion of the Break-Up
Fee shall terminate three years from the date of this Agreement. In the event
that EOP Partnership is not able to receive the full Base Amount, Cornerstone
and Cornerstone Partnership shall place the unpaid amount in escrow and shall
not release any portion thereof to EOP Partnership unless and until Cornerstone
receives either one of the following: (i) a letter from EOP's independent
accountants indicating the maximum amount that can be paid at that time to EOP
Partnership without causing EOP to fail to meet the REIT Requirements or (ii) a
Break-Up Fee Tax Opinion, in either of which events Cornerstone and Cornerstone
Partnership shall pay to EOP Partnership the lesser of the unpaid Base Amount or
the maximum amount stated in the letter referred to in (i) above.

     The "Break-Up Expenses" payable to EOP Partnership or Cornerstone
Partnership, as the case may be (the "Recipient"), shall be an amount equal to
the lesser of (i) $7,500,000 or (ii) the Recipient's out-of-pocket expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (including, without limitation, all attorneys', accountants' and
investment bankers' fees and expenses). If the Break-Up Expenses payable to the
Recipient exceed the maximum amount that can be paid to the Recipient without
causing the Recipient to fail to meet the requirements of Sections 856(c)(2) and
(3) of the Code determined as if the payment of such amount did not constitute
Qualifying Income, as determined by independent accountants to the Recipient
(the "Maximum Amount"), the amount initially payable to the Recipient shall be
limited to the Maximum Amount. If, however, within the three-year period
commencing on the date of this Agreement, the Recipient receives a Break-Up Fee
Tax Opinion indicating that it has received a ruling from the IRS holding that
the Recipient's receipt of the Break-Up

                                      A-54
<PAGE>   86

Expenses would either constitute Qualifying Income or would be excluded from
gross income of the Recipient within the meaning of the REIT Requirements or
that receipt by the Recipient of the balance of the Break-Up Expenses above the
Maximum Amount following the receipt of and pursuant to such ruling would not be
deemed constructively received prior thereto, the Recipient shall be entitled to
have payable to it the full amount of the Break-Up Expenses. The obligation of
EOP and EOP Partnership or Cornerstone and Cornerstone Partnership, as
applicable ("Payor"), to pay any unpaid portion of the Break-Up Expenses shall
terminate three years from the date of this Agreement. In the event that the
Recipient is not able to receive the full Break-Up Expenses, the Payor shall
place the unpaid amount in escrow and shall not release any portion thereof to
the Recipient unless and until the Payor receives either one of the following:
(i) a letter from the independent accountants of EOP or Cornerstone, as the case
may be, indicating the maximum amount that can be paid at that time to the
Recipient without causing it to fail to meet the REIT Requirements or (ii) a
Break-Up Expense Tax Opinion, in either of which events the Payor shall pay to
the Recipient the lesser of the unpaid Break-Up Expenses or the maximum amount
stated in the letter referred to in (i) above.

     7.3 Effect of Termination. In the event of termination of this Agreement by
either Cornerstone or EOP as provided in Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of EOP, EOP Partnership, Cornerstone or Cornerstone Partnership, other
than the last sentence of Section 5.2, Section 7.2, this Section 7.3 and Article
8, and except to the extent that such termination results from a material breach
by any party of any of its representations, warranties, covenants or agreements
set forth in this Agreement.

     7.4 Amendment. This Agreement may be amended by the parties in writing by
action of the respective Board of Trustees or Board of Directors of EOP and
Cornerstone at any time before or after any Shareholder Approvals are obtained
and prior to the filing of the Articles of Merger with the Department; provided,
however, that, after the Shareholder Approvals and Partner Approvals are
obtained, no such amendment, modification or supplement shall be made which by
law requires the further approval of shareholders or partners without obtaining
such further approval. The parties agree to amend this Agreement in the manner
provided in the immediately preceding sentence to the extent required to (a)
continue the status of each party as a REIT or (b) preserve the Merger as a
reorganization under Section 368(a) of the Code.

     7.5 Extension; Waiver. At any time prior to the Effective Time, the parties
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
7.4, waive compliance with any of the agreements or conditions of the other
party contained in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.

                                   ARTICLE 8

                               GENERAL PROVISIONS

     8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement confirming the representations and warranties in this
Agreement shall survive the Effective Time. This Section 8.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time.

     8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be delivered
personally, sent by overnight courier (providing proof of delivery) to the
parties or sent by telecopy (providing confirmation of transmission) at the
following addresses or

                                      A-55
<PAGE>   87

telecopy numbers (or at such other address or telecopy number for a party as
shall be specified by like notice):

     (a) if to EOP or EOP Partnership, to:

        Equity Office Properties Trust
        Two North Riverside Plaza, 22nd Floor
        Chicago, Illinois 60606
        Attention: Timothy H. Callahan, President
                Stanley M. Stevens, Chief Counsel
        Fax No.: (312) 559-5021

     with a copy to:

        Hogan & Hartson L.L.P.
        555 Thirteenth Street, N.W.
        Washington, D.C. 20004-1109
        Attention: J. Warren Gorrell, Jr., Esq.
                George P. Barsness, Esq.
        Fax No.: (202) 637-5910

     (b) if to Cornerstone or Cornerstone Partnership, to:

        Cornerstone Properties Inc.
        Tower 56
        126 East 56th Street, 6th Floor
        New York, New York 10022
        Attention: John S. Moody, President
        Fax No.: (212) 605-7199

     with a copy to:

        King & Spalding
        191 Peachtree Street
        Atlanta, GA 30303-1763
        Attention: William B. Fryer, Esq.
        Fax No.: (404) 572-5100

     All notices shall be deemed given only when actually received.

     8.3 Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."

     8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

     8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
Cornerstone Disclosure Letter, the EOP Disclosure Letter, the Confidentiality
Agreement, the Voting Agreements and the other agreements entered into in
connection with the Mergers (a) constitute the entire agreement and supersede
all prior agreements and understandings, both written and oral between the
parties with respect to the subject matter of this Agreement and (b) except as
provided in Section 5.9 ("Third Party Provisions"), are not intended to confer
upon any person other than the parties hereto any rights or remedies.

     8.6 Governing Law. THE PARTNERSHIP MERGER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,

                                      A-56
<PAGE>   88

REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICT OF LAWS THEREOF. EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING
SENTENCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF MARYLAND, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

     8.7 Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or delegated, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.

     8.8 Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in
Maryland or in any state court located in Maryland this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself (without making such
submission exclusive) to the personal jurisdiction of any federal court located
in Maryland or any state court located in Maryland in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement and (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court.

     8.9 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

     8.10 Exculpation. This Agreement shall not impose any personal liability on
any shareholder, trustee, trust manager, officer, employee or agent of EOP or
Cornerstone, and all Persons shall look solely to the property of EOP or
Cornerstone for the payment of any claim hereunder or for the performance of
this Agreement.

     8.11 Joint and Several Obligations. In each case where both Cornerstone and
Cornerstone Partnership, on the one hand, or EOP and EOP Partnership, on the
other hand, are obligated to perform the same obligation hereunder, such
obligation shall be joint and several.

                                      A-57
<PAGE>   89

     IN WITNESS WHEREOF, EOP, EOP Partnership, Cornerstone and Cornerstone
Partnership have caused this Agreement to be signed by their respective officers
(or general partners) thereunto duly authorized all as of the date first written
above.

                                            EQUITY OFFICE PROPERTIES TRUST

                                            By:   /s/ TIMOTHY H. CALLAHAN
                                              ----------------------------------
                                                Name: Timothy H. Callahan
                                              Title: President

                                            EOP OPERATING LIMITED PARTNERSHIP

                                            By: Equity Office Properties Trust,
                                            its
                                              managing general partner

                                            By:   /s/ TIMOTHY H. CALLAHAN
                                              ----------------------------------
                                                Name: Timothy H. Callahan
                                              Title: President

                                            CORNERSTONE PROPERTIES INC.

                                            By:      /s/ JOHN S. MOODY
                                              ----------------------------------
                                                Name: John S. Moody
                                              Title: President & CEO

                                            CORNERSTONE PROPERTIES LIMITED
                                            PARTNERSHIP

                                            By: Cornerstone Properties Inc.,
                                              its sole general partner

                                            By:      /s/ JOHN S. MOODY
                                              ----------------------------------
                                                Name: John S. Moody
                                              Title: President & CEO

                                      A-58
<PAGE>   90

                        (Page intentionally left blank)

                                      A-59
<PAGE>   91

                FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER

     THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "First
Amendment") is entered into as of May 11, 2000 by and among EQUITY OFFICE
PROPERTIES TRUST, a Maryland real estate investment trust ("EOP"), EOP OPERATING
LIMITED PARTNERSHIP, a Delaware limited partnership ("EOP Partnership"),
CORNERSTONE PROPERTIES INC., a Nevada corporation ("Cornerstone"), and
CORNERSTONE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
("Cornerstone Partnership"), for the purpose of amending the Agreement and Plan
of Merger, dated as of February 11, 2000, entered into by and among EOP, EOP
Partnership, Cornerstone, and Cornerstone Partnership (the "Merger Agreement").
All capitalized terms herein and not otherwise defined shall have the meanings
ascribed to them in the Merger Agreement.

     WHEREAS, the parties hereto desire to amend certain provisions of the
Merger Agreement to clarify certain matters as provided herein;

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

SECTION 1. SELECTION OF UNSATISFIED CONDITIONAL REDEMPTIONS BY LOT;
           CLARIFICATION OF PRORATION PROVISIONS.

     (a) Section 1.1(a)(v) of the Merger Agreement is amended by redesignating
such section as Section 1.1(a)(v)(A).

     (b) Section 1.1(a)(v) of the Merger Agreement is amended further by
changing the phrase "the procedures set forth in Sections 1.11 and 1.12" to read
"the procedures set forth in Sections 1.1(a)(v)(B), 1.11 and 1.12".

     (c) Section 1.1(a)(v) of the Merger Agreement is amended further by adding
the following new subparagraph (B):

          (B) In the event that Section 1.12(b)(ii)(B) is applicable and Excess
     Cash (as defined in Section 1.12(b)(ii)(B)) is allocated to the Conditional
     Cash Elections (as defined in Section 1.12(b)(i)(B)), each conditional
     Exercise made pursuant to Section 1.1(a)(v)(A) that, pursuant to Section
     1.1(a)(v)(A), would not be not effective (before giving effect to the
     procedures set forth in this subparagraph (B)) shall, together with all
     other such conditional Exercises, be subject to being chosen by lot from
     among other such conditional Exercises to receive a portion of the Excess
     Cash. Any conditional Exercise that is chosen by lot shall be made
     effective if sufficient remaining Excess Cash is available (after taking
     into account all prior conditional Exercises chosen by lot) to pay to the
     Redeeming Partner who submitted such conditional Exercise cash for each
     share of Cornerstone Common Stock that must be converted into solely cash
     in order for such conditional Exercise to be effective. Conditional
     Exercises described in the first sentence of this subparagraph (B) shall be
     subject to being chosen by lot until the amount of remaining Excess Cash
     available is less than the amount of cash that would be required to allow
     any of the remaining conditional Exercises to become effective pursuant to
     the requirements of Section 1.1(a)(v)(A).

     (d) Section 1.12(a) of the Merger Agreement is amended by adding the
following sentence at the end thereof:

          Except as otherwise expressly provided pursuant to this Section 1.12,
     each share of Cornerstone Common Stock for which a Cash Election is
     received shall be converted into the right to receive $18.00 per share in
     cash, without interest, and each share of Cornerstone Common Stock for
     which a Share Election is received shall be converted into EOP Common
     Shares in accordance with the Common Stock Exchange Ratio.
<PAGE>   92

     (e) Section 1.12(b) of the Merger Agreement is amended by deleting the
indented language and substituting therefor the following subparagraphs (i) and
(ii):

          (i) in the event that Non-conditional Cash Elections (defined to mean
     all Cash Elections received other than Conditional Cash Elections as
     defined in Section 1.12(b)(i)(B), below) are received for a number of
     shares of Cornerstone Common Stock that is greater than 58,551,525 shares
     of Cornerstone Common Stock, then:

             (A) each share of Cornerstone Common Stock covered by a
        Non-conditional Cash Election shall be converted into the right to
        receive (1) an amount in cash, without interest, equal to the product of
        (x) $18.00 and (y) a fraction (the "Cash Fraction") the numerator of
        which shall be 58,551,525 and the denominator of which shall be the
        aggregate number of shares of Cornerstone Common Stock covered by all
        Non-conditional Cash Elections, and (2) a number of EOP Common Shares
        equal to the product of (x) the Common Stock Exchange Ratio and (y) a
        fraction equal to one minus the Cash Fraction; and

             (B) each Conditional Cash Election (defined to mean any Cash
        Election received with respect to Electing Cornerstone OP Units with
        respect to which a conditional Exercise is made pursuant to Section
        1.1(a)(v)(A)) shall be of no force and effect; and

          (ii) in the event that Non-conditional Cash Elections are received for
     a number of shares of Cornerstone Common Stock that is equal to or less
     than 58,551,525 shares of Cornerstone Common Stock, then:

             (A) each share of Cornerstone Common Stock covered by a
        Non-conditional Cash Election shall be converted into the right to
        receive an amount in cash, without interest, equal to $18.00; and

             (B) an amount of cash equal to the product of (x) $18.00 and (y)
        the excess, if any, of 58,551,525 over the number of shares of
        Cornerstone Common Stock for which Non-conditional Cash Elections are
        received (referred to as "Excess Cash") shall be allocated to the
        Conditional Cash Elections as a group, to be applied as provided for in
        Section 1.1(a)(v)(B).

SECTION 2. NOTICE PERIOD FOR FINAL DIVIDEND.

     Section 1.15(d)(i) of the Merger Agreement is amended by deleting the
number "10" in the second sentence of Section 1.15(d)(i) and substituting the
number "20" therefor.

SECTION 3. FRACTIONAL EOP OP UNITS.

     (a) Section 1.15(g) of the Merger Agreement is amended by adding "; No
Fractional EOP OP Units" after the word "Shares" in the caption.

     (b) Section 1.15(g) of the Merger Agreement is amended by adding the
following new paragraph (iii):

          (iii) No fractional EOP Partnership Units shall be issued pursuant to
     this Agreement. In lieu of the issuance of any fractional EOP Partnership
     Units pursuant to this Agreement, each holder of Cornerstone OP Units who
     would receive, based on the exchange ratio specified in Section 1.10(a)(i),
     a number of EOP OP Units that is not a whole number shall receive instead a
     number of EOP OP Units that is equal to the whole number that is nearest to
     the fractional number of EOP OP Units that otherwise would be paid to such
     holder of Cornerstone OP Units based on the exchange ratio specified in
     Section 1.10(a)(i).

     (c) Section 1.15(i) of the Merger Agreement is amended by adding "," and
deleting the word "and" after the word "certificates" in the second clause and
adding "and fractional EOP Common Shares" after the word "procedure" in such
second clause.

                                       A-2
<PAGE>   93

SECTION 4. AMENDMENT OF SECTION 5.10 TO PROVIDE FOR A SPECIAL DIVIDEND BY
           CORNERSTONE OF $0.03 PER SHARE OF COMMON STOCK.

     Section 5.10 is amended to add at the end thereof the following new
language:

          Notwithstanding any of the foregoing or any provision of Section
     1.15(d), in the event that EOP and Cornerstone do not declare their regular
     dividend distributions for the second quarter of 2000 prior to the
     Effective Time of the Merger, (i) Cornerstone shall declare and pay to the
     holders of Cornerstone Common Stock a special dividend in the amount of
     $0.03 per share, the record date for which shall be not later than the
     close of business on the last day prior the Effective Time of the Merger
     (the "Special Dividend"), and Cornerstone shall cause to be withheld from
     the Special Dividend payable to Persons who are not "United States persons"
     (as defined in Section 7701(a)(30) of the Code) $0.02 per share or such
     higher amount as shall be sufficient so that Cornerstone shall be
     considered to have complied fully with the withholding requirements
     applicable to it under Treasury Regulations Section 1.1445-8 and Section
     1445 of the Code with respect to all distributions paid by it during
     calendar year 2000 (and to the extent such treatment is necessary, or
     Cornerstone deems it to be desirable, to permit or facilitate such
     withholding, Cornerstone shall treat the Special Dividend as a "capital
     gain dividend" for purposes of Treasury Regulations Section 1.1445-8 and
     Section 1445 of the Code), and (ii) Cornerstone Partnership shall make a
     distribution to the holders of the Cornerstone OP Units at a time and in an
     amount sufficient to permit Cornerstone to pay the Special Dividend as
     contemplated hereby. The Special Dividend shall be paid on or prior to the
     last business day prior to the Closing Date. EOP shall not make any
     distribution to the holders of the EOP Common Shares to correspond to the
     Special Dividend to be paid to the holders of Cornerstone Common Stock.

SECTION 5. INDEX OF DEFINED TERMS.

     The Index of Defined Terms contained in the Merger Agreement is amended by
adding the following new entries:

<TABLE>
<S>                                                   <C>
"Conditional Cash Election".........................  1.12(b)(i)(B)"
"Excess Cash........................................  1.12(b)(ii)(B)"
"Non-conditional Cash Election".....................  1.12(b)(i)"
"Special Dividend"..................................  5.10"
</TABLE>

SECTION 6. CONSTRUCTION OF MERGER AGREEMENT.

     The Merger Agreement shall be read together and shall have the same force
and effect as if the provisions of the Merger Agreement and this First Amendment
were contained in one document. Except as expressly amended by this First
Amendment, the Merger Agreement shall remain in full force and effect in
accordance with its terms.

SECTION 7. COUNTERPARTS.

     This First Amendment may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

                                       A-3
<PAGE>   94

     IN WITNESS WHEREOF, EOP, EOP Partnership, Cornerstone and Cornerstone
Partnership have caused this First Amendment to be signed by their respective
officers (or general partners) thereunto duly authorized all as of the date
first written above.

                                            EQUITY OFFICE PROPERTIES TRUST

                                            By:   /s/ STANLEY M. STEVENS

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

                                              Name: Stanley M. Stevens
                                              Title: Executive Vice President

                                            EOP OPERATING LIMITED PARTNERSHIP

                                            By: Equity Office Properties Trust,
                                                its general partner

                                            By:   /s/ STANLEY M. STEVENS

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

                                              Name: Stanley M. Stevens
                                              Title: Executive Vice President

                                            CORNERSTONE PROPERTIES INC.

                                            By:      /s/ JOHN S. MOODY

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

                                              Name: John S. Moody
                                              Title: President & CEO

                                            CORNERSTONE PROPERTIES LIMITED
                                            PARTNERSHIP

                                            By: Cornerstone Properties Inc., its
                                                sole general partner

                                            By:      /s/ JOHN S. MOODY

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

                                              Name: John S. Moody
                                              Title: President & CEO

                                       A-4
<PAGE>   95

                                                                         ANNEX B

                          [LETTERHEAD OF J.P. MORGAN]

February 11, 2000

The Board of Trustees
Equity Office Properties Trust
Two N. Riverside Plaza
Chicago, IL 60606

Attention: Mr. Samuel Zell
        Chairman

Ladies and Gentlemen:

     You have requested our opinion as to the fairness, from a financial point
of view, to Equity Office Properties Trust ("EOP" or the "Company") of the
consideration proposed to be paid by the Company in connection with the proposed
merger (the "Merger") of Cornerstone Properties Inc. (the "Seller") with and
into the Company. Pursuant to the Agreement and Plan of Merger, dated as of
February 11, 2000 (the "Agreement"), among the Company, the Seller, and their
operating partnership subsidiaries, the Seller will be merged with and into the
Company, with the Company as the survivor of such merger, and each share of
common stock, no par value, of the Seller will be converted into the right to
receive either $18.00 or 0.7009 common shares of beneficial interest, $.01 par
value, of the Company, or a combination of such cash and stock consideration
according to the election and proration provisions in the Agreement.

     In arriving at our opinion, we have reviewed (i) the Agreement; (ii)
certain publicly available information concerning the business of the Seller and
of certain other companies engaged in businesses comparable to those of the
Seller, and the reported market prices for certain other companies' securities
deemed comparable; (iii) publicly available terms of certain transactions
involving companies comparable to the Seller and the consideration received for
such companies; (iv) current and historical market prices of the common stock of
the Seller and the Company; (v) the audited financial statements of the Company
and the Seller for the fiscal year ended December 31, 1998, and the unaudited
financial statements of the Company and the Seller for the period ended
September 30, 1999; (vi) certain agreements with respect to outstanding
indebtedness or obligations of the Company and the Seller; (vii) certain
internal financial analyses and forecasts prepared by the Company and the Seller
and their respective managements; and (viii) the terms of other business
combinations that we deemed relevant.

     In addition, we have held discussions with certain members of the
management of the Company and the Seller with respect to certain aspects of the
Merger, and the past and current business operations of the Company and the
Seller, the financial condition and future prospects and operations of the
Company and the Seller, the effects of the Merger on the financial condition and
future prospects of the Company and the Seller, and certain other matters we
believed necessary or appropriate to our inquiry. We have reviewed such other
financial studies and analyses and considered such other information as we
deemed appropriate for the purposes of this opinion.

     In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness in all material respects of all
information that was publicly available or was furnished to us by the Company
and the Seller or otherwise reviewed by us, and we have not assumed any
responsibility or liability therefor. We have not conducted any valuation or
appraisal of any assets or liabilities, nor have any such valuations or
appraisals been provided to us. In relying on financial analyses and forecasts
provided to us, we have assumed that they have been reasonably prepared based on
assumptions reflecting the best currently available estimates and judgments by
management as to the expected future results of operations and financial
condition of the Company and the Seller to which such analyses or forecasts
relate. We have also assumed that the Merger will have the tax consequences

                                       B-1
<PAGE>   96

described in discussions with, and materials furnished to us by, representatives
of the Company, and that the other transactions contemplated by the Agreement
will be consummated as described in the Agreement. We have relied as to all
legal matters relevant to rendering our opinion upon the advice of counsel.

     Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. It should be understood that subsequent developments may affect this
opinion and that we do not have any obligation to update, revise, or reaffirm
this opinion. We are expressing no opinion herein as to the price at which the
Company's shares will trade at any future time.

     We have acted as financial advisor to the Company with respect to the
proposed Merger and will receive a fee from the Company for our services
performed to date. We will also receive an additional fee if the proposed Merger
is consummated. In the ordinary course of their businesses, our affiliates may
actively trade the debt and equity securities of the Company or the Seller for
their own account or for the accounts of customers and, accordingly, they may at
any time hold long or short positions in such securities.

     On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that the consideration proposed to be paid by the Company in the
Merger is fair, from a financial point of view, to the Company.

     This letter is provided to the Board of Trustees of the Company in
connection with and for the purposes of its evaluation of the Merger. This
opinion does not constitute a recommendation to any shareholder of the Company
as to how such shareholder should vote with respect to the Merger. This opinion
may not be disclosed, referred to, or communicated (in whole or in part) to any
third party for any purpose whatsoever except with our prior written consent in
each instance. This opinion may be reproduced in full in any filing made by the
Company with the Securities and Exchange Commission in connection with the
Merger.

Very truly yours,
J.P. MORGAN SECURITIES INC.

By:       /s/ JOHN PERKINS
    --------------------------------
    Name: John Perkins
    Title: Vice President

                                       B-2
<PAGE>   97

                                                                         ANNEX C

                         [LETTERHEAD OF LAZARD FRERES]

                                                      February 11, 2000

The Board of Directors
Cornerstone Properties Inc.
126 East 56th Street
New York, NY

Dear Members of the Board:

     We understand that Cornerstone Properties Inc. ("Cornerstone") has entered
into an Agreement and Plan of Merger with Equity Office Properties Trust
("Equity Office") dated as of February 11, 2000 (the "Merger Agreement"),
pursuant to which Cornerstone will merge with and into Equity Office and
Cornerstone Properties Limited Partnership ("Cornerstone OP") will merge with
and into EOP Operating Limited Partnership ("Equity Office OP") (collectively,
the "Merger"). Pursuant to the Merger (as set out in the Merger Agreement), each
outstanding share of common stock of Cornerstone ("Common Stock") would be
converted into the right to receive either $18.00 in cash or .7009 shares of
Equity Office common stock as elected by the holders of Cornerstone Common
Stock, and subject to pro ration and adjustment as provided in the Merger
Agreement.

     You have requested our opinion as to the fairness, from a financial point
of view, to the holders of Common Stock of the consideration to be received by
such holders in the Merger. In connection with this opinion, we have:

          (i) Reviewed the financial terms and conditions of the Merger
     Agreement;

          (ii) Analyzed certain historical business and financial information
     relating to Cornerstone and Equity Office;

          (iii) Reviewed various financial forecasts and other data provided to
     us by each of Cornerstone and Equity Office and relating to their
     respective businesses;

          (iv) Held discussions with members of the senior management of
     Cornerstone and Equity Office with respect to the businesses, prospects and
     strategic objectives of each company;

          (v) Reviewed public information with respect to certain other
     companies in lines of business we believe to be generally comparable to the
     business of Cornerstone;

          (vi) Reviewed the financial terms of certain business combinations
     involving companies in lines of business we believe to be generally
     comparable to those of Cornerstone;

          (vii) Reviewed the historical stock prices and trading volumes of the
     Common Stock and the common stock of Equity Office; and

          (viii) Conducted such other financial studies, analyses and
     investigations as we deemed appropriate.

     We have relied upon the accuracy and completeness of the foregoing
information, and have not assumed any responsibility for any independent
verification of such information or any independent valuation or appraisal of
any of the assets or liabilities of Cornerstone or Equity Office, or concerning
the solvency or fair value of Cornerstone, Cornerstone OP, Equity Office, Equity
Office OP or any other entity. With respect to financial forecasts, we have
assumed that they have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of management of Cornerstone and
Equity Office as to the future financial performance of Cornerstone and Equity
Office, respectively. We

                                       C-1
<PAGE>   98

assume no responsibility for and express no view as to such forecasts or the
assumptions on which they are based.

     Further, our opinion is necessarily based on economic, monetary, market and
other conditions as in effect on, and the information made available to us as of
the date hereof. As you know, we have not been asked to solicit nor have we
solicited indications of interest from any other parties.

     In rendering our opinion, we have assumed that the Merger will be
consummated on the terms described in the Merger Agreement, without any waiver
of any material terms or conditions by Cornerstone or Cornerstone OP, and that
obtaining the necessary regulatory approvals for the Merger will not have an
adverse effect on Cornerstone or Cornerstone OP. We note that Cornerstone OP
unitholders have an option, exercisable prior to the Merger, to receive Equity
Office OP Units to be issued in the partnership merger or to redeem their units
for shares of Cornerstone Common Stock and elect to receive cash in the Merger
of Cornerstone into Equity Office, with respect to which we do not express a
view. However, our analysis has assumed that prior to the Merger each holder of
units in Cornerstone OP has elected to exercise its redemption right and receive
shares of Common Stock in Cornerstone in exchange therefor in the manner
provided in the Merger Agreement.

     Lazard Freres & Co. LLC is acting as investment banker to Cornerstone in
connection with the Merger and will receive a fee for our services paid partly
upon announcement and the balance upon the closing of the Merger. We have in the
past provided investment banking services to Cornerstone for which we have
received customary fees.

     Our engagement and the opinion expressed herein are for the benefit of
Cornerstone's Board of Directors and our opinion does not constitute a
recommendation as to how the holders of Common Stock of Cornerstone (and the
holders of limited partnership interests in Cornerstone OP) should vote with
respect to the matters contemplated by the Merger Agreement. Except as provided
in the engagement letter dated January 28, 2000, between Cornerstone and us, it
is understood that this letter may not be disclosed or otherwise referred to
without our prior consent, except as may otherwise be required by law or by a
court of competent jurisdiction.

     Based on and subject to the foregoing, we are of the opinion that the
consideration to be received in the Merger as set forth above is fair, from a
financial point of view, to the holders of Common Stock of Cornerstone.

                                            Very truly yours,

                                            LAZARD FRERES & CO. LLC

                                            By    /s/ MATTHEW J. LUSTIG
                                            ------------------------------------
                                                     Matthew J. Lustig
                                                     Managing Director

                                       C-2
<PAGE>   99

                                                                         ANNEX D

                AMENDMENTS TO EQUITY OFFICE DECLARATION OF TRUST
               RELATING TO "DOMESTICALLY-CONTROLLED" REIT STATUS

1. AMENDMENT TO SECTION 7.2.1(A)

     Section 7.2.1(a) is amended to add the following new subparagraph (iv):

          (iv) No Person shall acquire Beneficial Ownership of any Shares after
     the Effective Time if, as a result of such acquisition of Beneficial
     Ownership, the fair market value of the Shares owned directly and
     indirectly by Non-U.S. Persons for purposes of Section 897(h)(4)(B) of the
     Code would comprise forty three percent (43%) or more of the fair market
     value of the issued and outstanding Shares; provided, however, that the
     foregoing shall not apply to any acquisition of Beneficial Ownership of any
     Preferred Shares outstanding at the Effective Time or any Common Shares
     upon the conversion of any such Preferred Shares.

2. AMENDMENTS TO SECTION 7.1

     Section 7.1 is amended to add the following new definitions:

          Effective Time.  The term "Effective Time" shall mean the later of (i)
     the time the SDAT accepts for record articles of merger relating to the
     merger of Cornerstone Properties, Inc. with and into the Trust or (ii) the
     time established under such articles, not to exceed 30 days after the
     articles are accepted for record by the SDAT.

          Non-U.S. Person.  The term "Non-U.S. Person" shall mean a Person other
     than a U.S. Person.

          U.S. Person.  The term "U.S. Person" shall mean (a) a citizen or
     resident of the United States, (b) a partnership created or organized in
     the United States or under the laws of the United States or any state
     therein (including the District of Columbia), (c) a corporation created or
     organized in the United States or under the laws of the United States or
     any state therein (including the District of Columbia), and (d) any estate
     or trust (other than a foreign estate or foreign trust, within the meaning
     of Section 7701(a)(31) of the Code).

3. AMENDMENTS TO SECTION 7.2.1(B)

     Section 7.2.1(b) is amended to read as follows:

          (b) Transfer in Trust.  If any Transfer of Shares (whether or not such
     Transfer is the result of transaction entered into through the facilities
     of the NYSE or any other national securities exchange or automated
     inter-dealer quotation system) occurs which, if effective, would result in
     any Person Beneficially Owning or Constructively Owning Shares in violation
     of Section 7.2.1(a)(i), (ii) or (iv),

             (i) then that number of Shares the Beneficial or Constructive
        Ownership of which otherwise would cause such Person to violate Section
        7.2.1(a)(i), (ii) or (iv), as applicable (rounded up to the nearest
        whole share) shall be automatically transferred to a Charitable Trust
        for the benefit of a Charitable Beneficiary, as described in Section
        7.3, effective as of the close of business on the Business Day prior to
        the date of such Transfer, and such Person shall acquire no rights in
        such Shares; or

             (ii) if the transfer to the Charitable Trust described in clause
        (i) of this sentence would not be effective for any reason to prevent
        the violation of Section 7.2.1(a)(i), (ii) or (iv), as applicable, then
        the Transfer of that number of Shares that otherwise would cause such
        Person to violate Section 7.2.1(a)(i), (ii) or (iv), as applicable
        (rounded up to the nearest whole share) shall be void ab initio, and the
        intended transferee shall acquire no rights in such Shares.

                                       D-1
<PAGE>   100

4. AMENDMENT TO SECTION 7.2.4(B)

     The existing Section 7.2.4(b) is amended to read as follows:

          (b) each Person who is a Beneficial or Constructive Owner of Shares
     and each Person (including the shareholder of record) who is holding Shares
     for a Beneficial or Constructive Owner shall provide to the Trust such
     information as the Trust may require, in good faith, in order to determine
     the Trust's status as a REIT or a "domestically controlled REIT" (within
     the meaning of Section 897(h)(4)(B) of the Code) and to comply with the
     requirements of any taxing authority or to determine such compliance.

5. AMENDMENT TO ADD NEW SECTION 7.2.9

     The existing Section 7.2.9 is renumbered as Section 7.2.10 and the
following new Section 7.2.9 is added:

          Section 7.2.9 Increase in Percentage Set Forth in Section
     7.2.1(a)(iv).  The Board of Trustees may from time to time increase the
     percentage set forth in Section 7.2.1(a)(iv) from forty three percent (43%)
     to such higher percentage as shall be determined by the Board of Trustees;
     provided, however, that in no event shall such percentage exceed forty nine
     percent (49%) less the percentage of the aggregate fair market value of the
     total issued and outstanding Shares represented by the fair market value of
     any Preferred Shares then outstanding that were outstanding at the
     Effective Time (as such fair market values are determined by the Board of
     Trustees in good faith).

6. AMENDMENTS TO SECTION 7.2.10

     The first sentence of the legend set forth in Section 7.2.10 (as renumbered
pursuant to the other amendments made pursuant hereto) is amended to delete the
word "and" immediately preceding the following: "(iv) no Person may Transfer
Shares . . .", and to insert the following new language at the end of such first
sentence:

          ; and (v) no Person may acquire Beneficial Ownership of any Shares
     after the Effective Date if, as a result of such acquisition, the fair
     market value of the Shares owned directly and indirectly by Non-U.S.
     Persons would comprise more than forty three percent (43%) of the fair
     market value of the issued and outstanding Shares; provided, however, that
     clause (v) shall not apply to any acquisition of any Preferred Shares
     outstanding at the Effective Time.

                                       D-2
<PAGE>   101

                                                                         ANNEX E

      FORM OF SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
                      OF EOP OPERATING LIMITED PARTNERSHIP

<PAGE>   102

                               TABLE OF CONTENTS

<TABLE>
<S>           <C>                                                           <C>
ARTICLE I     DEFINED TERMS...............................................     E-1
ARTICLE II    ORGANIZATIONAL MATTERS......................................    E-12
  Section     Organization................................................    E-12
     2.1
  Section     Name........................................................    E-12
     2.2
  Section     Registered Office and Agent; Principal Office...............    E-12
     2.3
  Section     Term........................................................    E-12
     2.4
ARTICLE III   PURPOSE.....................................................    E-12
  Section     Purpose and Business........................................    E-12
     3.1
  Section     Powers......................................................    E-13
     3.2
ARTICLE IV    CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP
              INTERESTS...................................................    E-13
  Section     Capital Contributions of the Partners.......................    E-13
     4.1
  Section     Issuances of Partnership Interests..........................    E-14
     4.2
  Section     No Preemptive Rights........................................    E-15
     4.3
  Section     Other Contribution Provisions...............................    E-15
     4.4
  Section     No Interest on Capital......................................    E-15
     4.5
  Section     Separate Agreements.........................................    E-15
     4.6
ARTICLE V     DISTRIBUTIONS...............................................    E-15
  Section     Requirement and Characterization of Distributions...........    E-15
     5.1
  Section     Amounts Withheld............................................    E-17
     5.2
  Section     Distributions Upon Liquidation..............................    E-18
     5.3
  Section     Revisions to Reflect Issuance of Partnership Interests......    E-18
     5.4
ARTICLE VI    ALLOCATIONS.................................................    E-18
  Section     Allocations For Capital Account Purposes....................    E-18
     6.1
  Section     Revisions to Allocations to Reflect Issuance of Partnership
     6.2      Interests...................................................    E-19
ARTICLE VII   MANAGEMENT AND OPERATIONS OF BUSINESS.......................    E-19
  Section     Management..................................................    E-19
     7.1
  Section     Certificate of Limited Partnership..........................    E-22
     7.2
  Section     Title to Partnership Assets.................................    E-22
     7.3
  Section     Reimbursement of the General Partner........................    E-23
     7.4
  Section     Outside Activities of the General Partner; Relationship of
     7.5      Shares to Partnership Units; Funding Debt...................    E-24
  Section     Transactions with Affiliates................................    E-26
     7.6
  Section     Indemnification.............................................    E-26
     7.7
  Section     Liability of the General Partner............................    E-28
     7.8
  Section     Other Matters Concerning the General Partner................    E-28
     7.9
  Section     Reliance by Third Parties...................................    E-30
     7.10
  Section     Restrictions on General Partner's Authority.................    E-30
     7.11
  Section     Loans by Third Parties......................................    E-31
     7.12
ARTICLE VIII  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..................    E-31
  Section     Limitation of Liability.....................................    E-31
     8.1
  Section     Management of Business......................................    E-31
     8.2
  Section     Outside Activities of Limited Partners......................    E-31
     8.3
  Section     Return of Capital...........................................    E-32
     8.4
  Section     Rights of Limited Partners Relating to the Partnership......    E-32
     8.5
  Section     Redemption Right............................................    E-33
     8.6
ARTICLE IX    BOOKS, RECORDS, ACCOUNTING AND REPORTS......................    E-35
  Section     Records and Accounting......................................    E-35
     9.1
  Section     Fiscal Year.................................................    E-35
     9.2
  Section     Reports.....................................................    E-35
     9.3
</TABLE>

                                        i
<PAGE>   103

<TABLE>
<S>           <C>                                                           <C>
ARTICLE X     TAX MATTERS.................................................    E-36
  Section     Preparation of Tax Returns..................................    E-36
     10.1
  Section     Tax Elections...............................................    E-36
     10.2
  Section     Tax Matters Partner.........................................    E-36
     10.3
  Section     Organizational Expenses.....................................    E-37
     10.4
  Section     Withholding.................................................    E-37
     10.5
ARTICLE XI    TRANSFERS AND WITHDRAWALS...................................    E-38
  Section     Transfer....................................................    E-38
     11.1
  Section     Transfers of Partnership Interests of General Partner.......    E-38
     11.2
  Section     Limited Partners' Rights to Transfer........................    E-39
     11.3
  Section     Substituted Limited Partners................................    E-40
     11.4
  Section     Assignees...................................................    E-41
     11.5
  Section     General Provisions..........................................    E-41
     11.6
ARTICLE XII   ADMISSION OF PARTNERS.......................................    E-43
  Section     Admission of a Successor General Partner....................    E-43
     12.1
  Section     Admission of Additional Limited Partners....................    E-43
     12.2
  Section     Amendment of Agreement and Certificate of Limited
     12.3     Partnership.................................................    E-44
ARTICLE XIII  DISSOLUTION AND LIQUIDATION.................................    E-44
  Section     Dissolution.................................................    E-44
     13.1
  Section     Winding Up..................................................    E-44
     13.2
  Section     Compliance with Timing Requirements of Regulations..........    E-45
     13.3
  Section     Rights of Limited Partners..................................    E-46
     13.4
  Section     Notice of Dissolution.......................................    E-47
     13.5
  Section     Cancellation of Certificate of Limited Partnership..........    E-47
     13.6
  Section     Reasonable Time for Winding Up..............................    E-47
     13.7
  Section     Waiver of Partition.........................................    E-47
     13.8
  Section     Liability of Liquidator.....................................    E-47
     13.9
ARTICLE XIV   AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS................    E-47
  Section     Amendments..................................................    E-47
     14.1
  Section     Meetings of the Partners....................................    E-48
     14.2
ARTICLE XV    GENERAL PROVISIONS..........................................    E-49
  Section     Addresses and Notice........................................    E-49
     15.1
  Section     Titles and Captions.........................................    E-49
     15.2
  Section     Pronouns and Plurals........................................    E-49
     15.3
  Section     Further Action..............................................    E-50
     15.4
  Section     Binding Effect..............................................    E-50
     15.5
  Section     Creditors...................................................    E-50
     15.6
  Section     Waiver......................................................    E-50
     15.7
  Section     Counterparts................................................    E-50
     15.8
  Section     Applicable Law..............................................    E-50
     15.9
  Section     Invalidity of Provisions....................................    E-50
     15.10
  Section     Power of Attorney...........................................    E-50
     15.11
  Section     Entire Agreement............................................    E-51
     15.12
  Section     No Rights as Shareholders...................................    E-51
     15.13
  Section     Limitation to Preserve REIT Status..........................    E-51
     15.14
</TABLE>

                                       ii
<PAGE>   104

                                   EXHIBIT A
                       PARTNERS AND PARTNERSHIP INTERESTS

                                   EXHIBIT B
                          CAPITAL ACCOUNT MAINTENANCE

                                   EXHIBIT C
                            SPECIAL ALLOCATION RULES

                                   EXHIBIT D
                              NOTICE OF REDEMPTION

                                   EXHIBIT E
                    PROTECTED PARTNERS AND PROTECTED AMOUNTS

                                  EXHIBIT E-1

                                (CAP AGREEMENT)

                                  EXHIBIT E-2

                                (1120 AGREEMENT)

                                  EXHIBIT E-3

                           (WRIGHT RUNSTAD AGREEMENT)

                                  EXHIBIT E-4

                             (GALBREATH AGREEMENT)

                                  EXHIBIT E-5

                          (PALO ALTO SQUARE AGREEMENT)

                                  EXHIBIT E-6

                            (CORNERSTONE AGREEMENT)

                                       iii
<PAGE>   105

                                  ATTACHMENT A

                           (SERIES A PREFERRED UNITS)

                                  ATTACHMENT B

                           (SERIES B PREFERRED UNITS)

                                  ATTACHMENT C

                           (SERIES C PREFERRED UNITS)

                                  ATTACHMENT D

                           (SERIES D PREFERRED UNITS)

                                       iv
<PAGE>   106

                                    FORM OF

                          SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                       EOP OPERATING LIMITED PARTNERSHIP

     THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as
of           , 2000, is entered into by and among Equity Office Properties
Trust, a Maryland real estate investment trust, as the General Partner, and the
Persons whose names are set forth on Exhibit A hereto as Limited Partners,
together with any other Persons who become Partners in the Partnership as
provided herein.

     WHEREAS, Equity Office Properties Trust, Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership II, an Illinois limited Partnership,
and certain other persons named therein entered into an Agreement of Limited
Partnership of EOP Operating Limited Partnership dated as of July 3, 1997,
pursuant to which the Partnership was formed (the "Original Partnership
Agreement");

     WHEREAS, the General Partner and the other Partners in the Partnership
entered into eleven amendments to the Original Partnership Agreement (the "Prior
Amendments") and 20 addenda to the Original Partnership Agreement effecting the
admission of Additional Limited Partners to the Partnership, the withdrawal of
certain Partners from the Partnership, and, in some cases, certain amendments to
provisions of the Original Partnership Agreement made in connection therewith
(the "Prior Addenda");

     WHEREAS, the General Partner and the Persons named on Exhibit A hereto as
Limited Partners entered into the First Amended and Restated Agreement of
Limited Partnership, dated as of May 1, 2000, to incorporate the Original
Partnership Agreement, the Prior Amendments, and the Addenda (the "First Amended
and Restated Agreement"); and

     WHEREAS, the General Partner and the other Partners in the Partnership now
desire to enter into amendments to the First Amended and Restated Agreement of
Limited Partnership by entering into this Second Amended and Restated Agreement
of Limited Partnership;

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby amend and restate the
First Amended and Restated Agreement of Limited Partnership in its entirety and
agree to continue the Partnership as a limited partnership under the Delaware
Revised Uniform Limited Partnership Act, as amended from time to time, as
follows:

                                   ARTICLE I

                                 DEFINED TERMS

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

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

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

     "Adjusted Capital Account" means the Capital Account maintained for each
Partner as of the end of each Partnership Year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

                                       E-1
<PAGE>   107

     "Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Adjusted Capital Account as of the
end of the relevant Partnership Year.

     "Adjusted Property" means any property the Carrying Value of which has been
adjusted pursuant to Exhibit B.

     "Adjustment Date" has the meaning set forth in Section 4.2.B.

     "Affiliate" means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
(ii) any Person owning or controlling ten percent (10%) or more of the
outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests or
(iv) any officer, director, general partner or trustee of such Person or any
Person referred to in clauses (i), (ii), and (iii) above. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Aggregate Protected Amount" means the aggregate balances of the Protected
Amounts, if any, of all Protected Partners, as determined on the date in
question.

     "Agreed Value" means (i) in the case of any Contributed Property, the
704(c) Value of such property as of the time of its contribution to the
Partnership, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed, as the
same is reflected in the books and records of the Partnership; and (ii) in the
case of any property distributed to a Partner by the Partnership, the
Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the regulations
thereunder.

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

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

     "Available Cash" means, with respect to any period for which such
calculation is being made:

          (a) all cash revenues and funds received by the Partnership from
     whatever source (excluding the proceeds of any Capital Contribution) plus
     the amount of any reduction (including, without limitation, a reduction
     resulting because the General Partner determines such amounts are no longer
     necessary) in reserves of the Partnership, which reserves are referred to
     in clause (b)(iv) below;

          (b) less the sum of the following (except to the extent made with the
     proceeds of any Capital Contribution):

             (i) all interest, principal and other debt payments made during
        such period by the Partnership,

             (ii) all cash expenditures (including capital expenditures) made by
        the Partnership during such period,

             (iii) investments in any entity (including loans made thereto) to
        the extent that such investments are permitted under this Agreement and
        are not otherwise described in clauses (b)(i) or (ii), and

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

                                       E-2
<PAGE>   108

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

     "Book-Tax Disparities" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

     "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois are authorized or required by law to
close.

     "Capital Account" means the Capital Account maintained for a Partner
pursuant to Exhibit B.

     "Capital Contribution" means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
4.1 or 4.2.

     "Carrying Value" means (i) with respect to a Contributed Property or
Adjusted Property, the 704(c) Value of such property reduced (but not below
zero) by all Depreciation with respect to such Contributed Property or Adjusted
Property, as the case may be, charged to the Partners' Capital Accounts and (ii)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Exhibit B, and to reflect changes, additions (including capital
improvements thereto) or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.

     "Cash Amount" means an amount of cash equal to the Value on the Valuation
Date of the Shares Amount.

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

     "Class A" has the meaning set forth in Section 5.1.C.

     "Class A Share" has the meaning set forth in Section 5.1.C.

     "Class A Unit" means any Partnership Unit that is not specifically
designated by the General Partner as being of another specified class of
Partnership Units.

     "Class B" has the meaning set forth in Section 5.1.C.

     "Class B Share" has the meaning set forth in Section 5.1.C.

     "Class B Unit" means a Partnership Unit that is specifically designated by
the General Partner as being a Class B Unit.

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

     "Consent" means the consent or approval of a proposed action by a Partner
given in accordance with Section 14.2.

     "Consent of the Outside Limited Partners" means the Consent of Limited
Partners (excluding for this purpose any Limited Partnership Interests held by
the General Partner, any Person of which the General
                                       E-3
<PAGE>   109

Partner owns or controls more than fifty percent (50%) of the voting interests
and any Person directly or indirectly owning or controlling more than fifty
percent (50%) of the outstanding voting interests of the General Partner)
holding Percentage Interests that are greater than fifty percent (50%) of the
aggregate Percentage Interest of all Limited Partners who are not excluded for
the purposes hereof.

     "Consolidation" means (i) the transactions whereby the Partnership acquired
interests in certain office properties owned by the Opportunity Partnerships and
certain asset management and property management businesses that provided
services to those properties and to other office properties, in exchange for
Partnership Units, and (ii) the merger of the ZML Investors, Inc., ZML Investors
II, Inc., Zell/Merrill Lynch Real Estate Opportunity Partners III Trust and
Zell/Merrill Lynch Real Estate Opportunity Partners IV Trust with and into
Equity Office Properties Trust, all as described in a Joint Proxy
Statement/Offering Memorandum dated March 25, 1997.

     "Contributed Property" means each property or other asset contributed to
the Partnership, in such form as may be permitted by the Act, but excluding cash
contributed or deemed contributed to the Partnership. Once the Carrying Value of
a Contributed Property is adjusted pursuant to Exhibit B, such property shall no
longer constitute a Contributed Property for purposes of Exhibit B, but shall be
deemed an Adjusted Property for such purposes.

     "Conversion Factor" means 1.0; provided that, if the General Partner Entity
(i) declares or pays a dividend on its outstanding Shares in Shares or makes a
distribution to all holders of its outstanding Shares in Shares, (ii) subdivides
its outstanding Shares or (iii) combines its outstanding Shares into a smaller
number of Shares, the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which shall be the number of
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 Shares (determined
without the above assumption) issued and outstanding on the record date for such
dividend, distribution, subdivision or combination; and provided further that if
an entity shall cease to be the General Partner Entity (the "Predecessor
Entity") and another entity shall become the General Partner Entity (the
"Successor Entity"), the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which is the Value of one
Share of the Predecessor Entity, determined as of the date when the Successor
Entity becomes the General Partner Entity, and the denominator of which is the
Value of one Share of the Successor Entity, determined as of that same date.
(For purposes of the second proviso in the preceding sentence, if any
shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the fair
market value (as determined in good faith by the General Partner) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares).) Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if a
Specified Redemption Date shall fall between the record date and the effective
date of any event of the type described above, that the Conversion Factor
applicable to such redemption shall be adjusted to take into account such event.

     "Convertible Funding Debt" has the meaning set forth in Section 7.5.F.

     "Debt" means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by

                                       E-4
<PAGE>   110

such Person, (iii) all indebtedness for borrowed money or for the deferred
purchase price of property or services secured by any lien on any property owned
by such Person, to the extent attributable to such Person's interest in such
property, even though such Person has not assumed or become liable for the
payment thereof, and (iv) obligations of such Person incurred in connection with
entering into a lease which, in accordance with generally accepted accounting
principles, should be capitalized.

     "Declaration of Trust" means the Articles of Amendment and Restatement of
Declaration of Trust of Equity Office Properties Trust filed in the State of
Maryland on July 9, 1997, as amended or restated from time to time.

     "Deemed Partnership Interest Value" means, as of any date with respect to
any class of Partnership Interests, the Deemed Value of the Partnership Interest
of such class multiplied by the applicable Partner's Percentage Interest of such
class.

     "Deemed Value of the Partnership Interest" means, as of any date with
respect to any class of Partnership Interests, (a) if the common shares of
beneficial interest (or other comparable equity interests) of the General
Partner Entity are Publicly Traded (i) the total number of shares of beneficial
interest (or other comparable equity interest) of the General Partner Entity
corresponding to such class of Partnership Interest (as provided for in Section
4.2.B) issued and outstanding as of the close of business on such date
(excluding any treasury shares) multiplied by the Value of a share of such
beneficial interest (or other comparable equity interest) on such date divided
by (ii) the Percentage Interests of the General Partner, held directly or
indirectly through another entity, in such class of Partnership Interests on
such date, and (b) otherwise, the aggregate Value of such class of Partnership
Interests determined as set forth in the fourth and fifth sentences of the
definition of Value. For purposes of clause (a) of the preceding sentence,
"Value" means the average of the daily market price of such corresponding shares
of beneficial interest (or other comparable equity interests) of the General
Partner Entity for such number of consecutive trading days or the Business Day
immediately preceding the date with respect to which Value must be determined
(which number of days or the Business Day shall be determined by the General
Partner in its sole discretion), with the market price for each such trading day
being the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on such day.
Notwithstanding any of the foregoing, with respect to any class or series of
Partnership Interests that is entitled to a preference as compared to the class
of Partnership Interests corresponding to common shares of beneficial interests
(or other comparable equity interests) of the General Partner Entity, "Value"
means the stated liquidation preference or value of such class or series of
Partnership Interests provided in the instrument establishing such class or
series of Partnership Interests (unless otherwise provided in such instrument).

     "Depreciation" means, for each fiscal year, an amount equal to the federal
income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.

     "Distribution Period" has the meaning set forth in Section 5.1.C.

     "Effective Date" means the date of the closing of the Consolidation.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "ERISA Partner" means either any (a) Limited Partner or (b) holder of
shares of beneficial interest in the General Partner that received such Shares
in the mergers of ZML Investors, Inc., ZML Investors II, Inc., Zell/Merrill
Lynch Real Estate Opportunity Partners III Trust, and Zell/Merrill Lynch Real
Estate Opportunity Partners IV Trust into the General Partner, and which Limited
Partner or shareholder
                                       E-5
<PAGE>   111

is either (i) an employee benefit plan subject to Title I of ERISA or section
4975 of the Code, or (ii) a nominee for or a trust established pursuant to such
employee benefit plan, or (iii) which is an entity whose underlying assets
include assets of such employee benefit plan by reason of such plan's investment
in such entity.

     "ERISA Plan" means an "employee benefit plan" as that term is defined in 29
U.S.C. Section 1002(3), and which is not exempt from regulation under ERISA by
virtue of 29 U.S.C. Section 1003(b).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Fair Value" shall have the meaning described in Section 7.09.E(iv).

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

     "General Partner" means Equity Office Properties Trust, a Maryland real
estate investment trust, or its successor, as general partner of the
Partnership.

     "General Partner Entity" means the General Partner; provided, however, that
if (i) the common shares of beneficial interest (or other comparable equity
interests) of the General Partner are at any time not Publicly Traded and (ii)
the common shares of beneficial interest (or other comparable equity interests)
of an entity that owns, directly or indirectly, fifty percent (50%) or more of
the common shares of beneficial interest (or other comparable equity interests)
of the General Partner are Publicly Traded, the term "General Partner Entity"
shall refer to such entity whose common shares of beneficial interest (or other
comparable equity securities) are Publicly Traded. If both requirements set
forth in clauses (i) and (ii) above are not satisfied, then the term "General
Partner Entity" shall mean the General Partner.

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

     "General Partner Payment" has the meaning set forth in Section 15.14
hereof.

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

     "Immediate Family" means, with respect to any natural Person, such natural
Person's spouse, parents, descendants, nephews, nieces, brothers, and sisters.

     "Incapacity" or "Incapacitated" means, (i) as to any individual who is a
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her Person
or estate, (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter, (iii) as to any partnership or limited liability
company which is a Partner, the dissolution and commencement of winding up of
the partnership or limited liability company, (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership, (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee) or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner's
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation,

                                       E-6
<PAGE>   112

reorganization or other relief under any bankruptcy, insolvency or other similar
law now or hereafter in effect has not been dismissed within one hundred twenty
(120) days after the commencement thereof, (g) the appointment without the
Partner's consent or acquiescence of a trustee, receiver of liquidator has not
been vacated or stayed within ninety (90) days of such appointment or (h) an
appointment referred to in clause (g) is not vacated within ninety (90) days
after the expiration of any such stay.

     "Indemnitee" means (i) any Person made a party to a proceeding by reason of
its status as (A) the General Partner, (B) a Limited Partner, or (C) a trustee,
director or officer of the Partnership, or the General Partner and (ii) such
other Persons (including Affiliates of the General Partner, a Limited Partner or
the Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.

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

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

     "Liquidating Event" has the meaning set forth in Section 13.1.

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

     "Net Income" means, for any taxable period, the excess, if any, of the
Partnership's items of income and gain for such taxable period over the
Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Income is subjected to the special allocation
rules in Exhibit C, Net Income or the resulting Net Loss, whichever the case may
be, shall be recomputed without regard to such item.

     "Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction for such taxable period over the
Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C, Net Loss or the resulting Net Income, whichever the case may
be, shall be recomputed without regard to such item.

     "New Securities" means (i) any rights, options, warrants or convertible or
exchangeable securities having the right to subscribe for or purchase Shares,
excluding grants under any Share Option Plan, or (ii) any Debt issued by the
General Partner Entity that provides any of the rights described in clause (i).

     "Nonrecourse Built-in Gain" means, with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or negative
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.

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

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

     "Notice of Redemption" means a Notice of Redemption substantially in the
form of Exhibit D.

                                       E-7
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     "Opportunity Partnerships" means, Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership, Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership II, Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership III, and Zell/Merrill Lynch Real Estate
Opportunity Partners Limited Partnership IV.

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

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

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

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

     "Partnership" means the limited partnership formed under the Act upon the
terms and conditions set forth in the Original Partnership Agreement and
continued pursuant to this Agreement, or any successor to such limited
partnership.

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

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

     "Partnership Record Date" means the record date established by the General
Partner either (i) for the distribution of Available Cash pursuant to Section
5.1 hereof, which record date shall be the same as the record date established
by the General Partner Entity for a distribution to its shareholders of some or
all of its portion of such distribution, or (ii) if applicable, for determining
the Partners entitled to vote on or consent to any proposed action for which the
consent or approval of the Partners is sought pursuant to Section 14.2 hereof.

     "Partnership Unit" means a fractional, undivided share of the Partnership
Interests of all Partners issued pursuant to Sections 4.1 and 4.2, and includes
Class A Units, Class B Units, Series A Preferred Units, Series B Preferred
Units, Series C Preferred Units, and any other classes or series of Partnership
Units established after the date hereof. The number of Partnership Units
outstanding and the Percentage Interests in the Partnership represented by such
Partnership Units are set forth in Exhibit A, as such Exhibit may be amended
from time to time.

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

     "Percentage Interest" means, as to a Partner holding a class of Partnership
Interests, its interest in such class, determined by dividing the Partnership
Units of such class owned by such Partner by the total number of Partnership
Units of such class then outstanding as specified in Exhibit A, as such exhibit
may be amended from time to time, multiplied by the aggregate Percentage
Interest allocable to such class of Partnership Interests. If the Partnership
shall at any time have outstanding more than one class of Partnership Interests,
the Percentage Interest attributable to each class of Partnership Interests
shall be determined as set forth in Section 4.2.B.

     "Person" means a natural person, partnership (whether general or limited),
trust, estate, association, corporation, limited liability company,
unincorporated organization, custodian, nominee or any other individual or
entity in its own or any representative capacity.
                                       E-8
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     "Predecessor Entity" has the meaning set forth in the definition of
"Conversion Factor" herein.

     "Protected Amount" means the amount specified on Exhibit E with respect to
any Protected Partner, as such Exhibit may be amended from time to time.

     "Protected Partner" means a Partner designated as a Protected Partner on
Exhibit E, as such Exhibit may be amended from time to time, which Protected
Partner is obligated to make certain contributions, not in excess of such
Protected Partner's Protected Amount, to the Partnership with respect to any
deficit balance in such Partner's Capital Account upon the occurrence of certain
events. A Protected Partner who is obligated to make any such contribution only
upon liquidation of the Partnership shall be designated on Exhibit E as a Part I
Protected Partner and a Protected Partner who is obligated to make any such
contribution to the Partnership either upon liquidation of the Partnership or
upon liquidation of such Protected Partner's Partnership Interest shall be
designated on Exhibit E as a Part II Protected Partner.

     "Publicly Traded" means listed or admitted to trading on the New York Stock
Exchange, the American Stock Exchange or another national securities exchange or
designated for quotation on the NASDAQ National Market, or any successor to any
of the foregoing.

     "Qualified REIT Subsidiary" means any Subsidiary of the General Partner
that is a "qualified REIT subsidiary" within the meaning of Section 856(i) of
the Code.

     "Qualified Transferee" means an "Accredited Investor" as defined in Rule
501 promulgated under the Securities Act.

     "Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized either as ordinary income or as "unrecaptured Section 1250
gain" (as defined in Section 1(h)(7) of the Code because it represents the
recapture of deductions previously taken with respect to such property or asset.

     "Recourse Liabilities" means the amount of liabilities owed by the
Partnership (other than Nonrecourse Liabilities and liabilities to which Partner
Nonrecourse Deductions are attributable in accordance with Section 1.704-(2)(i)
of the Regulations).

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

     "Redemption Amount" means either the Cash Amount or the Shares Amount, as
determined by the General Partner, in its sole and absolute discretion; provided
that if the Shares are not Publicly Traded at the time a Redeeming Partner
exercises its Redemption Right, the Redemption Amount shall be paid only in the
form of the Cash Amount unless the Redeeming Partner, in its sole and absolute
discretion, consents to payment of the Redemption Amount in the form of the
Shares Amount. A Redeeming Partner shall have no right, without the General
Partner's consent, in its sole and absolute discretion, to receive the
Redemption Amount in the form of the Shares Amount.

     "Redemption Right" has the meaning set forth in Section 8.6.A.

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

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

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

     "Residual Gain" or "Residual Loss" means any item of gain or loss, as the
case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of Contributed Property or
Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate Book-Tax
Disparities.

     "Safe Harbor" has the meaning set forth in Section 11.6.F.

     "Securities Act" means the Securities Act of 1933, as amended.
                                       E-9
<PAGE>   115

     "Series A Preferred Shares" means the 8.98% Series A Cumulative Redeemable
Preferred Shares of Equity Office Properties Trust issued in connection with the
merger of Beacon Properties Corporation into Equity Office Properties Trust on
December 19, 1997.

     "Series A Preferred Units" means the series of Partnership Units
representing units of Limited Partnership Interest designated as the 8.98%
Series A Cumulative Redeemable Preferred Units with the designations,
preferences and other rights set forth in Attachment A hereto.

     "Series B Preferred Shares" means the 5.25% Series B Convertible,
Cumulative Preferred Shares of the Company, with the preferences, conversion and
other rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption of shares as described in
the Articles Supplementary to the Declaration of Trust filed with the State
Department of Assessments and Taxation of Maryland on February 19, 1998,
establishing the series of preferred shares, designated Series B Preferred
Shares.

     "Series B Preferred Units" means the series of Partnership Units
representing units of Limited Partnership Interest designated as the 5.25% B
Convertible, Cumulative Preferred Units, with the preferences, conversion and
other rights, voting powers, restrictions, limitations as to distributions,
qualification and terms and conditions of redemption of units set forth in
Attachment B hereto.

     "Series C Preferred Shares" means the 8 5/8% Series C Cumulative Redeemable
Preferred Shares of Beneficial Interest of the Company issued and sold in the
underwritten public offering made pursuant to the Company's effective shelf
registration statement on Form S-3 (Reg. No. 333-58729), its prospectus dated
July 22, 1998, and its related prospectus supplement dated December 1, 1998.

     "Series C Preferred Units" means the series of Partnership Units
representing units of Limited Partnership Interest designated as the 8 5/8%
Series C Cumulative Redeemable Preferred Units, with the designations,
preferences and other rights set forth in Attachment C hereto.

     "Series D Preferred Units" means the series of Partnership Units
representing units of Limited Partnership Interest designated as the 7%
Cumulative Convertible Preferred Units, with the designations, preferences and
other rights set forth in Attachment D hereto.

     "704(c) Value" of any Contributed Property means the fair market value of
such property at the time of contribution as determined by the General Partner
using such reasonable method of valuation as they may adopt; provided, however,
subject to Exhibit B, the General Partner shall, in its sole and absolute
discretion, use such method as it deems reasonable and appropriate to allocate
the aggregate of the 704(c) Value of Contributed Properties in a single or
integrated transaction among each separate property on a basis proportional to
its fair market values.

     "Share" means a share of beneficial interest (or other comparable equity
interest) of the General Partner Entity. Shares may be issued in one or more
classes or series in accordance with the terms of the Declaration of Trust (or,
if the General Partner is not the General Partner Entity, the organizational
documents of the General Partner Entity). If there is more than one class or
series of Shares, the term "Shares" shall, as the context requires, be deemed to
refer to the class or series of Shares that correspond to the class or series of
Partnership Interests for which the reference to Shares is made. When used with
reference to Class A Units, the term "Shares" refers to common shares of
beneficial interest (or other comparable equity interest) of the General Partner
Entity.

     "Shares Amount" means a number of Shares equal to the product of the number
of Partnership Units offered for redemption by a Redeeming Partner times the
Conversion Factor; provided that, if the General Partner Entity issues to all
holders of Shares rights, options, warrants or convertible or exchangeable
securities entitling such holders to subscribe for or purchase Shares or any
other securities or property (collectively, the "rights"), then the Shares
Amount shall also include such rights that a holder of that number of Shares
would be entitled to receive.

     "Share Option Plan" means any equity incentive plan of the General Partner,
the General Partner Entity, the Partnership and/or any Affiliate of the
Partnership.
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<PAGE>   116

     "Specified Redemption Date" means the tenth Business Day after receipt by
the General Partner of a Notice of Redemption; provided that, if the Shares are
not Publicly Traded, the Specified Redemption Date means the thirtieth Business
Day after receipt by the General Partner of a Notice of Redemption.

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

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

     "Successor Entity" has the meaning set forth in the definition of
"Conversion Factor" herein.

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

     "Termination Transaction" has the meaning set forth in Section 11.2.B.

     "Unrealized Gain" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (i) the fair market
value of such property (as determined under Exhibit B) as of such date, over
(ii) the Carrying Value of such property (prior to any adjustment to be made
pursuant to Exhibit B) as of such date.

     "Unrealized Loss" attributable to any item of Partnership property means,
as of any date of determination, the excess, if any, of (i) the Carrying Value
of such property (prior to any adjustment to be made pursuant to Exhibit B) as
of such date, over (ii) the fair market value of such property (as determined
under Exhibit B) as of such date.

     "Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption or, if such date is not a Business Day, the first Business
Day thereafter.

     "Value" means, with respect to any outstanding Shares of the General
Partner Entity that are Publicly Traded, the average of the daily market price
for the ten consecutive trading days immediately preceding the date with respect
to which value must be determined. The market price for each such trading day
shall be the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on such day.
If the outstanding Shares of the General Partner Entity are Publicly Traded and
the Shares Amount includes rights that a holder of Shares would be entitled to
receive, 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. If the
Shares of the General Partner Entity are not Publicly Traded, the Value of the
Shares Amount per Partnership Unit offered for redemption (which will be the
Cash Amount per Partnership Unit offered for redemption payable pursuant to
Section 8.6.A) means the amount that a holder of one Partnership Unit would
receive if each of the assets of the Partnership were to be sold for its fair
market value on the Specified Redemption Date, the Partnership were to pay all
of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement. Such
Value shall be determined by the General Partner, acting in good faith and based
upon a commercially reasonable estimate of the amount that would be realized by
the Partnership if each asset of the Partnership (and each asset of each
partnership, limited liability company, trust, joint venture or other entity in
which the Partnership owns a direct or indirect interest) were sold to an
unrelated purchaser in an arms' length transaction where neither the purchaser
nor the seller were under economic compulsion to enter into the transaction
(without regard to any discount in value as a result of the Partnership's
minority interest in any property or any illiquidity of the Partnership's
interest in any property). In connection with determining the Deemed Value of
the Partnership Interest for purposes of determining the number of additional
Partnership Units issuable upon a Capital Contribution funded by an underwritten
public offering or an arm's length private placement of shares of beneficial
interest (or other comparable equity interest) of the General Partner, the Value
of such shares shall be the public offering or arm's length

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private placement price per share of such class of beneficial interest (or other
comparable equity interest) sold.

                                   ARTICLE II

                             ORGANIZATIONAL MATTERS

SECTION 2.1  ORGANIZATION

     The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the terms and conditions set forth in the
Original Agreement, as amended by the Prior Amendments, the Prior Addenda, and
the First Amended and Restated Agreement. The Partners hereby agree to continue
the business of the Partnership on the terms set forth in this Agreement. Except
as expressly provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.

SECTION 2.2  NAME

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

SECTION 2.3  REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE

     The address of the registered office of the Partnership in the State of
Delaware shall be located at Corporation Trust Center, 1209 Orange Street,
Wilmington, County of New Castle, Delaware 19801, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office shall be Corporation Trust Company. The principal office of
the Partnership shall be Two North Riverside Plaza, Suite 2100, Chicago,
Illinois 60606, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.

SECTION 2.4  TERM

     The term of the Partnership commenced on November 1, 1996, and shall
continue until December 31, 2095, unless it is dissolved sooner pursuant to the
provisions of Article XIII or as otherwise provided by law.

                                  ARTICLE III

                                    PURPOSE

SECTION 3.1  PURPOSE AND BUSINESS

     The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act; provided, however, that such business
shall be limited to and conducted in such a manner as to permit the General
Partner Entity at all times to be classified as a REIT, unless the General
Partner Entity ceases to qualify or is not qualified as a REIT for any reason or
reasons not related to the business conducted by the

                                      E-12
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Partnership, (ii) to enter into any corporation, partnership, joint venture,
trust, limited liability company or other similar arrangement to engage in any
of the foregoing or the ownership of interests in any entity engaged, directly
or indirectly, in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, the Partners
acknowledge that the status of the General Partner Entity as a REIT inures to
the benefit of all the Partners and not solely to the General Partner Entity or
its Affiliates.

SECTION 3.2  POWERS

     The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness, whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property; provided,
however, that the Partnership shall not take, or refrain from taking, any action
which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner Entity
to continue to qualify as a REIT, (ii) could subject the General Partner Entity
to any taxes under Section 857 or Section 4981 of the Code or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over either the General Partner or the General Partner Entity or
its securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.

                                   ARTICLE IV

                      CAPITAL CONTRIBUTIONS AND ISSUANCES
                            OF PARTNERSHIP INTERESTS

SECTION 4.1  CAPITAL CONTRIBUTIONS OF THE PARTNERS

     Prior to the execution of this Agreement, the Partners have made the
Capital Contributions as set forth in Exhibit A. The Partners own Partnership
Units in the amounts set forth in Exhibit A and have Percentage Interests in the
Partnership as set forth in Exhibit A, which number of Partnership Units and
Percentage Interest shall be adjusted in Exhibit A from time to time by the
General Partner to the extent necessary to reflect accurately redemptions,
Capital Contributions, the issuance of additional Partnership Units or similar
events having an effect on a Partner's Percentage Interest occurring after the
date hereof in accordance with the terms of this Agreement. To the extent the
Partnership acquires any property by the merger of any other Person into the
Partnership, Persons who receive Partnership Interests in exchange for their
interests in the Person merging into the Partnership shall become Partners and
shall be deemed to have made Capital Contributions as provided in the applicable
merger agreement and as set forth in Exhibit A. A number of Partnership Units
held by the General Partner equal to one percent (1%) of the aggregate number of
Partnership Units owned by the General Partner shall be deemed to be the General
Partner Partnership Units and shall be the General Partnership Interest of the
General Partner. All other Partnership Units held by the General Partner shall
be deemed to be Limited Partnership Interests and shall be held by the General
Partner in its capacity as a Limited Partner in the Partnership. Except as
provided in Sections 7.5, 10.5, and 13.3 hereof, the Partners shall have no
obligation to make any additional Capital Contributions or provide any
additional funding to the Partnership (whether in the form of loans, repayments
of loans or otherwise). Except as otherwise set forth in Section 13.3 hereof, no
Partner shall have any obligation to restore any deficit that may exist in its
Capital Account, either upon a liquidation of the Partnership or otherwise.

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SECTION 4.2  ISSUANCES OF PARTNERSHIP INTERESTS

     A. General.  The General Partner is hereby authorized to cause the
Partnership from time to time to issue to Partners (including the General
Partner and its Affiliates) or other Persons (including, without limitation, in
connection with the contribution of property to the Partnership) Partnership
Units or other Partnership Interests in one or more classes, or in 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, subject to applicable Delaware law, by the General Partner in its
sole and absolute discretion, 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 that no such
Partnership Units or other Partnership Interests shall be issued to the General
Partner unless either (a) the Partnership Interests are issued in connection
with the grant, award or issuance of Shares or other equity interests in the
General Partner having designations, preferences and other rights such that the
economic interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner in
accordance with this Section 4.2.A or (b) the additional Partnership Interests
are issued to all Partners holding Partnership Interests in the same class in
proportion to their respective Percentage Interests in such class. If the
Partnership issues Partnership Interests pursuant to this Section 4.2.A, the
General Partner shall make such revisions to this Agreement (including but not
limited to the revisions described in Section 5.4, Section 6.2 and Section 8.6)
as it deems necessary to reflect the issuance of such Partnership Interests.

     B. Percentage Interest Adjustments in the Case of Capital Contributions for
Partnership Units.  Upon the acceptance of additional Capital Contributions in
exchange for Partnership Units and so long as the Partnership shall have
outstanding more than one class of Partnership Interests, the Percentage
Interest related thereto shall be equal to a fraction, the numerator of which is
equal to the amount of cash, if any, plus the Agreed Value of Contributed
Property, if any, contributed with respect to such additional Partnership Units
and the denominator of which is equal to the sum of (i) the Deemed Value of the
Partnership Interests for all outstanding classes (computed as of the Business
Day immediately preceding the date on which the additional Capital Contributions
are made (an "Adjustment Date")) plus (ii) the aggregate amount of additional
Capital Contributions contributed to the Partnership on such Adjustment Date in
respect of such additional Partnership Units. The Percentage Interest of each
other Partner holding Partnership Interests not making a full pro rata Capital
Contribution shall be adjusted to a fraction the numerator of which is equal to
the sum of (i) the Deemed Partnership Interest Value of such Limited Partner
(computed as of the Business Day immediately preceding the Adjustment Date) plus
(ii) the amount of additional Capital Contributions (such amount being equal to
the amount of cash, if any, plus the Agreed Value of Contributed Property, if
any, so contributed), if any, made by such Partner to the Partnership in respect
of such Partnership Interest as of such Adjustment Date and the denominator of
which is equal to the sum of (i) the Deemed Value of the Partnership Interests
of all outstanding classes (computed as of the Business Day immediately
preceding such Adjustment Date) plus (ii) the aggregate amount of the additional
Capital Contributions contributed to the Partnership on such Adjustment Date in
respect of such additional Partnership Interests. For purposes of calculating a
Partner's Percentage Interest pursuant to this Section 4.2.B, cash Capital
Contributions by the General Partner will be deemed to equal the cash
contributed by the General Partner plus (a) in the case of cash contributions
funded by an offering of any equity interests in or other securities of the
General Partner, the offering costs attributable to the cash contributed to the
Partnership, and (b) in the case of Partnership Units issued pursuant to Section
7.5.E, an amount equal to the difference between the Value of the Shares sold
pursuant to any Share Option Plan and the net proceeds of such sale.

     C. Classes of Partnership Units.  Subject to Section 4.2.A above and
Section 4.2.D below, the Partnership shall have two classes of Partnership Units
entitled "Class A Units" and "Class B Units."

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<PAGE>   120

Either Class A Units or Class B Units, at the election of the General Partner,
in its sole and absolute discretion, may be issued to newly admitted Partners in
exchange for the contribution by such Partners of cash, real estate partnership
interests, stock, notes or other assets or consideration; provided that any
Partnership Unit that is not specifically designated by the General Partner as
being of a particular class shall be deemed to be a Class A Unit. Each Class B
Unit shall be converted automatically into a Class A Unit on the day immediately
following the Partnership Record Date for the Distribution Period (as defined in
Section 5.1.C) in which such Class B Unit was issued, without the requirement
for any action by either the Partnership or the Partner holding the Class B
Unit.

     D. Preferred Units Outstanding.  Pursuant to Section 4.2.A, the Partnership
has heretofore established and issued Series A Preferred Units, Series B
Preferred Units, and Series C Preferred Units, and the Partnership is
establishing and issuing the Series D Preferred Units in connection with the
adoption of this Agreement. The terms and conditions of the Series A Preferred
Units, the Series B Preferred Units, the Series C Preferred Units, and the
Series D Preferred Units are set forth in Attachment A, Attachment B, Attachment
C, and Attachment D, respectively, attached hereto and made part hereof.

SECTION 4.3  NO PREEMPTIVE RIGHTS

     Except to the extent expressly granted by the Partnership pursuant to
another agreement, no Person shall have any preemptive, preferential or other
similar right with respect to (i) additional Capital Contributions or loans to
the Partnership or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.

SECTION 4.4  OTHER CONTRIBUTION PROVISIONS

     If any Partner is admitted to the Partnership and is given a Capital
Account in exchange for services rendered to the Partnership, such transaction
shall be treated by the Partnership and the affected Partner as if the
Partnership had compensated such Partner in cash, and the Partner had
contributed such cash to the capital of the Partnership.

SECTION 4.5  NO INTEREST ON CAPITAL

     No Partner shall be entitled to interest on its Capital Contributions or
its Capital Account.

SECTION 4.6  SEPARATE AGREEMENTS

     In connection with the issuance of Partnership Units to certain Additional
Limited Partners, the Partnership has entered into separate agreements that set
forth additional rights and obligations of such Additional Limited Partners and
additional terms and conditions of such Additional Limited Partner's Partnership
Interests. Such agreements are described in Exhibits E-1 through E-6 attached
hereto and made part hereof.

                                   ARTICLE V

                                 DISTRIBUTIONS

SECTION 5.1  REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS

     A. General.  The General Partner shall distribute at least quarterly an
amount equal to one hundred percent (100%) of Available Cash generated by the
Partnership during such quarter or shorter period to the Partners who are
Partners on the Partnership Record Date with respect to such quarter or shorter
period as provided in Sections 5.1.B, 5.1.C and 5.1.D. Notwithstanding anything
to the contrary contained herein, in no event may a Partner receive a
distribution of Available Cash with respect to a Partnership Unit for a quarter
or shorter period if such Partner is entitled to receive a distribution with
respect to a Share for which such Partnership Unit has been redeemed or
exchanged. Unless otherwise expressly
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provided for herein, in Attachment A, Attachment B, Attachment C, and Attachment
D hereto, with respect to Series A Preferred Units, Series B Preferred Units,
Series C Preferred Units, and Series D Preferred Units, respectively, or in an
agreement at the time a new class or series of Partnership Interests is created
in accordance with Article IV hereof, no Partnership Interest shall be entitled
to a distribution in preference to any other Partnership Interest. The General
Partner shall make such reasonable efforts, as determined by it in its sole and
absolute discretion and consistent with the qualification of the General Partner
Entity as a REIT, to distribute Available Cash (a) to Limited Partners so as to
preclude any such distribution or portion thereof from being treated as part of
a sale of property to the Partnership by a Limited Partner under Section 707 of
the Code or the Regulations thereunder; provided that, the General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any distribution to a Limited Partner being so
treated, and (b) to the General Partner in an amount sufficient to enable the
General Partner Entity to make distributions to its shareholders that will
enable the General Partner Entity to (1) satisfy the requirements for
qualification as a REIT under the Code and the Regulations (the "REIT
Requirements"), and (2) avoid any federal income or excise tax liability.

     B. Method.  (i) Each holder of Partnership Interests that is entitled to
any preference in distribution (including, without limitation, the preferences
in distribution set forth in Attachment A, Attachment B, Attachment C, and
Attachment D hereto with respect to Series A Preferred Units, Series B Preferred
Units, Series C Preferred Units, and Series D Preferred Units, respectively)
shall be entitled to a distribution in accordance with the rights of any such
class of Partnership Interests (and, within such class, pro rata in proportion
to the respective Percentage Interests on such Partnership Record Date); and

          (ii) To the extent there is Available Cash remaining after the payment
     of any preference in distribution in accordance with the foregoing clause
     (i), with respect to Partnership Interests that are not entitled to any
     preference in distribution, pro rata to each such class in accordance with
     the terms of such class (and, within each such class, pro rata in
     proportion to the respective Percentage Interests on such Partnership
     Record Date).

     C. Distributions When Class B Units Are Outstanding.  If for any quarter or
shorter period with respect to which a distribution is to be made (a
"Distribution Period") Class B Units are outstanding on the Partnership Record
Date for such Distribution Period, the General Partner shall allocate the
Available Cash with respect to such Distribution Period available for
distribution with respect to the Class A Units and Class B Units collectively
between the Partners who are holders of Class A Units ("Class A") and the
Partners who are holders of Class B Units ("Class B") as follows:

          (1) Class A shall receive that portion of the Available Cash (the
     "Class A Share") determined by multiplying the amount of Available Cash by
     the following fraction:
                                     A X Y
                            ------------------------
                               (A X Y) + (B X X)

          (2) Class B shall receive that portion of the Available Cash (the
     "Class B Share") determined by multiplying the amount of Available Cash by
     the following fraction:
                                     B X X
                            ------------------------
                               (A X Y) + (B X X)

          (3) For purposes of the foregoing formulas, (i) "A" equals the number
     of Class A Units outstanding on the Partnership Record Date for such
     Distribution Period; (ii) "B" equals the number of Class B Units
     outstanding on the Partnership Record Date for such Distribution Period;
     (iii) "Y" equals the number of days in the Distribution Period; and (iv)
     "X" equals the number of days in the Distribution Period for which the
     Class B Units were issued and outstanding.

     The Class A Share shall be distributed among Partners holding Class A Units
on the Partnership Record Date for the Distribution Period in accordance with
the number of Class A Units held by each Partner on such Partnership Record
Date; provided that in no event may a Partner receive a distribution of

                                      E-16
<PAGE>   122

Available Cash with respect to a Class A Unit if a Partner is entitled to
receive a distribution out of such Available Cash with respect to a Share for
which such Class A Unit has been redeemed or exchanged. The Class B Shares shall
be distributed among the Partners holding Class B Units on the Partnership
Record Date for the Distribution Period in accordance with the number of Class B
Units held by each Partner on such Partnership Record Date. In no event shall
any Class B Units be entitled to receive any distribution of Available Cash for
any Distribution Period ending prior to the date on which such Class B Units are
issued.

     D. Distributions When Class B Units Have Been Issued on Different
Dates.  If Class B Units which have been issued on different dates are
outstanding on the Partnership Record Date for any Distribution Period, then the
Class B Units issued on each particular date shall be treated as a separate
series of Partnership Units for purposes of making the allocation of Available
Cash for such Distribution Period among the holders of Partnership Units (and
the formula for making such allocation, and the definitions of variables used
therein, shall be modified accordingly). Thus, for example, if two series of
Class B Units are outstanding on the Partnership Record Date for any
Distribution Period, the allocation formula for each series, "Series B(1)" and
"Series B(2)" would be as follows:

          (1) Series B(1) shall receive that portion of the Available Cash
     determined by multiplying the amount of Available Cash by the following
     fraction:
                                  B(1) X X(1)
                   ------------------------------------------
                    (A X Y) + (B(1) X X(1)) + (B(2) X X(2))

          (2) Series B(2) shall receive that portion of the Available Cash
     determined by multiplying the amount of Available Cash by the following
     fraction:
                                  B(2) X X(2)
                   ------------------------------------------
                    (A X Y) + (B(1) X X(1)) + (B(2) X X(2))

          (3) For purposes of the foregoing formulas the definitions set forth
     in Section 5.1.C.3 remain the same except that (i) "B(1)" equals the number
     of Partnership Units in Series B(1) outstanding on the Partnership Record
     Date for such Distribution Period; (ii) "B(2)" equals the number of
     Partnership Units in Series B(2) outstanding on the Partnership Record Date
     for such Distribution Period; (iii) "X(1)" equals the number of days in the
     Distribution Period for which the Partnership Units in Units in Series B(2)
     outstanding on the Partnership Record Date for such Distribution Period;
     (iii) "X(2)" equals the number of days in the Distribution Period for which
     the Partnership Units in Series B(1) were issued and outstanding; and (iv)
     "X(2)" equals the number of days in the Distribution Period for which the
     Partnership Units in Series B(2) were issued and outstanding.

     E. Minimum Distributions if Shares Not Publicly Traded.  In addition (and
without regard to the amount of Available Cash), if the Shares of the General
Partner Entity are not Publicly Traded, the General Partner shall make cash
distributions with respect to the Class A Units at least annually for each
taxable year of the Partnership beginning prior to the fifteenth (15th)
anniversary of the Effective Date in an aggregate amount with respect to each
such taxable year at least equal to 95% of the Partnership's taxable income for
such year allocable to the Class A Units, with such distributions to be made not
later than 60 days after the end of such year.

SECTION 5.2  AMOUNTS WITHHELD

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

                                      E-17
<PAGE>   123

SECTION 5.3  DISTRIBUTIONS UPON LIQUIDATION

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

SECTION 5.4  REVISIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS

     If the Partnership issues Partnership Interests to the General Partner or
any Additional Limited Partner pursuant to Article IV hereof, the General
Partner shall make such revisions to this Article V and Exhibit A as it deems
necessary to reflect the issuance of such additional Partnership Interests
without the requirements for any other consents or approvals.

                                   ARTICLE VI

                                  ALLOCATIONS

SECTION 6.1  ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES

     For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Exhibit B) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

     A. Net Income.  After giving effect to the special allocations set forth in
Section 1 of Exhibit C of the Partnership Agreement, Net Income shall be
allocated:

          (1) first, to the General Partner to the extent that cumulative Net
     Losses previously allocated the General Partner pursuant to Section
     6.1.B(6) exceed cumulative Net Income previously allocated to the General
     Partner pursuant to this clause (1);

          (2) second, to each Protected Partner until the cumulative Net Income
     allocated such Protected Partner under this clause (2) equals the
     cumulative Net Losses allocated such Protected Partner under Section
     6.1.B(5) (and, within the class of Protected Partners, pro rata in
     proportion to their respective percentages of the cumulative Net Losses
     allocated all Protected Partners pursuant to Section 6.1.B(5) hereof);

          (3) third, to the General Partner until the cumulative Net Income
     allocated under this clause (3) equals the cumulative Net Losses allocated
     the General Partner under Section 6.1.B(4);

          (4) fourth, to the holders of any Partnership Interests that are
     entitled to any preference upon liquidation until the cumulative Net income
     allocated under this clause (4) equals the cumulative Net Losses allocated
     to such Partners under Section 6.1.B(3);

          (5) fourth, to the holders of any Partnership Interests that are
     entitled to any preference in distribution in accordance with the rights of
     any such class of Partnership Interests until each such Partnership
     Interest has been allocated, on a cumulative basis pursuant to this clause
     (5), Net Income equal to the amount of distributions received which are
     attributable to the preference of such class of Partnership Interests (and,
     within such class, pro rata in proportion to the respective Percentage
     Interests as of the last day of the period for which such allocation is
     being made); and

          (6) finally, with respect to Partnership Interests that are not
     entitled to any preference in the allocation of Net Income, pro rata to
     each such class in accordance with the terms of such class (and, within
     such class, pro rata in proportion to the respective Percentage Interests
     as of the last day of the period for which such allocation is being made).

                                      E-18
<PAGE>   124

     B. Net Losses.  After giving effect to the special allocations set forth in
Section 1 of Exhibit C, Net Losses shall be allocated:

          (1) first, to the holders of Partnership Interests, in proportion to
     their share of the Net Income previously allocated pursuant to Section
     6.1.A(6), to the extent that any prior allocations of Net Income to such
     Partners pursuant to Section 6.1.A(6) exceed, on a cumulative basis,
     distributions with respect to such Partnership Interests pursuant to clause
     (ii) of Section 5.1.B;

          (2) second, with respect to classes of Partnership Interests that are
     not entitled to any preference in distribution upon distribution, pro rata
     to each such class in accordance with the terms of such class (and, within
     such class, pro rata in proportion to the respective Percentage Interests
     as of the last day of the period for which such allocation is being made);
     provided that Net Losses shall not be allocated to any Partner pursuant to
     this Section 6.1.B(2) to the extent that such allocation would cause such
     Partner to have an Adjusted Capital Account Deficit (or increase any
     existing Adjusted Capital Account Deficit) (determined in each case (i) by
     not including in the Partners' Adjusted Capital Accounts any amount that a
     Partner is obligated to contribute to the Partnership with respect to any
     deficit in its Capital Account pursuant to Section 13.3 and (ii) in the
     case of a Partner who also holds classes of Partnership Interests that are
     entitled to any preferences in distribution upon liquidation, by
     subtracting from such Partners' Adjusted Capital Account the amount of such
     preferred distribution to be made upon liquidation) at the end of such
     taxable year (or portion thereof);

          (3) third, with respect to classes of Partnership Interests that are
     entitled to any preference in distribution upon liquidation, in reverse
     order of the priorities of each such class (and within each such class, pro
     rata in proportion to their respective Percentage Interests as of the last
     day of the period for which such allocation is being made); provided that
     Net Losses shall not be allocated to any Partner pursuant to this Section
     6.1.B(3) to the extent that such allocation would cause such Partner to
     have an Adjusted Capital Account Deficit (or increase any existing Adjusted
     Capital Account Deficit) (determined in each case by not including in the
     Partners' Adjusted Capital Accounts any amount that a Partner is obligated
     to contribute to the Partnership with respect to any deficit in its Capital
     Account pursuant to Section 13.3) at the end of such taxable year (or
     portion thereof);

          (4) fourth, to the General Partner in an amount equal to the excess of
     (a) the amount of the Partnership Recourse Liabilities over (b) the
     Aggregate Protected Amount;

          (5) fifth, to and among the Protected Partners, in proportion to their
     respective Protected Amounts, until such time as the Protected Partners as
     a group have been allocated cumulative Net Losses pursuant to this clause
     (5) equal to the Aggregate Protected Amount; and

          (6) thereafter, to the General Partner.

     C. Allocation of Nonrecourse Debt.  For purposes of Regulation Section
1.752-3(a), the Partners agree that Nonrecourse Liabilities of the Partnership
in excess of the sum of (i) the amount of Partnership Minimum Gain and (ii) the
total amount of Nonrecourse Built-in Gain shall be allocated by the General
Partner by taking into account facts and circumstances relating to each
Partner's respective interest in the profits of the Partnership. For this
purpose, the General Partner will have discretion in any fiscal year to allocate
such excess Nonrecourse Liabilities among the Partners in any manner permitted
under Code Section 752 and the Regulations thereunder.

     D. Recapture Income.  Any gain allocated to the Partners upon the sale or
other taxable disposition of any Partnership asset shall, to the extent possible
after taking into account other required allocations of gain pursuant to Exhibit
C, be characterized as Recapture Income in the same proportions and to the same
extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.

                                      E-19
<PAGE>   125

SECTION 6.2  REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF PARTNERSHIP
             INTERESTS

     If the Partnership issues Partnership Interests to the General Partner or
any Additional Limited Partner pursuant to Article IV hereof, the General
Partner shall make such revisions to this Article VI and Exhibit A as it deems
necessary to reflect the terms of the issuance of such Partnership Interests,
including making preferential allocations to classes of Partnership Interests
that are entitled thereto. Such revisions shall not require the consent or
approval of any other Partner.

                                  ARTICLE VII

                     MANAGEMENT AND OPERATIONS OF BUSINESS

SECTION 7.1  MANAGEMENT

     A. Powers of General Partner.  Except as otherwise expressly provided in
this Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners with or without cause. In
addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 7.11, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 and to effectuate the purposes set
forth in Section 3.1, including, without limitation:

          (1) the making of any expenditures, the lending or borrowing of money
     (including, without limitation, making prepayments on loans and borrowing
     money to permit the Partnership to make distributions to its Partners in
     such amounts as are required under Section 5.1.E or will permit the General
     Partner Entity (so long as the General Partner Entity qualifies as REIT) to
     avoid the payment of any federal income tax (including, for this purpose,
     any excise tax pursuant to Section 4981 of the Code) and to make
     distributions to its shareholders sufficient to permit the General Partner
     Entity to maintain REIT status), the assumption or guarantee of, or other
     contracting for, indebtedness and other liabilities, the issuance of
     evidences of indebtedness (including the securing of same by mortgage, deed
     of trust or other lien or encumbrance on the Partnership's assets) and the
     incurring of any obligations the General Partner deems necessary for the
     conduct of the activities of the Partnership;

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

          (3) the acquisition, disposition, mortgage, pledge, encumbrance,
     hypothecation or exchange of any or all of the assets of the Partnership
     (including the exercise or grant of any conversion, option, privilege or
     subscription right or other right available in connection with any assets
     at any time held by the Partnership) or the merger or other combination of
     the Partnership with or into another entity on such terms as the General
     Partner deems proper;

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

                                      E-20
<PAGE>   126

          (5) the management, operation, leasing, landscaping, repair,
     alteration, demolition or improvement of any real property or improvements
     owned by the Partnership or any Subsidiary of the Partnership or any Person
     in which the Partnership has made a direct or indirect equity investment;

          (6) the negotiation, execution, and performance of any contracts,
     conveyances or other instruments that the General Partner considers useful
     or necessary to the conduct of the Partnership's operations or the
     implementation of the General Partner's powers under this Agreement,
     including contracting with contractors, developers, consultants,
     accountants, legal counsel, other professional advisors and other agents
     and the payment of their expenses and compensation out of the Partnership's
     assets;

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

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

          (9) the holding, managing, investing and reinvesting of cash and other
     assets of the Partnership;

          (10) the collection and receipt of revenues and income of the
     Partnership;

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

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

          (13) the formation of, or acquisition of an interest (including
     non-voting interests in entities controlled by Affiliates of the
     Partnership or third parties) in, and the contribution of property to, any
     further limited or general partnerships, joint ventures, limited liability
     companies or other relationships that it deems desirable (including,
     without limitation, the acquisition of interests in, and the contributions
     of funds or property to, or making of loans to, its Subsidiaries and any
     other Person in which it has an equity investment from time to time, or the
     incurrence of indebtedness on behalf of such Persons or the guarantee of
     the obligations of such Persons); provided that, as long as the General
     Partner has determined to continue to qualify as a REIT, the Partnership
     may not engage in any such formation, acquisition or contribution that
     would cause the General Partner to fail to qualify as a REIT;

          (14) the control of any matters affecting the rights and obligations
     of the Partnership, including the settlement, compromise, submission to
     arbitration or any other form of dispute resolution or abandonment of any
     claim, cause of action, liability, debt or damages due or owing to or from
     the Partnership, the commencement or defense of suits, legal proceedings,
     administrative proceedings, arbitrations or other forms of dispute
     resolution, the representation of the Partnership in all suits or legal
     proceedings, administrative proceedings, arbitrations or other forms of
     dispute resolution, the incurring of legal expense and the indemnification
     of any Person against liabilities and contingencies to the extent permitted
     by law;

          (15) the determination of the fair market value of any Partnership
     property distributed in kind, using such reasonable method of valuation as
     the General Partner may adopt;

                                      E-21
<PAGE>   127

          (16) the exercise, directly or indirectly, through any
     attorney-in-fact acting under a general or limited power of attorney, of
     any right, including the right to vote, appurtenant to any assets or
     investment held by the Partnership;

          (17) the exercise of any of the powers of the General Partner
     enumerated in this Agreement on behalf of or in connection with any
     Subsidiary of the Partnership or any other Person in which the Partnership
     has a direct or indirect interest, individually or jointly with any such
     Subsidiary or other Person;

          (18) the exercise of any of the powers of the General Partner
     enumerated in this Agreement on behalf of any Person in which the
     Partnership does not have any interest pursuant to contractual or other
     arrangements with such Person;

          (19) the making, executing and delivering of any and all deeds,
     leases, notes, deeds to secure debt, mortgages, deeds of trust, security
     agreements, conveyances, contracts, guarantees, warranties, indemnities,
     waivers, releases or other legal instruments or agreements in writing
     necessary or appropriate in the judgment of the General Partner for the
     accomplishment of any of the powers of the General Partner enumerated in
     this Agreement; and

          (20) the distribution of cash to acquire Partnership Units held by a
     Limited Partner in connection with a Limited Partner's exercise of its
     Redemption Right under Section 8.6; and

          (21) the amendment and restatement of Exhibit A to reflect accurately
     at all times the Capital Contributions and Percentage Interests of the
     Partners as the same are adjusted from time to time to the extent necessary
     to reflect redemptions, Capital Contributions, the issuance of Partnership
     Units, the admission of any Additional Limited Partner or any Substituted
     Limited Partner or otherwise, which amendment and restatement,
     notwithstanding anything in this Agreement to the contrary, shall not be
     deemed an amendment of this Agreement, as long as the matter or event being
     reflected in Exhibit A otherwise is authorized by this Agreement.

     B. No Approval by Limited Partners.  Except as provided in Section 7.11,
each of the Limited Partners agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement, the Act or any
applicable law, rule or regulation, to the full extent permitted under the Act
or other applicable law. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.

     C. Insurance.  At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder and (iii) such other insurance as the
General Partner, in its sole and absolute discretion, determines to be
necessary.

     D. Working Capital and Other Reserves.  At all times from and after the
date hereof, the General Partner may cause the Partnership to establish and
maintain working capital reserves in such amounts as the General Partner, in its
sole and absolute discretion, deems appropriate and reasonable from time to
time, including upon liquidation of the Partnership under Section 13.

     E. No Obligations to Consider Tax Consequences of Limited Partners.  In
exercising their authority under this Agreement, the General Partner may, but
shall be under no obligation to, take into account the tax consequences to any
Partner (including the General Partner) of any action taken (or not taken) by
any of them. The General Partner and the Partnership shall not have liability to
a Limited Partner for monetary damages or otherwise for losses sustained,
liabilities incurred or benefits not derived by such Limited Partner in
connection with such decisions, provided that the General Partner has acted in
good faith and pursuant to its authority under this Agreement.

                                      E-22
<PAGE>   128

SECTION 7.2  CERTIFICATE OF LIMITED PARTNERSHIP

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

SECTION 7.3  TITLE TO PARTNERSHIP ASSETS

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

SECTION 7.4  REIMBURSEMENT OF THE GENERAL PARTNER

     A. No Compensation.  Except as provided in this Section 7.4 and elsewhere
in this Agreement (including the provisions of Articles V and VI regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as the general partner
of the Partnership.

     B. Responsibility for Partnership Expenses.  The Partnership shall be
responsible for and shall pay all expenses relating to the Partnership's
organization, the ownership of its assets and its operations. The General
Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole and absolute discretion, for all
expenses it incurs relating to the ownership and operation of, or for the
benefit of, the Partnership (including, without limitation, expenses related to
the operations of the General Partner and to the management and administration
of any Subsidiaries of the General Partner or the Partnership or Affiliates of
the Partnership, such as auditing expenses and filing fees); provided that the
amount of any such reimbursement shall be reduced by (i) any interest earned by
the General Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership as permitted in Section 7.5.A
(which interest is considered to belong to the Partnership and shall be paid
over to the Partnership to the extent not applied to reimburse the General
Partner for expenses hereunder); and (ii) any amount derived by the General
Partner from any investments permitted in Section 7.5.A. The General Partner
shall determine in good faith the amount of expenses incurred by it related to
the ownership and operation of, or for the benefit of, the Partnership. If
certain expenses are incurred for the benefit of the Partnership and other
entities (including the General Partner), such expenses will be allocated to the
Partnership and such other entities in such a manner as the General Partner in
its sole and absolute discretion deems fair and reasonable. Such reimbursements
shall be in addition to any reimbursement to the General Partner pursuant to
Section 10.3.C and as a result of indemnification pursuant to Section 7.7. All
payments and reimbursements hereunder shall be
                                      E-23
<PAGE>   129

characterized for federal income tax purposes as expenses of the Partnership
incurred on its behalf, and not as expenses of the General Partner.

     C. Partnership Interest Issuance Expenses.  The General Partner shall also
be reimbursed for all expenses it incurs relating to any issuance of Partnership
Interests, Shares, Debt of the Partnership or the General Partner or rights,
options, warrants or convertible or exchangeable securities pursuant to Article
IV (including, without limitation, all costs, expenses, damages and other
payments resulting from or arising in connection with litigation related to any
of the foregoing), all of which expenses are considered by the Partners to
constitute expenses of, and for the benefit of, the Partnership.

     D. Purchases of Shares by the General Partner.  If the General Partner
exercises its rights under the Declaration of Trust to purchase Shares or
otherwise elects to purchase from its shareholders Shares in connection with a
share repurchase or similar program or for the purpose of delivering such Shares
to satisfy an obligation under any dividend reinvestment or equity purchase
program adopted by the General Partner, any employee equity purchase plan
adopted by the General Partner or any similar obligation or arrangement
undertaken by the General Partner in the future, the purchase price paid by the
General Partner for those Shares and any other expenses incurred by the General
Partner in connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursable to the General Partner, subject to the
conditions that: (i) if those Shares subsequently are to be sold by the General
Partner, the General Partner shall pay to the Partnership any proceeds received
by the General Partner for those Shares (provided that a transfer of Shares for
Partnership Units pursuant to Section 8.6 would not be considered a sale for
such purposes); and (ii) if such Shares are not retransferred by the General
Partner within thirty (30) days after the purchase thereof, the General Partner
shall cause the Partnership to cancel a number of Partnership Units (rounded to
the nearest whole Partnership Unit) held by the General Partner equal to the
product attained by multiplying the number of those Shares by a fraction, the
numerator of which is one and the denominator of which is the Conversion Factor.

     E. Reimbursement not a Distribution.  If and to the extent any
reimbursement made pursuant to this Section 7.4 is determined for federal income
tax purposes not to constitute a payment of expenses of the Partnership, the
amount so determined shall constitute a guaranteed payment with respect to
capital within the meaning of Section 707(c) of the Code, shall be treated
consistently therewith by the Partnership and all Partners and shall not be
treated as a distribution for purposes of computing the Partners' Capital
Accounts.

     F. Funding for Certain Capital Transactions.  In the event that the General
Partner shall undertake to acquire (whether by merger, consolidation, purchase,
or otherwise) the assets or equity interests of another Person and such
acquisition shall require the payment of cash by the General Partner (whether to
such Person or to any other selling party or parties in such transaction or to
one or more creditors, if any, of such Person or such selling party or parties),
(i) the Partnership shall advance to the General Partner the cash required to
consummate such acquisition if, and to the extent that, such cash is not to be
obtained by the General Partner through an issuance of Shares described in
Section 4.2 or pursuant to a transaction described in Section 7.5.B, (ii) the
General Partner shall immediately, upon consummation of such acquisition,
transfer to the Partnership (or cause to be transferred to the Partnership), in
full and complete satisfaction of such advance and as required by Section 7.5,
the assets or equity interests of such Person acquired by the General Partner in
such acquisition, and (iii) pursuant to and in accordance with Section 4.2 and
Section 7.5.B, the Partnership shall issue to the General Partner Partnership
Interests and/or rights, options, warrants or convertible or exchangeable
securities of the Partnership having designations, preferences and other rights
that are substantially the same as those of any additional Shares, other equity
securities, New Securities and/or Convertible Funding Debt, as the case may be,
issued by the General Partner in connection with such acquisition (whether
issued directly to participants in the acquisition transaction or to third
parties in order to obtain cash to complete the acquisition). In addition to,
and without limiting the foregoing, in the event that the General Partner
engages in a transaction in which (x) the General Partner (or a wholly owned
direct or indirect Subsidiary of the General Partner) merges with another entity
(referred to as the "Parent Entity") that is organized in the "UPREIT format"
(i.e., where the Parent Entity holds substantially all of its assets and
conducts substantially all of its
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operations through a partnership, limited liability company or other entity
(referred to as an "Operating Entity")) and the General Partner survives such
merger, (y) such Operating Entity merges with or is otherwise acquired by the
Partnership in exchange in whole or in part for Partnership Interests, and (z)
the General Partner is required or elects to pay part of the consideration in
connection with such merger involving the Parent Entity in the form of cash and
part of the consideration in the form of Shares, the Partnership shall
distribute to the General Partner with respect to its existing Partnership
Interest an amount of cash sufficient to complete such transaction and the
General Partner shall cause the Partnership to cancel a number of Partnership
Units (rounded to the nearest whole number) held by the General Partner equal to
the product attained by multiplying the number of additional Shares of the
General Partner that the General Partner would have issued to the Parent Entity
or the owners of the Parent Entity in such transaction if the entire
consideration therefor were to have been paid in Shares by a fraction, the
numerator of which is one and the denominator of which is the Conversion Factor.

SECTION 7.5  OUTSIDE ACTIVITIES OF THE GENERAL PARTNER; RELATIONSHIP OF SHARES
             TO PARTNERSHIP UNITS; FUNDING DEBT

     A. General.  Without the Consent of the Outside Limited Partners, the
General Partner shall not, directly or indirectly, enter into or conduct any
business other than in connection with the ownership, acquisition and
disposition of Partnership Interests as General Partner or Limited Partner and
the management of the business of the Partnership and such activities as are
incidental thereto. Without the Consent of the Outside Limited Partners, the
assets of the General Partner shall be limited to Partnership Interests and
permitted debt obligations of the Partnership (as contemplated by Section
7.5.F), so that Shares and Partnership Units are completely fungible except as
otherwise specifically provided herein; provided that the General Partner shall
be permitted to hold such bank accounts or similar instruments or accounts in
its name as it deems necessary to carry out its responsibilities and purposes as
contemplated under this Agreement and its organizational documents (provided
that accounts held on behalf of the Partnership to permit the General Partner to
carry out its responsibilities under this Agreement shall be considered to
belong to the Partnership and the interest earned thereon shall, subject to
Section 7.4.B, be applied for the benefit of the Partnership); and, provided
further that, the General Partner shall be permitted to acquire, directly or
through a Qualified REIT Subsidiary or limited liability company, up to a one
percent (1%) interest in any partnership or limited liability company at least
ninety-nine percent (99%) of the equity of which is owned, directly or
indirectly, by the Partnership. The General Partner and any of its Affiliates
may acquire Limited Partnership Interests and shall be entitled to exercise all
rights of a Limited Partner relating to such Limited Partnership Interests.

     B. Repurchase of Shares.  If the General Partner exercises its rights under
the Declaration of Trust to purchase Shares or otherwise elects to purchase from
its shareholders Shares in connection with a share repurchase or similar program
or for the purpose of delivering such shares to satisfy an obligation under any
dividend reinvestment or share purchase program adopted by the General Partner,
any employee share purchase plan adopted by the General Partner or any similar
obligation or arrangement undertaken by the General Partner in the future, then
the General Partner shall cause the Partnership to purchase from the General
Partner that number of Partnership Units of the appropriate class equal to the
product obtained by multiplying the number of Shares purchased by the General
Partner times a fraction, the numerator of which is one and the denominator of
which is the Conversion Factor, on the same terms and for the same aggregate
price that the General Partner purchased such Shares.

     C. Forfeiture of Shares.  If the Partnership or the General Partner
acquires Shares as a result of the forfeiture of such Shares under a restricted
or similar share plan, then the General Partner shall cause the Partnership to
cancel that number of Partnership Units equal to the number of Shares so
acquired, and, if the Partnership acquired such Shares, it shall transfer such
Shares to the General Partner for cancellation.

     D. Issuances of Shares.  After the Effective Date, the General Partner
shall not grant, award, or issue any additional Shares (other than Shares issued
pursuant to Section 8.6 hereof, pursuant to a dividend or distribution
(including any share split) of Shares to all of its shareholders), or in
connection with any acquisition permitted by Section 7.5.A hereof of up to a one
percent (1%) interest in any
                                      E-25
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partnership or limited liability company at least ninety-nine percent (99%) of
the equity of which is owned, directly or indirectly, by the Partnership), other
equity securities of the General Partner, New Securities or Convertible Funding
Debt unless (i) the General Partner shall cause, pursuant to Section 4.2.A
hereof, the Partnership to issue to the General Partner 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 the same as those of such additional
Shares, other equity securities, New Securities or Convertible Funding Debt, as
the case may be, and (ii) the General Partner transfers to the Partnership, as
an additional Capital Contribution, the proceeds from the grant, award, or
issuance of such additional Shares, other equity securities, New Securities or
Convertible Funding Debt, as the case may be, or from the exercise of rights
contained in such additional Shares, other equity securities, New Securities or
Convertible Funding Debt, as the case may be. Without limiting the foregoing,
the General Partner is expressly authorized to issue additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be, for less than fair market value, and the General Partner is expressly
authorized, pursuant to Section 4.2.A hereof, to cause the Partnership to issue
to the General Partner corresponding Partnership Interests, as long as (a) the
General Partner concludes in good faith that such issuance is in the interests
of the General Partner and the Partnership (for example, and not by way of
limitation, the issuance of Shares and corresponding Partnership Units pursuant
to a share purchase plan providing for purchases of Shares, either by employees
or shareholders, at a discount from fair market value or pursuant to employee
share options that have an exercise price that is less than the fair market
value of the Shares, either at the time of issuance or at the time of exercise)
and (b) the General Partner transfers all proceeds from any such issuance or
exercise to the Partnership as an additional Capital Contribution.

     E. Share Option Plan.  If at any time or from time to time, the General
Partner sells Shares pursuant to any Share Option Plan, the General Partner
shall transfer the net proceeds of the sale of such Shares to the Partnership as
an additional Capital Contribution in exchange for an amount of additional
Partnership Units equal to the number of Shares so sold divided by the
Conversion Factor.

     F. Funding Debt.  The General Partner may incur a Funding Debt, including,
without limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities ("Convertible Funding Debt"), subject to
the condition that the General Partner lend to the Partnership the net proceeds
of such Funding Debt; provided that Convertible Funding Debt shall be issued
pursuant to Section 7.5.D above; and, provided further that, the General Partner
shall not be obligated to lend the net proceeds of any Funding Debt to the
Partnership in a manner that would be inconsistent with the General Partner's
ability to remain qualified as a REIT. If the General Partner enters into any
Funding Debt, the loan to the Partnership shall be on comparable terms and
conditions, including interest rate, repayment schedule and costs and expenses,
as are applicable with respect to or incurred in connection with such Funding
Debt.

SECTION 7.6  TRANSACTIONS WITH AFFILIATES

     A. Transactions with Certain Affiliates.  Except as expressly permitted by
this Agreement, the Partnership shall not, directly or indirectly, sell,
transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership
that is not also a Subsidiary of the Partnership, except pursuant to
transactions that are on terms that are fair and reasonable and no less
favorable to the Partnership than would be obtained from an unaffiliated third
party.

     B. Conflict Avoidance.  The General Partner is expressly authorized to
enter into, in the name and on behalf of the Partnership, a right of first
opportunity arrangement and other conflict avoidance agreements with various
Affiliates of the Partnership and General Partner on such terms as the General
Partner, in its sole and absolute discretion, believes are advisable.

     C. Benefit Plans Sponsored by the Partnership.  The General Partner in its
sole and absolute discretion and without the approval of the Limited Partners,
may propose and adopt on behalf of the

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Partnership employee benefit plans funded by the Partnership for the benefit of
employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them.

SECTION 7.7  INDEMNIFICATION

     A. General.  The Partnership shall indemnify each Indemnitee to the fullest
extent provided by the Act from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines, settlements
and other amounts arising from or in connection with any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, incurred by the Indemnitee and relating to the Partnership or the
General Partner or the operation of, or the ownership of property by, the
Partnership or the General Partner as set forth in this Agreement in which any
such Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established by a final determination of a court of
competent jurisdiction 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. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guarantee, contractual obligation for any
indebtedness or other obligation or otherwise, for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including, without limitation,
any indebtedness which the Partnership or any Subsidiary of the Partnership has
assumed or taken subject to), and the General Partner is hereby authorized and
empowered, on behalf of the Partnership, to enter into one or more indemnity
agreements consistent with the provisions of this Section 7.7 in favor of any
Indemnitee having or potentially having liability for any such indebtedness. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 7.7.A. The termination of any proceeding by conviction
or 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 7.7.A
with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the
Partnership, and any insurance proceeds from the liability policy covering the
General Partner and any Indemnitee, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.

     B. Advancement of Expenses.  Reasonable expenses expected to be incurred by
an Indemnitee shall be paid or reimbursed by the Partnership in advance of the
final disposition of any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative made or threatened against an
Indemnitee upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this Section
7.7.A has been met and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.

     C. No Limitation of Rights.  The indemnification provided by this Section
7.7 shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.

     D. Insurance.  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.
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<PAGE>   133

     E. Benefit Plan Fiduciary.  For purposes of this Section 7.7, (i) excise
taxes assessed on an Indemnitee, of for which the Indemnitee is otherwise found
liable, with respect to an ERISA Plan pursuant to applicable law shall
constitute fines within the meaning of this Section 7.7, and (iii) actions taken
or omitted by the Indemnitee with respect to an ERISA Plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of such ERISA Plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Partnership.

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

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

     H. Benefit.  The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their employees, officers, directors, trustees, heirs, successors,
assigns and administrators and shall not be deemed to create any rights for the
benefit of any other Persons. Any amendment, modification or repeal of this
Section 7.7, or any provision hereof, shall be prospective only and shall not in
any way affect the limitation on the Partnership's liability to any Indemnitee
under this Section 7.7 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or related to matters
occurring, in whole or in part, prior to such amendment, modification or repeal,
regardless of when such claims may arise or be asserted.

     I. Indemnification Payments Not Distributions.  If and to the extent any
payments to the General Partner pursuant to this Section 7.7 constitute gross
income to the General Partner (as opposed to the repayment of advances made on
behalf of the Partnership), such amounts shall constitute guaranteed payments
within the meaning of Section 707(c) of the Code, shall be treated consistently
therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners' Capital Accounts.

     J. Exception to Indemnification.  Notwithstanding anything to the contrary
in this Agreement, the General Partner shall not be entitled to indemnification
hereunder for any loss, claim, damage, liability or expense for which the
General Partner is obligated to indemnify the Partnership under any other
agreement between the General Partner and the Partnership.

SECTION 7.8  LIABILITY OF THE GENERAL PARTNER

     A. General.  Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership, any Partners or any Assignees for losses sustained, liabilities
incurred or benefits not derived as a result of errors in judgment or mistakes
of fact or law or of any act or omission unless the General Partner acted in bad
faith and the act or omission was material to the matter giving rise to the
loss, liability or benefit not derived.

     B. No Obligation to Consider Separate Interests of Limited Partners or
Shareholders.  The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, 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
Assignees) in deciding whether to cause the Partnership to take (or decline to
take) any actions, and that 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. Actions of Agents.  Subject to its obligations and duties as General
Partner set forth in Section 7.1.A, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by the General Partner in good faith.

                                      E-28
<PAGE>   134

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

SECTION 7.9  OTHER MATTERS CONCERNING THE GENERAL PARTNER

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

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

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

     D. Actions to Maintain REIT Status or Avoid Taxation of the General Partner
Entity.  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 Entity to
qualify as a REIT or (ii) to allow the General Partner Entity to avoid incurring
any liability for taxes under Section 857 or 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.

     E. Actions to Maintain REOC Status.  If and so long as the Partnership
Interests of "benefit plan investors" is "significant" (as such terms, or terms
succeeding thereto with the same objective, are used in 29 C.F.R. Section
2510.3-101(f) (such regulation or successor regulation being known as the "Plan
Assets Regulation")), or if necessary so that the underlying assets of the
General Partner will not be "plan assets" (as such term is defined in the Plan
Assets Regulations) of any ERISA Partner, then the General Partner shall conduct
the affairs of the Partnership in such manner so that the Partnership shall
qualify as a "real estate operating company" (REOC"), as that term is used in
the Plan Assets Regulations, and so that the assets of the Partnership will not
be plan assets of any ERISA Partner.

          (i) If the General Partner, pursuant to this Section 7.09.E, intends
     to conduct the affairs of the Partnership as a REOC, the General Partner
     shall deliver to each ERISA Partner an opinion of counsel reasonably
     acceptable to each ERISA Partner and upon which such ERISA Partner may rely
     with respect to the Partnership's REOC status as of the "initial valuation
     date" and, if requested in writing by an ERISA Partner, as of each "annual
     valuation period" (as those terms, or terms succeeding thereto with the
     same objective, are defined in the Plan Assets Regulation). Such opinion of
     counsel shall state, (A) as to the opinion respecting the "initial
     valuation date," that the Partnership shall qualify as a REOC for the
     period beginning on such "initial valuation date" and ending on the last
     day of the first "annual valuation period," and (B) as to each annual
     opinion respecting each "annual valuation period," that the Partnership
     shall qualify as a REOC for the 12-month period following the last day of
     such "annual valuation period." Such opinion of counsel may rely upon,
     among other things, a certificate of the General Partner as to the exercise
     of management rights with respect to one or more investments (other than
     short-term investments pending long-term
                                      E-29
<PAGE>   135

     commitment or distribution to investors) during the appropriate period and
     as to a description of such investments, and also shall state whether the
     Partnership has included in a certification to the opinion a statement to
     the effect that on such "initial valuation date" or during such "annual
     valuation period" at least 50 percent of Partnership assets (other than
     short-term investments pending long-term commitment or distribution to
     investors), valued at cost, were invested in real estate investments as
     described in the Plan Assets Regulation.

          (ii) If the opinion described in this subsection is not provided in
     the affirmative, or if any ERISA Partner shall obtain and deliver to the
     General Partner an opinion of counsel to such ERISA Partner (which opinion
     shall be reasonably satisfactory to the General Partner) that there is a
     reasonable probability that either the Partnership was not or will not be a
     REOC for a period in which either (i) participation by benefit plan
     investors in the Partnership is significant or (ii) REOC status is
     necessary so that the underlying assets of the General Partner will not be
     plan assets and the General Partner does not obtain an opinion to the
     contrary reasonably acceptable to each such ERISA Partner within fifteen
     (15) days of its receipt of the opinion delivered by the ERISA Partner (it
     being understood that the existence or reaffirmation of the opinion
     delivered by the ERISA Partner to the General Partner shall not constitute
     the sole basis of any ERISA Partner's determination that the opinion
     delivered within fifteen days by the General Partner is not reasonably
     satisfactory), then the General Partner is hereby authorized and empowered
     to take such actions as it deems necessary and appropriate to mitigate,
     prevent, or cure such adverse consequences as might result to an ERISA
     Partner from the underlying assets of the Partnership being assets of an
     ERISA Partner or the underlying assets of the General Partner being assets
     of any ERISA Partner.

SECTION 7.10  RELIANCE BY THIRD PARTIES

     Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without consent or approval of any other
Partner or Person, to encumber, sell or otherwise use in any manner any and all
assets of the Partnership, to enter into any contracts on behalf of the
Partnership and to take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if the General
Partner were the Partnership's sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such dealing.
In no event shall any Person dealing with the General Partner or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (i) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership, and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

SECTION 7.11  RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY

     A. Consent Required.  The General Partner may not take any action in
contravention of an express prohibition or limitation of this Agreement without
the written Consent of (i) all Partners adversely affected or (ii) such lower
percentage of the Limited Partnership Interests as may be specifically provided
for under a provision of this Agreement or the Act.

     B. Sale of All Assets of the Partnership.  Except as provided in Article
XIII, the General Partner may not, directly or indirectly, cause the Partnership
to sell, exchange, transfer or otherwise dispose of all or substantially all of
the Partnership's assets in a single transaction or a series of related
transactions (including by way of merger (including a triangular merger),
consolidation or other combination with any
                                      E-30
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other Persons) (i) if such merger, sale or other transaction is in connection
with a Termination Transaction permitted under Section 11.2.B hereof, without
the Consent of the Partners holding at least a majority of the then outstanding
Partnership Units (including any Partnership Units held by the General Partner),
or (ii) otherwise, without the Consent of the Outside Limited Partners.

     C. Communications Act Investors.  Unless otherwise approved in writing by
each affected Communications Act Investor (hereinafter defined), the General
Partner may not, directly or indirectly, cause the Partnership to invest in any
Property or otherwise take any action that (i) would result in the
Communications Act Investor being placed in a position whereby it would have or
be deemed to have the right to act for any third party in selecting or dealing
with any interexchange carrier (which, for purposes hereof, shall include
satellite telecommunication service) in providing long distance service between
local access and transport areas which originates in any State within the region
in which the affected Communications Act Investor (or the operating company
affiliate thereof) provides wireline telephone local exchange service, (but in
no event shall the foregoing be deemed to prohibit the Partnership from
contracting with a third party to perform such functions on a discretionary
basis as part of its property management duties where such activity is a
necessary adjunct to an investment and such activities, in the aggregate, are
not significant in relation to the Partnership's business activities taken as a
whole), or (ii) would cause a significant percentage of the Partnership's gross
income from any Property to be attributable to either the provision or resale of
long distance service between local access and transport areas which originates
in any State within the region in which the affected Communications Act Investor
(or the operating company affiliate thereof) provides wireline telephone local
exchange service, or the manufacture of telecommunications, customer premises or
related equipment. In addition, the Partnership will not engage in any
telecommunications activities other than those that may be ancillary to the
ownership or operation of its investments or make an investment in a cable
television system that would violate the cable-telephone cross-ownership
restriction in the Communications Act of 1934, as amended, with regard to the
local exchange service area of a Communications Act Investor (or the operating
company affiliate thereof). Notwithstanding the foregoing, the Partnership is
not precluded from engaging in any telecommunications business or cable business
unless such business is found to place the Communications Act Investor in
violation of law. The General Partner shall have a period of 120 days following
a finding by a court or regulatory body that such a violation exists to use its
reasonable best efforts to prevent or eliminate such violation, including, but
not limited to, correction of the condition giving rise to the violation,
amendment to this Agreement or sale of the relevant property or the interest of
the Communications Act Investor therein. A "Communications Act Investor" is a
Partner or shareholder of the General Partner that has notified the General
Partner that it is subject to the Communications Act of 1934, as amended.

SECTION 7.12  LOANS BY THIRD PARTIES

     The Partnership may incur Debt, or enter into similar credit, guarantee,
financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any acquisition of property) with any Person upon
such terms as the General Partner determines appropriate.

                                  ARTICLE VIII

                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

SECTION 8.1  LIMITATION OF LIABILITY

     The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement, including Section 10.5, or under the Act.

SECTION 8.2  MANAGEMENT OF BUSINESS

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

SECTION 8.3  OUTSIDE ACTIVITIES OF LIMITED PARTNERS

     Subject to Section 7.5 hereof, and subject to any agreements entered into
pursuant to Section 7.6.C hereof and to any other agreements entered into by a
Limited Partner or its Affiliates with the Partnership or a Subsidiary, any
Limited Partner (other than the General Partner) and any officer, director,
employee, agent, trustee, Affiliate or shareholder of any Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct or indirect competition with the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners (other than the General Partner) or any other Person shall
have any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner to the extent expressly provided herein), and such Person shall
have no obligation pursuant to this Agreement to offer any interest in any such
business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such
Person.

SECTION 8.4  RETURN OF CAPITAL

     Except pursuant to the right of redemption set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein. No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.2.A) or, except to the extent provided by Exhibit C or as permitted
by Sections 4.2.A, 5.1.B(i), 6.1.A(ii) and 6.1.B(i), or otherwise expressly
provided in this Agreement, as to profits, losses, distributions or credits.

SECTION 8.5  RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP

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

          (1) to obtain a copy of the most recent annual and quarterly reports
     filed with the Securities and Exchange Commission by either the General
     Partner Entity or the Partnership pursuant to the Exchange Act;

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

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

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

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

     B. Notice of Conversion Factor.  The Partnership shall notify each Limited
Partner upon request of the then current Conversion Factor and any changes that
have been made thereto.

     C. Notice of Extraordinary Transaction of the General Partner Entity.  The
General Partner Entity shall not make any extraordinary distributions of cash or
property to its shareholders or effect a merger (including, without limitation,
a triangular merger), a sale of all or substantially all of its assets or any
other similar extraordinary transaction without notifying the Limited Partners
of its intention to make such distribution or effect such merger, sale or other
extraordinary transaction at least twenty (20) Business Days prior to the record
date to determine shareholders eligible to receive such distribution or to vote
upon the approval of such merger, sale or other extraordinary transaction (or,
if no such record date is applicable, at least twenty (20) business days before
consummation of such merger, sale or other extraordinary transaction); provided,
however, that the General Partner, in its sole discretion, may shorten the
required notice period of not less than twenty (20) business days prior to the
record date to determine the shareholders eligible to vote upon a merger
transaction (but not any of the other transactions covered by this Section
8.5.C.) by up to ten (10) business days (thereby continuing to afford the
holders of Units the opportunity to redeem Units under Section 8.6 on or prior
to the record date for the shareholder vote on the merger transaction) so long
as (i) the General Partner Entity will be the surviving entity in such merger
transaction, (ii) immediately following the merger transaction, Persons who held
voting securities of the General Partner Entity immediately prior to such merger
transaction will hold, solely by reason of the ownership of voting securities of
the General Partner Entity immediately prior to the merger transaction, voting
securities of the General Partner Entity representing not less than fifty one
percent (51%) of the total combined voting power of all outstanding voting
securities of the General Partner Entity after such merger, and (iii) in the
event that in connection with such merger transaction the Partnership will merge
with another entity, the Partnership will be the surviving entity in such
merger. This provision for such notice shall not be deemed (i) to permit any
transaction that otherwise is prohibited by this Agreement or requires a Consent
of the Partners or (ii) to require a Consent of the Limited Partners to a
transaction that does not otherwise require Consent under this Agreement. Each
Limited Partner agrees, as a condition to the receipt of the notice pursuant
hereto, to keep confidential the information set forth therein until such time
as the General Partner Entity has made public disclosure thereof and to use such
information during such period of confidentiality solely for purposes of
determining whether to exercise the Redemption Right; provided, however, that a
Limited Partner may disclose such information to its attorney, accountant and/or
financial advisor for purposes of obtaining advice with respect to such exercise
so long as such attorney, accountant and/or financial advisor agrees to receive
and hold such information subject to this confidentiality requirement; ;
provided, however, that the General Partner, in its sole discretion, may shorten
the required notice period of not less than twenty (20) business days prior to
the record date to determine the shareholders eligible to vote upon a merger
transaction (but not any of the other transactions covered by this Section
8.5.C.) to a period of not less than ten (10) calendar days (thereby continuing
to afford the holders of Units the opportunity to redeem Units under Section 8.6
on or prior to the record date for the shareholder vote on the merger
transaction) so long as (i) the General Partner Entity will be the surviving
entity in such merger transaction, (ii) immediately following the merger
transaction, Persons who held voting securities of the General Partner Entity
immediately prior to such merger transaction will hold, solely by reason of the
ownership of voting securities of the General Partner Entity immediately prior
to the merger transaction, voting securities of the General Partner Entity
representing not less than fifty-one percent (51%) of the total combined voting
power of all outstanding voting securities of the General Partner Entity after
such merger, and (iii) in the event that in connection with such merger
transaction the Partnership will merge with another entity, the Partnership will
be the surviving entity in such merger.

     D. Confidentiality.  Notwithstanding any other provision of this Section
8.5, the General Partner may keep confidential from the Limited Partners, for
such period of time as the General Partner determine in

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its sole and absolute discretion to be reasonable, any information that (i) the
General Partner reasonably believes to be in the nature of trade secrets or
other information the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or could damage the
Partnership or its business or (ii) the Partnership is required by law or by
agreements with unaffiliated third parties to keep confidential.

SECTION 8.6  REDEMPTION RIGHT

     A. General.  (i) Subject to Section 8.6.C, at any time on or after the
first anniversary date of the issuance of a Partnership Unit to a Limited
Partner pursuant to Article IV hereof (which one-year period shall commence upon
the issuance of such Partnership Unit regardless of whether such Partnership
Unit is designated upon issuance as a Class A Unit, a Class B Unit or otherwise
and shall include the period of time from the date such Partnership Unit is
issued to such Limited Partner as other than a Class A Unit until the date such
Partnership Unit is converted automatically to a Class A Unit pursuant to
Section 4.2.C hereof), or on or after such date prior to the expiration of such
one-year period as the General Partner, in its sole and absolute discretion,
designates with respect to any or all Class A Units then outstanding, the holder
of a Partnership Unit (if other than the General Partner or the General Partner
Entity or any Subsidiary of either the General Partner or the General Partner
Entity) shall have the right (the "Redemption Right") to require the Partnership
to redeem such Partnership Unit, with such redemption to occur on the Specified
Redemption Date and at a redemption price equal to and in the form of the Cash
Amount to be paid by the Partnership. Any such Redemption Right shall be
exercised pursuant to a Notice of Redemption delivered to the Partnership (with
a copy to the General Partner) by the Limited Partner who is exercising the
Redemption Right (the "Redeeming Partner"). A Limited Partner may exercise the
Redemption Right from time to time, without limitation as to frequency, with
respect to part or all of the Units that it owns, as selected by the Limited
Partner, provided that a Limited Partner may not exercise the Redemption Right
for less than one thousand (1,000) Partnership Units unless such Redeeming
Partner then holds less than one thousand (1,000) Partnership Units, in which
event such Redeeming Partner must exercise the Redemption Right for all of the
Partnership Units held by such Redeeming Partner.

          (ii) The Redeeming Partner shall have no right with respect to any
     Partnership Units so redeemed to receive any distributions paid after the
     Specified Redemption Date with respect to such Partnership Units.

          (iii) The Assignee of any Limited Partner may exercise the rights of
     such Limited Partner pursuant to this Section 8.6, and such Limited Partner
     shall be deemed to have assigned such rights to such Assignee and shall be
     bound by the exercise of such rights by such Limited Partner's Assignee. In
     connection with any exercise of such rights by such Assignee on behalf of
     such Limited Partner, the Cash Amount shall be paid by the Partnership
     directly to such Assignee and not to such Limited Partner.

          (iv) If the General Partner Entity provides notice to the Limited
     Partners, pursuant to Section 8.5.C hereof, the Redemption Right shall be
     exercisable, without regard to whether the Partnership Units have been
     outstanding for any specified period, during the period commencing on the
     date on which the General Partner Entity provides such notice and ending on
     the record date to determine shareholders eligible to receive such
     distribution or to vote upon the approval of such merger, sale or other
     extraordinary transaction (or, if no such record date is applicable, at
     least twenty (20) business days before the consummation of such merger,
     sale or other extraordinary transaction). If this subparagraph (iv)
     applies, the Specified Redemption Date is the date on which the Partnership
     and the General Partner receive notice of exercise of the Redemption Right,
     rather than ten (10) Business Days after receipt of the notice of
     redemption.

     B. General Partner Assumption of Right.  (i) If a Limited Partner has
delivered a Notice of Redemption, the General Partner may, in its sole and
absolute discretion (subject to the limitations on ownership and transfer of
Shares set forth in the Declaration of Trust), elect to assume directly and
satisfy

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a Redemption Right by paying to the Redeeming Partner either the Cash Amount or
the Shares Amount, as the General Partner determines in its sole and absolute
discretion (provided that payment of the Redemption Amount in the form of Shares
shall be in Shares registered for resale under Section 12 of the Exchange Act
and listed for trading on the exchange or national market on which the Shares
are Publicly Traded and, provided further that, if the Shares are not Publicly
Traded at the time a Redeeming Partner exercises its Redemption Right, the
Redemption Amount shall be paid only in the form of the Cash Amount unless the
Redeeming Partner, in its sole and absolute discretion, consents to payment of
the Redemption Amount in the form of the Shares Amount), on the Specified
Redemption Date, whereupon the General Partner shall acquire the Partnership
Units offered for redemption by the Redeeming Partner and shall be treated for
all purposes of this Agreement as the owner of such Partnership Units. 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 Partner or to the Partnership
with respect to the Redeeming Partner'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 8.6B and shall fully
perform its obligations in connection therewith, the Partnership shall have no
right or obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner's exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and the General Partner shall, for federal
income tax purposes, treat the transaction between the General Partner and the
Redeeming Partner as a sale of the Redeeming Partner's Partnership Units to the
General Partner. Nothing contained in this Section 8.6.B shall imply any right
of the General Partner to require any Limited Partner to exercise the Redemption
Right afforded to such Limited Partner pursuant to Section 8.6.A.

          (ii) If the General Partner determines to pay the Redeeming Partner
     the Redemption Amount in the form of Shares, the total number of Shares to
     be paid to the Redeeming Partner in exchange for the Redeeming Partner's
     Partnership Units shall be the applicable Shares Amount. If this amount is
     not a whole number of Shares, the Redeeming Partner shall be paid (i) that
     number of Shares which equals the nearest whole number less than such
     amount plus (ii) an amount of cash which the General Partner determines, in
     its reasonable discretion, to represent the fair value of the remaining
     fractional Share which would otherwise be payable to the Redeeming Partner.

          (iii) Each Redeeming Partner agrees to execute such documents as the
     General Partner may reasonably require in connection with the issuance of
     Shares upon exercise of the Redemption Right.

     C. Exceptions to Exercise of Redemption Right.  Notwithstanding the
provisions of Sections 8.6.A and 8.6.B, a Partner shall not be entitled to
exercise the Redemption Right pursuant to Section 8.6.A if (but only as long as)
the delivery of Shares to such Partner on the Specified Redemption Date (i)
would be prohibited under the Declaration of Trust or (ii) would be prohibited
under applicable federal or state securities laws or regulations (in each case
regardless of whether the General Partner would in fact assume and satisfy the
Redemption Right).

     D. No Liens on Partnership Units Delivered for Redemption.  Each Limited
Partner covenants and agrees with the General Partner that all Partnership Units
delivered for redemption shall be delivered to the 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
Partnership shall be under any obligation to acquire Partnership Units which are
or may be subject to any liens. Each Limited Partner further agrees that, if any
state or local property transfer tax is payable as a result of the transfer of
its Partnership Units to the Partnership or the General Partner, such Limited
Partner shall assume and pay such transfer tax.

     E. Additional Partnership Interests.  If the Partnership issues Partnership
Interests to any Additional Limited Partner pursuant to Article IV, the General
Partner shall make such revisions to this Section 8.6 as it determines are
necessary to reflect the issuance of such Partnership Interests (including
setting forth any restrictions on the exercise of the Redemption Right with
respect to such Partnership Interests).

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                                   ARTICLE IX

                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

SECTION 9.1  RECORDS AND ACCOUNTING

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

SECTION 9.2  FISCAL YEAR

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

SECTION 9.3  REPORTS

     A. Annual Reports.  As soon as practicable, but in no event later than the
date on which the General Partner Entity mails its annual report to its
shareholders, the General Partner Entity shall cause to be mailed to each
Limited Partner an annual report, as of the close of the most recently ended
Partnership Year, containing financial statements of the Partnership, or of the
General Partner Entity if such statements are prepared solely on a consolidated
basis with the Partnership, for such Partnership Year, presented in accordance
with generally accepted accounting principles, such statements to be audited by
a nationally recognized firm of independent public accountants selected by the
General Partner Entity.

     B. Quarterly Reports.  If and to the extent that the General Partner Entity
mails quarterly reports to its shareholders, as soon as practicable, but in no
event later than the date on such reports are mailed, the General Partner Entity
shall cause to be mailed to each Limited Partner a report containing unaudited
financial statements, as of the last day of such calendar quarter, of the
Partnership, or of the General Partner Entity if such statements are prepared
solely on a consolidated basis with the Partnership, and such other information
as may be required by applicable law or regulation, or as the General Partner
determines to be appropriate.

                                   ARTICLE X

                                  TAX MATTERS

SECTION 10.1  PREPARATION OF TAX RETURNS

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

SECTION 10.2  TAX ELECTIONS

     Except as otherwise provided herein, the General Partner shall, in its sole
and absolute discretion, determine whether to make any available election
pursuant to the Code; provided, however, that the General Partner shall make the
election under Section 754 of the Code in accordance with applicable regulations
thereunder. The General Partner shall have the right to seek to revoke any such
election

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(including, without limitation, the election under Section 754 of the Code) upon
the General Partner's determination in its sole and absolute discretion that
such revocation is in the best interests of the Partners.

SECTION 10.3  TAX MATTERS PARTNER

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

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

          (1) to enter into any settlement with the IRS with respect to any
     administrative or judicial proceedings for the adjustment of Partnership
     items required to be taken into account by a Partner for income tax
     purposes (such administrative proceedings being referred to as a "tax
     audit" and such judicial proceedings being referred to as "judicial
     review"), and in the settlement agreement the tax matters partner may
     expressly state that such agreement shall bind all Partners, except that
     such settlement agreement shall not bind any Partner (i) who (within the
     time prescribed pursuant to the Code and Regulations) files a statement
     with the IRS providing that the tax matters partner shall not have the
     authority to enter into a settlement agreement on behalf of such Partner or
     (ii) who is a "notice partner" (as defined in Section 6231(a)(8) of the
     Code) or a member of a "notice group" (as defined in Section 6223(b)(2) of
     the Code);

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

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

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

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

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

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

     C. Reimbursement.  The tax matters partner shall receive no compensation
for its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm and/or
law firm to assist the tax matters partner in discharging its duties hereunder,
so long as the compensation paid by the Partnership for such services is
reasonable.
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SECTION 10.4  ORGANIZATIONAL EXPENSES

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

SECTION 10.5  WITHHOLDING

     Each Limited Partner hereby authorizes the Partnership to withhold from or
pay on behalf of or with respect to such Limited Partner any amount of federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited Partner
or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the available funds of the Partnership
which would, but for such payment, be distributed to the Limited Partner. Any
amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 10.5. If a Limited Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.5 when due, the General Partner may, in
its sole and absolute discretion, elect to make the payment to the Partnership
on behalf of such defaulting Limited Partner, and in such event shall be deemed
to have loaned such amount to such defaulting Limited Partner and shall succeed
to all rights and remedies of the Partnership as against such defaulting Limited
Partner (including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks, as
published from time to time in the Wall Street Journal, plus four (4) percentage
points (but not higher than the maximum lawful rate under the laws of the State
of Illinois) from the date such amount is due (i.e., fifteen (15) days after
demand) until such amount is paid in full. Each Limited Partner shall take such
actions as the Partnership or the General Partner shall request to perfect or
enforce the security interest created hereunder.

                                   ARTICLE XI

                           TRANSFERS AND WITHDRAWALS

SECTION 11.1  TRANSFER

     A. Definition.  The term "transfer," when used in this Article XI with
respect to a Partnership Interest or a Partnership Unit, shall be deemed to
refer to a transaction by which the General Partner purports to assign all or
any part of its General Partnership Interest to another Person or by which a
Limited Partner purports to assign all or any part of its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise. The term "transfer" when used in this Article XI does not include
any redemption or repurchase of Partnership Units by the Partnership from a
Partner or acquisition of Partnership Units from a Limited Partner by the
General Partner pursuant to Section 8.6 or otherwise. No part of the interest of
a Limited Partner shall be subject to the claims of any creditor, any spouse for
alimony or support, or to legal process, and may not be voluntarily or
involuntarily alienated or encumbered except as may be specifically provided for
in this Agreement.

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<PAGE>   144

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

SECTION 11.2  TRANSFERS OF PARTNERSHIP INTERESTS OF GENERAL PARTNER

     A. Except for transfers of Partnership Units to the Partnership as provided
in Section 7.5 or Section 8.6, the General Partner may not transfer any of its
Partnership Interest (including both its General Partnership Interest and its
Limited Partnership Interest) except in connection with a transaction described
in Section 11.2.B or as otherwise expressly permitted under this Agreement, nor
shall the General Partner withdraw as the General Partner except in connection
with a transaction described in Section 11.2.B.

     B. The General Partner shall not engage in any merger (including a
triangular merger), consolidation or other combination with or into another
person, sale of all or substantially all of its assets or any reclassification,
recapitalization or change of outstanding Shares (other than a change in par
value, or from par value to no par value, or as a result of a subdivision or
combination as described in the definition of "Conversion Factor") ("Termination
Transaction"), unless the Termination Transaction has been approved by the
Consent of the Partners holding at least a majority of the then outstanding
Partnership Units (including any Partnership Units held by the General Partner)
and in connection with which all Limited Partners either will receive, or will
have the right to elect to receive, for each Partnership Unit an amount of cash,
securities, or other property equal to the product of the Conversion Factor
multiplied by the greatest amount of cash, securities or other property paid to
a holder of Shares corresponding to such Partnership Unit in consideration of
one such Share at any time during the period from and after the date on which
the Termination Transaction is consummated; provided that if, in connection with
the Termination Transaction, a purchase, tender or exchange offer shall have
been made to and accepted by the holders of more than fifty percent (50%) of the
outstanding Shares, each holder of Partnership Units shall receive, or shall
have the right to elect to receive without any right of Consent set forth above
in this subsection B, the greatest amount of cash, securities, or other property
which such holder would have received had it exercised the Redemption Right and
received Shares in exchange for its Partnership Units immediately prior to the
expiration of such purchase, tender or exchange offer and had thereupon accepted
such purchase, tender or exchange offer.

SECTION 11.3  LIMITED PARTNERS' RIGHTS TO TRANSFER

     A. General.  Subject to the provisions of Sections 11.3.C, 11.3.D, 11.3.E,
11.4 and 11.6, a Limited Partner (other than the General Partner) may transfer
with or without the consent of the General Partner, all or any portion of its
Partnership Interest, or any of such Limited Partner's rights as a Limited
Partner, provided that prior written notice of such proposed transfer is
delivered to the General Partner. Notwithstanding the foregoing, any Limited
Partner may, at any time, without the consent of the General Partner, (i)
transfer all or any portion of its Partnership Interest to the General Partner,
(ii) transfer all or any portion of its Partnership Interest to an Affiliate,
another original Limited Partner or to an Immediate Family member, subject to
the provisions of Section 11.6, (iii) transfer all or any portion of its
Partnership Interest to a trust for the benefit of a charitable beneficiary or
to a charitable foundation, subject to the provisions of Section 11.6, and (iv)
subject to the provisions of Section 11.6, pledge (a "Pledge") all or any
portion of its Partnership Interest to a lending institution, which is not an
Affiliate of such Limited Partner, as collateral or security for a bona fide
loan or other extension of credit, and transfer such pledged Partnership
Interest to such lending institution in connection with the exercise of remedies
under such loan or extension or credit. Each Limited Partner or Assignee
(resulting from a transfer made pursuant to clauses (i)-(iv) of the proviso of
the preceding sentence) shall have the right to transfer all or any portion of
its Partnership Interest, subject to the provisions of Section 11.6 and the
satisfaction of each of the following conditions (in addition to the right of
each such Limited Partner or Assignee to continue to

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make any such transfer permitted by clauses (i)-(iv) of such proviso without
satisfying either of the following conditions):

          (a) GENERAL PARTNER RIGHT OF FIRST REFUSAL.  The transferring Partner
     shall give written notice of the proposed transfer to the General Partner,
     which notice shall state (i) the identity of the proposed transferee, and
     (ii) the amount and type of consideration proposed to be received for the
     transferred Partnership Units. The General Partner shall have ten (10) days
     upon which to give the transferring Partner notice of its election to
     acquire the Partnership Units on the proposed terms. If it so elects, it
     shall purchase the Partnership Units on such terms within ten (10) days
     after giving notice of such election. If it does not so elect, the
     transferring Partner may transfer such Partnership Units to a third party,
     on economic terms no more favorable to the transferee than the proposed
     terms, subject to the other conditions of this Section 11.3.

          (b) QUALIFIED TRANSFEREE.  Any transfer of a Partnership Interest
     shall be made only to Qualified Transferees.

     It is a condition to any transfer otherwise permitted hereunder (excluding
Pledges of a Partnership Interest, but including any transfer of the pledged
Partnership Interest, whether to the secured party or otherwise, pursuant to the
secured party's exercise of its remedies under such Pledge or the related loan
or extension of credit) that the transferee assumes by operation of law or
express agreement all of the obligations of the transferor Limited Partner under
this Agreement with respect to such transferred Partnership Interest and no such
transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor Partner of its
obligations under this Agreement without the approval of the General Partner, in
its reasonable discretion. Notwithstanding the foregoing, any transferee of any
transferred Partnership Interest shall be subject to any and all ownership
limitations contained in the Declaration of Trust. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substitute Limited
Partner, no transferee, whether by a voluntary transfer, by operation of law or
otherwise, shall have rights hereunder, other than the rights of an Assignee as
provided in Section 11.5.

     B. Incapacitated Limited Partners.  If a Limited Partner is subject to
Incapacity, the executor, administrator, trustee, committee, guardian,
conservator or receiver of such Limited Partner's estate shall have all the
rights of a Limited Partner, but not more rights than those enjoyed by other
Limited Partners for the purpose of settling or managing the estate and such
power as the Incapacitated Limited Partner possessed to transfer all or any part
of its interest in the Partnership. The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.

     C. No Transfers Violating Securities Laws.  The General Partner may
prohibit any transfer of Partnership Units by a Limited Partner unless it
receives a written opinion of legal counsel (which opinion and counsel shall be
reasonably satisfactory to the Partnership) to such Limited Partner that such
transfer would not require filing of a registration statement under the
Securities Act or would not otherwise violate any federal, or state securities
laws or regulations applicable to the Partnership or the Partnership Unit or, at
the option of the Partnership, an opinion of legal counsel to the Partnership to
the same effect.

     D. No Transfers Affecting Tax Status of Partnership.  No transfer of
Partnership Units by a Limited Partner (including a redemption or exchange
pursuant to Section 8.6) may be made to any Person if (i) in the opinion of
legal counsel for the Partnership, it would result in the Partnership being
treated as an association taxable as a corporation for federal income tax
purposes or would result in a termination of the Partnership for federal income
tax purposes (except as a result of the redemption or exchange for Shares of all
Partnership Units held by all Limited Partners other than the General Partner or
the General Partner Entity or any Subsidiary of the General Partner or the
General Partner Entity or pursuant to a transaction expressly permitted under
Section 7.11.B or Section 11.2), (ii) in the opinion of legal counsel for the
Partnership, it would adversely affect the ability of the General Partner Entity
to continue to qualify as a REIT or would subject the General Partner Entity to
any additional taxes under Section 857 or Section 4981 of the Code or (iii) such
transfer is effectuated through an "established securities market"
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or a "secondary market (or the substantial equivalent thereof)" within the
meaning of Section 7704 of the Code (provided that this clause (iii) shall not
be the basis for limiting or restricting in any manner the exercise of the
Redemption Right under Section 8.6 unless, and only to the extent that, outside
tax counsel provides to the General Partner an opinion to the effect that, in
the absence of such limitation or restriction, there is a significant risk that
the Partnership will be treated as a "publicly traded partnership" and, by
reason thereof, taxable as a corporation).

     E. No Transfers to Holders of Nonrecourse Liabilities.  No Pledge or
transfer of any Partnership Units may be made to a lender to the Partnership or
any Person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership whose loan constitutes a
Nonrecourse Liability unless (i) the General Partner is provided notice thereof
and (ii) the lender enters into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Redemption 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.

SECTION 11.4  SUBSTITUTED LIMITED PARTNERS

     A. Consent of General Partner.  No Limited Partner shall have the right to
substitute a transferee as a Limited Partner in its place. The General Partner
shall, however, have the right to consent to the admission of a transferee of
the interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion. The General Partner's failure or refusal to
permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
any Partner. The General Partner hereby grants its consent to the admission as a
Substituted Limited Partner to any bona fide financial institution that loans
money or otherwise extends credit to a holder of Units and thereafter becomes
the owner of such Units pursuant to the exercise by such financial institution
of its rights under a Pledge of such Units granted in connection with such loan
or extension of credit.

     B. Rights of Substituted Limited Partner.  A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article XI
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any
transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the
terms and conditions of this Agreement (including, without limitation, the
provisions of Section 15.11) and such other documents or instruments as may be
required to effect the admission.

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

SECTION 11.5  ASSIGNEES

     If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 as a
Substituted Limited Partner, as described in Section 11.4, such transferee shall
be considered an Assignee for purposes of this Agreement. An Assignee shall be
entitled to all the rights of an assignee of a limited partnership interest
under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, and shall
have the rights granted to the Limited Partners under Section 8.6, but shall not
be deemed to be a holder of Partnership Units for any other purpose under this
Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Limited Partners for a vote (such Partnership Units
being deemed to have been voted on such matter in the same proportion as all
other Partnership Units

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held by Limited Partners are voted). If any such transferee desires to make a
further assignment of any such Partnership Units, such transferee shall be
subject to all the provisions of this Article XI to the same extent and in the
same manner as any Limited Partner desiring to make an assignment of Partnership
Units.

SECTION 11.6  GENERAL PROVISIONS

     A. Withdrawal of Limited Partner.  No Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Limited Partner's Partnership Units in accordance with this Article XI or
pursuant to redemption of all of its Partnership Units under Section 8.6.

     B. Termination of Status as Limited Partner.  Any Limited Partner who shall
transfer all of its Partnership Units in a transfer permitted pursuant to this
Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.6 shall cease to be a Limited Partner.

     C. Timing of Transfers.  Transfers pursuant to this Article XI may only be
made upon three business days prior notice, unless the General Partner otherwise
agrees.

     D. Allocations.  If any Partnership Interest is transferred during any
quarterly segment of the Partnership's fiscal year in compliance with the
provisions of this Article XI or redeemed or transferred pursuant to Section
8.6, Net Income, Net Losses, each item thereof and all other items attributable
to such interest for such fiscal year shall be divided and allocated between the
transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the books method (unless the General
Partner, in its sole and absolute discretion, elects to adopt a daily, weekly,
or a monthly proration period, in which event Net Income, Net Losses, each item
thereof and all other items attributable to such interest for such fiscal year
shall be prorated based upon the applicable method selected by the General
Partner). Solely for purposes of making such allocations, each of such items for
the calendar month in which the transfer or redemption occurs shall be allocated
to the Person who is a Partner as of midnight on the last day of said month. All
distributions of Available Cash attributable to any Partnership Unit with
respect to which the Partnership Record Date is before the date of such
transfer, assignment or redemption shall be made to the transferor Partner or
the Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Available Cash
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.

     E. Additional Restrictions.  In addition to any other restrictions on
transfer herein contained, including without limitation the provisions of this
Article XI, in no event may any transfer or assignment of a Partnership Interest
by any Partner (including pursuant to Section 8.6) be made without the express
consent of the General Partner, in its sole and absolute discretion, (i) to any
person or entity who lacks the legal right, power or capacity to own a
Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership
such transfer would cause a termination of the Partnership for federal or state
income tax purposes (except as a result of the redemption or exchange for Shares
of all Partnership Units held by all Limited Partners or pursuant to a
transaction expressly permitted under Section 7.11.B or Section 11.2); (v) if in
the opinion of counsel to the Partnership, such transfer would cause the
Partnership to cease to be classified as a partnership for federal income tax
purposes (except as a result of the redemption or exchange for Shares of all
Partnership Units held by all Limited Partners or pursuant to a transaction
expressly permitted under Section 7.11.B or Section 11.2); (vi) if such transfer
would cause the Partnership Interests of "benefit plan investors" to become
"significant," as those terms are used in Section 7.9.E., or would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(c) of the Code); (vii) if
such transfer would, in the opinion of counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.1-101;
(viii) if

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such transfer requires the registration of such Partnership Interest pursuant to
any applicable federal or state securities laws; (ix) if 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 or such transfer causes the Partnership to become a "publicly traded
partnership," as such term is defined in Section 469(k)(2) or Section 7704(b) of
the Code (provided that this clause (ix) shall not be the basis for limiting or
restricting in any manner the exercise of the Redemption Right under Section 8.6
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a "publicly traded partnership" and, by reason thereof, taxable as a
corporation); (x) if such transfer subjects the Partnership to regulation under
the Investment Company Act of 1940, the Investment Advisors Act of 1940 or
ERISA, each as amended; (xi) such transfer could adversely affect the ability of
the General Partner Entity to remain qualified as a REIT; or (xii) if in the
opinion of legal counsel for the transferring Partner (which opinion and counsel
shall be reasonably satisfactory to the Partnership) or legal counsel for the
Partnership, such transfer would adversely affect the ability of the General
Partner Entity to qualify as a REIT or subject the General Partner Entity to any
taxes under Section 857 or Section 4981 of the Code.

     F. Avoidance of "Publicly Traded Partnership" Status.  The General Partner
shall monitor the transfers of interests in the Partnership to determine (i) if
such interests are being traded on an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code and (ii) whether additional transfers of interests
would result in the Partnership being unable to qualify for at least one of the
"safe harbors" set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors under which
interests will not be treated as "readily tradable on a secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704 of the Code)
(the "Safe Harbors"). The General Partner shall take all steps reasonably
necessary or appropriate to prevent any trading of interests or any recognition
by the Partnership of transfers made on such markets and, except as otherwise
provided herein, to insure that at least one of the Safe Harbors is met;
provided, however, that the foregoing shall not authorize the General Partner to
limit or restrict in any manner the right of any holder of a Partnership Unit to
exercise the Redemption Right in accordance with the terms of Section 8.6
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a "publicly traded partnership" and, by reason thereof, taxable as a
corporation.

                                  ARTICLE XII

                             ADMISSION OF PARTNERS

SECTION 12.1  ADMISSION OF A SUCCESSOR GENERAL PARTNER

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

SECTION 12.2  ADMISSION OF ADDITIONAL LIMITED PARTNERS

     A. General.  No Person shall be admitted as an Additional Limited Partner
without the consent of the General Partner, which consent shall be given or
withheld in the General Partner's sole and absolute discretion. A Person who
makes a Capital Contribution to the Partnership in accordance with this
Agreement, including without limitation, under Section 4.1.C, or who exercises
an option to receive Partnership Units shall be admitted to the Partnership as
an Additional Limited Partner only with the

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consent of the General Partner and only upon furnishing to the General Partner
(i) evidence of acceptance in form satisfactory to the General Partner of all of
the terms and conditions of this Agreement, including, without limitation, the
power of attorney granted in Section 15.11 and (ii) such other documents or
instruments as may be required in the discretion of the General Partner to
effect such Person's admission as an Additional Limited Partner. The admission
of any Person as an Additional Limited Partner shall become effective on the
date upon which the name of such Person is recorded on the books and records of
the Partnership, following the consent of the General Partner to such admission.

     B. Allocations to Additional Limited Partners.  If any Additional Limited
Partner is admitted to the Partnership on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other
items allocable among Partners and Assignees for such Partnership Year shall be
allocated among such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests during the Partnership
Year in accordance with Section 706(d) of the Code, using the interim closing of
the books method (unless the General Partner, in its sole and absolute
discretion, elects to adopt a daily, weekly or monthly proration method, in
which event Net Income, Net Losses, and each item thereof would be prorated
based upon the applicable period selected by the General Partner). Solely for
purposes of making such allocations, each of such items for the calendar month
in which an admission of any Additional Limited Partner occurs shall be
allocated among all the Partners and Assignees including such Additional Limited
Partner. All distributions of Available Cash with respect to which the
Partnership Record Date is before the date of such admission shall be made
solely to Partners and Assignees other than the Additional Limited Partner, and
all distributions of Available Cash thereafter shall be made to all the Partners
and Assignees including such Additional Limited Partner.

SECTION 12.3  AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP

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

                                  ARTICLE XIII

                          DISSOLUTION AND LIQUIDATION

SECTION 13.1  DISSOLUTION

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

          (i) the expiration of its term as provided in Section 2.4 hereof;

          (ii) an event of withdrawal of the General Partner, as defined in the
     Act (other than an event of bankruptcy), unless within ninety (90) days
     after the withdrawal a "majority in interest" (as defined below) of the
     remaining Partners Consent in writing to continue the business of the
     Partnership and to the appointment, effective as of the date of withdrawal,
     of a substitute General Partner;

          (iii) through December 31, 2046, an election to dissolve the
     Partnership made by the General Partner with the consent of Limited
     Partners who hold ninety percent (90%) of the outstanding Units held by
     Limited Partners (including Units held by the General Partner);

          (iv) an election to dissolve the Partnership made by the General
     Partner, in its sole and absolute discretion after December 31, 2046;

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<PAGE>   150

          (v) entry of a decree of judicial dissolution of the Partnership
     pursuant to the provisions of the Act;

          (vi) the sale of all or substantially all of the assets and properties
     of the Partnership for cash or for marketable securities; or

          (vii) a final and non-appealable judgment is entered by a court of
     competent jurisdiction ruling that the General Partner is bankrupt or
     insolvent, or a final and non-appealable order for relief is entered by a
     court with appropriate jurisdiction against the General Partner, in each
     case under any federal or state bankruptcy or insolvency laws as now or
     hereafter in effect, unless prior to or at the time of the entry of such
     order or judgment a "majority in interest" (as defined below) of the
     remaining Partners Consent in writing to continue the business of the
     Partnership and to the appointment, effective as of a date prior to the
     date of such order or judgment, of a substitute General Partner.

     As used herein, a "majority in interest" shall refer to Partners (excluding
the General Partner) who hold more than fifty percent (50%) of the outstanding
Percentage Interests not held by the General Partner.

SECTION 13.2  WINDING UP

     A. General.  Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner (or, if there is no remaining General Partner,
any Person elected by a majority in interest of the Limited Partners (the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include equity or other securities of the General Partner or any other entity)
shall be applied and distributed in the following order:

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

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

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

          (4) Fourth, to the holders of Partnership Interests that are entitled
     to any preference in distribution upon liquidation in accordance with the
     rights of any such class or series of Partnership Interests, including
     without limitation, Series A Preferred Units, Series B Preferred Units, and
     Series C Preferred Units (and, within each such class or series, to each
     holder thereof pro rata based on the proportion of the total number of
     outstanding units of such class or series represented by such holder's
     units of such series or class); and

          (5) The balance, if any, to the Partners in accordance with their
     Capital Accounts, after giving effect to all contributions, distributions,
     and allocations for all periods.

     The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article XIII.

     B. Deferred Liquidation.  Notwithstanding the provisions of Section 13.2.A
which require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may,

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in its sole and absolute discretion, defer for a reasonable time the liquidation
of any assets except those necessary to satisfy liabilities of the Partnership
(including to those Partners as creditors) or distribute to the Partners, in
lieu of cash, as tenants in common and in accordance with the provisions of
Section 13.2.A, undivided interests in such Partnership assets as the Liquidator
deems not suitable for liquidation. Any such distributions in kind shall be made
only if, in the good faith judgment of the Liquidator, such distributions in
kind are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreements governing the
operation of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such reasonable
method of valuation as it may adopt.

SECTION 13.3  COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS; RESTORATION OF
              DEFICIT CAPITAL ACCOUNTS

     A. Timing of Distributions.  If the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
under this Article XIII to the General Partner and Limited Partners who have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). In the discretion of the General Partner, a pro rata
portion of the distributions that would otherwise be made to the General Partner
and Limited Partners pursuant to this Article XIII may be: (A) distributed to a
trust established for the benefit of the General Partner and Limited Partners
for the purposes of liquidating Partnership assets, collecting amounts owed to
the Partnership and paying any contingent or unforeseen liabilities or
obligations of the Partnership or of the General Partner arising out of or in
connection with the Partnership (in which case the assets of any such trust
shall be distributed to the General Partner and Limited Partners from time to
time, in the reasonable discretion of the General Partner, in the same
proportions as the amount distributed to such trust by the Partnership would
otherwise have been distributed to the General Partner and Limited Partners
pursuant to this Agreement); or (B) withheld to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership, provided that
such withheld amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.

     B. Restoration of Deficit Capital Accounts Upon Liquidation of the
Partnership.  If any Partner has a deficit balance in its Capital Account (after
giving effect to all contributions, distributions and allocations for all
taxable years, including the year during which such liquidation occurs), such
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever, except as otherwise set forth in this Section 13.3.B, or as
otherwise expressly agreed in writing by the affected Partner and the
Partnership after the date hereof. Notwithstanding the foregoing, (i) if the
General Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions, and allocations for all Partnership
Years or portions thereof, including the year during which such liquidation
occurs), the General Partner shall contribute to the capital of the Partnership
the amount necessary to restore such deficit balance to zero in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a Protected Partner has a
deficit balance in its Capital Account (after giving effect to all
contributions, distributions, and allocations for all Partnership Years or
portions thereof, including the year during which such liquidation occurs), such
Protected Partner shall be obligated to make a contribution to the Partnership
with respect to any such deficit balance in such Protected Partner's Capital
Account upon a liquidation of the Partnership in an amount equal to the lesser
of such deficit balance or such Protected Partner's Protected Amount; and (iii)
the first sentence of this Section 13.3.B shall not apply with respect to any
other Partner to the extent, but only to such extent, that such Partner
previously has agreed in writing, with the consent of the General Partner, to
undertake an express obligation to restore all or any portion of a deficit that
may exist in its Capital Account upon a liquidation of the Partnership
(including, without limitations, those Partners who have undertaken "deficit
restoration obligations" as defined in Exhibit E). No Limited Partner shall have
any right to become a Protected Partner, to increase its Protected Amount, or
otherwise agree to restore any portion of any

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deficit that may exist in its Capital Account, except, and only to the extent,
provided in Exhibits E-1 through E-6 (or the agreements described therein),
without the express written consent of the General Partners, in its sole and
absolute discretion. Any contribution required of a Partner under this Section
13.3.B. shall be made on or before the later of (i) the end of the Partnership
Year in which the interest is liquidated or (ii) the ninetieth (90th) day
following the date of such liquidation. The proceeds of any contribution to the
Partnership made by a Protected Partner with respect to a deficit in such
Protected Partner's Capital Account balance shall be treated as a Capital
Contribution by such Protected Partner and the proceeds thereof shall be treated
as assets of the Partnership to be applied as set forth in Section 13.2.A.

     C. Restoration of Deficit Capital Accounts Upon a Liquidation of a
Partner's Interest by Transfer.  If a Protected Partner's interest in the
Partnership is "liquidated" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) (other than in connection with a liquidation of the
Partnership) which term shall include a redemption by the Partnership of such
Protected Partner's interest upon exercise of the Redemption Right, and such
Protected Partner is designated on Exhibit E as Part II Protected Partner, such
Protected Partner shall be required to contribute cash to the Partnership equal
to the lesser of (i) the amount required to increase its Capital Account balance
as of such date to zero, or (ii) such Protected Partner's Protected Amount. For
this purpose, (i) the Protected Partner's deficit Capital Account balance shall
be determined by taking into account all contributions, distributions, and
allocations for the portion of the Partnership Year ending on the date of the
liquidation or redemption, and (ii) solely for purposes of determining such
Protected Partner's Capital Account balance, the General Partner shall
redetermine the Carrying Value of the Partnership's assets on such date based
upon the principles set forth in Sections 1.D.(3) and (4) of Exhibit B hereto,
and shall take into account the Protected Partner's allocable share of any
Unrealized Gain or Unrealized Loss resulting from such redetermination in
determining the balance of its Capital Account. The amount of any payment
required hereunder shall be due and payable within the time period specified in
the second to last sentence of Section 13.3.B.

     D. Effect of the Death of a Protected Partner.  After the death of a
Protected Partner who is an individual, the executor of the estate of such
Protected Partner may elect to reduce (or eliminate) the Protected Amount of
such Protected Partner. Such elections may be made by such executor by
delivering to the General Partner within two hundred and seventy (270) days of
the death of such Limited Partner, a written notice setting forth the maximum
deficit balance in its Capital Account that such executor agrees to restore
under this Section 13.3, if any. If such executor does not make a timely
election pursuant to this Section 13.3 (whether or not the balance in the
applicable Capital Account is negative at such time), then the Protected
Partner's estate (and the beneficiaries thereof who receive distributions of
Partnership Interests therefrom) shall be deemed a Protected Partner with a
Protected Amount in the same amount as the deceased Protected Partner. Any
Protected Partner which itself is a partnership may likewise elect, after the
date of its partner's death to reduce (or eliminate) its Protected Amount by
delivering a similar notice to the General Partner within the time period
specified above, and in the absence of any such notice the Protected Amount of
such Protected Partner shall not be reduced to reflect the death of any of its
partners.

SECTION 13.4  RIGHTS OF LIMITED PARTNERS

     Except as otherwise provided in this Agreement, each Limited Partner shall
look solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to demand or receive property
other than cash from the Partnership. Except as otherwise expressly provided in
this Agreement, no Limited Partner shall have priority over any other Limited
Partner as to the return of its Capital Contributions, distributions, or
allocations.

SECTION 13.5  NOTICE OF DISSOLUTION

     If a Liquidating Event occurs or an event occurs that would, but for
provisions of an election or objection by one or more Partners pursuant to
Section 13.1, result in a dissolution of the Partnership, the General Partner
shall, within thirty (30) days thereafter, provide written notice thereof to
each of the
                                      E-47
<PAGE>   153

Partners and to all other parties with whom the Partnership regularly conducts
business (as determined in the discretion of the General Partner).

SECTION 13.6  CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP

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

SECTION 13.7  REASONABLE TIME FOR WINDING UP

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

SECTION 13.8  WAIVER OF PARTITION

     Each Partner hereby waives any right to partition of the Partnership
property.

SECTION 13.9  LIABILITY OF LIQUIDATOR

     The Liquidator shall be indemnified and held harmless by the Partnership in
the same manner and to the same degree as an Indemnitee may be indemnified
pursuant to Section 7.7.

                                  ARTICLE XIV

                  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

SECTION 14.1  AMENDMENTS

     A. General.  Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners holding twenty-five percent (25%) or more of
the Partnership Interests. Following such proposal (except an amendment pursuant
to Section 14.1.B), the General Partner shall submit any proposed amendment to
the Limited Partners. The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate. For purposes of
obtaining a written vote, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to
respond in such time period shall constitute a vote which is consistent with the
General Partner's recommendation with respect to the proposal. Except as
provided in Section 14.1.B, 14.1.C or 14.1.D, a proposed amendment shall be
adopted and be effective as an amendment hereto if it is approved by the General
Partner and it receives the Consent of Partners holding a majority of the
Percentage Interests of the Limited Partners (including Limited Partnership
Interests held by the General Partner).

     B. Amendments Not Requiring Limited Partner Approval.  Notwithstanding
Section 14.1.A or 14.1.C, the General Partner shall have the power, without the
consent of the Limited Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:

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

          (2) to reflect the admission, substitution, termination, or withdrawal
     of Partners in accordance with this Agreement (which may be effected
     through the replacement of Exhibit A with an amended Exhibit A);

                                      E-48
<PAGE>   154

          (3) to set forth the designations, rights, powers, duties, and
     preferences of the holders of any additional Partnership Interests issued
     pursuant to Article IV;

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

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

     The General Partner shall notify the Limited Partners when any action under
this Section 14.1.B is taken in the next regular communication to the Limited
Partners; provided, however, that no notice need be given of any amendment of
this Agreement to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement (whether or not
effected through the replacement of Exhibit A with an amended Exhibit A). For
purposes of the immediately preceding sentence, notwithstanding any other means
by which the General Partner may provide any such notice to the Limited
Partners, such notice requirement shall be deemed to have been satisfied upon
the filing with the Securities and Exchange Commission by the Partnership of any
amendment to this Agreement permitted under this Section 14.1.B as an exhibit to
(i) a registration statement filed by the Partnership under the Securities Act
or (ii) any report or other document filed by the Partnership under the Exchange
Act.

     C. Amendments Requiring Limited Partner Approval (Excluding the General
Partner).  Notwithstanding Section 14.1.A, without the Consent of the Outside
Limited Partners, the General Partner shall not amend Section 4.2.A, Section
5.1.E, Section 7.1.A (second sentence only), Section 7.5, Section 7.6, Section
7.8, Section 7.11.B, Section 11.2, Section 13.1 (other than Section 13.1(iii)
which can be amended only with a Consent of 90% of the Partnership Units
(including Partnership Units held by the General Partner)), the last sentence of
Section 11.4.A (provided that no such amendment shall in any event adversely
affect the rights of any lender who made a loan or who extended credit and
received in connection therewith a Pledge of Units prior to the date such
amendment is adopted unless, and only to the extent such lender consents
thereto), this Section 14.1.C or Section 14.2.

     D. Other Amendments Requiring Certain Limited Partner
Approval.  Notwithstanding anything in this Section 14.1 to the contrary, this
Agreement shall not be amended with respect to any Partner adversely affected
without the Consent of such Partner, or any Assignee who is a bona fide
financial institution that loans money or otherwise extends credit to a holder
of Units, adversely affected if such amendment would (i) convert a Limited
Partner's interest in the Partnership into a general partner's interest, (ii)
modify the limited liability of a Limited Partner, (iii) amend Section 7.11.A,
(iv) amend Article V or Article VI (except as permitted pursuant to Sections
4.2, 5.1.E, 5.4, 6.2 and 14.1(B)(3)), (v) amend Section 8.6 or any defined terms
set forth in Article I that relate to the Redemption Right (except as permitted
in Section 8.6.E), or (vi) amend Sections 11.3 or 11.5, or any additional
restrictions from Section 11.6.E or amend Sections 14.1.B(4) or 14.1.D. This
Section 14.1.D does not require unanimous consent of all Partners adversely
affected unless the amendment is to be effective against all Partners adversely
affected.

SECTION 14.2  MEETINGS OF THE PARTNERS

     A. General.  Meetings of the Partners may be called by the General Partner
and shall be called upon the receipt by the General Partner of a written request
by Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
(7) days nor more than thirty (30) days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever the vote or
Consent of Partners is permitted or required under this Agreement,
                                      E-49
<PAGE>   155

such vote or Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.1.A. Except as otherwise
expressly provided in this Agreement, the Consent of holders of a majority of
the Percentage Interests held by Limited Partners (including Limited Partnership
Interests held by the General Partner) shall control.

     B. Actions Without a Meeting.  Any action required or permitted to be taken
at a meeting of the Partners may be taken without a meeting if a written consent
setting forth the action so taken is signed by a majority of the Percentage
Interests of the Partners (or such other percentage as is expressly required by
this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of
the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.

     C. Proxy.  Each Limited Partner may authorize any Person or Persons to act
for him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership's receipt of written notice
thereof.

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

                                   ARTICLE XV

                               GENERAL PROVISIONS

SECTION 15.1  ADDRESSES AND NOTICE

     Any notice, demand, request or report required or permitted to be given or
made to a Partner or Assignee under this Agreement shall be in writing and shall
be deemed given or made when delivered in person or when sent by first class
United States mail or by other means of written communication to the Partner or
Assignee at the address set forth in Exhibit A or such other address as the
Partners shall notify the General Partner in writing.

SECTION 15.2  TITLES AND CAPTIONS

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

SECTION 15.3  PRONOUNS AND PLURALS

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

SECTION 15.4  FURTHER ACTION

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

                                      E-50
<PAGE>   156

SECTION 15.5  BINDING EFFECT

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

SECTION 15.6  CREDITORS

     Other than as expressly set forth herein with regard to any Indemnitee,
none of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership.

SECTION 15.7  WAIVER

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

SECTION 15.8  COUNTERPARTS

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

SECTION 15.9  APPLICABLE LAW

     This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.

SECTION 15.10  INVALIDITY OF PROVISIONS

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

SECTION 15.11  POWER OF ATTORNEY

     A. General.  Each Limited Partner and each Assignee who accepts Partnership
Units (or any rights, benefits or privileges associated therewith) is deemed to
irrevocably constitute and appoint the General Partner, any Liquidator and
authorized officers and attorneys-in-fact of each, and each of those acting
singly, in each case with full power of substitution, as its true and lawful
agent and attorney-in-fact, with full power and authority in its name, place and
stead to:

          (1) execute, swear to, acknowledge, deliver, file and record in the
     appropriate public offices (a) all certificates, documents and other
     instruments (including, without limitation, this Agreement and the
     Certificate and all amendments or restatements thereof) that the General
     Partner or any Liquidator deems appropriate or necessary to form, qualify
     or continue the existence or qualification of the Partnership as a limited
     partnership (or a partnership in which the limited partners have limited
     liability) in the State of Delaware and in all other jurisdictions in which
     the Partnership may conduct business or own property, (b) all instruments
     that the General Partner or any Liquidator deem appropriate or necessary to
     reflect any amendment, change, modification or restatement of this
     Agreement in accordance with its terms, (c) all conveyances and other
     instruments or documents that the General Partner or any Liquidator deems
     appropriate or necessary to reflect the dissolution and liquidation of the
     Partnership pursuant to the terms of this Agreement, including, without
     limitation, a certificate of cancellation, (d) all instruments relating to
     the admission, withdrawal, removal or substitution of any Partner pursuant
     to, or other events described in, Article XI, XII or XIII hereof or the
     Capital Contribution of any Partner and (e) all certificates, documents and
     other instruments relating to the determination of the rights, preferences
     and privileges of Partnership Interests; and
                                      E-51
<PAGE>   157

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

     Nothing contained in this Section 15.11 shall be construed as authorizing
the General Partner or any Liquidator to amend this Agreement except in
accordance with Article XIV hereof or as may be otherwise expressly provided for
in this Agreement.

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

SECTION 15.12  ENTIRE AGREEMENT

     This Agreement contains the entire understanding and agreement among the
Partners with respect to the subject matter hereof and supersedes any prior
written oral understandings or agreements among them with respect thereto.

SECTION 15.13  NO RIGHTS AS SHAREHOLDERS

     Nothing contained in this Agreement shall be construed as conferring upon
the holders of the Partnership Units any rights whatsoever as shareholders of
the General Partner, including, without limitation, any right to receive
dividends or other distributions made to shareholders of the General Partner or
to vote or to consent or receive notice as shareholders in respect to any
meeting of shareholders for the election of trustees of the General Partner or
any other matter.

SECTION 15.14  LIMITATION TO PRESERVE REIT STATUS

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

          (i) an amount equal to the excess, if any, of (a) 4.20% of the General
     Partner's total gross income (but not including the amount of any General
     Partner Payments) for the fiscal year which is described in subsections (A)
     though (H) of Section 856(c)(2) of the Code over (b) the amount of gross
     income (within the meaning of Section 856(c)(2) of the Code) derived by the
     General Partner from sources other than those described in subsections (A)
     through (H) of Section 856(c)(2) of the Code (but not including the amount
     of any General Partner Payments); or

                                      E-52
<PAGE>   158

          (ii) an amount equal to the excess, if any of (a) 25% of the General
     Partner's total gross income (but not including the amount of any General
     Partner Payments) for the fiscal year which is described in subsections (A)
     through (I) of Section 856(c)(3) of the Code over (b) the amount of gross
     income (within the meaning of Section 856(c)(3) of the Code) derived by the
     General Partner from sources other than those described in subsections (A)
     through (I) of Section 856(c)(3) of the Code (but not including the amount
     of any General Partner Payments); provided, however, that General Partner
     Payments in excess of the amounts set forth in subparagraphs (i) and (ii)
     above may be made if the General Partner, as a condition precedent, obtains
     an opinion of tax counsel that the receipt of such excess amounts would not
     adversely affect the General Partner's ability to qualify as a REIT. To the
     extent General Partner Payments may not be made in a year due to the
     foregoing limitations, such General Partner Payments shall carry over and
     be treated as arising in the following year, provided, however, that such
     amounts shall not carry over for more than five years, and if not paid
     within such five year period, shall expire; provided further, that (i) as
     General Partner Payments are made, such payments shall be applied first to
     carry over amounts outstanding, if any, and (ii) with respect to carry over
     amounts for more than one Partnership Year, such payments shall be applied
     to the earliest Partnership Year first.

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

                                          GENERAL PARTNER:

                                          EQUITY OFFICE PROPERTIES TRUST

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

                                          LIMITED PARTNERS:

                                          By: Equity Office Properties Trust,
                                              as Attorney-in-Fact for the
                                              Limited Partners

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

                                          For purposes of Section 8.6 hereof:
                                          EQUITY OFFICE PROPERTIES TRUST

                                          By:
                                          --------------------------------------
                                          Name:
                                          --------------------------------------
                                          Title:
                                          --------------------------------------
                                      E-53
<PAGE>   159

                                   EXHIBIT A

                       PARTNERS AND PARTNERSHIP INTERESTS

<TABLE>
<CAPTION>
                                                                    CLASS A AND CLASS B UNITS
                                                              -------------------------------------
                                                                            INITIAL
                                                              PARTNERSHIP   CAPITAL     PERCENTAGE
                NAME AND ADDRESS OF PARTNER                      UNITS      ACCOUNT    INTEREST (4)
                ---------------------------                   -----------   --------   ------------
<S>                                                           <C>           <C>        <C>
GENERAL PARTNER:
Equity Office Properties Trust
Two North Riverside Plaza
Suite 2200
Chicago, Illinois 60606

LIMITED PARTNERS:
TOTAL CLASS A AND CLASS B UNITS.............................                             100.00000%
                                                                                         =========
</TABLE>

<TABLE>
<CAPTION>
                                                                    SERIES A PREFERRED UNITS
                                                              ------------------------------------
                                                                            INITIAL
                                                              PARTNERSHIP   CAPITAL    PERCENTAGE
                NAME AND ADDRESS OF PARTNER                      UNITS      ACCOUNT    INTEREST(4)
                ---------------------------                   -----------   --------   -----------
<S>                                                           <C>           <C>        <C>
TOTAL SERIES A PREFERRED UNITS..............................                            100.00000%
                                                                                        =========
</TABLE>

<TABLE>
<CAPTION>
                                                                    SERIES B PREFERRED UNITS
                                                              ------------------------------------
                                                                            INITIAL
                                                              PARTNERSHIP   CAPITAL    PERCENTAGE
                NAME AND ADDRESS OF PARTNER                      UNITS      ACCOUNT    INTEREST(4)
                ---------------------------                   -----------   --------   -----------
<S>                                                           <C>           <C>        <C>
TOTAL SERIES B PREFERRED UNITS..............................                            100.00000%
                                                                                        =========
</TABLE>

<TABLE>
<CAPTION>
                                                                    SERIES C PREFERRED UNITS
                                                              ------------------------------------
                                                                            INITIAL
                                                              PARTNERSHIP   CAPITAL    PERCENTAGE
                NAME AND ADDRESS OF PARTNER                      UNITS      ACCOUNT    INTEREST(4)
                ---------------------------                   -----------   --------   -----------
<S>                                                           <C>           <C>        <C>
TOTAL SERIES C PREFERRED UNITS..............................                            100.00000%
                                                                                        =========
</TABLE>

NOTES:

(1) 194 Class A Units were cancelled to provide cash for fractional share
    amounts in connection with the merger of Beacon Properties Corporation into
    Equity Office Properties Trust on December 19, 1997.

(2) Beacon Partner

(3) Class B Units.

(4) For purposes of this calculation, the Class A Units and Class B Units are
    treated as one class. Of the aggregate Partnership Interests currently
    outstanding, the percentage of each class and series are as follows:

<TABLE>
<S>                                                           <C>
Class A and B Units (collectively)..........................          %
Series A Preferred Units....................................          %
Series B Preferred Units....................................          %
Series C Preferred Units....................................          %
                                                                100.00%
</TABLE>

(5) Acquired in connection with acquisition of Palo Alto.
<PAGE>   160

                                   EXHIBIT B

                          CAPITAL ACCOUNT MAINTENANCE

1.  Capital Accounts of the Partners

     A. The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section l.704-l(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions and any other deemed contributions made by such Partner to the
Partnership pursuant to this Agreement and (ii) all items of Partnership income
and gain (including income and gain exempt from tax) computed in accordance with
Section 1.B hereof and allocated to such Partner pursuant to Section 6.1 of the
Agreement and Exhibit C thereof, and decreased by (x) the amount of cash or
Agreed Value of all actual and deemed distributions of cash or property made to
such Partner pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 1.B hereof and allocated
to such Partner pursuant to Section 6.1 of the Agreement and Exhibit C thereof.

     B. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) (1) of the Code shall be included in taxable income or loss),
with the following adjustments:

          (1) Except as otherwise provided in Regulations Section
     1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
     and deduction shall be made without regard to any election under Section
     754 of the Code which may be made by the Partnership, provided that the
     amounts of any adjustments to the adjusted bases of the assets of the
     Partnership made pursuant to Section 734 of the Code as a result of the
     distribution of property by the Partnership to a Partner (to the extent
     that such adjustments have not previously been reflected in the Partners'
     Capital Accounts) shall be reflected in the Capital Accounts of the
     Partners in the manner and subject to the limitations prescribed in
     Regulations Section l.704-1(b)(2)(iv)(m)(4).

          (2) The computation of all items of income, gain, and deduction shall
     be made without regard to the fact that items described in Sections
     705(a)(l)(B) or 705(a)(2)(B) of the Code are not includible in gross income
     or are neither currently deductible nor capitalized for federal income tax
     purposes.

          (3) Any income, gain or loss attributable to the taxable disposition
     of any Partnership property shall be determined as if the adjusted basis of
     such property as of such date of disposition were equal in amount to the
     Partnership's Carrying Value with respect to such property as of such date.

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

          (5) In the event the Carrying Value of any Partnership Asset is
     adjusted pursuant to Section 1.D hereof, the amount of any such adjustment
     shall be taken into account as gain or loss from the disposition of such
     asset.

          (6) Any items specially allocated under Section 2 of Exhibit C to the
     Agreement hereof shall not be taken into account.

     C. A transferee (including any Assignee) of a Partnership Unit shall
succeed to a pro rata portion of the Capital Account of the transferor.

     D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D(2), the Carrying Values of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times
<PAGE>   161

of the adjustments provided in Section 1.D(2) hereof, as if such Unrealized Gain
or Unrealized Loss had been recognized on an actual sale of each such property
and allocated pursuant to Section 6.1 of the Agreement.

          (2) Such adjustments shall be made as of the following times: (a)
     immediately prior to the acquisition of an additional interest in the
     Partnership by any new or existing Partner in exchange for more than a de
     minimis Capital Contribution; (b) immediately prior to the distribution by
     the Partnership to a Partner of more than a de minimis amount of property
     as consideration for an interest in the Partnership; and (c) immediately
     prior to the liquidation of the Partnership within the meaning of
     Regulations Section 1.704-l(b)(2)(ii)(g), provided, however, that
     adjustments pursuant to clauses (a) and (b) above shall be made only if the
     General Partner determines that such adjustments are necessary or
     appropriate to reflect the relative economic interests of the Partners in
     the Partnership.

          (3) In accordance with Regulations Section 1.704-l(b)(2)(iv)(e), the
     Carrying Value of Partnership assets distributed in kind shall be adjusted
     upward or downward to reflect any Unrealized Gain or Unrealized Loss
     attributable to such Partnership property, as of the time any such asset is
     distributed.

          (4) In determining Unrealized Gain or Unrealized Loss for purposes of
     this Exhibit B, the aggregate cash amount and fair market value of all
     Partnership assets (including cash or cash equivalents) shall be determined
     by the General Partner using such reasonable method of valuation as it may
     adopt, or in the case of a liquidating distribution pursuant to Article
     XIII of the Agreement, shall be determined and allocated by the Liquidator
     using such reasonable methods of valuation as it may adopt. The General
     Partner, or the Liquidator, as the case may be, shall allocate such
     aggregate fair market value among the assets of the Partnership in such
     manner as it determines in its sole and absolute discretion to arrive at a
     fair market value for individual properties.

     E. The provisions of the Agreement (including this Exhibit B and the other
Exhibits to the Agreement) relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall be interpreted
and applied in a manner consistent with such Regulations. In the event the
General Partner shall determine that it is prudent to modify the manner in which
the Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Partnership, the
General Partner, or the Limited Partners) are computed in order to comply with
such Regulations, the General Partner may make such modification without regard
to Article XIV of the Agreement, provided that it is not likely to have a
material effect on the amounts distributable to any Person pursuant to Article
XIII of the Agreement upon the dissolution of the Partnership. The General
Partner also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section l.704-l(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations Section
l.704-1(b).

2.  No Interest

     No interest shall be paid by the Partnership on Capital Contributions or on
balances in Partners' Capital Accounts.

3.  No Withdrawal

     No Partner shall be entitled to withdraw any part of its Capital
Contribution or Capital Account or to receive any distribution from the
Partnership, except as provided in Articles IV, V, VII and XIII of the
Agreement.

                                       B-2
<PAGE>   162

                                   EXHIBIT C

                            SPECIAL ALLOCATION RULES

1.  Special Allocation Rules.

     Notwithstanding any other provision of the Agreement or this Exhibit C, the
following special allocations shall be made in the following order:

     A. Minimum Gain Chargeback.  Notwithstanding the provisions of Section 6.1
of the Agreement or any other provisions of this Exhibit C, if there is a net
decrease in Partnership Minimum Gain during any Partnership Year, each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner's share
of the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(f)(6). This Section 1.A is intended to comply
with the minimum gain chargeback requirements in Regulations Section 1.704-2(f)
and for purposes of this Section 1.A only, each Partner's Adjusted Capital
Account Deficit shall be determined prior to any other allocations pursuant to
Section 6.1 of this Agreement with respect to such Partnership Year and without
regard to any decrease in Partner Minimum Gain during such Partnership Year.

     B. Partner Minimum Gain Chargeback.  Notwithstanding any other provision of
Section 6.1 of this Agreement or any other provisions of this Exhibit C (except
Section 1.A hereof), if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Partnership Year, each
Partner who has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General
Partner and Limited Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(i)(4). This Section
1.B is intended to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.B, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of the Agreement or this Exhibit with respect to such Partnership Year,
other than allocations pursuant to Section 1.A hereof.

     C. Qualified Income Offset.  In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6),
and after giving effect to the allocations required under Sections 1.A and 1.B
hereof with respect to such Partnership Year, such Partner has an Adjusted
Capital Account Deficit, items of Partnership income and gain (consisting of a
pro rata portion of each item of Partnership income, including gross income and
gain for the Partnership Year) shall be specifically allocated to such Partner
in an amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit created by such adjustments,
allocations or distributions as quickly as possible. This Section 1.C is
intended to constitute a "qualified income offset" under Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     D. Gross Income Allocation.  In the event that any Partner has an Adjusted
Capital Account Deficit at the end of any Partnership Year (after taking into
account allocations to be made under the preceding paragraphs hereof with
respect to such Partnership Year), each such Partner shall be specially
allocated items of Partnership income and gain (consisting of a pro rata portion
of each item of Partnership income, including gross income and gain for the
Partnership Year) in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, its Adjusted Capital Account Deficit.
<PAGE>   163

     E. Nonrecourse Deductions.  Nonrecourse Deductions for any Partnership Year
shall be allocated to the Partners in accordance with their respective
Percentage Interests. If the General Partner determines in its good faith
discretion that the Partnership's Nonrecourse Deductions must be allocated in a
different ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized,
upon notice to the Limited Partners, to revise the prescribed ratio for such
Partnership Year to the numerically closest ratio which would satisfy such
requirements.

     F. Partner Nonrecourse Deductions.  Any Partner Nonrecourse Deductions for
any Partnership Year shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance with Regulations
Sections 1.704-2(b)(4) and 1.704-2(i).

     G. Code Section 754 Adjustments.  To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent Exhibit E-1 with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.

2.  Allocations for Tax Purposes

     A. Except as otherwise provided in this Section 2, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to Section 6.1 of the Agreement and
Section 1 of this Exhibit C.

     B. In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss, and
deduction shall be allocated for federal income tax purposes among the Partners
as follows:

          (1) (a) In the case of a Contributed Property, such items attributable
     thereto shall be allocated among the Partners consistent with the
     principles of Section 704(c) of the Code to take into account the variation
     between the 704(c) Value of such property and its adjusted basis at the
     time of contribution (taking into account Section 2.C of this Exhibit C);
     and

          (b) any item of Residual Gain or Residual Loss attributable to a
     Contributed Property shall be allocated among the Partners in the same
     manner as its correlative item of "book" gain or loss is allocated pursuant
     to Section 6.1 of the Agreement and Section 1 of this Exhibit C.

          (2) (a) In the case of an Adjusted Property, such items shall

             (i) first, be allocated among the Partners in a manner consistent
        with the principles of Section 704(c) of the Code to take into account
        the Unrealized Gain or Unrealized Loss attributable to such property and
        the allocations thereof pursuant to Exhibit B;

             (ii) second, in the event such property was originally a
        Contributed Property, be allocated among the Partners in a manner
        consistent with Section 2.B(1) of this Exhibit C; and

          (b) any item of Residual Gain or Residual Loss attributable to an
     Adjusted Property shall be allocated among the Partners in the same manner
     its correlative item of "book" gain or loss is allocated pursuant to
     Section 6.1 of the Agreement and Section 1 of this Exhibit C.

          (3) all other items of income, gain, loss and deduction shall be
     allocated among the Partners the same manner as their correlative item of
     "book" gain or loss is allocated pursuant to Section 6.1 of the Agreement
     and Section 1 of this Exhibit C.

     C. To the extent Regulations promulgated pursuant to Section 704(c) of the
Code permit a Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the
General Partner shall, subject to the following, have the authority to elect the
method to be used by the Partnership and such election shall be binding on all
Partners; provided
                                       C-2
<PAGE>   164

that, to the extent that the General Partner has agreed to use a particular
method with respect to a Contributed Property, the General Partner shall be
bound by such agreement (including, without limitation, the agreements set forth
in Exhibit E hereto) pursuant to the terms thereof. With respect to the
Contributed Property transferred to the Partnership in connection with the
Consolidation and the BRE/ Worldwide L.L.C. purchase, the Partnership shall
elect to use the "traditional method" set forth in Treasury Regulation Section
1.704-3(b).

                                       C-3
<PAGE>   165

                                   EXHIBIT D

                              NOTICE OF REDEMPTION

     The undersigned hereby irrevocably (i) redeems ________ Partnership Units
in EOP Operating Limited Partnership in accordance with the terms of the
Agreement of Limited Partnership of EOP Operating Limited Partnership, as
amended, and the Redemption Right referred to therein, (ii) surrenders such
Partnership Units and all right, title and interest therein and (iii) directs
that the Cash Amount or Shares Amount (as determined by the General Partner)
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if Shares are to be delivered, such Shares be registered or
placed in the name(s) and at the address(es) specified below. The undersigned
hereby represents, warrants, and certifies that the undersigned (a) has
marketable and unencumbered title to such Partnership Units, free and clear of
the rights of or interests of any other person or entity, (b) has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consult or approve such redemption and
surrender.

Dated:                                    Name of Limited Partner:
                                          --------------------------------------

                                          --------------------------------------
                                          (Signature of Limited Partner)

                                          --------------------------------------
                                          (Street Address)

                                          --------------------------------------
                                          (City)      (State)     (Zip Code)

                                          Signature Guaranteed by:

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

IF SHARES ARE TO BE ISSUED, ISSUE TO:

Name:
     ---------------------------------------------------------------------------
Social Security or tax identifying number:
                                          --------------------------------------
<PAGE>   166

                                   EXHIBIT E

                    PROTECTED PARTNERS AND PROTECTED AMOUNTS

PART I PROTECTED PARTNERS                   PROTECTED AMOUNT

PART II PROTECTED PARTNERS

     (1) Protected Amount is the Deficit Obligation or Indemnity Obligation, as
applicable, as provided in the First Prior Amendment to the Original Partnership
Agreement, as set forth in Exhibit E-1.

     (2) Protected Amount is the Deficit Obligation or Indemnity Obligation, as
applicable, as provided in the Second Prior Amendment to the Original
Partnership Agreement, as set forth in Exhibit E-2.

     (3) Protected Amount is the DRO Amount or any applicable Partner
Contribution Amount, as defined in the Third Prior Amendment to the Original
Partnership Agreement, as set forth in Exhibit E-3.

     (4) Protected Amount is the Deficit Obligation as defined in the Prior
Addendum, dated April 21, 1998, to the Original Partnership Agreement, as set
forth in Exhibit E-4.

     (5) Protected Amount is as defined in the Tenth Prior Amendment to the
Original Partnership Agreement, as set forth in Exhibit E-5.
<PAGE>   167

                                  EXHIBIT E-1

                                (CAP AGREEMENT)

BACKGROUND

     On September 2, 1997, pursuant to a closing under that certain Agreement
for Contribution of Real Estate and Related Property dated as of August 1, 1997,
by and among the Partnership, the General Partner, Columbus America Properties,
L.L.C. ("CAP"), and certain members of CAP (the "Contribution Agreement"), CAP
received 1,690,000 Class A Units, subject to adjustment as provided in the
Contribution Agreement, (referred to as the "CAP Units"), in exchange for the
office properties known as Texaco Center, LL&E Tower and 601 Tchoupitoulas
Garage (collectively, the "CAP Properties"). In connection with the issuance of
the CAP Units, the First Prior Amendment to the Original Partnership Agreement
was executed, which set forth specific agreements regarding certain additional
rights and obligations of CAP and which was later amended by the Sixth Prior
Amendment to the Original Partnership Agreement. Such specific agreements are
described below.

     All capitalized terms used in this Exhibit E-1 and not otherwise defined
have the meanings assigned in the Agreement.

SPECIFIC AGREEMENTS

     1. Notwithstanding any other provision in the Agreement to the contrary and
in addition to (and not in lieu thereof) any and all other rights of CAP under
the Agreement:

          (i) The holders of the CAP Units shall have the right at any time and
     from time to time, to exchange all or any number of such CAP Units at the
     request of such holder for Shares in the form required in Section 8.6.B(i)
     of the Agreement, but subject in all respects to the terms of a certain
     Registration Rights Agreement dated as of September 2, 1997, by and among
     the General Partner, CAP and the other signatories thereto; and

          (ii) CAP shall have the right, exercisable upon written notice to
     Partnership at any time and from time to time before the earlier to occur
     of (a) September 3, 2000, or (b) the date that CAP shall have either
     transferred or converted all of its CAP Units into Shares, to require the
     Partnership or the General Partner to acquire all, or any portion or
     portions, of the CAP Units at $29.00 per CAP Unit. The price for such CAP
     Units shall be paid by the Partnership or the General Partner in
     immediately available funds not less than five (5) days after receipt of
     such notice from CAP. The CAP Units shall be conveyed to the Partnership or
     the General Partner, as applicable, free and clear of all liens and
     encumbrances, other than those liens and encumbrances, if any, in favor of
     General Partner or Partnership. At the closing of the acquisition of the
     CAP Units by the Partnership or the General Partner, the parties shall
     execute instruments of assignment and conveyance in the form attached to
     the First Prior Amendment at "Exhibit B" and an amendment to the Agreement
     evidencing the assignment of the CAP Units to the Partnership, or the
     General Partner, as applicable, and the withdrawal of CAP as a Limited
     Partner of the Partnership.

     2. Notwithstanding any other provision of the First Prior Amendment (as
amended by the Sixth Prior Amendment) or the Agreement to the contrary, upon
liquidation of the Partnership, CAP shall be required to contribute to the
Partnership the deficit balance in its Capital Account computed in accordance
with Section 1.752-2(b)(1) and (2) of the Regulations, provided, however, that
such contribution obligation shall not exceed $84,350,000 (the "Deficit
Obligation"). CAP specifically waives any right of contribution or subrogation
with respect to such Deficit Obligation and neither the General Partner nor any
other Partner or other Person shall be required to reimburse CAP for such
contribution. Irrespective of the balance in the Capital Account of CAP, CAP
agrees to indemnify the Partnership and the General Partner to the extent that
the recourse obligations of the Partnership exceed the assets of the Partnership
available to satisfy such recourse obligations. This indemnity obligation is
intended to protect and hold the Partnership and the General Partner harmless
for such recourse obligations without regard to
<PAGE>   168

obligations imposed on the General Partner under applicable state law or other
contract provisions. This indemnity obligation shall be limited to $84,350,000
(the "Indemnity Obligation"). CAP hereby specifically waives any right of
contribution from or subrogation against the General Partner or any other
Partner and neither the Partnership nor any other Partner shall be required to
contribute to or otherwise reimburse CAP with respect to such indemnity. Upon
payment of such indemnity, CAP's Capital Account shall be credited with such
payment only to the extent of any deficit in such Capital Account. Amounts paid
to the Partnership pursuant to the Deficit Obligation or the Indemnity
Obligation shall be used to satisfy the recourse obligations of the Partnership.

     CAP's Deficit Obligation and Indemnity Obligation shall not in the
aggregate exceed $84,350,000 (subject to reduction as provided herein). In
addition, the Deficit Obligation and the Indemnity Obligation shall be forever
reduced to $6,350,000 immediately upon the first placing, after acquisition of
the CAP Properties by the Partnership, of a non-recourse third party mortgage on
the CAP Properties securing a third party non-recourse loan to the Partnership
in an amount not less than $78,000,000.

     Upon the sale, redemption, conversion or other disposition of the CAP
Units, the Deficit Obligation and the Indemnity Obligation of CAP under this
provision shall terminate proportionately with the number of CAP Units sold,
redeemed, converted or otherwise disposed of; provided, however, that a
transferee of CAP may, in its sole discretion, assume the Deficit Obligation
and/or the Indemnity Obligation of CAP and, in such event, the Deficit
Obligation and the Indemnity Obligation shall be the obligations solely of such
transferee (but CAP's obligation shall in all events be proportionately
terminated as of the date of any such disposition of its interest in the
Partnership). Nothing in this paragraph 2 shall in any way affect the sale,
exchange, or conversion rights of CAP under the Agreement or under the First and
Sixth Prior Amendments.

                                      E-1-2
<PAGE>   169

                                  EXHIBIT E-2

                                (1120 AGREEMENT)

BACKGROUND

     On October 16, 1997, pursuant to a closing under that certain Contribution
Agreement dated September 4, 1997, as amended, by and between the Partnership
and 1120 20th Street Associates ("1120") (the "Contribution Agreement"), 1120
received 1,645,885 Class A Units, subject to adjustment as provided in the
Contribution Agreement, (referred to as the "1120 Units") in exchange for the
office property known as One Lafayette Centre, 1120 20th Street, N.W.,
Washington, D.C. (the "1120 Property"). In connection with the issuance of the
1120 Units, the Second Prior Amendment to the Original Partnership Agreement,
which set forth specific agreements regarding certain additional rights and
obligations of 1120, was executed. Such specific agreements are described below.

     All capitalized terms used in this Exhibit E-2 and not otherwise defined
herein have the meanings assigned in the Agreement.

SPECIFIC AGREEMENTS

     Notwithstanding any other provision of the Agreement to the contrary, upon
liquidation of the Partnership, 1120 shall be required to contribute to the
Partnership the deficit balance in its Capital Account computed in accordance
with Sections 1.752-2(b)(1) and (2) of the Regulations; provided, however, that
such contribution obligation shall not exceed $14,000,000 (the "Deficit
Obligation"). 1120 specifically waives any right of contribution or subrogation
with respect to such Deficit Obligation and neither the General Partner nor any
other Partner or other Person shall be required to reimburse 1120 for such
contribution. Irrespective of the balance in the Capital Account of 1120, 1120
agrees to indemnify the Partnership and the General Partner to the extent that
the recourse obligations of the Partnership exceed the assets of the Partnership
available to satisfy such recourse obligations. This indemnity obligation is
intended to protect and hold the Partnership and the General Partner harmless
for such recourse obligations without regard to obligations imposed on the
General Partner under applicable state law or other contract provisions. This
indemnity obligation shall be limited to $14,000,000 (the "Indemnity
Obligation"). 1120 specifically waives any right of contribution from or
subrogation against the General Partner or any other Partner and neither the
Partnership nor any other Partner shall be required to contribute to or
otherwise reimburse 1120 with respect to such indemnity. Upon payment of such
indemnity, 1120's Capital Amount shall be credited with such payment only to the
extent of any deficit in such Capital Account. Amounts paid to the Partnership
pursuant to the Deficit Obligation or the Indemnity Obligation shall be used to
satisfy the recourse obligations of the Partnership.

     Upon the sale, redemption, conversion or other disposition of the 1120
Units, the Deficit Obligation and the Indemnity Obligation of 1120 under this
provision shall terminate; provided, however, a transferee of 1120 may, in its
sole discretion, assume the Deficit Obligation and/or the Indemnity Obligation
of 1120 and, in such event, the Deficit Obligation and the Indemnity Obligation
shall be the obligation solely of such transferee (but 1120's obligation shall
in all events be terminated as of the date of any disposition of its interest in
the Partnership). Nothing herein shall in any way effect the sale, exchange or
conversion rights of 1120 under the Agreement or under the Second Prior
Amendment.
<PAGE>   170

                                  EXHIBIT E-3

                           (WRIGHT RUNSTAD AGREEMENT)

BACKGROUND

     On December 16, 1997, (i) pursuant to a closing under that certain
Contribution Agreement dated December 16, 1997, by and between the Partnership,
WRAM (as defined below), WRH (as defined below) and certain other parties (the
"Contribution Agreement") (a) Wright Runstad Asset Management L.P., a Washington
limited partnership ("WRAM"), received 446,890 Class B Units in exchange for
certain partnership interests ("Titleholder Interests") in Wright Runstad
Properties L.P., a Delaware limited partnership (the "Titleholder") and (b)
Wright Runstad Holdings L.P., a Washington limited partnership ("WRH"), received
2,168,810 Class B Units in exchange for certain Titleholder Interests; and (ii)
pursuant to a closing under that certain Investment Agreement dated December 16,
1997, by and among the Partnership, Wright Runstad Associates Limited
Partnership, a Washington limited partnership, ("WRALP"), H. Jon Runstad
("Runstad"), Douglas E. Norberg ("Norberg"), John F. Nordby ("Nordby"), and
certain other parties (the "Investment Agreement"), Runstad, Norberg, and Nordby
received, in the aggregate, 137,427 Class B Units in exchange for certain
limited partnership interests in WRALP ("WRALP Interests"). WRAM and WRH are
collectively referred to herein as the "Contributors." Runstad, Norberg, Nordby
are collectively referred to herein as the "Principals." The Class B Units
issued as described above are referred to herein as the WRP Units. Certain
property owned by the Titleholder as described in the Contribution Agreement is
referred to herein as the "WRP Property." In connection with the issuance of the
WRP Units, the Third Prior Amendment to the Original Partnership Agreement,
which set forth specific agreements regarding certain additional rights and
obligations of the Contributors and the Principals, was executed. Such specific
agreements are described below.

     All capitalized terms used in this Exhibit E-3 and not otherwise defined
shall have the meanings assigned to them in the Agreement.

SPECIFIC AGREEMENTS

     1. Right to Assign.  Notwithstanding any other provision of this Agreement
or of the Third Prior Amendment, each Contributor shall have the right to assign
all or any portion of its WRP Units, together with any and all other rights of
such Contributor pursuant to the Third Prior Amendment and the Agreement, to one
or more of the constituent partners or shareholders, members, partners, or
beneficiaries of constituent partners of such Contributor on December 16, 1997,
without the need for the consent of the General Partner or any Limited Partner
and without being subject to the right of first refusal set forth in Section
11.3.A(a) of the Agreement, but in each case subject to the restrictions and
conditions set forth in Sections 11.3.C, 11.3.D, 11.3.E, 11.6.E and 11.6.F of
the Agreement. Upon the delivery of written notice of such an assignment to the
General Partner, each assignee of WRP Units pursuant to the immediately
preceding sentence shall be admitted to the Partnership as a Substituted Limited
Partner owning the WRP Units so assigned and having all of the rights of a
Limited Partner under the Agreement and the Third Prior Amendment, subject only
to such assignee executing and delivering to the Partnership an acceptance of
all of the terms and conditions of the Agreement and such other documents or
instruments as the General Partner may reasonably require to effect such
admission, in accordance with Section 11.4.B of the Agreement. Each permitted
assignee of any of the WRP Units issued to a Contributor pursuant to the
Contribution Agreement that is admitted as a Substituted Limited Partner in
accordance with this Section 1 or Article XI of the Agreement, for so long as
such Person owns any such WRP Units, is referred to herein as a "Contributor
Limited Partner." Upon satisfaction of the condition described in the second
sentence of this Section 1, the General Partner shall amend Exhibit A to the
Agreement in the manner described in Section 11.4.C of the Agreement. For
purposes of Section 8.6 of the Agreement, each Contributor Limited Partner which
is a permitted assignee of a Contributor shall be entitled to exercise its right
to require the Partnership to redeem all or any portion of the WRP Units
assigned to it by such Contributor at any time.
<PAGE>   171

     2. Adjustments to Carrying Values.

          (a) Upon the admission of the Contributors and the Principals to the
     Partnership and upon the distribution by the Partnership of the Cash Amount
     to either Contributor or to any Principal or any Contributor Limited
     Partner pursuant to the exercise of the Redemption Right with respect to
     the WRP Units held by such Contributor, Principal or Contributor Limited
     Partner, the Carrying Values of the Assets of the Partnership shall be
     adjusted in accordance with the procedures described in Section 1.D of
     Exhibit B to the Agreement; provided, however, that in order to minimize
     the administrative burden associated with the adjustments required by this
     Section 2(a) in connection with the distribution of the Cash Amount to a
     Contributor, a Principal or a Contributor Limited Partner, the Partnership
     shall make the adjustments to the Carrying Values of the Partnership's
     Assets (and the resulting adjustments to the Capital Accounts of the
     Partners) only upon the happening of the most material event during the
     calendar year that is described in Section 1.D(2) of Exhibit B to the
     Agreement (the "Annual Adjustment"); and provided, further, that upon the
     distribution of the Cash Amount to a Contributor, a Principal or a
     Contributor Limited Partner or, at the option of the General Partner, upon
     the occurrence of any other event described in Section 1.D(2) of Exhibit B
     to the Agreement, that occurs during any year other than as of the date of
     the Annual Adjustment, the Partnership shall, at the time of such
     distribution, make adjustments to the Carrying Values of the Partnership's
     Assets in accordance with the procedures described in Section 1.D of
     Exhibit B to the Agreement for purposes of adjusting the Capital Account of
     such Contributor, such Principal or such Contributor Limited Partner who
     has exercised his Redemption Right or such other affected Partner, but no
     such adjustments shall be necessary at such time with respect to the
     Capital Account balances of Partners who remain Partners through the date
     of the Annual Adjustment or are otherwise not directly affected by any such
     other event.

          (b) Any determination of the fair market value of Partnership assets
     pursuant to Section 1.D of Exhibit B to the Agreement (for purposes of
     calculating Unrealized Gain or Unrealized Loss), with respect to adjusting
     the Carrying Values of Partnership assets in connection with the exercise
     of Redemption Rights by a Contributor, any Principal or any Contributor
     Limited Partner shall be made by assuming that the aggregate fair market
     value of all Partnership assets is equal to the aggregate Cash Amount that
     would be distributed by the Partnership if all Partnership Units held by
     all Partners (including the General Partner) were redeemed in exchange for
     the Cash Amount with respect to each such Partnership Unit at such time,
     provided, however, such valuation methodology shall not be utilized for
     purposes of determining the fair market value of the Partnership's assets
     with respect to any such exercise of Redemption Rights in contemplation of
     an assignment by or reorganization of the Partnership for the benefit of
     creditors and any liquidation of the Partnership related thereto or
     following the filing by (or in contemplation of a filing) by the
     Partnership of a case under Title 11 of the U.S. Code.

     3. Allocations.  Notwithstanding the provisions of Section 2.C of Exhibit C
to the Agreement, for purposes of allocating items of income, gain, loss and
deduction with respect to the WRP Property in the manner required by Section
704(c) of the Code, the Partnership shall employ, and shall cause any entity
controlled by the Partnership which holds title to any of the WRP Property to
employ, the "traditional method" as set forth in Regulation Section 1.704-3(b).

     4. Obligation to Restore Deficit Capital Account.

          (a) For purposes of this Section 4, the following terms shall have the
     meanings set forth below:

             (i) "DRO Amount" means (A) with respect to WRAM, $10,873,678, (B)
        with respect to WRH, $63,014,285 and (C) with respect to each Scheduled
        Assignee, the amount set forth opposite such Scheduled Assignee's name
        on Schedule 1 hereto.

             (ii) "Partner Contribution Agreement" means one or more agreements
        in favor of that certain partnership or those certain partnerships that
        are partners in WRH, which were executed concurrently with the Third
        Prior Amendment and have been assigned by such partnerships to

                                      E-3-2
<PAGE>   172

        WRH, pursuant to which a Second-Tier Partner has agreed to make certain
        capital contributions to WRH on the terms and subject to the conditions
        set forth in such Partner Contribution Agreement.

             (iii) "Partner Contribution Amount" means, with respect to each
        Second-Tier Partner, the amount set forth opposite such Second-Tier
        Partner's name on Schedule 1 hereto, which amount is the amount of
        capital contributions agreed to be made by such Second-Tier Partner
        pursuant to the Partner Contribution Agreement to which he is a party.

             (iv) "Scheduled Assignee" means each permitted assignee of any of
        the WRP Units of either WRAM or WRH listed on Schedule 1 hereto and the
        successors and assigns of such Scheduled Assignee.

             (v) "Second-Tier Partners" means those persons listed on Schedule 1
        to the Third Prior Amendment who are partners in certain general
        partnerships that are partners in WRH and who have executed and
        delivered one or more Partner Contribution Agreements.

          (b) Notwithstanding any other provisions of the Agreement, upon
     liquidation of the Partnership or upon the liquidation of the Partnership
     Interest of a Contributor or a Scheduled Assignee, each Contributor or
     Scheduled Assignee whose interest is being liquidated shall contribute to
     the Partnership, in accordance with Section 1.704-1(b)(2)(ii)(b)(2) of the
     Regulations, the deficit balance, if any, in its Capital Account,
     calculated after the allocation for such year of all items of Net Income,
     Net Losses, Gross Income and Unrealized Gain or Unrealized Loss allocated
     in accordance with Section 1.D of Exhibit B to the Agreement; provided,
     however, that in no event shall such contribution obligation for any
     Contributor or Scheduled Assignee exceed such Contributor's or Scheduled
     Assignee's DRO Amount. In addition, WRH assigned and conveyed to the
     Partnership, effective upon distribution of the WRP Units by WRH, all of
     WRH's rights under each Partner Contribution Agreement provided by a
     Second-Tier Partner; provided that in no event shall the contribution
     obligation pursuant to such Partner Contribution Agreement exceed such
     Second-Tier Partner's Partner Contribution Amount. The obligation pursuant
     to this Section 4(b) shall be for the benefit of the Partnership, the
     General Partner, the creditors of the Partnership or any other person to
     whom any debts, liabilities or obligations are owed by (or who otherwise
     has any claim against) the Partnership or the General Partner in its
     capacity as the general partner of the Partnership and shall be enforceable
     by such parties. Each Contributor and Scheduled Assignee unconditionally
     and irrevocably waives any subrogation, reimbursement or similar rights to
     which it might otherwise be entitled as the result of its performance with
     respect to the obligation created pursuant to Section 4(b), whether such
     rights arise with respect to the Partnership, another Partner, or a third
     party; provided, however, that the General Partner shall in all events be
     entitled to enforce the contribution obligation of a Contributor or
     Scheduled Assignee undertaken pursuant to Section 4(b).

          (c) Notwithstanding the foregoing, in the event that the General
     Partner, pursuant to Section 8.6.B of the Agreement, elects to assume
     directly and satisfy a Redemption Right exercised by a Contributor or a
     Scheduled Assignee (a "Tendering Limited Partner"), the General Partner
     shall assume the obligation of the Tendering Limited Partner pursuant to
     Section 4(b) above with respect to the WRP Units transferred to the General
     Partner by such Tendering Limited Partner; provided, however, that if the
     adjustment to the Carrying Values of Partnership Assets and the related
     adjustments to the Capital Accounts of the Partners pursuant to Section 2
     hereof and Section 1.D of Exhibit B to the Agreement that would have been
     undertaken pursuant to Section 2 hereof had the Partnership satisfied the
     Redemption Right exercised by such Tendering Limited Partner would have
     resulted in the Capital Account of the Tendering Limited Partner having a
     zero or positive balance, then, with respect to such WRP Units acquired
     from the Tendering Limited Partner, the General Partner shall have no
     obligation pursuant to Section 4(b) hereof with respect to a liquidation of
     the Partnership or a liquidation of the Partnership Interest reflected by
     such WRP Units that occurs more than twelve months following the
     acquisition of such WRP Units by the General Partner.

                                      E-3-3
<PAGE>   173

          (d) In the event that the liquidation of the Partnership Interest of a
     Tendering Limited Partner, other than in connection with the liquidation of
     the Partnership, would trigger an obligation pursuant to Section 4(b)
     hereof to contribute an amount to the Partnership, then the Net Income of
     the Partnership for the portion of such year ending on the Specified
     Redemption Date with respect to such Tendering Limited Partner shall be
     specially allocated to such Tendering Limited Partner in the amount
     necessary to eliminate the deficit balance in its Capital Account remaining
     after all other adjustments for such year (including any adjustments made
     pursuant to Section 1.D of Exhibit B to the Agreement).

     5. Maintenance of Recourse Debt.  The Partnership shall maintain unsecured
liabilities as to which the creditor has recourse to the General Partner,
including any such unsecured recourse liabilities (as to which the creditor has
recourse to the General Partner in its capacity as General Partner) of any other
entity that is allocable to the Partnership, in an aggregate amount not less
than the amount necessary such that: (a) prior to the distribution by WRAM and
WRH of WRP Units issued to them pursuant to the Contribution Agreement, the
amount of Partnership recourse liabilities allocated to each of WRAM and WRH
shall be not less than its DRO Amount; and (b) following the distribution by
WRAM and WRH of WRP Units issued to them pursuant to the Contribution Agreement,
the amount of Partnership recourse liabilities allocated directly or indirectly
to all Scheduled Assignees and Second-Tier Partners shall be not less than the
sum of their respective DRO Amounts and Partner Contribution Amounts. In making
such determination, the Partnership shall take into account any and all
allocations of Partnership recourse liabilities to other Partners by reason of
any guarantees, indemnities, restoration obligations or other, similar
arrangements with respect to any such Partners, and the liability by reason of
any such Partner's status as a general partner of the Partnership.

     6. Amendments.  Notwithstanding any provision in the Agreement to the
contrary, the provisions hereof and of the Third Prior Amendment may be waived
or amended or otherwise modified with the prior written consent of holders of
more than fifty percent (50%) of the WRP Units at the time outstanding and
without the consent of any other Limited Partner.

                                      E-3-4
<PAGE>   174

                                   SCHEDULE 1

                  SCHEDULED ASSIGNEES AND SECOND-TIER PARTNERS

<TABLE>
<CAPTION>
                                                                  DRO AMOUNT/
                    SCHEDULED ASSIGNEES/                      PARTNER CONTRIBUTION
                    SECOND-TIER PARTNERS                             AMOUNT
                    --------------------                      --------------------
<S>                                                           <C>
Runstad, H. Jon.............................................       (4,254,441)
Grousemount Associates......................................       (1,770,549)
Norberg, Douglas E..........................................       (1,551,346)
Nordby, Jon F...............................................         (593,282)
WRAM Inc....................................................       (2,704,060)
Allsop Inc..................................................       (2,608,769)
Atkin, Jeffrey..............................................          (65,221)
Bacon, David L..............................................          (50,842)
Blumenthal, Herman..........................................         (130,441)
Brinsley, John L............................................          (50,843)
Carr, Nancy.................................................          (64,912)
Cleveland T.E...............................................          (65,222)
Crowl, John S...............................................         (130,445)
Danz, Fredric A.............................................         (608,394)
Dingfield, Brabara J........................................       (1,329,940)
Fischer, Robert W...........................................          (50,845)
Flynn, Frank................................................         (260,876)
Flynn, Michael T............................................       (2,420,379)
Foster, Thomas B............................................         (801,449)
Ganahl, Timothy H...........................................         (130,446)
Green, Mark S...............................................         (130,443)
Griffin, J. Michael.........................................         (130,444)
Grousemount Associates......................................       (7,372,126)
Hanson, Peter C.............................................          (65,220)
Heeseman, Tex...............................................          (50,845)
Helsell Partnership.........................................         (108,388)
Helsell, Robert M...........................................         (280,007)
Isham, Martha E.............................................         (183,943)
Kosmos, George C. Jr........................................         (282,280)
Leendersten, Howard V.......................................         (738,833)
Margulis, Valerie L.........................................         (426,318)
Morbeck, John P.............................................         (130,445)
Newell, Christopher A.......................................         (295,017)
Nolan, James L..............................................          (50,845)
Norberg, Douglas E..........................................       (3,518,589)
Nordby, Jon F...............................................       (2,720,052)
Pappas, Theodore R..........................................         (130,445)
Parker, Victor E............................................         (738,834)
Penny, John D. Jr...........................................         (130,442)
Phelps, Margaret P..........................................         (256,141)
Pigott, James C. Family PS..................................         (608,393)
Rozner, Evelyne and Griffin, Matthew J......................       (2,084,177)
Runstad, H. Jon.............................................      (10,800,978)
Scheumann, Theiline P.......................................       (2,401,958)
Schuchart Partnership.......................................       (9,286,144)
Schuchart, George S.........................................         (453,335)
Skinner, Jean Enerson.......................................         (130,443)
</TABLE>

                                      E-3-5
<PAGE>   175

<TABLE>
<CAPTION>
                                                                  DRO AMOUNT/
                    SCHEDULED ASSIGNEES/                      PARTNER CONTRIBUTION
                    SECOND-TIER PARTNERS                             AMOUNT
                    --------------------                      --------------------
<S>                                                           <C>
Stansbury, M.E..............................................          (65,220)
Stearns, Kathlyn............................................         (295,017)
Stroum, Cynthia.............................................         (565,070)
Stuart, E. Hadley Jr........................................       (1,825,169)
Stuart, Marian B............................................       (1,216,770)
Taber, Andrew J.............................................         (225,585)
Taylor, William C...........................................         (496,317)
Trainer, Stevens U..........................................       (1,033,889)
Wayte, Alan.................................................          (50,845)
Whalen, Jerome D............................................         (190,605)
Windhover Associates........................................         (125,384)
Wright Runstad & Company....................................         (729,314)
Wyckoff, Ann P..............................................       (1,192,385)
Wyckoff, Paul...............................................          (54,446)
Wyckoff-Dickey, Sheila......................................          (43,181)
Wyman, David C..............................................         (738,833)
Wyman, Polly R..............................................         (434,094)
Ackerman G.N................................................           (3,723)
Ahearne T...................................................           (2,241)
Aherne P.L..................................................           (5,247)
Anderson D..................................................           (2,685)
Alston C....................................................             (618)
Berg B.J....................................................           (4,744)
Blanchard J.T...............................................          (54,556)
Bohannon M..................................................           (2,051)
Brandeberry M.E.............................................          (17,141)
Bristol J.B.................................................             (750)
Butler D.V..................................................           (4,920)
Chapman F.L.................................................          (41,845)
Clark B.....................................................           (2,716)
Coffey B....................................................           (1,069)
Coulson E.R.................................................           (4,464)
Cullen J.J..................................................           (4,830)
Dean R......................................................             (758)
Diercks R.J.................................................          (63,006)
DIiJulio P.S................................................           (3,598)
Dixon T.E...................................................           (1,736)
Ehrlichman P.S..............................................          (21,820)
Ellis W.H...................................................           (3,525)
Erxleben W.C................................................           (1,755)
Filer T.J...................................................           (2,006)
Fluhrer G.E.................................................          (49,462)
Foreman L.L.................................................           (2,914)
Foster T.B..................................................         (139,362)
Gaffiney J.M................................................          (62,317)
Galloway J..................................................           (1,129)
Gleaves C...................................................           (3,066)
Graybeal L.E................................................           (2,638)
Hall, C.M...................................................          (93,138)
Hendrickson J...............................................           (3,209)
</TABLE>

                                      E-3-6
<PAGE>   176

<TABLE>
<CAPTION>
                                                                  DRO AMOUNT/
                    SCHEDULED ASSIGNEES/                      PARTNER CONTRIBUTION
                    SECOND-TIER PARTNERS                             AMOUNT
                    --------------------                      --------------------
<S>                                                           <C>
Hill G.R....................................................           (4,135)
Howorth D.B.................................................           (2,613)
Israel A.D..................................................          (13,854)
Jackson D.E.................................................           (3,120)
Keefe R.E...................................................          (92,690)
Keehnel S.K.................................................           (5,979)
Kennedy P.F.................................................          (22,914)
Koslow A....................................................             (759)
Lee L.N.....................................................           (2,365)
Loacker L.J.................................................           (5,671)
Mack G......................................................           (5,530)
Macleod J.W.................................................           (2,749)
Magnano M.J.................................................          (43,651)
Marcy D.E...................................................           (2,531)
Martin L.C..................................................           (3,080)
Matson D.D..................................................         (116,291)
Mcconaughy B.A..............................................           (4,758)
Mc Cullough J.C.............................................             (267)
Mellem R....................................................           (2,569)
Morrow A.J..................................................           (3,440)
Murray M.K..................................................          (14,101)
Myklebust R.A...............................................           (1,123)
Nielsen M.J.................................................             (180)
Noll J.B....................................................          (25,934)
Nomellini C.P...............................................          (57,947)
Palmer D.S..................................................          (50,680)
Pepper L.H..................................................          (42,303)
Prince D.R..................................................           (4,289)
Redman A.M..................................................          (41,769)
Rheaume W.J.................................................           (2,778)
Rieke P.V...................................................           (2,881)
Roberts K.E.................................................           (6,033)
Runstad J.M.................................................          (31,986)
Russell B.L.................................................           (5,855)
Sandler M.D.................................................           (6,704)
Schweet L.S.................................................           (1,200)
Seidel R....................................................           (1,262)
Serkin B.P..................................................           (1,794)
Silvey M....................................................           (3,025)
Spitzer H...................................................           (5,318)
Stansbury M.E...............................................           (9,304)
Stone V.R...................................................          (44,495)
Sweeney D.B.................................................           (3,833)
Thieme D....................................................           (2,631)
Tonkin W.G..................................................           (4,370)
Utevsky D...................................................           (5,089)
Vaska M.....................................................           (2,240)
Voorhees L.R................................................           (5,427)
Washburn J.T................................................           (2,868)
Whalen J.D..................................................          (80,770)
</TABLE>

                                      E-3-7
<PAGE>   177

<TABLE>
<CAPTION>
                                                                  DRO AMOUNT/
                    SCHEDULED ASSIGNEES/                      PARTNER CONTRIBUTION
                    SECOND-TIER PARTNERS                             AMOUNT
                    --------------------                      --------------------
<S>                                                           <C>
Whiteley K..................................................           (8,925)
Whitford J.P................................................          (15,963)
Wilson D.R..................................................           (6,527)
Winberry P.B................................................           (2,609)
Winter D.S..................................................           (3,114)
Wolfe C.R...................................................           (1,417)
Wright C.W..................................................           (3,295)
                                                                  -----------
Total.......................................................      (73,887,963)
                                                                  ===========
</TABLE>

                                      E-3-8
<PAGE>   178

                                  EXHIBIT E-4

                             (GALBREATH AGREEMENT)

BACKGROUND

     On April 21, 1998, Galbreath-Denver Limited Partnership, an Ohio limited
partnership ("Galbreath") and 1560 Broadway Partnership, a Colorado general
partnership ("Broadway") (collectively the "Additional Limited Partners") each
was issued 1,684 Class B Units (referred to as the "Galbreath and Broadway
Units"). In connection with the issuance of the Galbreath and Broadway Units, a
Prior Addendum dated as of April 21, 1998, to the Original Partnership
Agreement, which set forth specific agreements regarding certain additional
rights and obligations of the Additional Limited Partners, was executed. Such
specific agreements are described below.

     All capitalized terms used in this Exhibit E-4 and not otherwise defined
shall have the meanings assigned in the Agreement.

SPECIFIC AGREEMENTS

     Notwithstanding any other provision of the Agreement to the contrary, upon
liquidation of the Partnership, each of the Additional Partners shall be
required to contribute to the Partnership the deficit balance in such party's
Capital Account computed in accordance with Sections 1.752-2(b)(1) and (2) of
the Regulations; provided, however, that such contribution obligation shall not
exceed the amount by which the recourse obligations of the Partnership exceed
the assets of the Partnership available to satisfy such recourse obligations and
shall not exceed $4,154,000 with respect to Galbreath and the lesser of the
deficit balance in Broadway's Capital Account in "owner" at the date of
"closing" reduced by any income allocated to Broadway after the date of Closing
or $10,500,000 with respect to Broadway (collectively, the "Deficit
Obligation"). Each of the Additional Limited Partners specifically waives any
right of contribution or subrogation with respect to such Deficit Obligation and
neither the General Partner nor any other Partner or other Person shall be
required to reimburse the Additional Limited Partners for such contributions.
Upon payment of such Deficit Obligation, each Additional Limited Partner's
Capital Account shall be credited with such payment. Amounts paid to the
Partnership pursuant to the Deficit Obligation shall be used to satisfy the
recourse obligations of the Partnership.

     Upon the sale, redemption, conversion or other disposition of the Galbreath
and Broadway Units received by any Additional Limited Partner, the Deficit
Obligation of such Additional Limited Partner shall be reduced in an amount
equal to the percentage of the Galbreath and Broadway Units owned by such
Additional Limited Partner which were sold, redeemed, converted or otherwise
disposed of by such Additional Limited Partner, and upon the sale, redemption,
conversion or other disposition of all the Galbreath and Broadway Units received
by any Additional Limited Partner, the Deficit Obligation shall be terminated
with respect to such Additional Limited Partner. Nothing in this Exhibit E-4
shall in any way effect the sale, exchange or conversion rights of the
Additional Limited Partners under the Agreement or this Exhibit E-4.

     In the case of Galbreath only, certain partners of Galbreath shall execute
and deliver to the Partnership, and the Partnership shall accept, a Guarantee in
the form agreed to by such Galbreath partners and the Partnership.
<PAGE>   179

                                  EXHIBIT E-5

                          (PALO ALTO SQUARE AGREEMENT)

BACKGROUND

     Pursuant to a closing under that certain Contribution Agreement dated
September 28, 1999, by and between Palo Alto Square Limited Partnership, an
Illinois limited partnership, ("Contributor") and the General Partner (the
"Contribution Agreement"), Contributor was issued 1,012,623 Class B Units
(referred to as the "Contributor Units") in exchange for certain real property
interests described in the Contribution Agreement (the "Property"). Contributor
has assigned the Contributor Units to the Equity Holders (as defined below). In
connection with the issuance of Contributor Units, the Tenth Prior Amendment to
the Original Partnership Agreement, which set forth specific agreements
regarding certain additional rights and obligations of the Contributor and its
constituent partners as set forth on Schedule 1 to such Tenth Prior Amendment
(the "Equity Holders"), was executed. Such specific agreements are described
below.

     All capitalized terms used in this Exhibit E-5 and not otherwise defined
shall have the meanings assigned in the Agreement.

SPECIFIC AGREEMENTS

     1. Right to Assign.  Notwithstanding any other provision of this Exhibit
E-5 or of the Agreement, the Equity Holders shall have the right to assign all
or any portion of their Contributor Units, together with any and all other
rights of the Equity Holders pursuant to this Exhibit E-5 or the Agreement, to
one or more of the constituent partners or shareholders, members, partners or
beneficiaries of constituent partners of the Equity Holders as of October 1,
1999, whether direct or indirect, without the need for the consent of the
General Partner or Limited Partners and without being subject to the right of
first refusal set forth in Section 11.3.A(a) of the Agreement, but in each case
subject to the restrictions and conditions set forth in Sections 11.3.C, 11.3.D,
11.3.E, 11.6.E and 11.6.F of the Agreement. Upon the delivery of written notice
of such an assignment to the General Partner, each assignee of Contributor Units
pursuant to the immediately preceding sentence shall be admitted to the
Partnership as a Substituted Limited Partner owning the Contributor Units so
assigned and having all of the rights of a Limited Partner under the Agreement
and this Exhibit E-5, subject only to such assignee executing and delivering to
the Partnership an acceptance of all of the terms and conditions of the
Agreement and such other documents or instruments as the General Partner may
reasonably require to effect such admission, in accordance with Section 11.4.B
of the Agreement. Each permitted assignee of any of the Contributor Units,
issued to the Contributor pursuant to the Contribution Agreement and
subsequently transferred to the Equity Holders, that is admitted as a
Substituted Limited Partner in accordance with this Section 1 or Article XI of
the Agreement, for so long as such Person owns any such Contributor Units, is
referred to in this Exhibit E-5 as an "Indirect Equity Holder." Upon
satisfaction of the condition described in the second sentence of this Section
1, the General Partner shall amend Exhibit A to the Agreement in the manner
described in Section 11.4.C of the Agreement. For purposes of Section 8.6 of the
Agreement, each Equity Holder and Indirect Equity Holder shall be entitled to
exercise its right to require the Partnership to redeem all or any portion of
the Contributor Units assigned to it by an Equity Holder at any time on or after
October 1, 1999.

     2. Adjustments to Carrying Values.  (a) The Carrying Values of the Assets
of the Partnership shall be adjusted in accordance with the procedures described
in Section 1.D of Exhibit B to the Agreement; provided, however, that in order
to minimize the administrative burden associated with the adjustments required
by this Section 2(a) in connection with the distribution of the Cash Amount to
an Equity Holder or an Indirect Equity Holder, the Partnership shall make the
adjustments to the Carrying Values of the Partnership's assets (and the
resulting adjustments to the Capital Accounts of the Partners) only upon the
happening of the most material event during the calendar year that is described
in Section 1.D(2) of Exhibit B to the Agreement (the "Annual Adjustment") and;
provided further that upon the distribution
<PAGE>   180

of the Cash Amount to an Equity Holder or an Indirect Equity Holder or, at the
option of the General Partner, upon the occurrence of any other event described
in Section 1.D(2) of Exhibit B to the Agreement, that occurs during any year
other than as of the date of the Annual Adjustment, the Partnership shall, at
the time of such distribution, make adjustments to the Carrying Values of the
Partnership's assets in accordance with the procedures described in Section 1.D
of Exhibit B to the Agreement for purposes of adjusting the Capital Account of
an Equity Holder, or such Indirect Equity Holder who has exercised his
Redemption Right or such other affected Partner, but no such adjustments shall
be necessary at such time with respect to the Capital Account balances of
Partners who remain Partners through the date of the Annual Adjustment or are
otherwise not directly affected by any such other event.

          (b) Any determination of the fair market value of Partnership assets
     pursuant to Section 1.D of Exhibit B to the Agreement (for purposes of
     calculating Unrealized Gain or, Unrealized Loss), with respect to adjusting
     the Carrying Values of Partnership assets in connection with the exercise
     of Redemption Rights by an Equity Holder or any Indirect Equity Holder
     shall be made by assuming that the aggregate fair market value of all
     Partnership assets is equal to the aggregate Cash Amount that would be
     distributed by the Partnership if all Partnership Units held by all
     Partners (including the General Partner) were redeemed in exchange for the
     Cash Amount with respect to each such Partnership Unit at such time,
     provided, however, such valuation methodology shall not be utilized for
     purposes of determining the fair market value of the Partnership's assets
     with respect to any such exercise of Redemption Rights in contemplation of
     an assignment by or reorganization of the Partnership for the benefit of
     creditors and any liquidation of the Partnership related thereto or
     following the filing by (or in contemplation of a filing) by the
     Partnership of a case under Title 11 of the U.S. Code.

     3. Allocations.  Notwithstanding the provisions of Section 2.C of Exhibit C
to the Agreement, for purposes of allocating, items of income, gain, loss and
deduction with respect to the Property in the manner required by Section 704(c)
of the Code, the Partnership shall employ, and shall cause any entity controlled
by the Partnership which holds title to any of the Property to employ the
"traditional method" as set forth in Regulation Section 1.704-3(b).

     4. Obligation to Restore Deficit Capital Accounts.  (a) For purposes of
this Section 4, the following terms shall have the meanings set forth below:

             (i) "Protected Amount" means, with respect to any Protected
        Partner, an amount equal to (i) the taxable gain, if any, that would be
        realized by such Protected Partner if such Partner were to dispose of
        its Partnership Interests for no consideration other than the release or
        deemed release of liabilities of the Partnership assumed by or otherwise
        allocable to such Partner under Code Section 752, as such hypothetical
        gain is determined from time to time, less (ii) such Partner's share of
        "qualified nonrecourse financing" as defined in Code Section 465(b)(6)
        and the Regulations thereunder, as such share is determined from time to
        time in accordance with Regulations Section 1.752-3(a). The Protected
        Amount allocable to any Protected Partner may be modified from time to
        time by an amendment to the Agreement or by execution of a written
        instrument by and between such Protected Partner and the General
        Partner, acting on behalf of the Partnership and without the prior
        written consent of any other Partner (whether or not Protected
        Partners).

             (ii) "Protected Partner(s)" means that or those Limited Partner(s)
        designated as Protected Partner(s) on Exhibit A attached to the Tenth
        Prior Amendment, as such designation may be modified from time to time
        by the General Partner, whether by express amendment to the Agreement or
        by execution of a written instrument by and between any Protected
        Partner(s) and the General Partner, acting on behalf of the Partnership
        and without the prior consent of other Limited Partners (whether or not
        Protected Partners). For purposes hereof, any successor, assignee, or
        transferee of Partnership Interests from a Protected Partner, which
        successor,

                                      E-5-2
<PAGE>   181

        assignee or transferee determines its basis in such Units by reference
        to the basis of the predecessor, assignor or transferor Protected
        Partner, shall be considered a Protected Partner.

          (b) Notwithstanding any provision of the Partnership Agreement to the
     contrary (including, without limitation, the second sentence of Section
     13.3 of the Partnership Agreement), upon liquidation of the Partnership or
     upon the liquidation of the Partnership Interest of a Protected Partner,
     such Protected Partner whose interest is being liquidated shall contribute
     to the Partnership in accordance with Treasury Regulation Section
     1.704-1(b)(2)(ii)(b)(2), the deficit balance, if any, in its Capital
     Account, calculated after the allocation for such year of all items of Net
     Income, Net Losses, Gross Income and Unrealized Gain or Unrealized Loss
     allocated in accordance with Section 6.1 of the Agreement, Section 1.D of
     Exhibit B to the Agreement, provided, however, that in no event shall such
     contribution obligation for any Protected Partner exceed such Protected
     Partner's Protected Amount. The obligation created pursuant to this Section
     4(b) shall be for the benefit of the Partnership, the General Partner, the
     creditors of the Partnership or any other person to whom any debts,
     liabilities or obligations are owed by (or who otherwise has any claim
     against) the Partnership or the General Partner in its capacity as general
     partner of the Partnership and shall be enforceable by such parties. Each
     Protected Partner unconditionally and irrevocably waives any subrogation,
     reimbursement or similar rights to which it might otherwise be entitled as
     the result of its performance with respect to the obligation pursuant to
     this Section 4(b), whether such rights arise with respect to the
     Partnership, another Partner of the Partnership or a third party; provided,
     however, that the General Partner shall in all events be entitled to
     enforce the contribution obligation of a Protected Partner undertaken
     pursuant to Section 4(b). Notwithstanding anything herein to the contrary,
     the obligation of a Protected Partner to contribute amounts pursuant to
     this paragraph shall continue in full force and effect in accordance with
     the terms hereof until one year following the transfer or other disposition
     by such Protected Partner of its Partnership Interests unless the
     Partnership and such Protected Partner agree otherwise. Unless expressly
     agreed by the Partnership and the affected holders of Contributor Units to
     the contrary in this or any other agreement, no holder of Contributor Units
     who is not a Protected Partner shall have any obligation to contribute
     amounts to the Partnership.

     5. Amendments.  Notwithstanding any provision in the Agreement to the
contrary, the provisions of the Tenth Prior Amendment may be waived or amended
or otherwise modified with the prior written consent of holders (being either
the Equity Holders and/or the Indirect Equity Holders) of more than seventy-five
percent (75%) of the Contributor Units at the time outstanding and without the
consent of any other Limited Partner.

                                      E-5-3
<PAGE>   182

                                  EXHIBIT E-6

                            (CORNERSTONE AGREEMENT)

BACKGROUND

     In connection with the closing of the merger of Cornerstone Properties
Limited Partnership ("Cornerstone Partnership") with and into the Partnership on
          , 2000, (the "Cornerstone Merger") pursuant to the Agreement and Plan
of Merger, dated as of February 11, 2000, as amended, among the General Partner,
the Partnership, Cornerstone Properties Inc. and Cornerstone Partnership (the
"Merger Agreement"), certain former limited partners of Cornerstone Partnership
who became Limited Partners as a result of the Cornerstone Merger (referred to
as "Former Cornerstone Limited Partners") have elected to become Protected
Partners and, as a group, the Former Cornerstone Limited Partners have been
given the right to increase their Protected Amount after the closing of the
Cornerstone Merger, subject to a specified aggregate dollar limitation. In
addition, the Partnership and Cornerstone Partnership entered into certain other
agreements with respect to tax matters that affect the Former Cornerstone
Limited Partners. The specific agreements between the Partnership and
Cornerstone Partnership with respect to these various matters are described
below.

     All capitalized terms used and not otherwise defined in this Exhibit E-6
shall have the meanings assigned in the Agreement.

SPECIFIC AGREEMENTS

     1. Election by Certain Former Cornerstone Limited Partners to Undertake
Deficit Restoration Obligation.  Each Former Cornerstone Limited Partner who,
prior to the closing of the Cornerstone Merger, had entered into an agreement
with Cornerstone Partnership to bear the economic risk of loss as to a portion
of Cornerstone Partnership's recourse indebtedness by undertaking the obligation
to restore a portion of its negative capital account balance upon liquidation of
such Former Cornerstone Limited Partner's interest in Cornerstone Partnership
was given the opportunity to become a Protected Partner with a Protected Amount
in an amount equal to the maximum amount such Former Cornerstone Limited Partner
was obligated to restore to Cornerstone Partnership immediately prior to the
closing of the Cornerstone Merger; provided, however, that except as set forth
in Paragraphs 2 and 3, below, no Former Cornerstone Limited Partner has the
right to increase its Protected Amount following the Cornerstone Merger. The
Former Cornerstone Limited Partners who have elected to become Protected
Partners under such provision of the Merger Agreement, along with their
specified Protected Amounts as of the closing of the Cornerstone Merger, are set
forth on Schedule 1 to this Exhibit E-6.

     2. Election by Former Cornerstone Limited Partners to Increase Protected
Amount.  Notwithstanding the proviso in Paragraph 1, above, Former Cornerstone
Limited Partners may, at any time following the Cornerstone Merger, elect to
become Protected Partners and/or increase their Protected Amounts (as determined
immediately prior to the Cornerstone Merger), as a group, by an aggregate amount
of up to [$50 million, reduced by the amount of any increases to the amounts
that such former limited partners of Cornerstone Partnership were obligated to
restore to Cornerstone Partnership that occurred during the period commencing on
February 11, 2000, and ending at the closing of the Cornerstone Merger/verify
any increases and insert fixed sum at the time of the Merger].

     3. Effect of Other Agreements With Former Cornerstone Limited
Partners.  Pursuant to the Merger Agreement, the Partnership assumed certain
obligations of Cornerstone Partnership made pursuant to agreements that were
listed as "tax protection agreements" on Schedule 2.18(j) to the Cornerstone
Disclosure Letter, as defined in the Merger Agreement, a copy of which is
attached as Schedule 2 to this Exhibit E-6 (the "Cornerstone Tax Protection
Agreements"). To the extent that the Cornerstone Tax Protection Agreements
included a right to enter into deficit restoration obligations with respect to
Cornerstone Partnership, such Former Cornerstone Limited Partners who are
beneficiaries of such Cornerstone Tax Protection Agreements are Protected
Partners and have Protected Amounts as provided in the Cornerstone Tax
Protection Agreements. Notwithstanding the limitations in Paragraphs 1 and 2
<PAGE>   183

above, the Protected Partners who are beneficiaries of the Cornerstone Tax
Protection Agreements shall have the right to increase their Protected Amounts
if and to the extent provided in the applicable Cornerstone Tax Protection
Agreement and the amount of any such increase shall not be taken into account in
applying the limitation in Paragraph 2. The Former Cornerstone Limited Partners
who are or have the right to become Protected Partners pursuant to the
Cornerstone Tax Protection Agreements, along with their specified Protected
Amounts (or the maximum Protected Amount that they are entitled to elect, as
noted therein) are set forth on Schedule 3 to this Exhibit E-6.

     4. Request to Increase Amount of Deficit Restoration Obligation.  The
Partnership shall consider in good faith a request from a Former Cornerstone
Limited Partner to become a Protected Partner and/or to increase its Protected
Amount, as applicable, from time to time after the Cornerstone Merger if such
Former Cornerstone Limited Partner shall provide information from its
professional tax advisor satisfactory to the Partnership showing that, in the
absence of such increased Protected Amount, such Limited Partner likely would
not be allocated from the Partnership sufficient indebtedness under Section 752
of the Code and the at-risk provisions under Section 465 of the Code to avoid
the recognition of gain (other than gain required to be recognized by reason of
actual cash distributions from the Partnership). The Partnership and its
professional tax advisors shall cooperate in good faith with such Former
Cornerstone Limited Partner and its professional tax advisor to provide such
information regarding the allocation of the Partnership liabilities and the
nature of such liabilities as is reasonably necessary in order to determine the
Former Cornerstone Limited Partner's adjusted tax basis in its Partnership
Interest and at-risk amount. In deciding whether or not to grant such a request,
the Partnership shall be entitled to take into account all factors related to
the Partnership, including, without limitation, the existing and anticipated
debt structure of the Partnership, the tax situations of all other Partners,
including the General Partner (individually and as a group), and the effect that
granting such a request might have on their tax situation, and the anticipated
long-term business needs of the Partnership. The Partnership's only obligation
with respect to any such request from a Former Cornerstone Limited Partner
pursuant to this Paragraph 4 shall be to act in good faith. In the event the
Partnership fails to act in good faith with respect to any such request, the
exclusive remedy of the Former Cornerstone Limited Partner who made such request
shall be an action for specific performance, with no entitlement to monetary
damages.

     5. Manner of Electing to Become a Protected Partner or To Increase
Protected Amount.  A Former Cornerstone Limited Partner who pursuant to the
rights set forth under the other Paragraphs of this Exhibit E-6, wishes to
become a Protected Partner or, if already a Protected Partner, to increase its
Protected Amount, shall provide a written notice to the General Partner
specifying the desired Protected Amount. If such election is made pursuant to
Paragraph 2, such election shall become effective upon the receipt thereof by
the General Partner unless (i) the General Partner determines that the
limitation set forth in Paragraph 2 would be exceeded by reason of such
election, or (ii) the General Partner reasonably determines, based on the advice
of its tax advisors and after consulting with the Former Cornerstone Limited
Partner and its tax advisors, that the amount specified in such Former
Cornerstone Limited Partner's election substantially exceeds the amount
necessary to cause such Former Cornerstone Limited Partner to be allocated
sufficient Partnership liabilities under Section 752 of the Code (taking into
account the effect of anticipated reductions in Partnership debt on such Former
Cornerstone Limited Partner's allocable share of Partnership liabilities) to
cover such Former Cornerstone Limited Partner's "negative tax capital account"
and reasonably projected changes therein. If such election is pursuant to a
Cornerstone Tax Protection Agreement, such election shall become effective upon
the receipt thereof by the General Partner unless the General Partner reasonably
determines, based on the advice of its tax advisors and after consulting with
the Former Cornerstone Limited Partner and its tax advisor, that such Former
Cornerstone Limited Partner does not have the right to undertake such election
without the consent of the General Partner. If such election is not pursuant to
Paragraph 2 or a Cornerstone Tax Protection Agreement (or such election does not
become effective pursuant to the provisions of one of the two preceding
sentences), such election shall be deemed to be a request pursuant to Paragraph
4 of this Exhibit E-6 and shall become effective only upon approval by the
General Partner in accordance with the provisions of the Paragraph 4. Upon
becoming effective, such election shall be irrevocable, cannot be

                                      E-6-2
<PAGE>   184

reduced, and shall be binding upon successive transferees of the Former
Cornerstone Limited Partner except as provided in Section 13.3 of the Agreement.

     6. No Obligation of the Partnership to Maintain Recourse
Debt.  Notwithstanding any obligations of the Partnership referred to in this
Exhibit E-6, the Partnership shall not be obligated to maintain any level of
indebtedness that qualifies as a Recourse Liability or Partner Nonrecourse Debt
in excess of the amounts otherwise specifically required to be maintained under
the Cornerstone Tax Protection Agreements assumed by the Partnership pursuant to
the Merger Agreement.

     7. Amendments of Exhibit E; Designation as Part II Protected Partners.  All
Protected Partners and their respective Protected Amounts as provided in this
Exhibit E-6 shall be reflected on Exhibit E, which shall be amended from time to
time as necessary to reflect any additional Protected Partners and/or increases
in Protected Amounts made pursuant to paragraphs 2, 3, or 4, above. Former
Cornerstone Partnership Limited Partners who are or become Protected Partners
pursuant to the provisions of this Exhibit E-6 shall be designated on Exhibit E
as Part II Protected Partners; provided, however, that any Former Cornerstone
Limited Partner who is only obligated to restore a deficit in its capital
account upon liquidation of the Partnership pursuant to a Cornerstone Tax
Protection Agreement shall be designated on Exhibit E as a Part I Protected
Partner.

     8. Section 704(c) Method.  Notwithstanding Paragraph 2.C. of Exhibit C, the
Partnership shall use the "traditional method" under Regulations Section
1.704-3(b) for purposes of making allocations under Section 704(c) of the Code
with respect to each property in which Cornerstone Partnership owns a direct or
indirect interest at the time of the Cornerstone Merger (the "Cornerstone
Properties") to take into account the Book-Tax Disparities as of the effective
time of the Cornerstone Merger with respect to the Cornerstone Properties, with
no "curative allocations" to offset the effect of the "ceiling rule," except to
the extent that the Partnership expressly would be required to use a different
method under a Cornerstone Tax Protection Agreement assumed by the Partnership
pursuant to the Merger Agreement. The 704(c) Values of the Cornerstone
Properties shall be as determined by agreement between Cornerstone Partnership
and the Partnership prior to the effective time of the Cornerstone Merger, or in
the absence of such agreement, as determined by the General Partner using such
reasonable method of valuation as it shall adopt.

     9. Allocations of "Tier 3" Nonrecourse Liabilities Pursuant to Regulations
Section 1.752-3(a)(3). Unless, and only to the extent, expressly provided
otherwise in the Cornerstone Tax Protection Agreements assumed by the
Partnership pursuant to the Merger Agreement, and notwithstanding Section 6.1.C.
of the Agreement, the Partnership shall determine in its reasonable discretion
the method to be used for allocating "excess nonrecourse liabilities" of the
Partnership pursuant to Regulations Section 1.752-3(a)(3) following the
Cornerstone Merger, provided that (i) the Partnership shall not use with respect
to the Former Cornerstone Limited Partners a method that is less favorable than
the method used by the Partnership with respect to the other Limited Partners of
the Partnership who are not parties to an express agreement specifying a
particular method to be used for such purposes, and (ii) in the case of a Former
Cornerstone Limited Partner who, prior to the Cornerstone Merger, had been
specially allocated a portion of a Cornerstone Partnership nonrecourse liability
secured by a property with respect to which such Cornerstone Partner has a
built-in gain under Section 704(c) of the Code to take into account such Former
Cornerstone Limited Partner's share of such built-in gain that was not taken
into account in making the allocation of such liability by Cornerstone
Partnership under Regulations Section 1.752-3(a)(2), the Partnership shall
continue such method of allocating such liability following the Cornerstone
Merger.

                                      E-6-3
<PAGE>   185

                                  ATTACHMENT A

                           (SERIES A PREFERRED UNITS)

     In accordance with Sections 4.2.A and 4.2.D of the Partnership Agreement,
set forth below are the terms and conditions of the Series A Preferred Units
established and issued by the Partnership to the General Partner on December 19,
1997, in connection with the merger of Beacon Properties L.P. ("Beacon
Partnership") with and into the Partnership (the "Beacon Partnership Merger"),
in exchange for the then outstanding Series A Preferred Units of Beacon
Partnership (all of which had been acquired by the General Partner as a result
of the merger of Beacon Properties Corporation with and into the General
Partner). All capitalized terms used in this Attachment and not otherwise
defined shall have the meanings assigned in the Partnership Agreement.

     A. Designation and Number.  A series of Partnership Units, designated as
Series A Preferred Units, was established on December 19, 1997, on which date
8,000,0000 Series A Preferred Units were issued to the General Partner in the
Beacon Partnership Merger.

     B. Rank.  The Series A Preferred Units shall, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of the
Partnership, rank (a) senior to the Class A Units, Class B Units and all
Partnership Interests ranking junior to the Series A Preferred Units; (b) on a
parity with the Series B Preferred Units, the Series C Preferred Units, the
Series D Preferred Units and all Partnership Interests issued by the Partnership
the terms of which specifically provide that such Partnership Interests rank on
a parity with the Series A Preferred Units; and (c) junior to all Partnership
Interests issued by the Partnership the terms of which specifically provide that
such Partnership Interests rank senior to the Series A Preferred Units.

     C. Distributions.

     (i) Pursuant to Section 5.1 of the Partnership Agreement, holders of Series
A Preferred Units shall be entitled to receive, out of Available Cash,
cumulative preferential distributions of Available Cash at the rate of 8.98% of
the $25.00 liquidation preference per annum (equivalent to a fixed annual amount
of $2.245 per unit). Such distributions shall be cumulative from the last date
on which any distributions were paid with respect to the Series A Preferred
Units of Beacon Partnership for which the Series A Preferred Units were
exchanged in connection with the Beacon Partnership Merger and shall be payable
quarterly in arrears on or before March 15, June 15, September 15 and December
15 of each year or, if not a business day, the next succeeding business day
(each a "Series A Preferred Unit Distribution Payment Date"). Any distribution
payable on the Series A Preferred Units for any partial distribution period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.

     (ii) No distributions on Series A Preferred Units shall be authorized or
paid or set apart for payment at such time as the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, prohibits such authorization, payment or setting apart for payment
or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof, or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.

     (iii) Notwithstanding the foregoing, distributions with respect to the
Series A Preferred Units will accrue whether or not the terms and provisions set
forth in Section C.(ii) of this Attachment A at any time prohibit the current
payment of distributions, whether or not there is sufficient Available Cash for
such distributions and whether or not such distributions are authorized. Accrued
but unpaid distributions on the Series A Preferred Units will accumulate as of
the Series A Preferred Unit Distribution Payment Date on which they first become
payable.

     (iv) When distributions are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series A Preferred Units and any
other Partnership Interests ranking on a parity as to distributions with the
Series A Preferred Units, all distributions authorized upon the Series A
Preferred Units and any other Partnership Interests ranking on a parity as to
distributions with the Series A Preferred Units shall be authorized pro rata so
that the amount of distributions authorized per Partnership

                                       A-1
<PAGE>   186

Unit of Series A Preferred Units and such other Partnership Interests shall in
all cases bear to each other the same ratio that accrued distributions per
Partnership Unit on the Series A Preferred Units and such other Partnership
Interests (which shall not include any accrual in respect of unpaid
distributions for prior distribution periods if such other Partnership Interests
do not have a cumulative distribution) bear to each other. No interest, or sum
of money in lieu of interest, shall be payable in respect of any distribution
payment or payments on Series A Preferred Units which may be in arrears.

     (v) Except as provided in Section C.(iv) of this Attachment A, unless full
cumulative distributions on the Series A Preferred Units have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for payment for all past distribution periods
and the then current distribution period, no distributions (other than in
Partnership Interests ranking junior to the Series A Preferred Units as to
distributions and upon liquidation) shall be authorized or paid or set aside for
payment nor shall any other distribution be authorized or made upon the Class A
Units, the Class B Units, or any other Partnership Interests ranking junior to
or on a parity with the Series A Preferred Units as to distributions or upon
liquidation, nor shall any Class A Units, Class B Units, or any other
Partnership Interests ranking junior to or on a parity with the Series A
Preferred Units as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such units or other
Partnership Interests) by the Partnership (except by conversion into or exchange
for Partnership Interests ranking junior to the Series A Preferred Units as to
distributions and upon liquidation).

     (vi) Holders of the Series A Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or Partnership Units in excess
of full cumulative distributions on the Series A Preferred Units as described
above. Any distribution payment made on the Series A Preferred Units shall first
be credited against the earliest accrued but unpaid distribution due with
respect to such Series A Preferred Units which remains payable.

     D. Allocations.  Allocations of the Partnership's items of income, gain,
loss and deduction shall be allocated among holders of Series A Preferred Units
in accordance with Article VI of the Agreement.

     E. Liquidation Preference.

     (i) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Partnership, the holders of Series A Preferred Units
then outstanding are entitled to be paid out of the assets of the Partnership
available for distribution to the Partners pursuant to Section 13.2.A of the
Agreement a liquidation preference of $25.00 per Series A Preferred Unit, plus
an amount equal to any accrued and unpaid distributions to the date of payment,
before any distribution of assets is made to holders of Class A Units, Class B
Units or any other Partnership Interests that rank junior to the Series A
Preferred Units as to liquidation rights.

     (ii) In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Partnership are
insufficient to pay the amount of the liquidating distributions on all
outstanding Series A Preferred Units and the corresponding amounts payable on
all other Partnership Interests ranking on a parity with the Series A Preferred
Units in the distribution of assets, then such assets shall be allocated among
the Series A Preferred Units, as a class, and each class or series of such other
such Partnership Interests, as a class, in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

     (iii) After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Series A Preferred Units will have no
right or claim to any of the remaining assets of the Partnership.

     (iv) The consolidation or merger of the Partnership with or into any other
partnership, corporation, trust or entity or of any other partnership,
corporation, trust or other entity with or into the Partnership or the sale,
lease or conveyance of all or substantially all of, the property or business of
the Partnership, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Partnership for purposes of this Section E.
                                       A-2
<PAGE>   187

     F. Redemption.  In connection with a redemption by the General Partner of
any or all of the Series A Preferred Shares of the General Partner, the
Partnership shall provide cash to the General Partner for such purpose which
shall be equal to redemption price of the Series A Preferred Shares to be
redeemed and one Series A Preferred Unit shall be canceled with respect to each
Series A Preferred Share so redeemed. From and after the date in which the
Series A Preferred Shares are redeemed, any Series A Preferred Units so canceled
shall no longer be outstanding and all rights hereunder, to distributions or
otherwise, with respect to such Series A Preferred Units shall cease.

                                       A-3
<PAGE>   188

                                  ATTACHMENT B

                           (SERIES B PREFERRED UNITS)

     In accordance with Sections 4.2.A and 4.2.D of the Agreement, set forth
below are the terms and conditions of the Series B Preferred Units established
and issued by the Partnership on February 19, 1998, in connection with the
issuance of Series B Preferred Shares by the General Partner. Capitalized terms
used herein and not otherwise defined shall have the meanings given to them in
the Agreement.

     A. Designation and Number.  A series of Partnership Units, designated as
Series B Preferred Units was established on February 19, 1998, on which date
6,000,000 Series B Preferred Units were issued to the General Partner.

     B. Rank.  The Series B Preferred Units shall, with respect to distribution
rights and rights upon voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Partnership, rank (a) senior to the Class A
Units, Class B Units and all Partnership Interests ranking junior to the Series
B Preferred Units; (b) on a parity with the Series A Preferred Units, the Series
C Preferred Units, the Series D Preferred Units, and all other Partnership
Interests issued by the Partnership the terms of which specifically provide that
such Partnership Interests rank on a parity with the Series B Preferred Units;
and (c) junior to all Partnership Interests issued by the Partnership the terms
of which specifically provide that such Partnership Interests rank senior to the
Series B Preferred Units.

     C. Distributions.

     (i) Pursuant to Section 5.1 of the Agreement, holders of Series B Preferred
Units shall be entitled to receive, out of Available Cash, cumulative
preferential cash distributions at the rate of 5.25% of the $50.00 liquidation
preference per annum (equivalent to a fixed annual amount of $2.625 per unit).
Distributions (which term as used herein shall include liquidated damages, if
any, payable pursuant to Section C.(vi) of this Attachment B) on the Series B
Preferred Units shall be payable quarterly and be cumulative from the fifteenth
day of each February, May, August and November or, if not a business day, the
next succeeding business day (each, a "Series B Preferred Unit Distribution
Payment Date"). Any distribution (including the initial distribution) payable on
the Series B Preferred Units for any partial distribution period shall be
prorated and computed on the basis of a 360-day year consisting of twelve 30-day
months.

     (ii) No distribution on the Series B Preferred Units shall be authorized by
the General Partner or paid or set apart for payment by the Partnership at such
time as the terms and provisions of any agreement of the Partnership, including
any agreement relating to its indebtedness, prohibits such authorization,
payment or setting apart for payment or provides that such authorization,
payment or setting apart for payment would constitute a breach thereof, or a
default thereunder, or if such authorization or payment shall be restricted or
prohibited by law. No interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution payment or payments on the Series B
Preferred Units which may be in arrears.

     Notwithstanding the foregoing, distributions with respect to the Series B
Preferred Units shall accumulate whether or not any of the foregoing
restrictions exist, whether or not there is sufficient Available Cash for the
payment thereof and whether or not such distributions are authorized.
Accumulated but unpaid distributions on the Series B Preferred Units shall not
bear interest, and holders of the Series B Preferred Units shall not be entitled
to any distributions in excess of full cumulative distributions. Any
distribution payment made on the Series B Preferred Units shall first be
credited against the earliest accumulated but unpaid distribution due with
respect to such units which remains payable.

     (iii) Except as provided in Section C.(iv) of this Attachment B, if any
Series B Preferred Units are outstanding, no distributions (other than in
Partnership Interests ranking junior to the Series B Preferred Units as to
distributions and upon liquidation, dissolution or winding up of the affairs of
the Partnership) shall be declared or paid or set apart for payment nor shall
any other distribution be declared or made upon the Class A Units, the Class B
Units, or any other Partnership Interests ranking junior to or on a parity with
the Series B Preferred Units as to distributions or upon liquidation,
dissolution or winding up of

                                       B-1
<PAGE>   189

the affairs of the Partnership for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on the
Series B Preferred Units for all past distribution periods and the then current
distribution period, nor shall any Class A Units, Class B Units, or any other
Partnership Interests ranking junior to or on a parity with the Series B
Preferred Units as to distributions or upon liquidation, dissolution or winding
up of the affairs of the Partnership, be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such Partnership Interests) by the
Partnership (except by conversion into or exchange for Partnership Interests
ranking junior to the Series B Preferred Units as to distributions and upon
liquidation, dissolution or winding up of the affairs of the Partnership).

     (iv) When distributions are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series B Preferred Units and any
other Partnership Interests ranking on a parity as to distributions with the
Series B Preferred Units, all distributions declared upon the Series B Preferred
Units and any other Partnership Interests ranking on a parity as to
distributions with the Series B Preferred Units shall be declared pro rata so
that the amount of distributions declared per unit of Series B Preferred Units
and such other Partnership Interests shall in all cases bear to each other the
same ratio that accumulated distributions per unit on the Series B Preferred
Units and such other Partnership Interests (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such other Partnership Interests do not have a cumulative distribution) bear
to each other.

     (v) Holders of Series B Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or Partnership Interests, in
excess of full cumulative distributions on the Series B Preferred Units as
described above. Accumulated but unpaid distributions on the Series B Preferred
Units will accumulate as of the Series B Preferred Unit Distribution Payment
Date on which they first become payable.

     (vi) If the General Partner fails to maintain the effectiveness of the
registration statement as required by the Registration Rights Agreement dated
February 19, 1998 between the General Partner and Lehman Brothers Inc. (the
"Registration Rights Agreement"), liquidated damages shall accumulate on the
$50.00 liquidation preference of the Series B Preferred Units at a rate of 0.25%
per annum (equivalent to a fixed annual amount of $0.125 per unit) with respect
to the first quarter immediately following such failure and at a rate of 0.50%
per annum (equivalent to a fixed annual amount of $0.25 per unit) with respect
to the second quarter and all subsequent quarters following such failure
("Liquidated Damages").

     D. Allocations.  Allocations of the Partnership's items of income, gain,
loss and deduction shall be allocated among holders of Series B Preferred Units
in accordance with Article VI of the Agreement.

     E. Liquidation Preference.

     (i) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Partnership, the holders of the Series B
Preferred Units shall be entitled to receive out of the assets of the
Partnership available for distribution to the Partners pursuant to Section
13.2.A of the Agreement a liquidation preference of $50.00 per Series B
Preferred Unit, plus an amount equal to any accumulated and unpaid distributions
to the date of payment, before any distribution of assets is made to holders of
Class A Units, Class B Units or any other Partnership Interests that rank junior
to the Series B Preferred Units as to liquidation rights.

     (ii) If upon any such voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Partnership, the assets of the Partnership are
insufficient to make such full payment to holders of the Series B Preferred
Units and the corresponding amounts payable on all other Partnership Interests
ranking on a parity with the Series B Preferred Units in the distribution of
assets, then the holders of such Partnership Interests shall share ratably in
any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

                                       B-2
<PAGE>   190

     (iii) After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Series B Preferred Units shall have no
right or claim to any of the remaining assets of the Partnership.

     (iv) None of a consolidation or merger of the Partnership with or into
another entity, merger of another entity with or into the Partnership, a
statutory unit exchange by the Partnership or a sale, lease or conveyance of all
or substantially all of the Partnership's property or business shall be
considered a liquidation, dissolution or winding up of the affairs of the
Partnership.

     F. Redemption.  In connection with redemption by the General Partner of any
of its Series B Preferred Shares in accordance with the provisions of the
Articles Supplementary to the Declaration of Trust filed with the State
Department of Assessments and Taxation of Maryland on February 19, 1998,
establishing the Series B Preferred Shares (the "Articles Supplementary"), the
Partnership shall provide cash to the General Partner for such purpose which
shall be equal to the redemption price (as set forth in the Articles
Supplementary) and one Series B Preferred Unit shall be canceled with respect to
each Series B Preferred Share so redeemed by the General Partner. From and after
the Series B Preferred Share Redemption Date (as defined in the Articles
Supplementary), any Series B Preferred Units so canceled shall no longer be
outstanding and all rights hereunder, to distributions or otherwise, with
respect to such Series B Preferred Units shall cease.

     G. Conversion.

     In connection with conversion into Shares of any Series B Preferred Shares
in accordance with the provisions of the Articles Supplementary, the Partnership
shall (i) issue to the General Partner a number of Class A Units equal to the
number of Shares issued by the General Partner upon such conversion; and (ii)
provide cash to the General Partner, if necessary, in an amount equal to the
amount of cash paid by the General Partner upon conversion of any Series B
Preferred Shares which would otherwise result in the issuance of fractional
Shares. One Series B Preferred Unit, or any fraction thereof, shall be canceled
with respect to each Series B Preferred Share, or any fraction thereof, so
converted, and from and after such conversion, any Series B Preferred Units so
canceled shall no longer be outstanding and all rights hereunder, to
distributions or otherwise, with respect to such Series B Preferred Units shall
cease.

                                       B-3
<PAGE>   191

                                  ATTACHMENT C

                           (SERIES C PREFERRED UNITS)

     In accordance with Sections 4.2.A and 4.2.D of the Agreement, set forth
below are the terms and conditions of the Series C Preferred Units established
and issued by the Partnership on December 14, 1998, in connection with issuance
of Series C Preferred Shares by the General Partner. Capitalized terms used
herein and not otherwise defined shall have the meanings given to them in the
Agreement.

     A. Designation and Number.  A series of Partnership Units, designated as
Series C Preferred Units was established on December 14, 1998, on which date
4,600,000 Series C Preferred Units were issued to the General Partner.

     B. Rank.  The Series C Preferred Units shall, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of the
Partnership, rank (a) senior to the Class A Units, Class B Units and all
Partnership Interests ranking junior to the Series C Preferred Units; (b) on a
parity with the Series A Preferred Units, the Series B Preferred Units, the
Series D Preferred Units, and all other Partnership Interests issued by the
Partnership the terms of which specifically provide that such Partnership
Interests rank on a parity with the Series C Preferred Units; and (c) junior to
all Partnership Interests issued by the Partnership the terms of which
specifically provide that such Partnership Interests rank senior to the Series C
Preferred Units.

     C. Distributions.

     (i) Pursuant to Section 5.1 of the Agreement, holders of Series C Preferred
Units shall be entitled to receive, out of Available Cash, cumulative
preferential distributions of Available Cash at the rate of 8 5/8% of the $25.00
liquidation preference per annum (equivalent to a fixed annual amount of
$2.15625 per unit). Such distributions shall accumulate on a daily basis and be
cumulative from the date of original issuance (December 8, 1998) and shall be
payable quarterly in arrears on March 15, June 15, September 15 and December 15
of each year or, if not a business day, the next succeeding business day (each a
"Series C Preferred Unit Distribution Payment Date"), commencing March 15, 1999.
Any distribution payable on the Series C Preferred Units for any partial
distribution period shall be computed on the basis of a 360-day year consisting
of twelve 30-day months.

     (ii) No distributions on Series C Preferred Units shall be authorized or
paid or set apart for payment at such time as the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, prohibits such authorization, payment or setting apart for payment
or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof, or a default thereunder, or if such authorization
or payment shall be restricted or prohibited by law.

     (iii) Notwithstanding the foregoing, distributions with respect to the
Series C Preferred Units will accumulate whether or not the terms and provisions
set forth in Section C.(ii) of this Attachment C at any time prohibit the
current payment of distributions, whether or not there is sufficient Available
Cash for such distributions and whether or not such distributions are
authorized. Accumulated but unpaid distributions on the Series C Preferred Units
will accumulate as of the Series C Preferred Unit Distribution Payment Date on
which they first become payable.

     (iv) When distributions are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series C Preferred Units and any
other Partnership Interests ranking on a parity as to distributions with the
Series C Preferred Units, all distributions authorized upon the Series C
Preferred Units and any other Partnership Interests ranking on a parity as to
distributions with the Series C Preferred Units shall be authorized pro rata so
that the amount of distributions authorized per Partnership Unit of Series C
Preferred Units and such other Partnership Interests shall in all cases bear to
each other the same ratio that accumulated distributions per Partnership Unit on
the Series C Preferred Units and such other Partnership Interests (which shall
not include any accumulation in respect of unpaid distributions for prior
distribution periods if such other Partnership Interests do not have a
cumulative

                                       C-1
<PAGE>   192

distribution) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distribution payment or payments on
Series C Preferred Units which may be in arrears.

     (v) Except as provided in Section C.(iv) of this Attachment C, unless full
cumulative distributions on the Series C Preferred Units have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for payment for all past distribution periods
and the then current distribution period, no distributions (other than in
Partnership Interests ranking junior to the Series C Preferred Units as to
distributions and upon liquidation) shall be authorized or paid or set aside for
payment nor shall any other distribution be authorized or made upon the Class A
Units, the Class B Units, or any other Partnership Interests ranking junior to
or on a parity with the Series C Preferred Units as to distributions or upon
liquidation, nor shall any Class A Units, Class B Units, or any other
Partnership Interests ranking junior to or on a parity with the Series C
Preferred Shares as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such units or other
Partnership Interests) by the Partnership (except by conversion into or exchange
for Partnership Interests ranking junior to the Series C Preferred Units as to
distributions and upon liquidation).

     (vi) Holders of the Series C Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or Partnership Units in excess
of full cumulative distributions on the Series C Preferred Units as described
above. Any distribution payment made on the Series C Preferred Units shall first
be credited against the earliest accumulated but unpaid distribution due with
respect to such Series C Preferred Units which remains payable.

     D. Allocations.  Allocations of the Partnership's items of income, gain,
loss and deduction shall be allocated among holders of Series C Preferred Units
in accordance with Article VI of the Agreement.

     E. Liquidation Preference.

     (i) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Partnership, the holders of Series C Preferred Units
then outstanding are entitled to be paid out of the assets of the Partnership
available for distribution to the Partners pursuant to Section 13.2.A of the
Agreement a liquidation preference of $25.00 per Series C Preferred Unit, plus
an amount equal to any accumulated and unpaid distributions to the date of
payment, before any distribution of assets is made to holders of Class A Units,
Class B Units or any other Partnership Interests that rank junior to the Series
C Preferred Units as to liquidation rights.

     (ii) In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Partnership are
insufficient to pay the amount of the liquidating distributions on all
outstanding Series C Preferred Units and the corresponding amounts payable on
all other Partnership Interests ranking on a parity with the Series C Preferred
Units in the distribution of assets, then such assets shall be allocated among
the Series C Preferred Units, as a class, and each class or series of such other
such Partnership Interests, as a class, in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

     (iii) After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Series C Preferred Units will have no
right or claim to any of the remaining assets of the Partnership.

     (iv) The consolidation or merger of the Partnership with or into any other
partnership, corporation, trust or entity or of any other partnership,
corporation, trust or other entity with or into the Partnership or the sale,
lease or conveyance of all or substantially all of, the property or business of
the Partnership, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Partnership for purposes of this Section E.

     F. Redemption.  In connection with a redemption by the General Partner of
any or all of the Series C Preferred Shares, the Partnership shall provide cash
to the General Partner for such purpose which shall be equal to redemption price
of the Series C Preferred Shares to be redeemed and one

                                       C-2
<PAGE>   193

Series C Preferred Unit shall be canceled with respect to each Series C
Preferred Share so redeemed. From and after the date in which the Series C
Preferred Shares are redeemed, the Series C Preferred Units so canceled shall no
longer be outstanding and all rights hereunder, to distributions or otherwise,
with respect to such Series C Preferred Units shall cease.

                                       C-3
<PAGE>   194

                                  ATTACHMENT D

                           (SERIES D PREFERRED UNITS)

     In accordance with Sections 4.2.A and 4.2.D of the Partnership Agreement,
set forth below are the terms and conditions of the Series D Preferred Units
hereby established that will be issued by the Partnership to Cornerstone
Properties Inc. on           , 2000, in connection with the merger of
Cornerstone Properties Limited Partnership ("Cornerstone Partnership") with and
into the Partnership (the "Cornerstone Partnership Merger"), in exchange for the
then outstanding Series A Cumulative Convertible Preferred Units of Cornerstone
Partnership (all of which will be acquired by the General Partner in the merger
of Cornerstone Properties Inc. with and into General Partner (the "REIT Merger")
immediately following the Cornerstone Partnership Merger). All capitalized terms
used in this Attachment and not otherwise defined shall have the meanings
assigned in the Partnership Agreement.

     A. Designation and Number.  A series of Partnership Units, designated as
Series D 7.0% cumulative Convertible Preferred Units (the "Series D Preferred
Units") is hereby established. The number of Series D Partnership Units shall be
3,030,303.

     B. Rank.  The Series D Preferred Units shall, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of the
Partnership, rank (a) senior to the Class A Units, Class B Units and all
Partnership Interests ranking junior to the Series D Preferred Units; (b) on a
parity with the Series A Preferred Units, the Series B Preferred Units, the
Series C Preferred Units, and all Partnership Interests issued by the
Partnership the terms of which specifically provide that such Partnership
Interests rank on a parity with the Series D Preferred Units (each referred to
as "Parity Preferred Units"); and (c) junior to all Partnership Interests issued
by the Partnership the terms of which specifically provide that such Partnership
Interests rank senior to the Series D Preferred Units.

     C. Distributions.

     Pursuant to Section 5.1 of the Partnership Agreement, holders of Series D
Preferred Units will be entitled to receive, out of Available Cash, cash
distributions at the rate of 7% per annum on the $16.50 liquidation preference.
Such distributions shall be cumulative from June   , 2000, and will be payable
annually on August 4 of each year (the "Series D Preferred Unit Distribution
Payment Date"). Distributions will be payable, in arrears, to holders of record
of Series D Preferred Units as they appear on the books of the Partnership on
such record dates, not more than 60 days nor less than 10 days preceding the
payment dates thereof, as shall be fixed by the General Partner. The amount of
distributions payable for the initial distribution period or any period shorter
or longer than a full distribution period shall be calculated on the basis of a
360-day year of twelve 30-day months. No distributions may be declared or paid
or set apart for payment on any Parity Partnership Preferred Units with regard
to the payment of distributions unless there shall also be or have been declared
and paid or set apart for payment on the Series D Preferred Units like
distributions for all distribution payment periods of the Series D Preferred
Units ending on or before the distribution payment date of such Parity
Partnership Preferred Units, ratably in proportion to the respective amounts of
distributions (x) accumulated and unpaid or payable on such Series D Preferred
Units on the one hand, and (y) accumulated and unpaid through the distribution
payment period or periods of the Series D Preferred Units next preceding such
distribution payment date, on the other hand.

     Except as set forth in the preceding sentence, unless full cumulative
distributions on the Series D Preferred Units have been paid, no distributions
may be paid or declared and set aside for payment or other distribution made
upon the Class A Units, Class B Units or on any other Partnership Units ranking
junior to or on a parity with the Series D Preferred Units as to distributions,
nor any Class A Units, Class B Units, or any other Partnership Units ranking
junior to or on a parity with the Series D Preferred Units as to distributions,
may be redeemed, purchased or otherwise acquired for any consideration (or any
payment be made to or available for a sinking fund for the redemption of any
Units or other Partnership Interests); provided, however, that any moneys
therefore deposited in any sinking fund with respect to any Partnership Unit in
compliance with the provisions of such sinking fund may thereafter be applied to
the

                                       D-1
<PAGE>   195

purchase or redemption of such Partnership Unit in accordance with the terms of
such sinking fund, regardless of whether, at the time of such application full
cumulative distributions upon Series D Preferred Units outstanding to the last
distribution payment date shall have been paid or declared and set apart for
payment) by the Partnership; provided that any such junior Partnership Units may
be converted into or exchanged for Partnership Units ranking junior to the
Series D Preferred Units as to distributions, and, provided, further, that any
such Partnership Units or Parity Partnership Preferred Units or Partnership
Units may be issued by the Partnership to the General Partner in connection with
a purchase of any corresponding share of beneficial interest issued by the
General Partner to preserve the General Partner Entity's status as a real estate
trust.

     D. Allocations.

     Allocations of the Partnership's items of income, gain, loss and deduction
shall be allocated among the holders of Series D Preferred Units in accordance
with Article VI of the Partnership Agreement.

     E. Liquidation Preference.

     The Series D Preferred Units shall rank, as to liquidation, dissolution or
winding up of the Partnership, prior to Class A Units and Class B Units and any
other class of Partnership Units of the Partnership ranking junior to Series D
Preferred Units as to rights upon liquidation, dissolution or winding up of the
Partnership, so that in the event of any liquidation, dissolution or winding up
of the Partnership, whether voluntary or involuntary, the holders of the Series
D Preferred Units shall be entitled to receive out of the assets of the
Partnership available for distribution to holders of Partnership Units, whether
from capital, surplus or earnings, before any distribution is made to holders of
Class A Units, Class B Units or any other such junior Partnership Units, an
amount equal to $16.50 per unit (the "Liquidation Preference" of a Series D
Preferred Units) plus an amount equal to all distributions(whether or not earned
or declared) accrued and accumulated and unpaid on the Series D Preferred Units
to the date of final distribution. The holders of the Series D Preferred Units
will not be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of Partnership Units of the Partnership ranking
senior to the Series D Preferred Units as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After payment of the full amount of
the Liquidation Preference and such distributions, the holders of Series D
Preferred Units will not be entitled to any further participation in any
distribution of assets by the Partnership. If, upon any liquidation, dissolution
or winding up of the Partnership, the assets of the Partnership, or proceeds
thereof, distributable among the holders of Parity Partnership Preferred Units
shall be insufficient to pay in full the preferential amount aforesaid, then
such assets, or the Proceeds thereof, shall be distributable among such holders
ratably in accordance with the respective amounts which would be payable on such
units if all amounts payable thereon were paid in full. For the purposes hereof,
neither a consolidation or merger of the Partnership with or into any other
partnership, limited liability company, corporation or any other entity, nor a
merger of any other partnership, limited liability company, corporation or any
other entity with or into the Partnership, nor a sale or transfer of all or any
part of the Partnership assets for cash or securities shall be considered a
liquidation, dissolution or winding up of the Partnership.

     F. Conversion.

     Each Series D Preferred Unit shall be convertible at any time, at the
election of the holders thereof, into a Class A Unit. In the event that the REIT
Merger is consummated and the Series A Cumulative Convertible Preferred Stock of
Cornerstone Properties Inc. is extinguished in connection therewith, the Series
D Preferred Units shall automatically be converted into a number of Class A
Units equal to the product of (i) the number of Series D Preferred Units
outstanding at such time, multiplied by (ii) 0.7009.

     G. Value.

     For purposes of the definition of Deemed value of Partnership Interest, the
Value on any date of the Series D Preferred Units shall be the greater of (i)
the Value of a Common Share of the General Partner on such date or (ii) the
Liquidation Preference of such Series D Preferred Unit.
                                       D-2
<PAGE>   196

     H. Voting Rights.

     The holders of Series D Preferred Units shall have no voting rights
whatsoever, except for (i) any voting rights to which they may be entitled under
the laws of the State of Delaware and (ii) as follows:

          So long as any Series D Partnership Preferred Units remain
     outstanding, the consent of the holders of at least two-thirds of the
     Series D Preferred Units outstanding at the time and all other classes or
     series of Partnership Preferred Units upon which like voting rights have
     been conferred and are exercisable (voting together as a class) given in
     person or by proxy, either in writing or at any meeting called for the
     purpose, shall be necessary to permit, effect or validate any one or more
     of the following:

             (i) the issuance or increase of any class or series of Partnership
        Units ranking senior to the Series D Preferred Units; or

             (ii) the amendment, alteration or repeal, whether by merger,
        consolidation or otherwise, of any of the provisions of this Agreement,
        (including this Attachment or any provision hereof) that would
        materially and adversely affect any power, preference, or special right
        of the Series D Preferred Units or of the holders thereof;

    provided, however, that any increase in the number of any class or series of
    Partnership Units or the creation and issuance of other classes or series of
    Partnership Units, in each case ranking on a parity with or junior to the
    Series D Preferred Units with respect to the payment of dividends and the
    distribution of assets upon liquidation, dissolution or winding up, shall
    not be deemed to materially and adversely affect such powers, preferences or
    special rights.

                                       D-3<PAGE>   1

     "Portions of this Exhibit have been omitted pursuant to a request for
    confidential treatment. The omitted portions, marked by ****, have been
                     separately filed with the Commission."

                                                                  EXHIBIT 10.103

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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

                                                                   PAGE 1 OF 18
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                                 Subcontract Type:           Firm Fixed Price
                                 Security Classification:    NA
                                 Prime Contract Number:      Various Commercial
                                 Supplier Number:
                                 Account Number:
                                 DPAS Priority Rating:       Not Applicable
                                 Cost Charge No. (CCN):      See Section G.3(c)
                                 Terms Of Payment:           Net 30 Days

Astrotech Space Operations, Inc.
6305 Ivy Lane, Suite 520
Greenbelt, MD 20770-06318

This Firm Fixed Price (FFP) Subcontract is hereby placed with Astrotech Space
Operations, Inc. (hereinafter referred to as "Astrotech," "ASO," Subcontractor,"
"Supplier," or "Seller") by McDonnell Douglas Corporation, a wholly owned
subsidiary of The Boeing Company, Huntington Beach, California (hereinafter
referred to as "MDC" or "Buyer") for the goods and services described herein,
and is subject to the terms and conditions set forth thereto.

Authority to Proceed 99797075 and amendments/changes thereto were issued in
contemplation of the execution of this Firm Fixed Subcontract, and are hereby
superseded in their entirety by this Subcontract. Any and all acts of
performance performed under the Authority to Proceed, as amended/changed, shall
be deemed performed under the applicable provisions of this Subcontract.

This Subcontract constitutes the entire understanding and agreement between the
parties with respect to the subject matter hereof and supersedes all prior
representations and agreements.

IN WITNESS WHEREOF, the parties hereto have executed this Subcontract effective
as of the date executed by MDC below:

                                              MCDONNELL DOUGLAS CORPORATION

By:                                         By:
   --------------------------------            --------------------------------

Typed/Printed Name:                         Typed Name:
                   ----------------                     -----------------------
                                                            (AUTHORIZED AGENT)

Title:                                      Title:
      -----------------------------               -----------------------------

Date:                                       Date:
      -----------------------------               -----------------------------

                           END OF COVER/SIGNATURE PAGE
================================================================================

<PAGE>   2
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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

                                        DRAFT                      PAGE 2 OF 18
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                             CONTENTS OF SUBCONTRACT

COVER/SIGNATURE PAGE

CONTENTS OF SUBCONTRACT

SECTION A       SPECIAL AGREEMENTS AND OTHER IMPORTANT PROVISIONS AND
                NOTIFICATIONS

                A.1      ORDER OF PRECEDENCE
                A.2      SUBCONTRACT MODIFICATIONS ( AND LIVING CONTRACT)

SECTION B       GOODS/SERVICES AND PRICES

                B.1      TYPE OF SUBCONTRACT
                B.2      STATEMENT OF REQUIREMENTS
                B.3      GOODS/SERVICES, PRICES AND SUBCONTRACT LINE ITEM
                         NUMBERS (SCLINs)
                B.4      PAYMENT AND BILLING (Receipt of Goods/Services)

SECTION C       SUPPLIER WORK STATEMENT /SPECIFICATIONS

                C.1      SUPPLIER WORK STATEMENT
                C.2.     RESERVED

SECTION D       RESERVED

SECTION E       INSPECTION AND ACCEPTANCE/QUALITY ASSURANCE

                E.1      INSPECTION AND ACCEPTANCE
                E.2      QUALITY ASSURANCE

SECTION F       DELIVERY/PERFORMANCE

                F.1      DELIVERY
                F.2      PAYLOAD PROCESSING SERVICES

SECTION G       SUBCONTRACT ADMINISTRATION DATA

                G.1      TECHNICAL AND ADMINISTRATIVE REPRESENTATIVES
                G.2      COMMUNICATIONS
                G.3      SUBMISSION OF INVOICES
                G.4      PAYMENT TERMS
                G.5      CALIFORNIA SALES - USE TAX

<PAGE>   3

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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

                                        DRAFT                      PAGE 3 OF 18
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                         CONTENTS OF SUBCONTRACT (cont.)

SECTION H       SPECIAL PROVISIONS

                H.1      PLACE OF PERFORMANCE
                H.2      BUYER/GOVERNMENT FURNISHED SPECIAL TOOLING, SPECIAL
                         TEST EQUIPMENT, MATERIAL, AND/OR FACILITIES
                H.3      DPAS PRIORITY RATING
                H.4      IDENTIFICATION OF RESTRICTIONS ON GOVERNMENT RIGHTS IN
                         TECHNICAL DATA  AND COMPUTER SOFTWARE
                H.6      PRIORITY USAGE OF BUILDING 9
                H.7      UPLINK AND DOWNLINK CAPABILITY BETWEEN COMPLEX 37 AND
                         ASTROTECH
                H.8      EXCLUSIVITY
                H.9      PAYLOAD FAIRING ACCESS PLATFORMS
                H.10     DAMAGE TO PERSONS OR PROPERTY INVOLVED IN PAYLOAD
                         PROCESSING ACTIVITY
                H.11     SCHEDULE AND FACILITY ASSIGMENTS
                H.12     TERMINATION

SECTION I       GENERAL PROVISIONS

                I.1       TERMS AND CONDITIONS GUIDE
                I.2       MODIFICATIONS TO  GENERAL PROVISIONS (full text)
                I.3       ADDITIONAL FULL-TEXT PROVISIONS

SECTION J       LIST OF DOCUMENTS, EXHIBITS AND ATTACHMENTS APPLICABLE TO THIS
                SUBCONTRACT

                            END OF TABLE OF CONTENTS

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

<PAGE>   4
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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

                                        DRAFT                      PAGE 4 OF 18
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SECTION A - SPECIAL AGREEMENTS AND OTHER IMPORTANT PROVISIONS AND NOTIFICATIONS

A.1      ORDER OF PRECEDENCE

         In the event of an inconsistency between any of the provisions of this
         Subcontract, the inconsistency shall be resolved by giving precedence
         to the provisions of the Subcontract in the following order:

         1.       Cover/Signature Page and Sections A through H (Schedule
                  Provisions)
         2.       NonDisclosure Agreement (NDA), (if applicable)
         3.       Contract Security Classification Specification (DD Form 254),
                  (if applicable)
         4.       Supplier Work Statement 7075
         5.       Section I (General Provisions)
         6.       All Other Attachments, Exhibits and Documents listed in
                  Section J

         Sections A through H comprise the "Schedule" of this Subcontract.

A.2      SUBCONTRACT MODIFICATIONS (AND LIVING CONTRACT)

         Modifications to this Subcontract shall be made through the issuance of
         a Supplemental Agreement or Administrative Contract Funding Order
         (ACFO), which will delineate therein the stated modification, and
         identify the changed Subcontract page(s). Changed portions of the
         Subcontract language will be marked in bold type. For Seller's
         convenience, replacement pages containing the Subcontract modifications
         will be provided, so that at all times, the Seller will possess a
         complete, corrected and coherent text of the Subcontract. Each
         replacement page shall be marked with the Subcontract number,
         modification number, and date.

                                END OF SECTION A

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

<PAGE>   5

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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

                                        DRAFT                      PAGE 5 OF 18
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SECTION B - GOODS/SERVICES AND PRICES

B.1      TYPE OF SUBCONTRACT

         The Subcontract awarded hereunder is a firm fixed price (FFP), type
         Subcontract. Under FFP contracting, the Seller shall provide
         goods/services at a price that is not subject to any adjustment on the
         basis of the Seller's cost experience in performing the subcontract. In
         FFP contracting, the Seller bears the entire risk of cost and
         performance.

B.2      STATEMENT OF REQUIREMENTS

         In accordance with the Subcontract, Seller shall provide all materials,
         labor, equipment and facilities, except as specified herein to be
         furnished by the Buyer and/or Government, and shall do all that is
         necessary or incident to the satisfactory and timely performance of the
         SCLINs listed below.

B.3      SERVICES, PRICES AND SUBCONTRACT LINE ITEM NUMBERS (SCLINs)

  (a)    Price.  MDC shall pay Astrotech a firm fixed price fee for the Basic
         Services provided for each Payload under this Subcontract (hereinafter
         called "Service Fee"). The Service Fee shall be determined by the
         actual launch date of the respective Payload in accordance with the
         price schedule set forth below. In addition, MDC shall pay Astrotech
         any additional charges agreed to or otherwise due and payable under
         this Subcontract. The Service Fee and any such additional charges are
         exclusive of any federal, state or local tax, if applicable. Although
         as of the effective date of this subcontract no such taxes are
         applicable, should such taxes become applicable they shall be added to
         the amount to be paid by MDC to Astrotech.

<TABLE>
<CAPTION>
               ----------------------------------------------------------------------------------
                Calendar Year     Guaranteed Quantity       Price        Excess Quantity Price
               ----------------------------------------------------------------------------------
<S>                                <C>                    <C>              <C>
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
                     ***             **** Missions           ***                  ***
               ----------------------------------------------------------------------------------
</TABLE>

  (b)    Dual manifested GEO spacecraft will be charged ****. Multiple-LEO/GEO
         constellation spacecraft missions will be charged as **** assuming a
         single spacecraft manufacturer for all satellites on a single flight.

  (c)    Should the guaranteed quantity of services not be required in any given
         year, a credit for a maximum of **** missions will be carried over to
         the next contract year. The credits would then expire at the end of
         that contract year and be applied only after the processing of the
         guaranteed quantity of missions stipulated above for that year.

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B.4      PAYMENT AND BILLING (Receipt of Goods/Services)

  (a)    The parties agree that the basis for payment under this Subcontract is
         the performance of acceptable services.

  (b)    Seller shall bill Buyer for each completed item of services. Buyer
         shall pay Seller upon receipt of the following: a properly prepared
         Seller's invoice and acceptable services. Seller shall prepare and
         submit the aforementioned invoice in accordance with Subcontract
         Sections G.3 and G.4.

  (c)    Payments. All payments defined in this subcontract shall be (i) in
         United States Dollars, (ii) payable to Astrotech Space Operations,
         Inc., and (iii) delivered, at MDC expense, to the offices of Astrotech
         Space Operations, Inc. at 6305 Ivy Lane, Suite 520, Greenbelt, Maryland
         20770-6318 (or other address specified by Astrotech in writing) within
         thirty (30) days of receipt of the invoice by MDC. All payments made
         under this Subcontract shall reference the number of the applicable
         Mission Exhibit shown on the cover page of the Mission Exhibit.

  (d)    Billing Schedule. Each Mission Exhibit of this Subcontract sets forth
         the billing schedule for payment of the Service Fee applicable to that
         particular Payload. The amount and billing dates of the three scheduled
         Service Fee partial payments are determined pursuant to Sections (1),
         (2), and (3) below. In addition to invoicing MDC for the three
         scheduled Service Fee partial payments, Astrotech shall provide MDC a
         separate invoice for any additional charge agreed to or otherwise due
         and payable under this Subcontract pursuant to Section (4) below,
         unless otherwise expressly provided for in this Subcontract. Each
         invoice shall be due and payable upon receipt by MDC.

            (1) Deposit and First Partial Payment. On the effective date of each
                Mission Exhibit, MDC will be billed five percent (5%) of the
                Service Fee for that particular Payload to be processed at
                Astrotech TICO under this Subcontract.

            (2) Second Partial Payment. Thirty (30) days prior to the beginning
                of the Occupancy Period for each particular Payload, MDC will be
                billed forty-five percent (45%) of the Service Fee applicable to
                that particular Payload plus any adjustments to the First
                Partial Payment required due to a change in the scheduled launch
                date subsequent to the effective date of the applicable Mission
                Exhibit. The cumulative total of the First and Second Partial
                Payments will equal fifty percent (50%) of the applicable
                Service Fee.

            (3) Third Partial Payment. On the last day of the Occupancy Period
                or when the customer vacates the facility for each particular
                Payload, MDC will be billed fifty percent (50%) of the Service
                Fee applicable to that particular Payload plus any adjustments
                to the First and Second Partial Payments required due to a
                change in the launch date subsequent to the Second Partial
                Payment billing date of the applicable Mission Exhibit. The
                cumulative total of the First, Second, and Third Partial
                Payments will equal one hundred percent (100%) of the applicable
                Service Fee based upon the actual launch date.

            (4) Final Billing. As soon as practicable, but not later than sixty
                (60) days after the customer vacates the facility for each
                particular Payload, MDC will be invoiced for any additional
                charges agreed to or otherwise due and payable for that
                particular Payload under this Subcontract.

  (e)    Payment for Guaranteed Minimum Quantity For any calendar year in which
         MDC fails to meet the minimum quantity guarantee specified in Section
         B.3 (a), Astrotech will submit an invoice to MDC for the amount equal
         to the guaranteed quantity minus the actual number of payloads
         processed and launched in that calendar year times the mission price
         for that year. This invoice will be submitted on the first business day
         of January in the following calendar year in which the shortfall
         occurred in accordance with Section B.4 (c) above. Payment by MDC for
         missions guaranteed but not processed will result in a mission
         credit(s) governed by Section B.3 (c).

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                                END OF SECTION B

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

SECTION C - STATEMENT OF WORK/SPECIFICATIONS

C.1      SUPPLIER WORK STATEMENT

         The goods/services which the Seller is to provide are stated in Section
         B hereof, and shall be furnished in accordance with the Subcontract
         schedule provisions and any referenced Supplier Work Statement
         documents set forth in Section J, which are incorporated herein by this
         reference.

C.2      RESERVED

                                END OF SECTION C

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

SECTION D - RESERVED

                                END OF SECTION D

================================================================================
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SECTION E - INSPECTION AND ACCEPTANCE/QUALITY ASSURANCE

E.1      INSPECTION AND ACCEPTANCE

  (a)    All goods and services shall be subject to in-process inspection/test
         by the Buyer at the Seller's facility to the extent practicable at all
         times during the period of performance and, in any event, prior to
         shipment. If the Buyer performs inspection or evaluation on the
         premises of the Seller or its subcontractor(s), the Seller shall
         furnish and require its subcontractor(s) to furnish, without additional
         charge, all reasonable facilities and assistance for the safe and
         convenient performance of these duties.

  (b)    The provisions of Section E are in addition to any other inspection and
         acceptance provisions of the Subcontract. In the event of a conflict
         between Section E and any other inspection and acceptance provisions of
         the Subcontract, including the inspection and acceptance provisions set
         forth by the Subcontract Statement of Work and the Subcontract General
         Provisions, the full text provisions of Section E shall prevail.

                                END OF SECTION E

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

SECTION F - DELIVERY/PERFORMANCE

F.1   DELIVERY

         During the period 27 October 1999 through ****, Astrotech will be
         expanding their facilities to support this subcontract prior to the
         start of the Period of Performance set forth in Section F.2 below.
         During this period, MDC and Astrotech agree that the termination
         liability amounts specified in Section H.12 (a) are in effect.

F.2      PAYLOAD PROCESSING SERVICES

         Payload processing services period of performance is **** through ****.
         The occupancy date is ****, at which time the new Spacecraft Processing
         Facility (SPF) built in accordance with the SWS specified in Section J
         will be available to support the Delta IV 5 meter fairing pathfinder
         effort.

                                END OF SECTION F

================================================================================
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SECTION G - SUBCONTRACT ADMINISTRATION DATA

G.1      TECHNICAL AND ADMINISTRATIVE REPRESENTATIVES

  (a)    The following technical and administrative representatives of the Buyer
         and Seller are hereby designated for this Subcontract:

         Seller's Representatives are:       Buyer's Representatives are:
         Lloyd S. Erickson                   Norm Yearsley
         Technical Representative            Technical Representative

         John Satrom                         Kim E. Palchikoff
         Contract Representative             Subcontract Representative

         In the event Kim E. Palchikoff is not available, Martin Vande Ven or
         his duly authorized representative shall serve as Buyer's Subcontract
         Representative. In the event John Satrom is not available, his/her duly
         authorized representative shall serve as Seller's Contract
         Representative.

  (b)    The Buyer's Technical Representative is responsible for day-to-day
         clarifications, guidance and technical direction as may be required
         within the scope of the technical work requirements. "Technical
         direction" shall be in accordance with the "Technical Direction"
         provision of the General Provisions of the Subcontract.

  (c)    Contact with the Buyer regarding prices, terms, quantities, deliveries,
         and financial adjustments shall be made only between the Buyer's
         Subcontract Representative and the Seller's Contract Representative.
         Actions taken by the Seller, which by their nature effect a change to
         this Subcontract, shall only be binding upon the Buyer when such action
         is specifically authorized in writing by the Buyer's Subcontract
         Representative. Unless specified otherwise in this subcontract, all
         written communications between Seller and Buyer shall be addressed and
         directed to the Buyer's Subcontract Representative and Seller's
         Contract Representative.

  (d)    The Buyer shall be responsible for all liaison and communications with
         the Buyer's customer as well as the Buyer's other subcontractors for
         the term of this Subcontract. The Seller shall not communicate with the
         Buyer's customer nor the Buyer's other subcontractors regarding this
         Subcontract except with the prior consent of the Buyer.

  (e)    No verbal or written request, notice, authorization, direction or order
         received by the Seller shall be binding upon the Buyer, or serve as the
         basis for a change in the Subcontract, unless issued (or confirmed) in
         writing by the Buyer's Subcontract Representative.

  (f)    The Seller shall immediately notify the Buyer's Subcontract
         Representative whenever a verbal or written change notification has
         been received from an employee of the Buyer (other than the Subcontract
         Representative), which would affect any of the terms, conditions, cost,
         schedules, etc., of this Subcontract, and the Seller is to perform no
         work or make any changes in response to any such notification or make
         any claim on Buyer unless the Buyer's Subcontract Representative
         directs the Seller, in writing, to implement such change notification.

<PAGE>   10

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G.2       COMMUNICATIONS

         All notices and other binding communications shall be in writing and
         sent by cable, telex, U.S. mail, telefax, or other customary means,
         addressed as follows:

<TABLE>
<CAPTION>
         Seller:                               Buyer:
<S>                                          <C>
         Astrotech Space Operations, Inc.      McDonnell Douglas Corporation
         6305 Ivy Lane, Suite 520              5301 Bolsa Avenue
         Greenbelt, MD 20770-06318             Huntington Beach, CA 92647-2099
           Attn:  John Satrom                    Attn: Kim E. Palchikoff, M/C H012-C215
</TABLE>

         or to such other address as the Seller's Contract Representative or
         Buyer's Subcontract Representative shall designate by written notice.
         All correspondence, data and reports submitted by the Seller shall
         reference the Subcontract number.

G.3      SUBMISSION OF INVOICES

  (a)    For each shipment of goods or completed item of services, Seller shall
         submit invoices no more than once a month, in triplicate (one original
         and two copies) and addressed as follows:

         (1)    Original and one (1) copy to:
                       McDonnell Douglas Corporation
                       Accounts Payable - M/C 2761371
                       P. O. Box 66856
                       St. Louis, MO 63166-6856

         (2)    Fax one (1) copy to:
                       McDonnell Douglas Corporation
                       5301 Bolsa Avenue
                       Huntington Beach, California 92647-2099
                       Attention:  Kim E. Palchikoff
                                    M/C H012-C215

  (b)    Seller's invoices and attachments thereto shall contain the following
         information, as applicable: Seller's name and business address, date of
         invoice, Subcontract number, Buyer's internal accounting numbers or
         Cost Charge Numbers (CCNs), name of Buyer's designated Subcontract
         Representative, description of services, extended totals, Seller's
         signature and payment terms.

  (c)    Invoices submitted without the above information may be returned to the
         Seller for correction.

G.4      PAYMENT TERMS

         Determination of payment due date, whether under net or discount terms,
         will be based on the latest of (i) the date services are performed;
         (ii) the date provided in this Subcontract for the completion of
         services, or (iii) the date an accurate invoice is received. Payment
         will be deemed to have been made when deposited in the mail. Payment
         terms are Net 30 days.

G.5      CALIFORNIA SALES - USE TAX

         All goods and services purchased under this Subcontract are for resale.
         Buyer's California Tax Permit No. is SY-ADA-98-003153.

                                END OF SECTION G

================================================================================
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SECTION H - SPECIAL PROVISIONS

H.1      PLACE OF PERFORMANCE

         The work under this Subcontract shall be performed at the Seller's
         Facility located at Titusville, Florida.

H.2      BUYER/GOVERNMENT FURNISHED SPECIAL TOOLING (ST), SPECIAL TEST
         EQUIPMENT (STE), PLANT EQUIPMENT (PE), MATERIAL, AND/OR FACILITIES

  (a)    Pursuant to the Property Clause of this Subcontract, the Buyer shall
         furnish for use in the performance of this Subcontract, the following
         Buyer and/or Government-furnished ST, STE, PE, material, and/or
         facilities identified in paragraphs (b) and (c) below on or before the
         date(s) specified.

  (b)    Buyer Furnished ST, STE, PE, material, and/or facilities:  None

  (c)    Government Furnished ST, STE, PE, material, and/or facilities:  None

H.3      RESERVED

H.4      IDENTIFICATION OF RESTRICTIONS ON GOVERNMENT RIGHTS IN TECHNICAL DATA
         AND COMPUTER SOFTWARE

  (a)    In accordance with the Section I General Provisions pertaining to data
         rights, the Subcontractor has identified the technical data and/or
         computer software listed in paragraph (b) below, that may be delivered
         by Seller with other than unlimited rights.

  (b)    None

H.5      PRIORITY USAGE OF BUILDING 9

         During the period of performance specified in Section F.2, Astrotech
         will offer to MDC the use of the Building 9 Spacecraft Processing
         Facility on a "First Right of Refusal" basis. Should another Astrotech
         customer request use of Bldg. 9, Astrotech will contact MDC in writing
         to offer MDC the opportunity to occupy the specified areas of the
         facility during the requested period. MDC shall have 15 calendar days
         to provide written response to Astrotech regarding their intention to
         occupy the facility during the stated period or to release it for
         another customer's use. Should MDC request use of Bldg. 9 during the
         period specified, a program Mission Exhibit between Astrotech and MDC
         will be prepared and executed reserving the specified Bldg. 9 areas.

H.6      ROADWAY OVERHEAD OBSTRUCTIONS

         Astrotech accepts the cost and responsibility for raising/relocating
         any overhead obstructions along the roadway from the Astrotech facility
         to Launch Complex 17 and/or 37. Consideration for this effort is
         included in the price schedule contained in Section B3(a) of this
         document.

H.7      UPLINK AND DOWNLINK CAPABILITY BETWEEN COMPLEX 37 AND ASTROTECH

         Technical resolution for spacecraft uplink and downlink capability
         between Complex 37 and Astrotech has not been accomplished. An
         acceptable solution will be developed between Astrotech and MDC. Any
         such improvement to the communications requirements would be subject to
         an equitable adjustment. As a mitigation measure, Astrotech will
         maintain their current RF communication capability.

<PAGE>   12

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H.8      EXCLUSIVITY

         MDC will utilize Astrotech services exclusively from **** through ****
         for the prelaunch processing of the payloads for all commercial Delta
         launches during the duration of this subcontract, except as MDC may be
         directed by the Government to utilize Government facilities for a
         Government Payload, or as a commercial Customer may elect to separately
         contract with another entity other than MDC for or provide their own
         payload processing services or takes exception to the use of Astrotech
         for payload processing services, or upon the written acknowledgement by
         Astrotech that it is unable to adequately satisfy an essential
         requirement for a particular Payload.

H.9      PAYLOAD FAIRING ACCESS PLATFORMS

         Astrotech, at their expense, will design and construct the required
         payload fairing access platforms based on MDC's design requirements.
         MDC has provided a detailed design requirements document which will be
         used by Astrotech to determine the target cost for the project,
         currently estimated at ****. This target cost, to include the cost of
         financing, will be provided by Boeing no later than 31 January 2000 and
         will form the cost basis for this item on the contract. Boeing will be
         billed back on a cost per mission basis spread over the firm missions
         each year for the full **** years of the contract (**** missions). If
         the cost is less than the agreed to target cost, Boeing and Astrotech
         share the savings equally. In the event that the cost exceeds the
         target, but is less than ****% of the value, Boeing and Astrotech share
         the increase equally. In the event that the cost for the access
         platforms exceeds ****% of the targeted cost, Boeing agrees to review
         and accept a claim for an equitable price adjustment unless Astrotech
         is found to be negligent in its performance. Should Boeing change the
         design requirements following the establishment of the target price
         that results in an increase to the cost to design and build the
         platforms, Boeing will agree to review and accept a claim for an
         equitable price adjustment in the amount of such increase.

<PAGE>   13
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H.10     DAMAGE TO PERSONS OR PROPERTY INVOLVED IN PAYLOAD PROCESSING ACTIVITY

  (a)    Inter-Party Waiver of Liability.  In carrying out this Agreement,
         Astrotech and MDC will respectively utilize their property and
         employees in Payload Processing Activity in close proximity to one
         another and to others. Furthermore, the parties recognize that all
         participants in Payload Processing Activity are engaged in the common
         goal of meaningful exploration, exploitation and uses of outer space.
         In furtherance of this goal, the parties hereto agree to a no-fault,
         no-subrogation, inter-party waiver of liability pursuant to which each
         party agrees not to bring a claim in arbitration or otherwise against
         or sue the other party, and agrees to absorb the financial and any
         other consequences for Damage it incurs to its own property and
         employees as a result of participation in Payload Processing Activity,
         irrespective of whether such Damage is caused by Astrotech, MDC,
         Customer, or other participants in Payload Processing Activity, and
         regardless of whether such Damage arises through negligence of any
         degree or kind or otherwise (except for Damage caused by willful
         misconduct). Thus, the parties, by absorbing the consequences of damage
         to their property and employees without recourse against each other or
         other participants in Payload Processing Activity, jointly contribute
         to the common goal of meaningful exploration, exploitation and uses of
         outer space.

  (b)    Extension of Inter-Party Waiver.  The parties agree that this common
         goal will also be advanced through extension of the inter-party waiver
         of liability to other participants in Payload Processing Activity.
         Accordingly, the parties agree to use best efforts to extend the waiver
         as set forth in Clause H.10, Part (a) above to Customer and other
         customers of Astrotech and to contractors and subcontractors at every
         tier of Astrotech, MDC, Customer, other customers of Astrotech, and to
         all other participants in Payload Processing Activity, as third party
         beneficiaries, whether or not such participants causing damage bring
         property or employees to the Astrotech Facility or retain title to or
         other interest in property provided by them to be used, or otherwise
         involved, in Payload Processing Activity. Further, MDC will use best
         efforts to require that Customer extend the waiver as set forth in
         Clause H.10, Part (a) above to (i) all other persons and entities to
         whom it assigns all or part of its right to Services, and (ii) any
         person or entity to whom Customer has sold or leased or otherwise
         agreed to provide all or any portion of its Payload or Payload
         services. The parties agree that if they are unsuccessful in flowing
         down the provisions of Clause H.10, Part (a) to a customer, contractor,
         subcontractor, or the other persons and entities described above, each
         agrees to provide written notice thereof within 30 days of such
         failure. In addition, the party that is unsuccessful in flowing down
         Clause H.10, Part (a) shall, at its option, be obligated to procure or
         maintain insurance to indemnify the other party, its customers,
         contractors and subcontractors consistent with the requirements of
         Clause H.10, Part (a) or in the alternative to pay the other party all
         reasonable costs incurred in connection with that party procuring or
         maintaining additional insurance to indemnify that party its customers,
         contractors and subcontractors consistent with the requirements of
         Clause H.10, Part (a), and/or in the alternative to self insure for any
         damage not covered by insurance. In the event either party fails to
         fulfill its obligations under this Clause H.10, Part (b), said party
         agrees to indemnify the other party and other participants in Payload
         Processing Activity for any Liability they may sustain as a result of
         such failure.

   (c)   The parties agree in lieu of any provisions provided in Clause H.10,
         Part (b), Astrotech may at its sole option, and with no contractual or
         legal liabiliity to MDC, refuse to process any payload of an MDC
         customer who has refused to execute the Inter-party Waiver of Liability
         as set forth in Clause H.10, Parts (a) and (b). The aforementioned
         right of Astrotech shall be subject to Astrotech providing preliminary
         notice to MDC (not later than 45 days after MDC's Clause H.10, Part (b)
         notification) of Astrotech's intent not to process a payload and also
         subject to Astrotech's agreement to provide good faith support to any
         MDC efforts to convince its customer(s) to accept the Inter-party
         Waiver of Liability provision prior to Astrotech's final decision to
         invoke its rights under Clause H.10, Part (c).

<PAGE>   14

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H.11     SCHEDULE AND FACILITY ASSIGNMENT

  (a)    Occupancy Period. The period of time agreed to by MDC and Astrotech
         during which MDC and Customer will reside at the Astrotech Facility or
         otherwise receive Services for each Payload to be processed under this
         Subcontract (hereinafter called "Occupancy Period") and the launch date
         upon which the Occupancy Period is based shall be determined and set
         forth in the Mission Exhibit of this Subcontract applicable to the
         particular Payload. Such Mission Exhibit shall also contain the
         schedules and assignments for the use of the facilities within
         Astrotech TICO, as applicable, by MDC and Customer.

  (b)    Key Dates. Key milestone dates relating to all critical events that
         could affect the Occupancy Period or Services to be performed for each
         Payload under this Subcontract shall be exchanged between the MDC
         Technical Manager and the Astrotech Technical Manager. Each party shall
         advise the other, in a timely manner, of any event which occurs that
         would significantly alter the agreed to Occupancy Period or Services.

  (c)    Schedule Changes.  MDC and Astrotech recognize that the nature of
         spaceflight activity is such that schedules must sometimes be changed,
         often for reasons beyond the control or reasonable predictive ability
         of MDC, Customer, or Astrotech. In the event that a change in the
         Occupancy Period or in the schedules for the use of the respective
         Astrotech facilities for a particular Payload becomes necessary by MDC,
         Customer, or Astrotech, the parties agree to work together to
         accommodate the particular rescheduling request (including, if
         necessary, changes in the assignments for the use of the respective
         Astrotech facilities, and overtime and weekend work by Astrotech, MDC
         and Customer, and their respective contractors and subcontractors), in
         a manner that will be mutually acceptable, satisfy the established
         launch schedules, and be compatible with the established or changed
         schedules of the other customers of Astrotech. Once the need for such a
         change has been recognized by either party, that party shall promptly
         notify the other party of the particular rescheduling or reassignment
         request, and the related circumstances. Any officially announced change
         (by letter, press release, or other formal means) in the launch date
         for a particular Payload that is more than one week from the launch
         date upon which the current Occupancy Period is based shall be deemed
         to be notification to Astrotech of a request to change the Occupancy
         Period, unless MDC otherwise notifies Astrotech in writing.

  (d)    Schedule Changes Requested or Caused by MDC.  In the event that MDC
         requests or causes a change (including that resulting from an
         officially announced change in launch date) in the Occupancy Period or
         the schedule for the use of the respective Astrotech facilities for a
         particular Payload, as long as the resulting change does not exceed the
         duration of the previously established schedule such change shall not
         affect the Service Fee or other charges to MDC, except that MDC shall
         be charged any increase or credited with any decrease in the Service
         Fee applicable to any change in launch date associated with the
         rescheduled Occupancy Period in accordance with Section B.3(a), Price
         Schedule. In the event that MDC requests or causes a change in the
         Occupancy Period for a particular Payload which results in Customer
         vacating the Astrotech Facility after the beginning of the Occupancy
         Period, MDC shall also be charged a pro rata share of the applicable
         Service Fee based on the portion of the Occupancy Period elapsed as of
         the date of such vacation by Customer, computed on a daily basis.

  (e)    Schedule Changes Requested by Astrotech. In the event that Astrotech
         requests and MDC agrees to a change in the Occupancy Period for a
         particular Payload, such change shall not affect the Service Fee or
         other charges to MDC, except that MDC shall be credited with any
         decrease in the Service Fee applicable to any change in launch date
         associated with the rescheduled Occupancy Period in accordance with
         Section B.3(a), Price Schedule.

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H.12     TERMINATION

(a)       Termination by MDC.

         (1)    Termination for Convenience. MDC shall have the right to
                terminate for convenience, in whole or in part, its obligation
                to obtain Astrotech Services under this Subcontract by providing
                written notification to Astrotech.

         (2)    Termination for Cause. MDC shall only have the right to
                terminate, in whole or in part, its obligation to obtain
                Astrotech Servides under this Subcontract in the event and to
                the extent THAT (i) Astrotech fails to meet a material provision
                of this Subcontract for a particular Payload, and such failure
                continues without acceptable corrective action for thirty (30)
                days following written notification to Astrotech by MDC
                indicating such failure and that MDC intends to terminate, or
                (ii) Astrotech is unable to adequately satisfy an essential
                requirement for a particular Payload and Astrotech so
                acknowledges in writing within thirty (30) days following
                written notification to Astrotech by MDC citing such inability,
                which acknowledgment shall not be unreasonably withheld by
                Astrotech.

         (3)    Termination Charge. In the event of termination by MDC pursuant
                to Section H.12, Parts (a)(1) & (a)(2), MDC shall pay Astrotech
                a Termination Charge as determined below. In the event of an
                overpayment, Astrotech shall refund the amount of such
                overpayment to MDC.

                a)  Termination for Convenience. Should MDC exercise its rights
                    to terminate this Subcontract under the provisions of
                    Section H.12, Part (a)(1), the following charges would
                    apply.

                    1)   In Whole. Should MDC terminate this Subcontract in
                         Whole before the beneficial occupancy date of the new
                         Astrotech Spacecraft Processing Facility (Bldg. 9), the
                         termination charge to MDC would be equal to the total
                         costs expended to date on the design and construction
                         of Bldg. 9 and the MDC payload fairing work platforms
                         including any related project termination charges, not
                         to exceed the amount shown in the Exhibit B Termination
                         Liability Schedule for the month in which written
                         notification was provided by MDC to Astrotech, plus any
                         payload mission charges as described in 2) below.

                         Should MDC terminate this Subcontract in Whole on or
                         after the beneficial occupancy date of the new
                         Astrotech Spacecraft Processing Facility (Bldg. 9), the
                         total termination charge to MDC would equal the amount
                         shown on the Exhibit B Termination Liability Schedule
                         for the month in which written notification was
                         provided by MDC to Astrotech.

                    2)   In Part. Should MDC terminate this Subcontract for a
                         given Payload or Payloads that represents a mission or
                         missions over and above the annual guaranteed mission
                         quantity plus potential mission credits as defined in
                         Section B.3, Parts (a) and (c), MDC shall pay Astrotech
                         as liquidated damages a pro-rated share of the Service
                         Fee applicable for that particular Payload or Payloads
                         based on the portion of the contracted Occupancy Period
                         elapsed as of the date Customer vacates the Astrotech
                         Facility, computed on a daily basis, but not less than
                         five percent (5%) of the Service Fee for that Payload,
                         plus any additional charges agreed to or otherwise due
                         and payable under this Subcontract as of the date
                         Customer vacates the Astrotech Facility. The minimum 5%
                         termination fee also applies if termination by MDC
                         occurs prior to the start of facility Occupancy Period
                         for the Payload or Payloads.

                b)  Termination for Cause. Should MDC exercise its rights to
                    terminate this Subcontract under the provisions of Section
                    H.12, Part (a)(2) above, MDC shall not be required to

<PAGE>   16

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                    pay Astrotech any termination charge associated with that
                    particular Payload or Payloads.

(b)       Termination by Astrotech.

         (1)    Inability to Perform. Astrotech shall have the right to
                terminate, in whole or in part, its commitment to furnish
                Services under this Subcontract, only to the extent that
                Astrotech is prevented from performing said Services, (i) in the
                event of riot, civil strife, war, damage to or destruction of
                the Astrotech facility, natural disaster or other Act of God
                beyond the control of Astrotech, or (ii) in the event the United
                States Government terminates or fails to provide support it has
                committed to Astrotech which is necessary for Astrotech to
                perform certain Services to be provided hereunder, and Astrotech
                cannot reasonably provide other means whereby to perform such
                Services. Prior to considering termination pursuant to this
                Section H.12, Part (b)(1), Astrotech shall consult with MDC in
                order to seek alternative means of providing Services acceptable
                to MDC.

         (2)    Termination Charge. In the event of a termination of Services
                for a Payload by Astrotech pursuant to Section H.12, Part
                (b)(1), MDC shall not be required to pay Astrotech any
                termination charge. In the event of overpayment, Astrotech shall
                refund the amount of such overpayment to MDC.

                                END OF SECTION H

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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

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SECTION I - GENERAL PROVISIONS

The below-noted terms and conditions, full text clauses, provisions and
modifications thereto are the General Provisions of the Subcontract.

I.1      TERMS AND CONDITIONS GUIDE

         The Subcontract incorporates by reference the below-listed clauses with
         the same force and effect as if they were set forth in full text. The
         clauses are in the Expendable Launch Systems (ELS) Terms and Conditions
         Guide found on the Internet at
         http://www.boeing.com/companyoffices/doingbiz/tscs .

<TABLE>
<CAPTION>
         NUMBER                            TITLE
         ------                            -----
<S>                 <C>
         GP1          Fixed Price General Provisions
         312          Seller Compliance with Occupational Safety & Health Act of
                      1970
         328          Release Void
         329          Plant Rules and Government Clearance
         333          Insurance and Minimum Requirements
         336          Release and Use of Information
         354          Safety and Accident Prevention
         390          Commercial Space Operations Support Agreement (CSOSA) -
                      Allocation of Risk and Insurance
         524          Service and Supply Provisions
         862          Additional General Provisions (Fixed Price Contract)
</TABLE>

I.2      MODIFICATIONS TO GENERAL PROVISIONS (Full Text)

         MDC Clauses cited above from the Expendable Launch Systems (ELS) Terms
         and Conditions Guide found on the Internet at
         http://www.boeing.com/companyoffices/doingbiz/tscs .

         a)  GP1, Articles 14 and 15 are hereby deleted and replaced by Clause
             H.12.
         b)  GP1, Article 16 is deleted and replaced by:  "Neither party shall
             assign any of its rights or interest in this contract or
             subcontract all or substantially all of its performance of this
             contract, without the other party's prior written consent. Such
             consent shall not unreasonably be withheld. Neither party shall
             delegate any of its duties or obligations under this contract. No
             assignment, delegation or subcontracting by either party, with or
             without the other party's consent, shall relieve either party of
             any of its obligations under this contract. This article does not
             limit either party's ability to purchase standard commercial
             supplies or raw materials. Either party may assign its right to
             monies due or to become due."

I.3      ADDITIONAL FULL-TEXT PROVISIONS

         The following additional full-text provisions apply to this
         Subcontract:

                    NONE

                                END OF SECTION I

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MCDONNELL DOUGLAS CORPORATION                           SUBCONTRACT NO. 99797075

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                                    SECTION J

                   LIST OF DOCUMENTS, EXHIBITS AND ATTACHMENTS
                         APPLICABLE TO THIS SUBCONTRACT

1.     Exhibit A, Supplier Work Statement  7075 entitled  "Payload Processing
       Services" dated 1 December 1998, as modified by the following revisions
       thereto, are incorporated herein by this reference:

<TABLE>
<CAPTION>
       Revision No.                         Date
       ------------                         ----
<S>                                         <C>
              1                             5 August 1999
              2                             15 November 1999
</TABLE>

2.     Exhibit B, Termination Liability Schedule dated 20 May 1999.

    NOTE:         *The only clauses of the Terms and Conditions Guide applicable
                   to the Subcontract are as specified in Section I of the
                   Subcontract.

                                END OF SECTION J
                               END OF SUBCONTRACT

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

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