Document:

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                                 Exhibit 10-12

                 PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P.

                   Thirteenth Amendment to the Second Amended
                and Restated Agreement of Limited Partnership of
                 Prentiss Properties Acquisition Partners, L.P.,
                      Establishing the Series D Cumulative
              Convertible Redeemable Preferred Units of Partnership
                      Interest and Fixing Distribution and
                   Other Preferences and Rights of Such Units

                                    RECITALS

         A. The Board of Trustees of Prentiss Properties Trust (the "Trust") has
adopted a resolution designating and classifying 3,773,585 unissued and
unclassified preferred shares of beneficial interest of the Trust as Series D
Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest (the
"SERIES D PREFERRED SHARES").

         B. Pursuant to Section 4.02 and Article XI of the Second Amended and
Restated Agreement of Limited Partnership (the "AGREEMENT") of Prentiss
Properties Acquisition Partners, L.P. (the "Partnership"), Prentiss Properties
I, Inc. as the sole general partner of the Partnership (the "General Partner"),
desires to amend the Agreement to establish the Series D Cumulative Convertible
Redeemable Preferred Units of Partnership Interest (the "SERIES D PREFERRED
UNITS") with economic interests substantially similar to those of the Series D
Preferred Shares.

         NOW, THEREFORE, the General Partner hereby adopts the following
amendment to the Partnership Agreement:

         I.    AMENDMENT TO SECTION 4.02 (d). Section 4.02(d) is deleted in its
entirety.

         II.   AMENDMENT TO SECTION 4.02. Section 4.02 is amended by adding
Section 4.02(g), as follows:

(g)      Series D Cumulative Convertible Redeemable Preferred Units of
Partnership Interest.

         Section 1.  DEFINITIONS. For purposes of the Series D Preferred Units,
the following terms shall have the meanings indicated:

                     "Applicable Treasury Rate," for each Dividend Period, shall
mean the annual yield to maturity to U.S. Treasury securities with a ten-year
maturity, as compiled by and published in the most recent Federal Reserve
Statistical Release H.13(519) which has become publicly available prior to the
last Business Day of such Dividend Period (or, if such Statistical Release is no
longer published, any publicly available source of similar date).

                     "Base Rate" shall mean an annual dividend payment in an
amount per share equal to $1.60; PROVIDED, HOWEVER, that if the Trust gives
notice of its election to make a Dividend Increase (as defined in the Exchange
Agreement) following a Change of Control (as defined in the Exchange Agreement)
in accordance with Section 6.7 of the Exchange Agreement, then from and after
the date of such notice, the "Base Rate" shall mean an annual dividend payment
in an
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amount per share equal to the product of (a) the greater of (1) 800 basis points
plus the Applicable Treasury Rate or (2) 12% and (b) the greater of (1) the
Liquidation Preference per Series D Preferred Share and (2) the Volume-Weighted
Average trading Price for the thirty trading days preceding the Change of
Control transaction of the number of Common Shares into which each Series D
Preferred Share is then convertible.

                     "Board of Trustees" shall mean the Board of Trustees of the
Trust.

                     "Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City, New York are authorized or required by law, regulation or
executive order to close.

                     "Call Date" shall mean the date specified in the notice to
holders required under Section 5(d) as the Call Date.

                     "Change of Control" shall have the meaning set forth in
Section 6.7(f) of the Exchange Agreement.

                     "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                     "Common Units" shall mean all the units of partnership
interest in the Partnership that are not specifically designated as preferred
units pursuant to Section 4.02.

                     "Constituent Person" shall have the meaning set forth in
Section 6(e).

                     "Conversion Date" shall have the meaning set forth in
Section 6(a).

                     "Conversion Price" shall mean the conversion price per
Common Unit for which the Series D Preferred Units are convertible, as such
Conversion Price maybe adjusted pursuant to Section 6. The initial conversion
price shall be $26.50.

                     "Current Market Price" of publicly traded Common Units or
any other Partnership Units or other security of the Partnership or any other
issuer for any day shall mean the last reported sales price, regular way, on
such day, or, if no sale takes place on such day, the average of the reported
closing bid and asked prices on such day, regular way, in either case as
reported on the New York Stock Exchange ("NYSE") or, if such security is not
listed or admitted for trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted for trading or, if not
listed or admitted for trading on any national securities exchange, on the
Nasdaq National Market ("NASDAQ") or, if such security is not quoted on NASDAQ,
the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by the National Association of Securities
Dealers, Inc. (the "NASD") or, if bid and asked prices for such security on such
day shall not have been reported through the NASD, the average of the bid and
asked prices on such day as furnished by any NYSE member firm regularly making a
market in such security selected for such purpose by the Board of Trustees. If
the Common Units are not publicly traded, then the Current Market Price of such
Common Units shall be equal to the Current Market Price of common shares of
beneficial interest of the Trust ("COMMON SHARES"), multiplied by the
then-current Conversion Factor.

                     "Distribution Payment Date" shall mean (i) for any
Distribution Period with respect to which the Partnership pays a distribution on
the Common Units, the date on which such distribution is paid, or (ii) for any
Distribution Period with respect to' which the Partnership

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does not pay a distribution on the Common Units, a date to be set by the General
Partner, which date shall not be later than the thirtieth calendar day after the
end of the applicable Distribution Period.

                     "Distribution Periods" shall mean quarterly distribution
periods commencing on January 1, April 1, July 1 and October 1 of each year and
ending on and including the day preceding the first day of the next succeeding
Distribution Period with respect to any Series D Preferred Units (other than the
initial Distribution Period, which shall commence on the Issue Date for such
Series D Preferred Units and end on and include the last day of the calendar
quarter immediately following such Issue Date, and other than the Distribution
Period during which any Series D Preferred Units shall be redeemed pursuant to
Section 5 or converted pursuant to Section 6, which shall end on and include the
Call Date with respect to the Series D Preferred Units being redeemed or the
date that such Series D Preferred Units are converted, as the case may be).

                     "Exchange Agreement" shall mean the Exchange Agreement
,dated as of March 20, 2001, by and among Security Capital Preferred Growth
Incorporated, a Maryland corporation, the Trust and the Operating Partnership,
as amended from time to time.

                     "Expiration Time" shall have the meaning set forth in
Section 6(d)(iv).

                     "Fair Market Value" shall mean the average of the daily
Current Market Prices of a Common Unit on the five (5) consecutive Trading Days
selected by the General partner commencing not more than 20 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
any "ex date" with respect to the issuance or distribution requiring such
computation. The term "ex date," when used with respect to any issuance or
distribution, means the first day on which the Common Units trade regular way,
without the right to receive such issuance or distribution, on the exchange or
in the market, as the case may be, used to determine that day's Current Market
Price.

                     "Fully Junior Units" shall mean the Common Units and any
other class or series of units of partnership interest in the Partnership now or
hereafter issued and outstanding over which the Series D Preferred Units have
preference or priority in both (i) the payment of distributions and (ii) the
distribution of assets on any liquidation, dissolution or winding up of the
Trust.

                     "Funds from Operations" shall mean net income (loss)
(computed in accordance with generally accepted accounting principles) excluding
gains (or losses) from debt restructuring, and distributions in excess of
earnings allocated to other minority interests (as reflected in the financial
statements of the Partnership) plus depreciation/amortization of assets unique
to the real estate industry, all computed in a manner consistent with the
revised definition of Funds From Operations adopted by the National Association
of Real Estate Investment Trusts ("NAREIT"), in its White Paper dated March
1995, as such definitions may be modified from time to time, as determined by
the General Partner in good faith.

                     "Issue Date" shall mean the date on which the Series D
Preferred Units are issued.

                     "Junior Units" shall mean the Common Units and any other
class or series of Partnership Units now or hereafter issued and outstanding
over which the Series D Preferred

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Units have preference or priority in the payment of distributions or in the
distribution of assets on any liquidation, dissolution or winding up of the
Trust.

                     "Non-Electing Unit" shall have the meaning set forth in
Section 6(e).

                     "Parity Preferred Units" shall have the meaning set forth
in Section 7(b).

                     "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.

                     "Purchased Units" shall have the meaning set forth in
Section 6(d)(iv).

                     "REIT Termination Event" shall mean the earliest to occur
of:

                     (i)   the filing of a federal income tax return by the
                           Trust for any taxable year on which the Trust does
                           not compute its income as a real estate investment
                           trust;

                     (ii)  the approval by the unitholders of the Trust of a
                           proposal for the Trust to cease to qualify as a real
                           estate investment trust;

                     (iii) a determination by the Board of Trustees of the
                           Trust, based on the advice of counsel, that the Trust
                           has ceased to qualify as a real estate investment
                           trust; or

                     (iv)  a "determination" within the meaning of Section
                           1313(a) of the Code that the Trust has ceased to
                           qualify as a real estate investment trust.

                     "Securities" and "Security" shall have the meanings set
forth in Section 6(d)(iii).

                     "Securities Act" shall mean the Securities Act of 1933, as
amended.

                     "Series D Preferred Units" shall have the meaning given
such term in the preamble to this Thirteenth Amendment.

                     "Set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Partnership in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration or other action of the General Partner, the allocation
of funds to be so paid on any series or class of Partnership Units of the Trust;
PROVIDED, HOWEVER, that if any funds for any class or series of Junior Shares or
any class or series of shares of beneficial interest ranking on a parity with
the Series D Preferred Units as to the payment of distributions are placed in a
separate account of the Trust or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Series D
Preferred Units shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.

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                     "Trading Day" shall mean any day on which the securities in
question are traded on the NYSE, or if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on NASDAQ, or if such
securities are not quoted on NASDAQ, in the securities market in which the
securities are traded.

                     "Transaction" shall have the meaning set forth in Section
6(e).

                     "Transfer Agent" shall mean the Trust, or such other agent
or agents of the Trust as may be designated by the Board of Trustees or their
designee as the transfer agent, registrar and distribution disbursing agent for
the Series D Preferred Units.

                     "Volume-Weighted Average Trading Price" shall mean, for any
period, the number obtained by dividing (i) the sum of the products, for each
sale of any security during such period, of (a) the sale price of such security,
regular way, as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the securities are not listed or admitted to trading on the NYSE, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
securities are admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, the sale price, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the securities are not
quoted by any such organization, the sales prices as furnished by professional
market makers making a market in the securities or, if the securities are not
publicly traded, the sale price as reasonably determined in good faith by the
Board of Trustees and (b) the number of such securities sold by (ii) the total
number of such securities sold during such period.

Capitalized terms not otherwise defined herein have the meanings ascribed to
them in the Partnership Agreement.

         Section 2.  NUMBER OF UNITS AND DESIGNATION. A series of preferred
units of partnership interest designated as Series D Cumulative Convertible
Redeemable Preferred Units of Partnership Interest is hereby established and the
number of units which shall constitute such series shall not be more than
3,773,585 units, which number may be decreased (but not below the aggregate
number thereof then outstanding and/or which have been reserved for issuance)
from time to time by the General Partner.

         Section 3.  DISTRIBUTIONS.

                (a)  Subject to the preferential rights of the holders of Parity
         Preferred Units and holders of any preferred units that rank senior in
         the payment of distributions to the Series D Preferred Units issued
         after the date hereof in accordance herewith as to payment of
         distributions and rights upon voluntary or involuntary dissolution,
         liquidation or winding up, the holders of Series D Preferred Units
         shall be entitled to receive, when, as and if determined by the General
         Partner in its sole discretion, out of finds legally available for the
         payment of distributions, cumulative preferential distributions payable
         in

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         cash in an amount per share equal to the greater of (i) the Base Rate
         or (ii) the regular cash distributions (determined on each Distribution
         Payment Date) on the Common Units, or portion thereof, into which a
         Series D Preferred Share is convertible. The distributions referred to
         in clause (ii) of the preceding sentence shall equal the number of
         Common Units, or portion thereof, into which one Series D Preferred
         Unit will be convertible on or after the Conversion Date, multiplied by
         the most current quarterly distribution on one Common Unit on or before
         the applicable Distribution Payment Date. If the Partnership pays a
         regular cash distribution on the Common Units with respect to a
         Distribution Period after the date on which the Distribution Payment
         Date is declared pursuant to clause (ii) of the definition of
         Distribution Payment Date and the distribution calculated pursuant to
         clause (ii) of this paragraph (a) with respect to such Distribution
         Period is greater than the distribution previously declared on the
         Series D Preferred Units with respect to such Distribution Period, the
         Partnership shall pay an additional distribution to the holders of the
         Series D Preferred Units on the date on which the distribution on the
         Common Units is paid, in an amount equal to the difference between (y)
         the distribution calculated pursuant to clause (ii) of this paragraph
         (a) and (z) the amount of distributions previously declared on the
         Series D Preferred Units with respect to such Distribution Period. The
         distributions shall begin to accrue and shall be fully cumulative from
         the first day of the applicable Distribution Period, whether or not in
         any Distribution Period or Periods there shall be funds of the
         Partnership legally available for the payment of such distributions,
         and shall be payable quarterly, when, as and if the General Partner, in
         its sole discretion, determines, in arrears on Distribution Payment
         Dates. Each such distribution shall be payable in arrears to the
         holders of record of Series D Preferred Units as they appear in the
         records of the Partnership at the close of business on such record
         dates, not less than 10 nor more than 50 days preceding such
         Distribution Payment Dates thereof, as shall be fixed by the General
         Partner. Accrued and unpaid distributions for any past Distribution
         Periods may be declared and paid at any time and for such interim
         periods, without reference to any regular Distribution Payment Date, to
         holders of record on such date, not less than 10 nor more than 50 days
         preceding the payment date thereof, as may be fixed by the General
         Partner. Any distribution payment made on Series D Preferred Units
         shall first be credited against the earliest accrued but unpaid
         distribution due with respect to Series D Preferred Units which remains
         payable.

                (b)  The amount of distributions referred to in clause (i) of
         Section 3(a) payable for each full Distribution Period on the Series D
         Preferred Units shall be computed by dividing the annual distribution
         rate by four. The initial Distribution Period for the Series D
         Preferred Units will include a partial distribution for the period from
         the Issue Date until the last day of the calendar quarter immediately
         following such Issue Date. The amount of distributions payable for such
         period, or any other period shorter than a full Distribution Period, on
         the Series D Preferred Units shall be computed by dividing the number
         of days in such period by 365 and multiplying the result by the Series
         D Preferred distribution rate determined in accordance with Section
         3(a). Holders of Series D Preferred Units shall not be entitled to any
         distributions, whether payable in cash, property or shares, in excess
         of cumulative distributions, as herein provided, on the Series D
         Preferred Units. No interest, or sum of money in lieu of interest,
         shall be payable in respect of any distribution or distributions on the
         Series D Preferred Units which may be in arrears.

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                (c)  So long as any Series D Preferred Units are outstanding, no
         distributions, except as described in the immediately following
         sentence, shall be declared or paid or set apart for payment on any
         class or series of Parity Preferred Units 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 D Preferred Units for all
         Distribution Periods terminating on or prior to the Distribution
         Payment Date on such class or series of Parity Preferred Units. When
         distributions are not paid in full or a sum sufficient for such payment
         is not set apart, as aforesaid, all distributions declared upon Series
         D Preferred Units and all distributions declared upon any other class
         or series of Parity Preferred Units shall be declared ratably in
         proportion to the respective amounts of distributions accumulated and
         unpaid on the Series D Preferred Units and accumulated and unpaid on
         such Parity Preferred Units.

                (d)  So long as any Series D Preferred Units are outstanding, no
         distributions (other than distributions paid solely in shares of, or
         options, warrants or rights to subscribe for or purchase shares of,
         Fully Junior Units) shall be declared or paid or set apart for payment
         or other distribution shall be declared or made or set apart for
         payment upon Junior Units, nor shall any Junior Units be redeemed,
         purchased or otherwise acquired (other than a redemption, purchase or
         other acquisition of Common Units made for purposes of an employee
         incentive or benefit plan of the Partnership or any subsidiary or
         affiliate) for any consideration (or any moneys be paid to or made
         available for a sinking fund for the redemption of any Junior Units) by
         the Partnership, directly or indirectly (except by conversion into or
         exchange for Fully Junior Units), unless in each case (i) the full
         cumulative distributions on all outstanding Series D Preferred Units
         and any other Parity Preferred Units of the Partnership shall have been
         or contemporaneously are declared and paid or declared and set apart
         for payment for all past Distribution Periods with respect to the
         Series D Preferred Units and all past distribution periods with respect
         to such Parity Preferred Units and (ii) sufficient funds shall have
         been or contemporaneously are declared and paid or declared and set
         apart for the payment of the distribution for the current Distribution
         Period with respect to the Series D Preferred Units and the current
         distribution period with respect to such Parity Preferred Units.

                (e)  No distributions on Series D Preferred Units shall be
         declared 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 declaration, payment or setting apart for
         payment or provides that such declaration, payment or setting apart for
         payment would constitute a breach thereof or a default thereunder, or
         if such declaration or payment shall be restricted or prohibited by
         law.

         Section 4.  LIQUIDATION PREFERENCE.

                     (a) In the event of any liquidation, dissolution or winding
         up of the Partnership, whether voluntary or involuntary, subject to the
         rights of holders of Parity Preferred Units and subject to the prior
         preferences and other rights of any series of Partnership Units ranking
         senior to the Series D Preferred Units of Beneficial Interest upon
         liquidation, distribution or winding up of the Partnership, before any
         payment or distribution of the

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         assets of the Partnership (whether capital or surplus) shall be made to
         or set apart for the holders of Junior Units, the holders of the Series
         D Preferred Units shall be entitled to receive Twenty Six Dollars and
         Fifty Cents ($26.50) (the "LIQUIDATION PREFERENCE") per Series D
         Preferred Unit plus an amount equal to all distributions (whether or
         not earned or declared) accrued and unpaid thereon to the date of final
         distribution to such holders; but such holders shall not be entitled to
         any further payment; PROVIDED, that the distribution payable with
         respect to the Distribution Period containing the date of final
         distribution shall be equal to the greater of (i) the distribution
         provided in Section 3(a)(i) or (ii) the distribution determined
         pursuant to Section 3(a)(ii) for the preceding Distribution Period. If,
         upon any liquidation, dissolution or winding up of the Partnership, the
         assets of the Partnership, or proceeds thereof, distributable among the
         holders of the Series D Preferred Units shall be insufficient to pay in
         full the preferential amount aforesaid and liquidating payments on any
         other shares of any class or series of Parity Preferred Units, then
         such assets, or the proceeds thereof, shall be distributed among the
         holders of Series D Preferred Units and any such other Parity Preferred
         Units ratably in accordance with the respective amounts that would be
         payable on such Series D Preferred Units and any such other Parity
         Preferred Units if all amounts payable thereon were paid in full. For
         the purposes of this Section 4, (i) a consolidation or merger of the
         Partnership with one or more partnerships, corporations, real estate
         investment trusts or other entities or (ii) a sale, lease or conveyance
         of all or substantially all of the Partnership's property or business
         shall not be deemed to be a liquidation, dissolution or winding up,
         voluntary or involuntary, of the Partnership.

                  (b)  Subject to the rights of the holders of shares of any
         series or class or classes of units ranking on a parity with or prior
         to the Series D Preferred Units upon liquidation, dissolution or
         winding up, upon any liquidation, dissolution or winding up of the
         Partnership, after payment shall have been made in full to the holders
         of the Series D Preferred Units, as provided in this Section 4, the
         holders of Series D Preferred Units shall have no other claim to the
         remaining assets of the Partnership and any other series or class or
         classes of Junior Units shall, subject to the respective terms and
         provisions (if any) applying thereto, be entitled to receive any and
         all assets remaining to be paid or distributed, and the holders of the
         Series D Preferred Units shall not be entitled to share therein.

         Section 5.  REDEMPTION AT THE OPTION OF THE PARTNERSHIP.

                     (a) The Series D Preferred Units shall not be redeemable by
         the Partnership prior to December 29, 2005. On and after December 29,
         2005, the Partnership, at its option, may redeem the Series D Preferred
         Units, in whole at any time or from time to time in part out of funds
         legally available therefor at a redemption price payable in cash equal
         to 100% of the Liquidation Preference per Series D Preferred Units
         (plus all accumulated, accrued and unpaid distributions as provided
         below).

                     (b) Upon any redemption of Series D Preferred Units
         pursuant to this Section 5, the Partnership shall pay all accrued and
         unpaid distributions, if any, thereon to the Call Date, without
         interest. If the Call Date falls after a distribution payment record
         date and prior to the corresponding Distribution Payment Date, then
         each holder of Series D

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         Preferred Units at the close of business on such distribution payment
         record date shall be entitled to the distribution payable on such
         shares on the corresponding Distribution Payment Date notwithstanding
         any redemption of such shares before such Distribution Payment Date.
         Except as provided above, the Partnership shall make no payment or
         allowance for unpaid distributions, whether or not in arrears, on
         Series D Preferred Units called for redemption.

                     (c) If full cumulative distributions on the Series D
         Preferred Units and any other class or series of Parity Preferred Units
         of the Partnership have not been declared and paid or declared and set
         apart for payment; the Series D Preferred Units may not be redeemed
         under this Section 5 in part and the Partnership may not purchase or
         acquire Series D Preferred Units, otherwise than pursuant to a purchase
         or exchange offer made on the same terms to all holders of Series D
         Preferred Units.

                     (d) Notice of the redemption of any Series D Preferred
         Units under this Section 5 shall be mailed by first-class mail to each
         holder of record of Series D Preferred Units to be redeemed at the
         address of each such holder as shown on the Partnership's records, not
         less than 30 nor more than 90 days prior to the Call Date. Neither the
         failure to mail any notice required by this paragraph (d), nor any
         defect therein or in the mailing thereof, to any particular holder,
         shall affect the sufficiency of the notice or the validity of the
         proceedings for redemption with respect to the other holders. Each such
         mailed notice shall state, as appropriate: (1) the Call Date; (2) the
         number of Series D Preferred Units to be redeemed and, if fewer than
         all the shares held by such holder are to be redeemed, the number of
         such shares to be redeemed from such holder; (3) the redemption price;
         (4) the then-current Conversion Price; and (5) that distributions on
         the shares to be redeemed shall cease to accrue on such Call Date
         except as otherwise provided herein. Notice having been mailed as
         aforesaid, from and after the Call Date (unless the Partnership shall
         fail to make available an amount of cash necessary to effect such
         redemption), (i) except as otherwise provided herein, distributions on
         the Series D Preferred Units so called for redemption shall cease to
         accrue, (ii) such shares shall no longer be deemed to be outstanding,
         and (iii) all rights of the holders thereof as holders of Series D
         Preferred Units shall cease (except the rights to convert and to
         receive the cash payable upon such redemption, without interest
         thereon, upon surrender and endorsement of their certificates if so
         required and to receive any distributions payable thereon). The
         Partnership's obligation to provide cash in accordance with the
         preceding sentence shall be deemed fulfilled if, on or before the Call
         Date, the Partnership shall deposit with a bank or trust company (which
         maybe an affiliate of the Partnership) that has an office in the
         Borough of Manhattan, City of New York, and that has, or is an
         affiliate of a bank or trust company that has, capital and surplus of
         at least $50,000,000, necessary for such redemption, in trust, with
         irrevocable instructions that such cash be applied to the redemption of
         the Series D Preferred Units so called for redemption. No interest
         shall accrue for the benefit of the holders of Series D Preferred Units
         to be redeemed on any cash so set aside by the Partnership. Subject to
         applicable escheat laws, any such cash unclaimed at the end of two
         years from the Call Date shall revert to the general funds of the
         Partnership, after which reversion the holders of such shares so called
         for redemption shall look only to the general funds of the Partnership
         for the payment of such cash.

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                     As promptly as practicable after the Call Date, such Series
         D Preferred Units shall be exchanged for any cash (without interest
         thereon) for which such Series D Preferred Units have been redeemed,
         such exchange to be evidenced by appropriate amendments of Exhibit A to
         the Agreement and payment to the holder thereof (as shown on the
         records of the Partnership) of such cash. If fewer than all the
         outstanding Series D Preferred Units are to be redeemed, shares to be
         redeemed shall be selected by the Partnership from outstanding Series D
         Preferred Units not previously called for redemption pro rata (as
         nearly as may be), by lot or by any other method determined by the
         Partnership in its sole discretion to be equitable.

         Section 6.  CONVERSION. Holders of Series D Preferred Units shall have
the right to convert all or a portion of such units into Common Units, as
follows:

                     (a) Subject to and upon compliance with the provisions of
         this Section 6, a holder of Series D Preferred Units shall have the
         right, at his or her option, at any time after the earliest to occur of
         (i) the sixty first day after such holder provides the Partnership with
         written notice of its intent to convert Series D Preferred Units, (ii)
         the first day on which a Change of Control occurs, (iii) the occurrence
         of a REIT Termination Event, or (iv) such date as determined by the
         Partnership (the "Conversion Date"), to convert all or any portion of
         such units (or such units as determined by the General Partner if
         pursuant to clause (iv) above) into the number of Common Units obtained
         by dividing the aggregate Liquidation Preference of such units
         (inclusive of accrued but unpaid distributions) by the Conversion Price
         (as in effect at the time and on the date provided for in the last
         paragraph of paragraph (b) of this Section 6), such conversion to be
         made in the manner provided in paragraph (b) of this Section 6;
         PROVIDED, HOWEVER, that the right to convert units called for
         redemption pursuant to Section 5 shall terminate at the close of
         business on the fifth Business Day prior to the Call Date fixed for
         such redemption, unless the Partnership shall default in making payment
         of the cash payable upon such redemption under Section 5.

                     (b) In order to exercise the conversion right, the holder
         of each Series D Preferred Unit to be converted shall irrevocably
         instruct the General Partner in a writing duly executed by the holder
         or the holder's duly authorized attorney, with signature guaranteed, to
         convert such units into Common Units. The General Partner, in its sole
         discretion, may require such holder to provide additional instruments
         of transfer as its deems necessary or desirable to effect the
         conversion. Each instruction shall be accompanied by an amount
         sufficient to pay any transfer or similar tax (or evidence reasonably
         satisfactory to the General Partner demonstrating that such taxes have
         been paid).

                     Each conversion shall be deemed to have been effected
         immediately prior to the close of business on the date on which such
         instruction and such notice shall have been received by the General
         Partner as aforesaid (and if applicable, payment of an amount equal to
         the distribution payable on such units shall have been received by the
         General Partner as described above) and such conversion shall be at the
         Conversion Price in effect at such time on such date.

                     Holders of Series D Preferred Units at the close of
         business on a distribution payment record date shall be entitled to
         receive the distribution payable on such units on

                                       10
<PAGE>

         the corresponding Distribution Payment Date notwithstanding the
         conversion thereof following such distribution payment record date and
         prior to such Distribution Payment Date. However, the holder of Series
         D Preferred Units converted during the period between the close of
         business on any distribution payment record date and the opening of
         business on the corresponding Distribution Payment Date (except Series
         D Preferred Units converted after the issuance of notice of redemption
         with respect to a Call Date during such period, such Series D Preferred
         Units being entitled to such distribution on the Distribution Payment
         Date) must pay to the Partnership an amount equal to the distribution
         payable on such units on such Distribution Payment Date. A holder of
         Series D Preferred Units on a distribution payment record date who
         converts Series D Preferred Units into Common Units on the
         corresponding Distribution Payment Date will receive the distribution
         payable by the Partnership on such Series D Preferred Units on such
         date, and the converting holder need not pay the amount of such
         distribution upon conversion. Except as provided above, the Partnership
         shall make no payment or allowance for unpaid distributions, whether or
         not in arrears, on converted units or for distributions on the Common
         Units issued upon such conversion.

                     (c) In lieu of any fractional interest in a Common Unit
         that would otherwise be deliverable upon the conversion of a Series D
         Preferred Share, the General Partner, in its sole discretion, may cause
         the Partnership to pay to the holder of such fractional unit an amount
         in cash based upon the Fair Market Value of the Common Units on the
         Trading Day immediately preceding the date of conversion. If more than
         one unit shall be surrendered for conversion at one time by the same
         holder, the number of full Common Units issuable upon conversion
         thereof shall be computed on the basis of the aggregate number of
         Series D Preferred Units so surrendered.

                     (d) The Conversion Price shall be adjusted from time to
         time as follows:

                         (i)   If the Partnership shall after the Issue Date (A)
                     make a distribution on its Partnership Units in Common
                     Units, (B) subdivide its outstanding Common Units into a
                     greater number of units, (C) combine its outstanding Common
                     Units into a smaller number of units or (D) issue any
                     Partnership Units by reclassification of its Common Units,
                     the Conversion Price in effect at the opening of business
                     on the day following the date fixed for the determination
                     of unitholders entitled to receive such distribution or
                     distribution or at the opening of business on the Business
                     Day next following the day on which such subdivision,
                     combination or reclassification becomes effective, as the
                     case may be, shall be adjusted so that the holder of any
                     Series D Preferred Units thereafter surrendered for
                     conversion shall be entitled to receive the number of
                     Common Units that such holder would have owned or have been
                     entitled to receive after the happening of any of the
                     events described above as if such Series D Preferred Units
                     had been converted immediately prior to the record date in
                     the case of a distribution or distribution or the effective
                     date in the case of a subdivision, combination or
                     reclassification. An adjustment made pursuant to this
                     subparagraph (i) shall become effective immediately after
                     the opening of business on the Business Day next following
                     the record date (except as provided in paragraph (h) below)
                     in the case of a distribution and shall become effective
                     immediately after the opening of

                                       11
<PAGE>

                     business on the Business Day next following the effective
                     date in the case of a subdivision, combination or
                     reclassification.

                         (ii)  If the Partnership shall issue after the Issue
                     Date rights, options or warrants to all holders of Common
                     Units entitling them (for a period expiring within 45 days
                     after the record date mentioned below) to subscribe for or
                     purchase Common Units at a price per share less than 95%
                     (100% if a stand-by underwriter is used and charges the
                     Partnership a commission) of the Fair Market Value per
                     Common Unit on the record date for the determination of
                     unitholders entitled to receive such rights, options or
                     warrants, then the Conversion Price in effect at the
                     opening of business on the Business Day next following such
                     record date shall be adjusted to equal the price determined
                     by multiplying (A) the Conversion Price in effect
                     immediately prior to the opening of business on the
                     Business Day next following the date fixed for such
                     determination by (B) a fraction, the numerator of which
                     shall be the sum of (x) the number of Common Units
                     outstanding on the close of business on the date fixed for
                     such determination and (y) the number of shares that the
                     aggregate proceeds to the Partnership from the exercise of
                     such rights, options or warrants for Common Units would
                     purchase at 95% of such Fair Market Value (or 100% in the
                     case of a stand-by underwriting), and the denominator of
                     which shall be the sum of (x) the number of Common Units
                     outstanding on the close of business on the date fixed for
                     such determination and (y) the number of additional Common
                     Units offered for subscription or purchase pursuant to such
                     rights, options or warrants. Such adjustment shall become
                     effective immediately after the opening of business on the
                     day next following such record date (except as provided in
                     paragraph (h) below). In determining whether any rights,
                     options or warrants entitle the holders of Common Units to
                     subscribe for or purchase Common Units at less than 95% of
                     such Fair Market Value (or 100% in the case of a stand-by
                     underwriting), there shall be taken into account any
                     consideration received by the Partnership upon issuance and
                     upon exercise of such rights, options or warrants, the
                     value of such consideration, if other than cash, to be
                     determined by the General Partner whose determination shall
                     be conclusive.

                         (iii) If the Partnership shall distribute to all
                     holders of its Common Units any securities of the
                     Partnership (other than Common Units) or evidence of its
                     indebtedness or assets (excluding cumulative cash
                     distributions or distributions paid with respect to the
                     Common Units after December 31, 2000 which are not in
                     excess of the following: the sum of (A) the Partnership's
                     cumulative undistributed Funds from Operations at December
                     31, 2000, plus (B) the cumulative amount of Funds from
                     Operations, as determined by the General Partner, after
                     December 31, 2000, minus (C) the cumulative amount of
                     distributions accrued or paid in respect of the Series D
                     Preferred Units or any other class or series of preferred
                     units of the Partnership after the Issue Date or rights,
                     options or warrants to subscribe for or purchase any of its
                     securities (excluding those rights, options and warrants
                     issued to all holders of Common Units entitling them for a
                     period expiring within 45 days after the record date
                     referred to in subparagraph (ii) above to subscribe for or
                     purchase Common Units, which rights and warrants are
                     referred to in and treated

                                       12
<PAGE>

                     under subparagraph (ii) above) (any of the foregoing being
                     hereinafter in this subparagraph (iii) collectively called
                     the "SECURITIES" and individually a "SECURITY"), then in
                     each such case the Conversion Price shall be adjusted so
                     that it shall equal the price determined by multiplying (x)
                     the Conversion Price in effect immediately prior to the
                     close of business on the date fixed for the determination
                     of unitholders entitled to receive such distribution by (y)
                     a fraction, the numerator of which shall be the Fair Market
                     Value per Common Unit on the record date mentioned below
                     less the then fair market value (as determined by the
                     General Partner, whose determination shall be conclusive)
                     of the portion of the Securities or assets or evidences of
                     indebtedness so distributed or of such rights, options or
                     warrants applicable to one Common Unit, and the denominator
                     of which shall be the Fair Market Value per Common Unit on
                     the record date mentioned below. Such adjustment shall
                     become effective immediately at the opening of business on
                     the Business Day next following (except as provided in
                     paragraph (h) below) the record date for the determination
                     of unitholders entitled to receive such distribution. For
                     the purposes of this subparagraph (iii), the distribution
                     of a Security, which is distributed not only to the holders
                     of the Common Units on the date fixed for the determination
                     of unitholders entitled to such distribution of such
                     Security, but also is distributed with each Common Unit
                     delivered to a Person converting a Series D Preferred Unit
                     after such determination date, shall not require an
                     adjustment of the Conversion Price pursuant to this
                     subparagraph (iii); PROVIDED that on the date, if any, on
                     which a person converting a Series D Preferred Unit would
                     no longer be entitled to receive such Security with a
                     Common Unit (other than as a result of the termination of
                     all such Securities), a distribution of such Securities
                     shall be deemed to have occurred and the Conversion Price
                     shall be adjusted as provided in this subparagraph (iii)
                     (and such day shall be deemed to be tithe date fixed for
                     the determination of the unitholders entitled to receive
                     such distribution" and "the record date" within the meaning
                     of the two preceding sentences).

                         (iv)  In case a tender or exchange offer (which term
                     shall not include open market repurchases by the
                     Partnership) made by the Partnership or any subsidiary of
                     the Partnership for all or any portion of the Common Units
                     shall expire and such tender or exchange offer shall
                     involve the payment by the Partnership or such subsidiary
                     of consideration per Common Unit having a fair market value
                     (as determined in good faith by the General Partner, whose
                     determination shall be conclusive), at the last time (the
                     "EXPIRATION TIME") tenders or exchanges may be made
                     pursuant to such tender or exchange offer, that exceeds the
                     Current Market Price per Common Unit on the Trading Day
                     next succeeding the Expiration Time, the Conversion Price
                     shall be reduced so that the same shall equal the price
                     determined by multiplying the Conversion Price in effect
                     immediately prior to the effectiveness of the Conversion
                     Price reduction contemplated by this subparagraph, by a
                     fraction of which the numerator shall be the number of
                     Common Units outstanding (including any tendered or
                     exchanged units) at the Expiration Time, multiplied by the
                     Current Market Price per Common Unit on the Trading Day
                     next succeeding the Expiration Time, and the denominator
                     shall be the sum of (A) the fair market value (determined
                     as

                                       13
<PAGE>

                     aforesaid) of the aggregate consideration payable to
                     unitholders based upon the acceptance (up to any maximum
                     specified in the terms of the tender or exchange offer) of
                     all shares validly tendered or exchanged and not withdrawn
                     as of the Expiration Time (the shares deemed so accepted,
                     up to any maximum, being referred to as the "PURCHASED
                     UNITS") and (B) the product of the number of Common Units
                     outstanding (less any Purchased Units) at the Expiration
                     Time and the Current Market Price per Common Unit on the
                     Trading Day next succeeding the Expiration Time, such
                     reduction to become effective immediately prior to the
                     opening of business on the day following the Expiration
                     Time.

                         (v)   No adjustment in the Conversion Price shall be
                     required unless such adjustment would require a cumulative
                     increase or decrease of at least 1 % in such price;
                     PROVIDED, HOWEVER, that any adjustments that by reason of
                     this subparagraph (v) are not required to be made shall be
                     carried forward and taken into account in any subsequent
                     adjustment until made; and PROVIDED, FURTHER, that any
                     adjustment shall be required and made in accordance with
                     the provisions of this Section 6 (other than this
                     subparagraph (v)) not later than such time as may be
                     required in order to preserve the tax-free nature of a
                     distribution to the holders of Common Units:
                     Notwithstanding any other provisions of this Section 6, the
                     Partnership shall not be required to make any adjustment of
                     the Conversion Price for the issuance of any Common Units
                     pursuant to any plan providing for the reinvestment of
                     distributions or interest payable on securities of the
                     Partnership and the investment of additional optional
                     amounts in Common Units under such plan. All calculations
                     under this Section 6 shall be made to the nearest cent
                     (with $.005 being rounded upward) or to the nearest
                     one-tenth of a unit (with .05 of a unit being rounded
                     upward), as the case may be. Anything in this paragraph (d)
                     to the contrary notwithstanding, the Partnership shall be
                     entitled, to the extent permitted by law, to make such
                     reductions in the Conversion Price, in addition to those
                     required by this paragraph (d), as it in its discretion
                     shall determine to be advisable in order that any share
                     distributions, subdivision of shares, reclassification or
                     combination of shares, distribution of rights or warrants
                     to purchase shares or securities, or distribution of other
                     assets (other than cash distributions) hereafter made by
                     the Partnership to its partners shall not be taxable.

                     (e) If the Partnership shall be a party to any transaction
         (including without limitation a merger, consolidation, self tender
         offer for all or substantially all of its Common Units, sale of all or
         substantially all of the Partnership's assets or recapitalization of
         the Common Units and excluding any transaction as to which subparagraph
         (d)(i) of this Section 6 applies) (each of the foregoing being referred
         to herein as a "TRANSACTION"), in each case as a result of which all or
         substantially all of the Common Units are converted into the right to
         receive shares, securities or other property (including cash or any
         combination thereof), each Series D Preferred Unit which is not
         redeemed or converted into the right to receive shares, securities or
         other property prior to such Transaction shall thereafter be
         convertible into the kind and amount of shares, securities and other
         property (including cash or any combination thereof) receivable upon
         the consummation of such Transaction by a holder of that number of
         Common Units into

                                       14
<PAGE>

         which one Series D Preferred Unit was convertible immediately prior to
         such Transaction, assuming such holder of Common Units (i) is not a
         Person with which the Partnership consolidated or into which the
         Partnership merged or which merged into the Partnership or to which
         such sale or transfer was made, as the case may be ("CONSTITUENT
         PERSON"), or an affiliate of a Constituent Person and (ii) failed to
         exercise his rights of election, if any, as to the kind or amount of
         shares, securities and other property (including cash) receivable upon
         such Transaction (provided that if the kind or amount of shares,
         securities and other property (including cash) receivable upon such
         Transaction is not the same for each Common Unit held immediately prior
         to such Transaction by other than a Constituent Person or an affiliate
         thereof and in respect of which such rights of election shall not have
         been exercised ("NON-ELECTING UNIT"), then for the purpose of this
         paragraph (e) the kind and amount of shares, securities and other
         property (including cash) receivable upon such Transaction by each
         Non-Electing Unit shall be deemed to be the kind and amount so
         receivable per unit by holders of a plurality of the Non-Electing
         Units). The Partnership shall not be a party to any Transaction unless
         the terms of such Transaction are consistent with the provisions of
         this paragraph (e), and it shall not consent or agree to the occurrence
         of any Transaction until the Partnership has entered into an agreement
         with the successor or purchasing entity, as the case may be, for the
         benefit of the holders of the Series D Preferred Units that will
         contain provisions enabling the holders of the Series D Preferred Units
         that remain outstanding after such Transaction to convert into the
         consideration received by holders of Common Units at the Conversion
         Price in effect immediately prior to such Transaction. The provisions
         of this paragraph (e) shall similarly apply to successive Transactions.

                     (f) If:

                         (i)   the Partnership shall declare a distribution on
                     its Common Units (other than cash distributions or
                     distributions paid with respect to the Common Units after
                     December 31, 2000 not in excess of the sum of the
                     Partnership's cumulative undistributed Funds from
                     Operations at December 31, 2000, plus the cumulative amount
                     of Funds from Operations, as determined by the General
                     Partner, after December 31, 2000, minus the cumulative
                     amount of distributions accrued or paid in respect of the
                     Series D Preferred Units or any other class or series of
                     preferred units of the Partnership after the Issue Date);
                     or

                         (ii)  the Partnership shall authorize the granting to
                     all holders of Common Units of rights, options or warrants
                     to subscribe for or purchase any units of any class or any
                     other rights, options or warrants; or

                         (iii) there shall be any reclassification of the Common
                     Units (other than an event to which subparagraph (d)(i) of
                     this Section 6 applies) or any consolidation or merger to
                     which the Partnership is a party (other than a merger in
                     which the Partnership is the surviving entity) and for
                     which approval of any partners of the Partnership is
                     required, or a self tender offer by the Partnership for all
                     or substantially all of its outstanding Common Units or the
                     sale or transfer of all or substantially all of the assets
                     of the Partnership as an entirety; or

                                       15
<PAGE>

                         (iv)  there shall occur the voluntary or involuntary
                     liquidation, dissolution or winding up of the Partnership;

         then the General Partner shall cause to be mailed to the holders of
         Series D Preferred Units at their addresses as shown on the records of
         the Partnership, as promptly as possible, but at least 10 days prior to
         the applicable date hereinafter specified, a notice stating (A) the
         date on which a record is to be taken for the purpose of such
         distribution,-or granting of rights, options or warrants, or, if a
         record is not to be taken, the date as of which the holders of Common
         Units of record to be entitled to such distribution, or rights, options
         or warrants are to be determined or (B) the date on which such
         reclassification, consolidation, merger, sale, transfer, liquidation,
         dissolution or winding up is expected to become effective, and the date
         as of which it is expected that holders of Common Units of record shall
         be entitled to exchange their Common Units for securities or other
         property, if any, deliverable upon such reclassification,
         consolidation, merger, sale, transfer, liquidation, dissolution or
         winding up. Failure to give or receive such notice or any defect
         therein shall not affect the legality or validity of the proceedings
         described in this Section 6.

                     (g) Whenever the Conversion Price is adjusted as herein
         provided, the General Partner shall promptly (i) execute and file in
         its records an officer's certificate setting forth the Conversion Price
         after such adjustment and setting forth a brief statement of the facts
         requiring such adjustment which certificate shall be conclusive
         evidence of the correctness of such adjustment absent manifest error,
         and (ii) prepare a notice of such adjustment of the Conversion Price
         setting forth the adjusted Conversion Price and the effective date of
         such adjustment and shall mail such notice of such adjustment of the
         Conversion Price to the holder of each Series D Preferred Unit at such
         holder's last address as shown on the records of the Partnership.

                     (h) In any case in which paragraph (d) of this Section 6
         provides that an adjustment shall become effective on the day next
         following the record date for an event, the Partnership may defer until
         the occurrence of such event (A) issuing to the holder of any Series D
         Preferred Unit converted after such record date and before the
         occurrence of such event the additional Common Units issuable upon such
         conversion by reason of the adjustment required by such event over and
         above the Common Units issuable upon such conversion before giving
         effect to such adjustment and (B) paying to such holder any amount of
         cash in lieu of any fraction pursuant to paragraph (c) of this Section
         6.

                     (i) There shall be no adjustment of the Conversion Price in
         case of the issuance of any shares of beneficial interest of the
         Partnership in a reorganization, acquisition or other similar
         transaction except as specifically set forth in this Section 6. If any
         action or transaction would require adjustment of the Conversion Price
         pursuant to more than one paragraph of this Section 6, only one
         adjustment shall be made and such adjustment shall be the amount of
         adjustment that has the highest absolute value.

                     (j) If the Partnership shall take any action affecting the
         Common Units, other than action described in this Section 6, that in
         the opinion of the General Partner would materially and adversely
         affect the conversion rights of the holders of the Series D

                                       16
<PAGE>

         Preferred Units, the Conversion Price for the Series D Preferred Units
         may be adjusted, to the extent permitted by law, in such manner, if
         any, and at such time, as the General Partner, in its sole discretion,
         may determine to be equitable in the circumstances.

                         The Partnership shall endeavor to comply with all
         federal and state securities laws and regulations thereunder in
         connection with the issuance of any securities that the Partnership
         shall be obligated to deliver upon conversion of the Series D Preferred
         Units.

                     (k) The Partnership will pay any and all documentary stamp
         or similar issue or transfer taxes payable in respect of the issue or
         delivery of Common Units or other securities or property on conversion
         of the Series D Preferred Units pursuant hereto; provided, however,
         that the Partnership shall not be required to pay any tax that may be
         payable in respect of any transfer involved in the issue or delivery of
         Common Units or other securities or property in a name other than that
         of the holder of the Series D Preferred Units to be converted, and no
         such issue or delivery shall be made unless and until the person
         requesting such issue or delivery has paid to the Partnership the
         amount of any such tax or established, to the reasonable satisfaction
         of the Partnership, that such tax has been paid.

         Section 7.  RANKING. Any class or series of Partnership Units shall be
deemed to rank:

                     (a) prior to the Series D Preferred Units, as to the
         payment of distributions and as to distribution of assets upon
         liquidation, dissolution or winding up, if the holders of such class or
         series shall be entitled to the receipt of distributions or of amounts
         distributable upon liquidation, dissolution or winding up, as the case
         may be, in preference or priority to the holders of Series D Preferred
         Units;

                     (b) on a parity with the Series D Preferred Units, as to
         the payment of distributions and as to distribution of assets upon
         liquidation, dissolution or winding up, whether or not the distribution
         rates, Distribution Payment Dates or redemption or liquidation prices
         per share thereof shall be different from those of the Series D
         Preferred Units, if the holders of such class or series and the Series
         D Preferred Units shall be entitled to the receipt of distributions and
         of amounts distributable upon liquidation, dissolution or winding up in
         proportion to their respective amounts of accrued and unpaid
         distributions per share or liquidation preferences, without preference
         or priority one over the other ("PARITY PREFERRED UNITS");

                     (c) junior to the Series D Preferred Units, as to the
         payment of distributions or as to the distribution of assets upon
         liquidation, dissolution or winding up, if such class or series shall
         be Junior Shares; and

                     (d) junior to the Series D Preferred Units, as to the
         payment of distributions and as to the distribution of assets upon
         liquidation, dissolution or winding up, if such class or series shall
         be Fully Junior Units.

         Section 8.  VOTING. Except as expressly provided herein, the holders of
Series D Preferred Units shall have no voting rights.

                                       17
<PAGE>

         So long as any Series D Preferred Units are outstanding, in addition to
any other vote or consent of partners required by law or by the Partnership
Agreement, the affirmative vote of at least 51 % of the votes entitled to be
cast by the holders of the Series D Preferred Units given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:

                     (a) Any amendment, alteration or repeal of any of the
         provisions of the Agreement that materially and adversely affects the
         voting powers, rights or preferences of the holders of the Series D
         Preferred Units; PROVIDED, HOWEVER, that the amendment of the
         provisions of the Partnership Agreement so as to authorize or create or
         to increase the authorized amount of, any Parity Preferred Units, Fully
         Junior Units or Junior Units that are not senior in any respect to the
         Series D Preferred Units shall not be deemed to materially adversely
         affect the voting powers, rights or preferences of the holders of
         Series D Preferred Units; or

                     (b) A consolidation with or merger of the Partnership into
         another entity, or a consolidation with or merger of another entity
         into the Partnership, unless in each such case each Series D Preferred
         Units (i) shall remain outstanding without a material and adverse
         change to its terms and rights or (ii) shall be converted into or
         exchanged for convertible securities of the surviving entity having
         preferences, conversion or other rights, voting powers, restrictions,
         limitations as to distributions, qualifications and terms or conditions
         of redemption thereof identical to that of a Series D Preferred Unit
         (except for changes that do not materially and adversely affect the
         holders of the Series D Preferred Units);

PROVIDED, HOWEVER, that no such vote of the holders of Series D Preferred Units
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the issuance of any such prior shares or
convertible security is to be made, as the case may be, provision is made for
the redemption of all Series D Preferred Units at the time outstanding to the
extent such redemption is authorized by Section 5 hereof.

         For purposes of the foregoing provisions of this Section 8, each Series
D Preferred Unit shall have one (1) vote per unit, except that when any other
series of Preferred Units shall have the right to vote with the Series D
Preferred Units as a single class on any matter, then the Series D Preferred
Units and such other series shall have with respect to such matters one (1) vote
per $26.50 (or less pursuant to Section 4(a) hereof) of stated liquidation
preference. Except as otherwise required by applicable law or as set forth
herein, the Series D Preferred Units shall not have any relative, participating,
optional or other special voting rights and powers other than as set forth
herein, and the consent of the holders thereof shall not be required for the
taking of any Partnership action.

         Section 9.  RECORD HOLDERS. The General Partner may deem and treat the
record holder of any Series D Preferred Units as the true and lawful owner
thereof for all purposes, and the General Partner shall not be affected by any
notice to the contrary.

         III. AMENDMENT TO SECTION 5.01. Section 5.01 is amended by amending and
restating in its entirety Section 5.01(a) as follows:

                                       18
<PAGE>

         (a) GENERAL.

         (1) PROFIT.

         (A) First, 100% to the General partner and Common Unitholders until the
aggregate amount of Profit allocated under this SECTION 5.01(a)(1)(A) shall
equal the aggregate amount of Loss allocated to the Partners under SECTION
5.01(a)(2)(E);

         (B) Second, 100% to each Series B Preferred Unitholder, Series C
Preferred Unitholder and Series D Preferred Unitholder in proportion to and to
the extent of their respective excesses of (i) the aggregate amount of Loss
allocated to each under SECTION 5.01(a)(2)(D) over (ii) the aggregate amount of
Profit allocated to each under this SECTION 5.01(a)(1)(B);

         (C) Third, 100% to the General Partner and the Common Unitholders in
proportion to and to the extent of their respective excesses of (i) the
aggregate amount of Loss allocated to each under SECTION 5.01(a)(2)(C) over (ii)
the aggregate amount of Profit allocated to each under this SECTION
5.01(a)(1)(C);

         (D) Fourth, 100% proportionately to (i) each Series B Preferred
Unitholder until the aggregate amount of Profit allocated to each Series B
Preferred Unitholder under this SECTION 5.01(a)(1)(D)(i) shall equal the Series
B Preferred Distribution Amount, (ii) each Series C Preferred Unitholder until
the aggregate amount of Profit allocated to each Series C Preferred Unitholder
under this SECTION 5.01(a)(1)(D)(ii) shall equal the Series C Preferred
Distribution Amount and (iii) each Series D Preferred Unitholder until the
aggregate amount of Profit allocated to each Series D Preferred Unitholder under
this SECTION 5.01(a)(1)(D)(iii) shall equal the Series D Preferred Distribution
Amount; and

         (E) Fifth, 100% to the General Partner and the Common Unitholders in
accordance with the Percentage Interest of each.

         (2) LOSS.

         (A) First, 100% to the General Partner and the Common Unitholders to
the extent of and in proportion to (i) the aggregate amount of Profit allocated
to each under SECTION 5.01(a)(1)(E) over (ii) the aggregate amount of Loss
allocated to each under this SECTION 5.01(a)(2)(A);

         (B) Second, 100% proportionately to (i) each Series B Preferred
Unitholder to the extent of the Undistributed Series B Preferred Unit
Distribution Amount, (ii) each Series C Preferred Unitholder to the extent of
the Undistributed Series C Preferred Unit Distribution Amount and (iii) each
Series D Preferred Unitholder to the extent of the Undistributed Series D
Preferred Unit Distribution Amount;

         (C) Third, 100% to the General Partner and the Common Unitholders in
proportion to the Percentage Interest of each until the Capital Account balances
of both the General Partner and each Common Unitholder shall equal zero;

                                       19
<PAGE>

         (D) Fourth, 100% to each Series B Preferred Unitholder, Series C
Preferred Unitholder and Series D Preferred Unitholder in proportion to the
Capital Account balances of each until the Capital Account balance of each
Series B Preferred Unitholder, Series C Preferred Unitholder and Series D
Preferred Unitholder shall equal zero; and

         (E) Fifth, 100% to the General Partner and Common Unitholders in
accordance with their Percentage Interests.

         (3) DEFINITIONS. For purposes of this Section 5.01(a), the following
terms shall have the meanings indicated:

             "COMMON UNITHOLDER(S)" means all Persons holding a Limited
         Partnership Interest in the Partnership other than the Series B
         Preferred Unitholders, Series C Preferred Unitholders and Series D
         Preferred Unitholders.

             "SERIES B PREFERRED UNIT DISTRIBUTION AMOUNT" means the amount
         distributable to the Series B Preferred Unitholders as provided in
         Section 4.02(e) of the Second Amendment to the Second Amended and
         Restated Agreement of Limited Partnership of the Partnership dated June
         25, 1998.

             "SERIES B PREFERRED UNITHOLDER" means any Person holding Series B
         Preferred Units.

             "SERIES B PREFERRED UNITS" means the Series B Cumulative Redeemable
         Perpetual Preferred Units of Partnership Interest issued pursuant to
         the Second Amendment to the Second Amended and Restated Agreement of
         Limited Partnership of the Partnership dated June 25, 1998.

             "SERIES C PREFERRED UNIT DISTRIBUTION AMOUNT" means the amount
         distributable to the Series C Preferred Unitholders as provided in
         Section 4.02(f) of the Eighth Amendment to the Second Amended and
         Restated Agreement of Limited Partnership of the Partnership dated
         September 17, 1999.

             "SERIES C PREFERRED UNITHOLDER" means any Person holding Series C
         Preferred Units.

             "SERIES C PREFERRED UNITS" means the Series C Cumulative Redeemable
         Perpetual Preferred Units of Partnership Interest issued pursuant to
         the Eighth Amendment to the Second Amended and Restated Agreement of
         Limited Partnership of the Partnership dated September 17, 1999.

             "SERIES D PREFERRED UNIT DISTRIBUTION AMOUNT" means the amount
         distributable to the Series D Preferred Unitholders as provided in
         Section 4.02(g) of this Thirteenth Amendment.

             "SERIES D PREFERRED UNITHOLDER" means any Person holding Series D
         Preferred Units.

                                       20
<PAGE>

             "SERIES D PREFERRED UNITS" means the Series D Cumulative
         Convertible Redeemable Preferred Units of Partnership Interest issued
         pursuant to this Thirteenth Amendment.

             "UNDISTRIBUTED SERIES B PREFERRED UNIT DISTRIBUTION AMOUNT" means
         the excess of (i) the aggregate amount of Profit allocated to the
         Series B Unitholders under SECTION 5.01(a)(1)(D) and (ii) the
         aggregated amount of distributions made to the Series B Unitholders
         under Section 3 of Section 4.02(e) of the Second Amendment to the
         Second Amended and Restated Agreement of Limited Partnership of the
         Partnership dated June 25, 1998.

             "UNDISTRIBUTED SERIES C PREFERRED UNIT DISTRIBUTION AMOUNT" means
         the excess of (i) the aggregate amount of Profit allocated to the
         Series C Unitholders under SECTION 5.01(a)(1)(D) and (ii) the
         aggregated amount of distributions made to the Series C Unitholders
         under Section 3 of Section 4.02(f) of the Eighth Amendment to the
         Second Amended and Restated Agreement of Limited Partnership of the
         Partnership dated September 17, 1999.

             "UNDISTRIBUTED SERIES D PREFERRED UNIT DISTRIBUTION AMOUNT" means
         the excess of (i) the aggregate amount of Profit allocated to the
         Series D Unitholders under SECTION 5.01(a)(1)(D) and (ii) the
         aggregated amount of distributions made to the Series D Unitholders
         under Section 3 of Section 4.02(g) of this Thirteenth Amendment.

         IV. AMENDMENT TO EXHIBIT A. Exhibit A to the Agreement is hereby
amended and restated in its entirety as set forth on EXHIBIT A attached hereto.

                                       21
<PAGE>

         IN WITNESS WHEREOF, the General Partner has caused this Amendment to be
duly executed by its Senior Vice President this 20th day of March, 2001.

                                          PRENTISS PROPERTIES I, INC.

                                          By:  /s/ MICHAEL A. ERNST
                                              -------------------------------
                                          Name:    Michael A. Ernst
                                          Title:   Chief Financial Officer

                                       22<PAGE>

                                 Exhibit 10.14

                               EXCHANGE AGREEMENT

                           DATED AS OF MARCH 20, 2001

                                      AMONG

                 SECURITY CAPITAL PREFERRED GROWTH INCORPORATED,

                            PRENTISS PROPERTIES TRUST

                                       AND

                 PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P.
<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE

I.   EXCHANGE OF STOCK........................................................1
              1.1      Exchange of the Shares.................................1
              1.2      Closing................................................2

II.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................3
              2.1      Organization, Good Standing and Qualification..........3
              2.2      Power, Authority and Enforceability....................3
              2.3      Capitalization; Registration Rights....................4
              2.4      Valid Issuance of Series D Preferred Shares............4
              2.5      Compliance with Other Instruments......................5
              2.6      No Registration Under the Securities Act; No
                       General Solicitation...................................5
              2.7      Financial Statements...................................5
              2.8      No Material Adverse Changes............................6
              2.9      Conformity to Exchange Act; No Misstatement
                       or Omission............................................6
              2.10     Litigation.............................................6
              2.11     Properties.............................................7
              2.12     Environmental Compliance...............................8
              2.13     Taxes..................................................9
              2.14     Insurance.............................................10
              2.15     Employees; ERISA......................................10
              2.16     REOC Status...........................................11
              2.17     Legal Compliance......................................11
              2.18     Governmental Consent..................................12
              2.19     Investment Company....................................12

III. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR..........................12
              3.1      Power, Authority and Enforceability...................12
              3.2      Compliance with Other Instruments.....................12
              3.3      Ownership Limitations.................................13
              3.4      Acquisition for Investment; Sophistication............13
              3.5      Title to Shares.......................................13

IV.  CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING.....................14
              4.1      Amendment to Limited Partnership Agreement............14
              4.2      Series D Preferred Articles Supplementary.............14
              4.3      Representations and Warranties........................14
              4.4      Performance...........................................14
              4.5      No Material Adverse Change............................14
              4.6      Opinion of Company Counsel............................14
              4.7      Registration Rights Agreement.........................15
              4.8      Tax Indemnification Agreement.........................15
              4.9      Officer's Certificate.................................15
              4.10     Payment of Modification Fee...........................15
              4.11     Proceedings...........................................15

                                      -ii-
<PAGE>

              4.12     Limited Waiver of Ownership Limitations...............15
              4.13     No Injunction.........................................16

V.   CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE  CLOSING.................16
              5.1      Representations and Warranties........................16
              5.2      Performance...........................................16
              5.3      No Injunction.........................................16
              5.4      Officer's Certificate.................................16

VI.  COVENANTS...............................................................17
              6.1      Notice of Certain Actions.............................17
              6.2      No Sale of Security...................................17
              6.3      No General Solicitation...............................17
              6.4      Filing of Exchange Act Reports........................17
              6.5      Consultation and Related Rights.......................17
              6.6      Maintenance of REIT Status............................19
              6.7      Change of Control.....................................20
              6.8      Waiver of Ownership Limitations.......................23
              6.9      No Public Disclosure..................................24
              6.10     Annual Certificate of Independent Public
                       Accountants or Company Counsel........................24
              6.11     Prohibition on Issuance of Series D Preferred
                       Shares................................................24
              6.12     Amendment to Limited Partnership Agreement............24
              6.13     Certificate of Company Security Ownership.............24
              6.14     Standstill............................................24
              6.15     Tender Offer..........................................26
              6.16     Compliance Certificate................................26
              6.17     Voting of Shares......................................27

VII. MISCELLANEOUS...........................................................27
              7.1      Survival of Warranties................................27
              7.2      Successors and Assigns................................27
              7.3      Governing Law.........................................28
              7.4      Counterparts..........................................28
              7.5      Titles and Subtitles..................................28
              7.6      Notices...............................................28
              7.7      Finder's Fees.........................................29
              7.8      Expenses..............................................30
              7.9      Amendments and Waivers................................30
              7.10     Severability..........................................30
              7.11     Entire Agreement......................................30

                                     -iii-
<PAGE>

                               EXCHANGE AGREEMENT

                  This EXCHANGE AGREEMENT (this "Agreement") is made as of the
20th day of March, 2001 by and among Prentiss Properties Trust, a Maryland real
estate investment trust (the "Company"), Prentiss Properties Acquisition
Partners, L.P., a Delaware limited partnership (the "Operating Partnership"),
and Security Capital Preferred Growth Incorporated, a Maryland corporation (the
"Investor").

                               W I T N E S S E T H

                  WHEREAS, the Company has previously issued and sold to the
Investor, and the Investor has previously purchased from the Company, 3,773,585
Series A Cumulative Convertible Preferred Shares of Beneficial Interest, $.01
par value per share (the "Series A Preferred Shares"); and

                  WHEREAS, the Company has authorized the issuance of 3,773,585
shares of a new class of preferred shares of beneficial interest, par value $.01
per share, designated as "Series D Cumulative Convertible Preferred Shares of
Beneficial Interest" (the "Series D Preferred Shares"), the terms of which shall
be as set forth in the Series D Articles Supplementary (the "SERIES D PREFERRED
ARTICLES SUPPLEMENTARY") in substantially the form of EXHIBIT A hereto, in
accordance with and subject to the terms and conditions set forth herein; and

                  WHEREAS, the Company desires to issue, and the Investor
desires to acquire, the Series D Preferred Shares in exchange for the Series A
Preferred Shares.

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

I.       EXCHANGE OF STOCK.

         I.1        EXCHANGE OF THE SHARES.

                    (a) The Company shall adopt and file with the State
Department of Assessments and Taxation of Maryland (the "SDAT") on or before the
Closing (as defined below) the Series D Preferred Articles Supplementary.

                    (b) Subject to the terms and conditions of this Agreement,
at the Closing, the Company agrees to issue to the Investor, and the Investor
agrees to acquire from the Company, 3,773,585 Series D Preferred Shares in
exchange for all of the issued and outstanding Series A Preferred Shares held by
the Investor.

         I.2        CLOSING.

                    Upon the terms and subject to the satisfaction or waiver of
all the conditions to closing set forth in this Agreement, the closing (the
"Closing") of the exchange of the Series D Preferred Shares for the Series A
Preferred Shares shall take place at the offices of Mayer, Brown

                                       4
<PAGE>

& Platt, 190 South LaSalle Street, Chicago, Illinois or at such other location
as may be agreed upon by the Company and the Investor. The Closing shall take
place at 10:00 a.m., Chicago time, on March 21, 2001 or on such other date as
the Company and the Investor shall agree.

         At the Closing, (a) the Company (i) shall issue and deliver to the
Investor a certificate or certificates in definitive form, registered in the
name of the Investor, evidencing the Series D Preferred Shares being acquired by
the Investor at the Closing and (ii) shall pay an amount equal to all accrued
and unpaid dividends, whether or not declared, to the date of Closing, on the
Series A Preferred Shares in immediately available funds and shall pay the
Modification Fee (as defined below) into escrow as described in the following
paragraph and (b) the Investor shall deliver to the Company, certificates
evidencing all of the Series A Preferred Shares held by the Investor, endorsed
in blank or accompanied by duly executed stock powers in exchange for the
certificates evidencing the Series D Preferred Shares.

         Notwithstanding anything to the contrary in this Agreement, the
Modification Fee shall be placed into escrow and shall be paid over to Investor
from time to time to the extent the Modification Fee does not exceed the Total
Payment calculated at such time. As used in this Agreement, "TOTAL PAYMENT"
shall be an amount equal to the lesser of (i) the Modification Fee and (ii) the
sum of (A) the maximum amount that can be paid to Investor without causing
Investor to fail to meet the requirements of Sections 856(c)(2) and (3) of the
Internal Revenue Code (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 Investor, and (B) in the event Investor receives a letter from
outside counsel (the "TOTAL PAYMENT TAX OPINION") indicating that Investor's
receipt of the Modification Fee would either constitute Qualifying Income or
would be excluded from gross income of Investor within the meaning of Sections
856(c)(2) and (3) of the Code (the "REIT REQUIREMENTS") or that the receipt by
Investor of the remaining balance of the Modification Fee would not be deemed
constructively received prior thereto, the Modification Fee less the amount paid
under clause (A) above. Any unpaid amounts shall remain in escrow and the escrow
agent shall not release any portion thereof to Investor unless and until the
escrow agent receives either one of the following: (i) a letter from Investor's
independent accountants indicating the maximum amount that can be paid at that
time to Investor without causing Investor to fail to meet the REIT Requirements
or (ii) a Total Payment Tax Opinion, and in either of such events the Company
shall cause the escrow agent to release to Investor the lesser of the unpaid
Modification Fee or the maximum amount stated in the letter referred to in (B)
above. The escrow agent shall return to the Company any unpaid portion of the
Total Payment on the date that is ten (10) years from the date of this
Agreement. The funds in the escrow shall be invested in U.S. Treasury
obligations. The Company shall have no liability to the Investor for any loss of
the escrowed funds or for damages resulting from payments by the escrow agent to
the Investor in excess of the REIT Requirements. The parties will enter into an
escrow agreement substantially in the form attached hereto as EXHIBIT G as soon
as reasonably practicable following the date of this Agreement.

                                       5
<PAGE>

II.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

                    Each of the Company and the Operating Partnership represents
and warrants, as of the date of this Agreement and as of the date of the
Closing, that:

         II.1       ORGANIZATION, GOOD STANDING AND QUALIFICATION.

                    (a) The Company has been duly organized and is validly
existing as a real estate investment trust in good standing under the laws of
the State of Maryland with full power and authority to own, lease and operate
its properties and conduct its business as now being conducted, and has been
duly qualified to transact business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except where the failure to so
qualify would not have a Material Adverse Effect. "Material Adverse Effect"
means any material adverse effect on the operations, assets, business, affairs,
properties, or financial or other condition of the Company, the Operating
Partnership and the Subsidiaries (as defined below) taken as a whole.

                    (b) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the Delaware
Revised Uniform Limited Partnership Act with partnership power and authority to
own, lease and operate its properties and conduct its business as now being
conducted and has been duly qualified to transact business and is in good
standing under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
except where the failure to so qualify would not have a Material Adverse Effect.

                    (c) The subsidiaries of the Company and the Operating
Partnership set forth on SCHEDULE 2.1 (the "Subsidiaries") have each been duly
organized and are validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or formation and have full power and
authority to own, lease and operate their properties and to conduct their
businesses as now being conducted, and each Subsidiary has been duly qualified
to transact business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, except where the failure to be in good
standing or to so qualify would not have a Material Adverse Effect. None of the
Company's or the Operating Partnership's subsidiaries that are not included on
SCHEDULE 2.1 individually or in the aggregate constitute a "Significant
Subsidiary" as defined in Rule 1-02 of Regulation S-X.

         II.2       POWER, AUTHORITY AND ENFORCEABILITY

                    (a) Each of the Company and the Operating Partnership has
all requisite trust or partnership power and authority, and has taken all
required trust or partnership action necessary, to execute, deliver, and perform
its obligations under, this Agreement, the Registration Rights Agreement (as
defined below) and the Tax Indemnification Agreement (as defined below)
(collectively, the "Transaction Documents"). The Company has all requisite trust
power and

                                       6
<PAGE>

authority, and has taken all required trust action necessary, to issue the
Series D Preferred Shares and the Conversion Shares (as defined below).

                    (b) This Agreement has been, and at or prior to the Closing
each of the other Transaction Documents will have been, duly executed and
delivered by each of the Company and the Operating Partnership, as applicable,
and each Transaction Document constitutes the legal, valid and binding
obligation of each of the Company and the Operating Partnership, as applicable,
enforceable against each of the Company and the Operating Partnership, as
applicable, in accordance with its terms, except as may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) equitable principles of general applicability relating to the availability
of specific performance, injunctive relief, or other equitable remedies.

         II.3       CAPITALIZATION; REGISTRATION RIGHTS.

                    After giving effect to the Company's adoption of the Series
D Preferred Articles Supplementary and the transactions contemplated by the
Transaction Documents, the authorized shares of beneficial interest of the
Company will consist of 20,000,000 preferred shares, par value $.01 per share,
of which 1,900,000 will have been designated as "Series B Cumulative Redeemable
Perpetual Preferred Shares," 1,000,000 will have been designated as "Series B
Junior Participating Cumulative Preferred Shares," 2,000,000 will have been
designated as "Series C Cumulative Redeemable Perpetual Preferred Shares" and
3,773,585 will have been designated as "Series D Cumulative Convertible
Preferred Shares," and 100,000,000 common shares, $.01 par value per share. All
of the issued and outstanding shares of beneficial interest of the Company have
been duly and validly authorized and issued and are fully paid and are
nonassessable. All of the issued and outstanding partnership interests of the
Operating Partnership have been duly and validly authorized and issued. Except
as set forth on SCHEDULE 2.3, there are no persons with registration rights or
other similar rights with respect to any securities of the Company or the
Operating Partnership.

         II.4       VALID ISSUANCE OF SERIES D PREFERRED SHARES.

                    The Series D Preferred Shares, when issued and delivered in
accordance with the terms hereof in exchange for the Series A Preferred Shares,
will be duly and validly issued and nonassessable. The common shares of
Beneficial Interest of the Company issuable upon the conversion of the Series D
Preferred Shares (the "Conversion Shares"), when issued upon such conversion in
accordance with the Series D Preferred Articles Supplementary will be duly and
validly issued, fully paid and nonassessable and, subject to the accuracy of the
Investor's representations set forth in Article III, will be issued in
compliance with all applicable federal and state securities laws.

                                       7
<PAGE>

         II.5       COMPLIANCE WITH OTHER INSTRUMENTS.

                    The execution, delivery and performance of the Transaction
Documents by the Company and the Operating Partnership and the consummation by
the Company and the Operating Partnership of the transactions contemplated
hereby and thereby do not (i) result in a violation of the Company's Declaration
of Trust (the "Declaration"), the Company's Bylaws (the "Bylaws") or of the
Operating Partnership's Second Amended and Restated Agreement of Limited
Partnership, as amended (the "Limited Partnership Agreement"), or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company, the Operating Partnership or any of the
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree applicable to the Company, the Operating Partnership
or any of the Subsidiaries or by which any property or asset of the Company, the
Operating Partnership or any of the Subsidiaries is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect or materially impair the Company's or the
Operating Partnership's ability to perform its obligations under the Transaction
Documents).

         II.6       NO REGISTRATION UNDER THE SECURITIES ACT; NO GENERAL
SOLICITATION.

                    Assuming the accuracy of the Investor's representations set
forth in Article III, it is not necessary in connection with the offer and
delivery of the Series D Preferred Shares and the Conversion Shares in the
manner contemplated by this Agreement to register the Series D Preferred Shares
or the Conversion Shares under the Securities Act of 1933, as amended (the
"Securities Act").

         None of the Company, the Operating Partnership nor any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the offering
of the Series D Preferred Shares in a manner that would require registration
under the Securities Act of the Series D Preferred Shares or (ii) engaged in any
form of general solicitation or general advertising in connection with the
offering of the Series D Preferred Shares (as those terms are used in Regulation
D under the Securities Act), or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.

         II.7       FINANCIAL STATEMENTS.

                    The financial statements and supporting schedules included
in the Company's Annual Report on Form 10-K for the year ended December 31, 1999
and the Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30 and September 30, 2000, filed with the Securities and Exchange
Commission (the "Commission"), are complete and correct in all material respects
and present fairly the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates specified and the consolidated results
of their operations

                                       8
<PAGE>

for the periods specified, in each case, in conformity with generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as indicated therein or in the notes thereto.

         II.8       NO MATERIAL ADVERSE CHANGES.

                    Since December 31, 1999, (i) there has been no change in the
business, operations or financial condition, of the Company, the Operating
Partnership or the Subsidiaries or in the earnings or the ability to continue to
conduct business in the usual and ordinary course of the Company, the Operating
Partnership and the Subsidiaries, whether or not arising in the ordinary course
of business, which has had a Material Adverse Effect; and (ii) except for the
transactions contemplated by the Transaction Documents or described in the
Company's periodic reports (excluding exhibits thereto) filed with the
Commission since December 31, 1999, pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (collectively, the
"Disclosure Documents") or as set forth on SCHEDULE 2.8, there has been no
transaction entered into by the Company, the Operating Partnership or any of the
Subsidiaries other than transactions in the ordinary course of business or
transactions which would not, individually or in the aggregate, have a Material
Adverse Effect; and (iii) there have not been any changes in the Company's or
the Operating Partnership's authorized capital (except as set forth in SECTION
2.3 of this Agreement) or any material increases in the debt of the Company, the
Operating Partnership and the Subsidiaries considered as one enterprise; and
(iv) there has been no actual or, to the knowledge of the Company or the
Operating Partnership, threatened revocation of, or default under, any material
contract to which the Company, the Operating Partnership or any of the
Subsidiaries is a party, which could reasonably be expected to result in a
Material Adverse Effect. For purposes of this Agreement, "knowledge" of the
Company, the Operating Partnership or any of their subsidiaries shall mean the
actual knowledge of the Company's Chairman of the Board, President, Chief
Financial Officer, Treasurer, Chief Accounting Officer or General Counsel.

         II.9       CONFORMITY TO EXCHANGE ACT; NO MISSTATEMENT OR OMISSION.

                    Each of the Disclosure Documents, as of the date it was
filed with the Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the respective rules and regulations of the
Commission thereunder and did not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

         II.10      LITIGATION.

                    Except as set forth in the Disclosure Documents, there is no
action, suit or proceeding (whether or not purportedly on behalf of the Company,
the Operating Partnership or any of their subsidiaries) before or by any court
or governmental agency or body, domestic or foreign, now pending, or to the
knowledge of the Company or the Operating Partnership, threatened against or
affecting the Company, the Operating Partnership or any of their subsidiaries
which, either alone or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or materially

                                       9
<PAGE>

impair the Company's or the Operating Partnership's ability to perform its
obligations under the Transaction Documents or the compliance by the Company
with the terms, conditions and provisions of the Series D Preferred Shares or
the Conversion Shares.

         II.11      PROPERTIES.

                    (a) None of the Company, the Operating Partnership or any of
the Subsidiaries (collectively, the "Transaction Entities") nor the Properties
(as defined below) taken as a whole has sustained, since the date of the latest
audited financial statements included or incorporated by reference in the
Disclosure Documents, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
other than as set forth or contemplated in the Disclosure Documents. For
purposes of this Agreement, "Properties" means (i) all real property owned or
leased directly or indirectly by the Company, the Operating Partnership or any
Subsidiary or otherwise used in the operation or conduct of the Company's, the
Operating Partnership's or any of their subsidiary's business, (ii) the land on
which any such real property is located, (iii) all buildings, structures, and
other improvements and fixtures located on or under such land and (iv) all
easements, rights and other appurtenances to such land.

                    (b) (i) The Operating Partnership, directly or indirectly,
has good and marketable title to each of the Properties and the other assets not
located in Texas, and has good and indefeasible title to each of the Properties
and the other assets located in Texas, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those referred
to in the Disclosure Documents or those which are not material in amount or
those which would not have a Material Adverse Effect; (ii) all liens, charges,
encumbrances, claims or restrictions on or affecting any of the Properties and
the assets of any Transaction Entity which are required to be disclosed in the
Disclosure Documents are disclosed therein; (iii) except as otherwise described
in the Disclosure Documents, neither the Company or any of its subsidiaries nor
any 10% or greater (in terms of square footage or base rent) tenant of any of
the Properties is in default under (A) any space leases (as lessor or lessee, as
the case may be) relating to the Properties, or (B) any of the mortgages or
other security documents or other agreements encumbering or otherwise recorded
against the Properties, in each case which default would have a Material Adverse
Effect, and no Transaction Entity knows of any event which, but for the passage
of time or the giving of notice, or both, would constitute a default under any
of such documents or agreements; (iv) no tenant under any of the leases at the
Properties has a right of first refusal to purchase the premises demised under
such lease except for such rights of first refusal that would not have a
Material Adverse Effect; (v) each of the Properties complies with all applicable
codes, laws and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the Properties),
except for such failures to comply that would not have a Material Adverse
Effect; and (vi) no Transaction Entity has knowledge of any pending or
threatened condemnation proceedings, zoning change or other proceeding or action
that will in any material manner affect the size of, use of, improvements on,
construction on or access to the Properties.

                                       10
<PAGE>

                    (c) The mortgages and deeds of trust which encumber the
Properties are not convertible into equity securities of the entity owning such
Property and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized with any property other than other Properties.

                    (d) The Operating Partnership, directly or indirectly, has
obtained title insurance on the fee or leasehold interests in each of the
Properties, in an amount at least equal to the greater of (i) the mortgage
indebtedness of each such Property or (ii) the purchase price of each such
Property.

                    (e) Each Transaction Entity and its subsidiaries, and each
Property carries, or is covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of its business and the value of such
Property and as is customary for companies engaged in similar businesses in
similar industries.

                    (f) Neither the Company nor any of its subsidiaries (i) is
in default in any material respect, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
the Properties or any of its other properties or assets is subject except for
such defaults that would not have a Material Adverse Effect or (ii) is in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or the Properties or any of its other
properties or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of the Properties or any of its other
properties or assets or to the conduct of its business except for such
violations or failures that would not have a Material Adverse Effect.

         II.12      ENVIRONMENTAL COMPLIANCE.

                    (a) Except as disclosed in SCHEDULE 2.12 or in the
Disclosure Documents, to the Company's knowledge, the Company, the Operating
Partnership and each of their subsidiaries has complied and is in compliance
with all Environmental Statutes (as defined below) except as such non-compliance
would not have a Material Adverse Effect.

                    (b) Except as disclosed in SCHEDULE 2.12 or in the
Disclosure Documents, none of the Company, the Operating Partnership or any of
their subsidiaries intends to use any real property owned or occupied by any
such party for the purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing, spilling,
seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, injecting, dumping, transferring or otherwise disposing of or
dealing with Hazardous Materials.

                    (c) Except as disclosed in SCHEDULE 2.12 or in the
Disclosure Documents, none of the Company, the Operating Partnership or any of
their subsidiaries has any knowledge of any seepage, leak, escape, leach,
discharge, injection, release, emission, spill, pumping, pouring,

                                       11
<PAGE>

emptying or dumping of Hazardous Materials into waters on or adjacent to any
real property owned or occupied by any such party, or onto lands from which
Hazardous Materials might seep, flow or drain into such waters.

                    (d) Except as disclosed in SCHEDULE 2.12 or in the
Disclosure Documents, none of the Company, the Operating Partnership or any of
their subsidiaries has any knowledge of any occurrence or circumstance that,
with notice or passage of time or both, would give rise to a claim under or
pursuant to any federal, state or local Environmental Statute pertaining to
Hazardous Materials on or originating from any real property owned or occupied
by the Company, the Operating Partnership or any of their subsidiaries arising
out of the conduct of any such party, including without limitation pursuant to
any Environmental Statute.

                    (e) Except as disclosed in SCHEDULE 2.12 or in the
Disclosure Documents, to the knowledge of the Company, no land owned by the
Company, the Operating Partnership or any of their subsidiaries is included or
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
(as hereinafter defined) by the United States Environmental Protection Agency
(the "EPA") or on the inventory of other potential "Problem" sites issued by the
EPA and has not otherwise been publicly identified by the EPA as a potential
CERCLA site or included or proposed for inclusion on any list or inventory
issued pursuant to any other Environmental Statute or issued by any other
Governmental Authority (as hereinafter defined).

                    (f) As used herein, "Hazardous Material" shall include
without limitation any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, toxic substances or related materials, asbestos or
any hazardous material as defined by any federal, state or local environmental
law, ordinance, rule or regulation, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C.ss.ss.9601 ET SEQ. ("CERCLA"), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C.ss.ss.1801 ET SEQ., the Resource
Conservation and Recovery Act, as amended, 42 U.S.C.ss.ss.9601 ET SEQ., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.ss.ss.11001
ET SEQ., the Toxic Substances Control Act, 15 U.S.C.ss.ss.2601 ET SEQ., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.ss.ss.136 ET SEQ.,
the Clean Air Act, 42 U.S.C.ss.ss.7401 ET SEQ., the Clean Water Act (Federal
Water Pollution Control Act), 33 U.S.C.ss.ss.1251 ET SEQ., the Safe Drinking
Water Act, 42 U.S.C.ss.ss.300F to 300j-11, and the Occupational Safety and
Health Act, 29 U.S.C.ss.ss.651 ET SEQ., as any of the above statutes may be
amended from time to time, and in the regulations adopted and publications
promulgated pursuant to each of the foregoing (individually, an "Environmental
Statute") or by any federal, state or local governmental authority having or
claiming jurisdiction over the properties and assets described in the Company's
periodic reports filed pursuant to the Exchange Act (a "Governmental
Authority").

         II.13      TAXES.

                    (a) The Company, the Operating Partnership and the
Subsidiaries have filed or caused to be filed all federal, state, local, foreign
and other tax returns, reports, information returns and statements (except for
returns, reports, information returns and statements the failure to file

                                       12
<PAGE>

which will not result in any Material Adverse Effect) required to be filed by
them. The Company, the Operating Partnership and the Subsidiaries have paid or
caused to be paid all taxes (including interest and penalties) that are shown as
due and payable on such returns or claimed by any taxing authority to be due and
payable with respect to such returns, except those which are being contested by
them in good faith by appropriate proceedings and in respect of which adequate
reserves are being maintained on their books in accordance with generally
accepted accounting principles consistently applied. The Company, the Operating
Partnership and the Subsidiaries do not have any material liabilities for taxes
other than those incurred in the ordinary course of business and in respect of
which adequate reserves are being maintained by them in accordance with
generally accepted accounting principles consistently applied. Federal and state
income tax returns for the Company, the Operating Partnership and the
Subsidiaries have not been audited by the Internal Revenue Service or state
authorities. No deficiency, assessment with respect to or proposed adjustment of
the Company's, the Operating Partnership's or any of the Subsidiaries' federal,
state, local, foreign or other tax returns is pending or, to the best of the
Company's, the Operating Partnership's or any of the Subsidiaries' knowledge,
threatened except as would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect. There is no tax lien, whether
imposed by any federal, state, local or other tax authority, outstanding against
the assets, properties or business of the Company, the Operating Partnership or
any of the Subsidiaries except as would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect. There are no
applicable taxes, fees or other governmental charges payable by the Company, the
Operating Partnership or any of the Subsidiaries in connection with the
execution and delivery of the Transaction Documents or the issuance by the
Company of the Series D Preferred Shares or the Conversion Shares.

                    (b) The Company has qualified, and will elect, to be taxed
as a real estate investment trust pursuant to Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), for all taxable years
ending on or after December 31, 1996, and the Company expects under present law
to so qualify in the future.

                    (c) The Operating Partnership is not a publicly traded
partnership that is taxed as a corporation under Section 7704 of the Code.

         II.14      INSURANCE.

                    The Company, the Operating Partnership and each of their
subsidiaries carries or is entitled to the benefits of insurance in such amounts
and covering such risks as is reasonably sufficient under the circumstances or
is customary in the industry and all such insurance is in full force and effect.

         II.15      EMPLOYEES; ERISA.

                    The Company and the Operating Partnership have good
relationships with their employees, taken as a whole, and have not had any
substantial labor problems. Except as previously disclosed to the Investor in
writing or set forth on SCHEDULE 2.15, neither the Company nor the

                                       13
<PAGE>

Operating Partnership has any knowledge as to any intentions of any employee of
the Company, the Operating Partnership, any Subsidiary or Prentiss Properties
Limited, Inc. or Prentiss Properties Limited II, Inc. who holds the title of
vice president or a title senior to vice president, including without
limitation, chairman of the board, chief executive officer, executive vice
president, senior vice president, chief financial officer, chief accounting
officer, chief legal officer, general counsel, manager of operations, managing
director or regional director, or any significant group of employees to leave
the employ of the Company, the Operating Partnership, any Subsidiary or Prentiss
Properties Limited, Inc. and Prentiss Properties Limited II, Inc. Other than as
disclosed in the Disclosure Documents, neither the Company nor the Operating
Partnership has established, sponsored, maintained, made any contributions to or
been obligated by law to establish, maintain, sponsor or make any contributions
to any "employee pension benefit plan" or "employee welfare benefit plan" (as
such terms are defined in ERISA), including, without limitation, any
"multi-employer plan." Each of the Company and the Operating Partnership is in
compliance with all applicable laws relating to the employment of labor,
including provisions relating to wages, hours, equal opportunity, collective
bargaining and the payment of Social Security and other taxes, and with ERISA,
except where the failure to so comply would not have a Material Adverse Effect.

         II.16      REOC STATUS.

                    The Operating Partnership is, at all times since its
creation has been, and will continue to be a real estate operating company
("REOC") (as such term is defined in 29 CFR 2510.3-101(e)).

         II.17      LEGAL COMPLIANCE.

                    (a) Each of the Company, the Operating Partnership and each
of their subsidiaries is in compliance with all applicable laws, rules,
regulations, orders, licenses, judgments, writs, injunctions, decrees or demands
of any court or administrative body, domestic or foreign, or of any other
governmental agency or instrumentality, domestic or foreign, except to the
extent that failure to comply would not have a Material Adverse Effect. The
Company, the Operating Partnership and each of their subsidiaries have all
necessary permits, licenses and other authorizations required to conduct their
businesses as currently conducted, and as proposed to be conducted, except where
the failure to have such permits, licenses or other authorizations would not
have a Material Adverse Effect.

                    (b) Except as disclosed in the Disclosure Documents, there
are no adverse orders, judgments, writs, injunctions, decrees or demands of any
court or administrative body, domestic or foreign, or of any other governmental
agency or instrumentality, domestic or foreign, outstanding against the Company,
the Operating Partnership or any of their subsidiaries which could reasonably be
expected to result in a Material Adverse Effect.

                                       14
<PAGE>

         II.18      GOVERNMENTAL CONSENT.

                    Other than such consents, approvals, authorizations,
declarations or filings as have already been obtained or made or which will be
made at or prior to the date of the Closing, no consent, approval or
authorization of, or declaration or filing with, any governmental authority on
the part of the Company is required for the valid execution and delivery of the
Transaction Documents or performance hereunder or thereunder or the valid offer,
issue and delivery of the Series D Preferred Shares or the Conversion Shares
pursuant to this Agreement, except for filings with the Commission and any state
securities commission that the Company will be required to make pursuant to the
Registration Rights Agreement.

         II.19      INVESTMENT COMPANY.

                    The Company is not an "investment company", as defined in
the Investment Company Act of 1940, as amended, nor is the Company controlled by
an "investment company."

III0     REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.

                    The Investor represents and warrants, as of the date of this
Agreement and as of the date of the Closing, that:

         III.1      POWER, AUTHORITY AND ENFORCEABILITY.

                    (a) The Investor is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Maryland. The
Investor has the requisite corporate power and authority, and has taken all
required corporate action necessary, to execute, deliver, and perform its
obligations under, the Transaction Documents and to acquire the Series D
Preferred Shares hereunder.

                    (b) This Agreement has been, and at or prior to the Closing
each of the other Transaction Documents will have been, duly executed and
delivered by the Investor and each Transaction Document constitutes the legal,
valid and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii)
equitable principles of general applicability relating to the availability of
specific performance, injunctive relief, or other equitable remedies.

         III.2      COMPLIANCE WITH OTHER INSTRUMENTS.

                    The execution, delivery and performance of each of the
Transaction Documents by the Investor and the consummation by the Investor of
the transactions contemplated hereby and thereby do not (i) result in a
violation of the Investor's Charter or Bylaws or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any

                                       15
<PAGE>

agreement, indenture or instrument to which the Investor is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Investor or by which any property or asset of the Investor is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, materially impair the Investor's ability to
perform its obligations under the Transaction Documents).

         III.3      OWNERSHIP LIMITATIONS.

                    The Investor has received a copy of the Declaration and
understands the restrictions on transfer and ownership of the Company's shares
of beneficial interest included therein.

         III.4      ACQUISITION FOR INVESTMENT; SOPHISTICATION.

                    (a) The Investor is acquiring the Series D Preferred Shares
for its own account for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof, and the Investor has no
present intention or plan to effect any distribution of the Series D Preferred
Shares. The Investor is an "accredited investor" as defined in Regulation D and
is able to bear the economic risk of acquisition of the Series D Preferred
Shares, can afford to sustain a total loss on such investment, and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risk of the proposed investment. The Investor has
received copies of all of the Disclosure Documents and has been furnished the
opportunity to ask questions of and receive answers from representatives of the
Company concerning the Disclosure Documents and the business and financial
affairs of the Company.

                    (b) The Investor understands that the Series D Preferred
Shares have not been registered under the Securities Act or applicable state
securities laws and agrees not to sell, pledge or otherwise transfer any of the
Series D Preferred Shares in the absence of such registration or an opinion of
counsel reasonably satisfactory to the Company that such registration is not
required. Except as set forth in the Registration Rights Agreement, the Investor
acknowledges that the Company is not required to register the Series D Preferred
Shares. The certificate evidencing the Series D Preferred Shares will bear the
following legend:

                    "The securities represented by this certificate have not
                    been registered under the Securities Act of 1933, as
                    amended, or state securities laws and may not be transferred
                    except pursuant to a registration or an opinion of counsel
                    reasonably satisfactory to the Company that such
                    registration is not required."

         III.5      TITLE TO SHARES.

                    The Investor holds of record and owns beneficially 3,773,585
shares of Series A Preferred Shares. Prior to the Closing, the Investor will
hold the Series A Shares free and clear of all liens, encumbrances, claims,
security interests or restrictions (other than any restrictions under

                                       16
<PAGE>

applicable securities laws) and there will be no outstanding subscriptions,
options, warrants, rights, contracts, understandings or agreements to purchase
or otherwise acquire the Series A Preferred Shares, except for this Agreement.

IV0      CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING.

         The Investor's obligations at the Closing under SECTION 1.2 of this
Agreement are subject to the satisfaction or waiver by the Investor on or before
the Closing of each of the following conditions:

         IV.1       AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT.

         At or prior to the Closing, the amendments to the Limited Partnership
Agreement contemplated by SECTION 6.12 shall have been adopted.

         IV.2       SERIES D PREFERRED ARTICLES SUPPLEMENTARY.

                    At or prior to the Closing, the Series D Preferred Articles
Supplementary shall have been filed with and accepted for recording by the SDAT.

         IV.3       REPRESENTATIONS AND WARRANTIES.

                    The representations and warranties of each of the Company
and the Operating Partnership contained in Article II shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the date of the Closing.

         IV.4       PERFORMANCE.

                    Each of the Company and the Operating Partnership shall have
performed and complied in all material respects with all agreements, obligations
and conditions contained in the Transaction Documents that are required to be
performed or complied with by it on or before the date of the Closing.

         IV.5       NO MATERIAL ADVERSE CHANGE.

                    After the date of this Agreement and through the date of the
Closing, there shall not have occurred any change or event that has had a
Material Adverse Effect.

         IV.6       OPINION OF COMPANY COUNSEL.

                    The Investor shall have received from (a) Akin, Gump,
Strauss, Hauer & Feld LLP, counsel for the Company, an opinion in the form
attached hereto as EXHIBIT B-1 and a tax opinion in the form attached hereto as
EXHIBIT B-2 and (b) from Ballard Spahr Andrews & Ingersoll, counsel for the
Company, an opinion in the form attached hereto as EXHIBIT C.

                                       17
<PAGE>

         IV.7       REGISTRATION RIGHTS AGREEMENT.

                    Simultaneous with the Closing, the Company and the Investor
shall have entered into a registration rights agreement in substantially the
form attached hereto as EXHIBIT D (the "Registration Rights Agreement").

         IV.8       TAX INDEMNIFICATION AGREEMENT.

                    Simultaneous with the Closing, the Company and the Investor
shall have entered into a tax indemnification agreement in substantially the
form attached hereto as EXHIBIT E (the "Tax Indemnification Agreement").

         IV.9       OFFICER'S CERTIFICATE.

                    Each of the Company and the Operating Partnership shall have
delivered to the Investor on the date of the Closing a certificate or
certificates signed by an authorized officer of such entity to the effect that
the facts required to exist by SECTIONS 4.1, 4.2, 4.3, 4.4, 4.5 and 4.13
continue to exist on the date of the Closing.

         IV.10      PAYMENT OF MODIFICATION FEE.

                    The Company shall have paid a modification fee equal to
$125,000 (the "Modification Fee") into the escrow described in SECTION 1.2.

         IV.11      PROCEEDINGS.

                    All proceedings to be taken in connection with the
transactions contemplated by the Transaction Documents and all documents
incidental thereto, shall be reasonably satisfactory in form and substance to
the Investor; and the Investor shall have received copies of all documents which
the Investor may reasonably request in connection with said transactions and
copies of the records of all proceedings of the Company in connection therewith
in form and substance reasonably satisfactory to the Investor.

         IV.12      LIMITED WAIVER OF OWNERSHIP LIMITATIONS.

                    Subject to the Company's receipt of a certificate (the
"Certificate") from the Investor in form and substance acceptable to the Company
containing the representations and undertakings of the nature set forth in
SCHEDULE 4.12, the Board of Trustees of the Company shall have duly adopted a
resolution in form and substance reasonably satisfactory to the Investor,
thereby waiving the application of the Ownership Limit defined therein to the
Investor and its Affiliates to the extent provided in EXHIBIT F.

                                       18
<PAGE>

         IV.13      NO INJUNCTION

                    There shall not be in effect any order, decree or injunction
of a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by the Transaction Documents and
there shall be no actual or threatened action, suit, arbitration, inquiry,
proceedings or investigation by or before any Governmental Authority, court or
agency of competent jurisdiction, which would reasonably be expected to
materially impair the ability of the Company to consummate the transactions
contemplated by the Transaction Documents or to issue the Series D Preferred
Shares or the Conversion Shares.

V0       CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE  CLOSING.

                    The obligations of the Company under SECTION 1.2 of this
Agreement are subject to the fulfillment on or before the Closing of each of the
following conditions:

         V.1        REPRESENTATIONS AND WARRANTIES.

                    The representations and warranties of the Investor contained
in Article III shall be true on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the date
of the Closing.

         V.2        PERFORMANCE.

                    The Investor shall have performed and complied with all
agreements, obligations and conditions contained in the Transaction Documents
that are required to be performed or complied with by it on or before the date
of the Closing.

         V.3        NO INJUNCTION

                    There shall not be in effect any order, decree or injunction
of a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by the Transaction Documents and
there shall be no actual or threatened action, suit, arbitration, inquiry,
proceedings or investigation by or before any Governmental Authority, court or
agency of competent jurisdiction, which would reasonably be expected to
materially impair the ability of the Investor to consummate the transactions
contemplated by the Transaction Documents.

         V.4        OFFICER'S CERTIFICATE.

                    The Investor shall have delivered to the Company and the
Operating Partnership on the date of the Closing a certificate or certificates
signed by an authorized officer of the Investor to the effect that the
circumstances described in the Certificate and the facts required to exist by
SECTIONS 5.1, 5.2 and 5.3 continue to exist on the date of the Closing.

                                       19
<PAGE>

VI0      COVENANTS.

         VI.1       NOTICE OF CERTAIN ACTIONS.

                    After the date of this Agreement, the Company will promptly,
upon filing with the Commission, provide the Investor with copies of any
document filed by it with the Commission.

         VI.2       NO SALE OF SECURITY.

                    None of the Company, the Operating Partnership or any
Affiliate of either party will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) which would be integrated with the issuance of the Series D Preferred
Shares or the Conversion Shares in a manner which would require registration
under the Securities Act of the Series D Preferred Shares or the Conversion
Shares.

         VI.3       NO GENERAL SOLICITATION.

                    None of the Company, the Operating Partnership or any
Affiliate of either party will solicit any offer to buy or offer to sell Series
D Cumulative Convertible Preferred Shares of Beneficial Interest or any
Conversion Shares by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.

         VI.4       FILING OF EXCHANGE ACT REPORTS.

                    After the date of this Agreement, the Company will timely
file all documents required to be filed with the Commission pursuant to Section
13 or 15 of the Exchange Act, and so long as any of the Series D Preferred
Shares or the Conversion Shares remain issued and outstanding, shall provide to
the Investor copies of all such documents, including, without limitation, all
financial statements of the Company required to be filed with the Commission,
and all Supplemental Operating and Financial Data packages given to analysts.

         VI.5       CONSULTATION AND RELATED RIGHTS.

                    For so long as the Investor holds at least 25% of the Series
D Preferred Shares that it held immediately after the Closing (or 25% of the
Conversion Shares that the Investor could have obtained at that time upon
conversion of such Series D Preferred Shares whether or not such shares are then
convertible) (the "Threshold Amount"), the Investor shall have the right to
directly participate (within the meaning of 29 CFR 2510.3-101(d)(3)(ii)) in the
management of the Company and the Operating Partnership through and by the
following rights and powers:

                    (a)      The right to have reasonable access to senior
                             executives of the Company, the Operating
                             Partnership and their respective subsidiaries.

                                       20
<PAGE>

                    (b)      The right to be consulted on the appointment and
                             dismissal of (i) the chairman of the board, the
                             chief executive officer, the chief operating
                             officer, the president and the chief financial
                             officer (or any person fulfilling similar duties)
                             and the public accountants and public auditors for
                             the Company and its subsidiaries and (ii) the
                             general partner, the chief executive officer, the
                             chief operating officer, the president and the
                             chief financial officer, or any person or persons
                             fulfilling similar duties, and the public auditors
                             and public accountants for the Operating
                             Partnership and its subsidiaries.

                    (c)      The right to inspect the books and records of the
                             Company and the Operating Partnership.

                    (d)      The right to be consulted concerning the
                             development of the Company's and the Operating
                             Partnership's and their subsidiaries' annual
                             strategic plan that incorporates a specific
                             business strategy, an operating agenda, investment
                             and disposition objectives, and capitalization and
                             funding strategies.

                    (e)      The right to be consulted concerning the annual
                             operating and capital budgets of the Company and
                             the Operating Partnership and their subsidiaries.

                    (f)      The right to be consulted concerning Major
                             Transactions. "Major Transactions" means (i) any
                             acquisition or disposition of any assets in any
                             single transaction or any series of related
                             transactions where the aggregate purchase price
                             paid or received by the Company, the Operating
                             Partnership or their subsidiaries exceeds
                             $100,000,000, or, in the case of dispositions,
                             where the purchase price received does not
                             approximate the fair market value of the asset
                             sold, (ii) additional financings in excess of
                             $100,000,000 and (iii) a determination by the
                             Company's Board of Trustees to terminate the
                             Company's status as a real estate investment trust
                             pursuant to Sections 856 through 860 of the Code.

Notwithstanding the foregoing, the Company shall have no obligation to comply
with any advice offered by the Investor in any consultation referred to in this
SECTION 6.5.

                    Investor agrees that any information obtained through the
foregoing consultation rights which is not public shall be kept confidential,
and shall not be disclosed to any persons other than the directors, officers,
employees, financial advisors, legal advisors, and accountants of Investor and
Investor's investment advisor who reasonably need to have access to such
information and who are advised of the confidential nature of such information
and agree to maintain the confidentiality of such information; provided that the
foregoing obligation of Investor shall not (a) relate to any information that
(i) is or becomes generally available other than as a result of unauthorized
disclosure by Investor or by persons to whom Investor has made such information
available, or (ii)

                                       21
<PAGE>

is or becomes available to Investor on a non-confidential basis from a third
party that is not, to Investor's knowledge, bound by any other confidentiality
agreement with the Company or its Subsidiaries, or (b) prohibit disclosure of
any information if required by law, rule, regulation, court order, or other
legal or governmental process. Subject to the proviso to the foregoing sentence,
Investor further agrees that it will not under any circumstances provide any
information obtained through the foregoing consultation rights which is not
public to any person or entity or any officer, director (other than a
non-executive director, who in no case shall receive any information which is
not public and which was obtained pursuant to paragraphs (d) and (e) of this
Section 6.5) or employee of any entity that competes with or is contemplating
competing with the Company, the Operating Partnership or any of the Subsidiaries
in the acquisition, ownership, management, leasing, developing or building of
office or industrial properties.

         VI.6       MAINTENANCE OF REIT STATUS.

                    (a)      So long as any of the Series D Preferred Shares or
                             the Conversion Shares remain issued and
                             outstanding, the Company will continue to be taxed
                             as a real estate investment trust pursuant to
                             Sections 856 through 860 of the Code.

                    (b)      If the Company shall fail to continue to be taxed
                             as a real estate investment trust pursuant to
                             Sections 856 through 860 of the Code (a
                             "REIT-Repurchase Event"), the Investor shall have
                             the right to require the Company, to the extent the
                             Company shall have funds legally available
                             therefor, to repurchase any or all of the Series D
                             Preferred Shares or the Conversion Shares held by
                             the Investor at a repurchase price payable in cash
                             in an amount equal to 110% of (i) in the case of
                             the Series D Preferred Shares, the Liquidation
                             Preference (as defined in the Series D Preferred
                             Articles Supplementary) thereof, plus accrued and
                             unpaid dividends whether or not declared, if any to
                             the date of repurchase or the date payment is made
                             available (the "REIT-Repurchase Date") or (ii) in
                             the case of the Conversion Shares, the liquidation
                             preference on the number of Series D Preferred
                             Shares which the Holder would have held if the
                             Holder had not converted Series D Preferred Shares
                             into Conversion Shares, pursuant to the offer
                             described in SUBSECTION (c) below (the
                             "REIT-Repurchase Offer").

                    (c)      Within 15 days following the Company becoming aware
                             that a REIT-Repurchase Event has occurred, the
                             Company shall send by overnight courier a notice to
                             the Investor stating (A) that a REIT-Repurchase
                             Event has occurred and that the Investor has the
                             right to require the Company to repurchase any or
                             all of the Series D Preferred Shares or the
                             Conversion Shares then held by the Investor in
                             cash, (B) the date of repurchase (which shall be a
                             business day, no earlier than 30 days and no later
                             than 60 days from the date such notice is sent, or
                             such later date as may be necessary to comply with
                             the requirements of the Exchange Act), (C) the
                             repurchase

                                       22
<PAGE>

                             price and (D) the instructions determined by the
                             Company, consistent with this subsection, that the
                             Investor must follow in order to have the Series D
                             Preferred Shares or the Conversion Shares
                             repurchased.

                    (d)      On the REIT-Repurchase Date, the Company, to the
                             extent lawful, shall accept for payment Series D
                             Preferred Shares or Conversion Shares or portions
                             thereof tendered by the Investor or an Affiliate of
                             the Investor pursuant to the REIT-Repurchase Offer
                             and promptly send by overnight courier or by wire
                             transfer of immediately available funds to the
                             Investor, as directed by the Investor, an amount
                             equal to the REIT-Repurchase Payment in respect of
                             all Series D Preferred Shares or Conversion Shares
                             or portions thereof so tendered.

                    (e)      Notwithstanding anything else herein, to the extent
                             they are applicable to any REIT-Repurchase Offer,
                             the Company will comply with any federal and state
                             securities laws, rules and regulations and all time
                             periods and requirements shall be adjusted
                             accordingly.

                    (f)      Notwithstanding the provisions of this SECTION 6.6,
                             in no event shall the Company be required to
                             repurchase any Series D Preferred Shares at any
                             time that such repurchase is prohibited by the
                             Declaration or the Company's debt instruments.

         VI.7       CHANGE OF CONTROL

                    (a)      If a Change of Control (as defined below) occurs,
                             the Company shall, in its sole discretion, make an
                             election to effect one of the following: (i) to the
                             extent the Company shall have funds legally
                             available therefor, the Company may offer to
                             repurchase all of the Investor's Series D Preferred
                             Shares at a repurchase price payable in cash in an
                             amount equal to 100% of the Liquidation Preference
                             thereof, plus accrued and unpaid dividends whether
                             or not declared, if any (the "Repurchase Payment"),
                             to the date of repurchase or the date payment is
                             made available (the "Repurchase Date"), pursuant to
                             the offer described in SUBSECTION (b) below (the
                             "Repurchase Offer") or (ii) the Company shall
                             increase the Base Rate (as defined in the Series D
                             Preferred Articles Supplementary) as contemplated
                             by the definition of "Base Rate" contained in the
                             Series D Preferred Articles Supplementary (a
                             "Dividend Increase").

                    (b)      Within 15 days following the Company becoming aware
                             that a Change of Control has occurred, if the
                             Company elects to make a Repurchase Offer, the
                             Company shall send by overnight courier a notice to
                             the Investor stating (A) that a Change of Control
                             has occurred and that the Company is offering to
                             repurchase any or all of the Series D Preferred
                             Shares or the Conversion

                                       23
<PAGE>

                             Shares then held by the Investor in cash, (B) the
                             date of repurchase (which shall be a business day,
                             no earlier than 30 days and no later than 60 days
                             from the date such notice is mailed, or such later
                             date as may be necessary to comply with the
                             requirements of the Exchange Act), (C) the
                             repurchase price and (D) the instructions
                             determined by the Company, consistent with this
                             subsection, that the Investor must follow in order
                             to have the Series D Preferred Shares or the
                             Conversion Shares repurchased. If the Company
                             elects to make the Repurchase Offer, the Company,
                             to the extent lawful, shall accept for payment
                             Series D Preferred Shares or Conversion Shares or
                             portions thereof tendered by the Investor or an
                             Affiliate of the Investor pursuant to the
                             Repurchase Offer and promptly send by overnight
                             courier or by wire transfer of immediately
                             available funds to the Investor, as directed by the
                             Investor, an amount equal to the Repurchase Payment
                             in respect of all Series D Preferred Shares or
                             Conversion Shares or portions thereof so tendered.
                             To the extent that (i) the Company cannot lawfully
                             accept for payment any Series D Preferred Shares or
                             portions thereof delivered to the Company pursuant
                             to the Repurchase Offer or (ii) at any time that
                             such repurchase pursuant to the Repurchase Offer is
                             prohibited by the Declaration or the Company's debt
                             instruments, the Company shall effect a Dividend
                             Increase with respect to such Series D Preferred
                             Shares with the date of the notice sent pursuant to
                             this Section 6.7(b) being the date of the notice
                             for purposes of calculating the Base Rate pursuant
                             to the Series D Preferred Articles Supplementary.

                    (c)      Notwithstanding anything else herein to the
                             contrary, if the Change of Control is a transaction
                             described in clause (v) of the definition of
                             "Change of Control" and the Company elects to make
                             a Repurchase Offer, the following additional
                             conditions shall apply to the repurchase of Series
                             D Preferred Shares:

                             (1)    the Repurchase Date shall be the day on
                                    which the Change of Control transaction
                                    closes;

                             (2)    the Investor shall receive such detailed
                                    operating and financial information
                                    regarding the combined company as the
                                    Investor shall reasonably request in order
                                    to allow the Investor to evaluate the
                                    Repurchase Offer; and

                             (3)    the Investor shall have no less than 30 days
                                    to respond to the Repurchase Offer.

                    (d)      Notwithstanding anything else herein to the
                             contrary, to the extent they are applicable to any
                             Repurchase Offer, the Company will comply with any

                                       24
<PAGE>

                             federal and state securities laws, rules and
                             regulations and all time periods and requirements
                             shall be adjusted accordingly.

                    (e)      Within 15 days following the Company becoming aware
                             that a Change of Control has occurred, if the
                             Company elects to make a Dividend Increase, the
                             Company shall send by overnight courier a notice to
                             the Investor stating that a Change of Control has
                             occurred and that the Company has elected to
                             increase the Base Rate as contemplated by the
                             definition of "Base Rate" contained in the Series D
                             Preferred Articles Supplementary.

                    (f)      "Change of Control" means each occurrence of any of
                             the following: (i) the acquisition, directly or
                             indirectly, by any individual or entity or group
                             (as such term is used in Section 13(d)(3) of the
                             Exchange Act) of beneficial ownership (as defined
                             in Rule 13d-3 under the Exchange Act, except that
                             such individual or entity shall be deemed to have
                             beneficial ownership of all shares that any such
                             individual or entity has the right to acquire,
                             whether such right is exercisable immediately or
                             only after passage of time) of more than 25% of the
                             Company's outstanding shares of beneficial interest
                             with voting power, under ordinary circumstances, to
                             elect Trustees of the Company; (ii) other than with
                             respect to the election, resignation or replacement
                             of any trustee designated, appointed or elected by
                             the holders of the Series D Preferred Shares (each
                             a "Preferred Trustee"), during any period of two
                             consecutive years, individuals who at the beginning
                             of such period constituted the Board of Trustees of
                             the Company (together with any new trustees whose
                             election by such Board of Trustees or whose
                             nomination for election by the shareholders of the
                             Company was approved by a vote of 66 2/3% of the
                             trustees of the Company (excluding Preferred
                             Trustees) then still in office who were either
                             trustees at the beginning of such period, or whose
                             election or nomination for election was previously
                             so approved) (the "Incumbent Board") cease for any
                             reason to constitute a majority of the Board of
                             Trustees then in office; (iii) the Company's common
                             shares of beneficial interest cease to be listed on
                             the New York Stock Exchange or its successor; (iv)
                             the Company, either directly or through one or more
                             wholly-owned subsidiaries, ceases to be the sole
                             general partner of the Operating Partnership; or
                             (v) (A) the Company consolidating with or merging
                             into another entity or conveying, transferring or
                             leasing all or substantially all of its assets
                             (including, but not limited to, real property
                             investments) to any individual or entity, or (B)
                             any entity consolidating with or merging into the
                             Company, which in either event (A) or (B) is
                             pursuant to a transaction in which the outstanding
                             voting shares of beneficial interest of the Company
                             are reclassified or changed into or exchanged for
                             cash, securities or other property; provided,
                             however, that the events described in clause (v)
                             shall not be deemed to be a Change of Control (a)
                             if the sole purpose of such event is that the
                             Company is seeking

                                       25
<PAGE>

                             to change its domicile or to change its form of
                             organization from a trust to a corporation or (b)
                             if (x) the holders of the exchanged securities of
                             the Company immediately after such transaction
                             beneficially own at least a majority of the
                             securities of the merged or consolidated entity
                             normally entitled to vote in elections of trustees,
                             (y) the Chairman of the Board, Chief Executive
                             Officer and President of the Company immediately
                             prior to the execution of the transaction agreement
                             are senior executive officers of the merged or
                             consolidated entity, and (z) the individuals who
                             were members of the Incumbent Board immediately
                             prior to the execution of the transaction agreement
                             constitute at least a majority of the members of
                             the board of directors of the merged or
                             consolidated entity.

         VI.8       WAIVER OF OWNERSHIP LIMITATIONS.

                    So long as any of the Series D Preferred Shares remain
issued and outstanding or the Investor owns more than 8.5% of the Company's
outstanding common shares of beneficial interest, the Company shall not reverse
or rescind the waiver required to be granted pursuant to SECTION 4.12 of this
Agreement. The Company covenants and agrees to provide the Investor all
information which the Investor needs to complete the Certificate described in
SECTION 4.12.

                    The Company covenants and agrees that it shall waive the
application of such portions of the Ownership Limit (as defined in the
Declaration) as are necessary to permit ownership of more than 9.8% of the
outstanding number of Series D Preferred Shares by any Person to whom the
Investor or any transferee of the Investor transfers the Series D Preferred
Shares (a "Transferee"); provided that (x) such Transferee is not an individual
for purposes of Section 542(a) of the Internal Revenue Code, (y) the Company
shall not be required to waive such portions of the Ownership Limit that
prohibit the ownership of more than 8.5% of the number of outstanding common
shares of beneficial ownership of the Company by any such Transferee and (z) the
Company shall have received (i) a ruling from the Internal Revenue Service or an
opinion of counsel in each case to the extent that the restrictions contained in
Article VII, Sections 1(B)(3) and 1(B)(4) of the Declaration will not be
violated and that the Company's REIT status will not otherwise be lost; (ii)such
representations and undertakings from such Transferee as are reasonably
necessary to ascertain that no person's Beneficial Ownership (as defined in the
Declaration) or Constructive Ownership (as defined in the Declaration) of Equity
Shares (as defined in the Declaration) will otherwise violate the Ownership
Limit and (iii) such Person agrees that any violation or attempted violation of
the Ownership Limit will result in a transfer to the Share Trust (as defined in
the Declaration) of the Preferred Shares as provided in Article VII, Section
1(C) of the Declaration.

         VI.9       NO PUBLIC DISCLOSURE.

                    Neither the Company nor any Affiliate of the Company will
make any public disclosure concerning the transactions contemplated by the
Transaction Documents unless the Investor has had a reasonable time to review
such disclosure. Unless in the reasonable opinion of counsel to the Company that
such disclosure is required by applicable law, neither the Company nor

                                       26
<PAGE>

any Affiliate of the Company will make any such public disclosure without the
Investor's prior written consent.

         VI.10      ANNUAL CERTIFICATE OF INDEPENDENT PUBLIC ACCOUNTANTS OR
COMPANY COUNSEL.

                    So long as any of the Series D Preferred Shares or the
Conversion Shares remain outstanding, the Company shall, on an annual basis no
later than March 31 of each year, cause its independent public accountants or a
nationally recognized law firm to provide the Investor an opinion in form and
substance reasonably satisfactory to the Investor.

         VI.11      PROHIBITION ON ISSUANCE OF SERIES D PREFERRED SHARES.

                    The Company will not issue any Series D Preferred Shares to
any party other than the Investor or any direct or indirect transferee and then
only in compliance with the terms of the Declaration.

         VI.12      AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT.

                    The Company and Operating Partnership shall use their best
efforts to amend the Limited Partnership Agreement in order to effect the
transactions contemplated hereby.

         VI.13      CERTIFICATE OF COMPANY SECURITY OWNERSHIP.

                    Upon the Company's written request, within 30 days after
December 31 of each year, the Investor shall provide to the Company written
notice stating the name and address of the Investor, the number of Series D
Preferred Shares, Conversion Shares or other stock of the Company owned by the
Investor or its Affiliates, and a description of the manner in which such shares
are owned, together with such other additional information as the Company may
reasonably request in order to determine the effect, if any, of such ownership
on the Company's status as a REIT and to ensure compliance with its
undertakings, if any, set forth in the Certificate.

         VI.14      STANDSTILL.

         (a)   During the Standstill Period (as defined below), the Investor
shall not, and will cause each of its controlled Affiliates not to, directly or
indirectly:

               (i)    solicit offers, proposals or indications of interest with
                      respect to any Covered Transaction;

               (ii)   solicit, initiate, encourage or participate in any
                      "solicitation" of "proxies" or become a "participant" in
                      any election contest (as such terms are defined or used in
                      Regulation 14A under the Exchange Act, disregarding clause
                      (iv) of Rule 14a-1(1)(2) and including an exempt
                      solicitation pursuant to Rule 14a-2(b)(1); call or in any
                      way encourage or participate in a call for, any

                                       27
<PAGE>

                      special meeting of shareholders of the Company (or take
                      any action with respect to acting by written consent of
                      the shareholders of the Company) other than as provided in
                      the Series D Preferred Articles Supplementary; request, or
                      take any action to obtain or retain any list of holders of
                      any securities of the Company; or initiate or propose any
                      shareholder proposal or participate in or encourage the
                      making of, or solicit shareholders of the Company for the
                      approval of, one or more shareholder proposals; provided,
                      however, that Investor shall not be prohibited from
                      communicating with a security holder who is engaged in any
                      solicitation of proxies or who is a participant in any
                      election contest; or

               (iii)  seek representation on the Board of Directors of the
                      Company or a change in the composition or size of the
                      Board of Directors other than as provided in the Series D
                      Preferred Articles Supplementary.

         (b)   As used in this section, the following terms have the respective
meanings set forth below. Any terms used in this section and not defined
otherwise below shall have the meanings ascribed to them elsewhere in this
Agreement:

               "AFFILIATE" shall have the meaning ascribed thereto in Rule 12b-2
         promulgated under the Exchange Act, as such rule is in effect on the
         date hereof.

               "COVERED TRANSACTION" shall mean any merger, consolidation, other
         business combination, liquidation, sale of the Company or any
         subsidiary or all or substantially all of the assets of the Company or
         any other change of control of the Company or similar extraordinary
         transaction, but excluding any transaction in which the Company is the
         surviving and acquiring corporation;

               "GROUP" shall mean a "group" as such term is used in Section
         13(d)(3) of the Exchange Act.

               "PERSON" shall mean any individual, corporation, partnership,
         limited liability company, joint venture, trust, unincorporated
         organization, or other form of business or legal entity.

               "STANDSTILL PERIOD" shall mean the period beginning on the date
         hereof and ending on the first date following the date on which the
         Investor no longer holds the Threshold Amount of the Series D Preferred
         Shares and the Conversion Shares or the holders of the Series D
         Preferred Shares do not have the voting rights provided for in Section
         10 of the Series D Preferred Articles Supplementary. Notwithstanding
         the foregoing, the Standstill Period also shall be terminated on the
         earlier of:

                             (i)    the occurrence of a Change of Control; or

                                       28
<PAGE>

                             (ii)   the fifteenth business day after the written
                    submission by any person or Group other than the Investor or
                    an Affiliate of the Investor of a proposal to the Company or
                    an Affiliate of the Company with respect to, or otherwise
                    expressing an interest in pursuing, a Covered Transaction;
                    provided that, except as described in the next sentence, the
                    Standstill Period shall not terminate pursuant to this
                    clause (ii) if, within such 15 business day period, the
                    Board of Trustees determines that such proposal is not in
                    the best interest of the Company and its shareholders and
                    for so long as the Board of Trustees continues to reasonably
                    reject such proposal as a result of such determination. If
                    the Investor desires to tender any common shares of
                    beneficial interest into a tender offer (the "Tender
                    Shares") made by a third party, which tender offer has not
                    been approved by the Board of Trustees, the Investor shall
                    provide a notice (the "Tender Notice") to the Company
                    stating the intent of the Investor to participate in the
                    tender offer, and if the Company does not so elect to
                    purchase the Tender Shares for the same price offered
                    pursuant to such tender offer, the Investor may tender the
                    Tender Shares into the tender offer.

         VI.15      TENDER OFFER.

                    So long as the Investor or any Permitted Assignee holds any
Series D Preferred Shares, the Company will not recommend in favor of a tender
offer for its shares unless the tender offer provides that (a) the Series D
Preferred Shares will be tendered for directly and at a value not less than
their value assuming that they were converted to common shares of beneficial
interest of the Company at the then-applicable Conversion Price (as defined in
the Series D Preferred Articles Supplementary) and (b) all accrued but unpaid
dividends will be paid on the Series D Preferred Shares through the closing of
the tender offer.

         VI.16      COMPLIANCE CERTIFICATE.

                    So long as the Investor holds any Series D Preferred Shares,
within 45 days after the end of the first three fiscal quarters and within 90
days after the end of the fiscal year of the Company, the Company shall deliver
to the Investor a certificate signed by the President, Chief Executive Officer,
Chief Financial Officer, Treasurer or any Vice President of the Company setting
forth the ratio of Consolidated EBITDA (as defined in the Series D Preferred
Articles Supplementary) to Consolidated Fixed Charges (as defined in the Series
D Preferred Articles Supplementary), certifying whether or not the Company, the
Operating Partnership or any of their subsidiaries issued any securities in
violation of Section 7(a) of the Series D Preferred Articles Supplementary and
setting forth calculations in such detail as is necessary to demonstrate the
accuracy of such certificate.

         VI.17      VOTING OF SHARES.

                    To the extent that (a) the Investor and its Affiliates and
(b) Security Capital Global Capital Management Group Incorporated ("GCMG")
collectively own greater than 11.0% of the Company's outstanding shares of
beneficial interest that are entitled to vote with respect to a

                                       29
<PAGE>

particular matter, the Investor shall vote in accordance with the
recommendations of the Board of Trustees such number of shares of beneficial
interest equal to (a) the aggregate number of shares of beneficial interest
owned by the Investor and its Affiliates and GCMG less (b) such number of shares
owned by the Investor and its Affiliates and GCMG that represent 11.0% of the
Company's outstanding shares of beneficial interest; provided that this SECTION
6.17 shall not apply in any vote of the holders of the Series D Preferred Shares
voting as a single class.

VII. MISCELLANEOUS

          VII.1     SURVIVAL OF WARRANTIES.

                    The representations and warranties of the Company, the
Operating Partnership and the Investor contained in or made pursuant to Articles
II or III of this Agreement shall survive the Closing hereunder through and
until three years following the Closing, except for the warranties and
representations of the Company contained in SECTIONS 2.11, 2.12 and 2.13 which
shall survive until the expiration of the applicable statute of limitations. The
covenants contained in or made pursuant to Article VI of this Agreement shall
survive the Closing indefinitely, except for any provisions which expire by
their terms. The representations and warranties contained in this Agreement
shall in no way be affected by any investigation of the subject matter thereof
made by or on behalf of the Investor or the Company.

         VII.2      SUCCESSORS AND ASSIGNS.

                    Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
Except as specifically provided hereby, the Investor shall not be permitted to
assign any of its rights hereunder to any third party, provided, however, that
the Investor's rights hereunder may be assigned to any of the following (each, a
"Permitted Assignee") which shall then be an "Investor" for all purposes under
this Agreement: (a) (i) to another entity controlled directly or indirectly by
either the Investor or Security Capital Group Incorporated that agrees in
writing to be bound by the terms of this Agreement or (ii) one time only, with
the Company's approval, which shall not be unreasonably withheld, to one other
person or entity that purchases a minimum of 943,400 of the Series D Preferred
Shares from an Investor and agrees in writing to be bound by the terms of this
Agreement (such person in clause (ii) being referred to as an "Outside
Assignee"); provided that any such entity or person referred to in clauses (i)
or (ii) does not compete with or contemplate competing with the Company, the
Operating Partnership or any of the Subsidiaries in the acquisition, ownership,
management, leasing, developing or building of office or industrial properties;
and provided further that such Outside Assignee shall not receive the benefit of
the rights granted in Section 6.5 of this Agreement and that such Outside
Assignee shall receive the benefit of the rights granted in Section 6.8 of this
Agreement only to the extent described in the second paragraph of Section 6.8;
and (b) to lenders or

                                       30
<PAGE>

broker/dealers to secure indebtedness of the Investor or any other Permitted
Assignee, or in the event of a default in any indebtedness of the Investor or
any other Permitted Assignee; provided that the rights provided in this clause
(b) shall not apply to an Outside Assignee unless the Company consents to such
assignment, which consent shall not be unreasonably withheld.

         VII.3      GOVERNING LAW.

                    This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without giving effect to the
conflict of law provisions thereof.

         VII.4      COUNTERPARTS.

                    This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         VII.5      TITLES AND SUBTITLES.

                    The title and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

         VII.6      NOTICES.

                    Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given (a) upon personal delivery to the party to be notified, (b) on the fifth
business day after deposit with the United States Post Office, by registered or
certified mail, postage prepaid, (c) on the next business day after dispatch via
nationally recognized overnight courier or (d) upon confirmation of transmission
by facsimile, all addressed to the party to be notified at the address indicated
for such party below, or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties. Notices should be
provided in accordance with this Section at the following addresses:

If to the Investor, to:

         Security Capital Preferred Growth Incorporated
         11 South LaSalle Street
         Chicago, Illinois 60603
         Attention:  David E. Rosenbaum
                     David T. Novick
         Facsimile   (312) 345-5888

                                       31
<PAGE>

with a copy to:

         Mayer, Brown & Platt
         190 South LaSalle
         Chicago, Illinois  60603
         Attention:  Michael A. Campbell
         Facsimile:  (312) 701-7711

If to the Company or the Operating Partnership, to:

         Prentiss Properties Trust
         3890 West Northwest Highway
         Dallas, Texas 75220
         Attention:  Thomas F. August
         Facsimile:  (214) 350-3011

and a copy to:

         Prentiss Properties Trust
         3890 West Northwest Highway
         Dallas, Texas 75220
         Attention:  General Counsel
         Facsimile:  (214) 350-3011

and a copy to:

         Akin, Gump, Strauss, Hauer & Feld, LLP
         1700 Pacific Avenue
         Suite 4100
         Dallas, Texas 75201
         Attention:  Michael E. Dillard, P.C.
         Facsimile:  (214) 969-4343

         VII.7      FINDER'S FEES.

                    Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. The Investor agrees to indemnify and hold harmless the Company from
any liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Investor or any of its officers, employees or
representatives is responsible. The Company agrees to indemnify and hold
harmless the Investor from any liability for any commission or compensation in
the nature of a finders' fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.

                                       32
<PAGE>

         VII.8      EXPENSES.

                    Except as described in Section 4.10 or in this Section 7.8,
each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of the Transaction Documents.
The Company shall pay the Investor's expenses in connection with the Transaction
Documents and all related matters, including the fees and disbursements of
counsel to the Investor, up to $50,000. If any action at law or in equity is
necessary to enforce or interpret the terms of the Transaction Documents, the
Limited Partnership Agreement or the Series D Preferred Articles Supplementary,
the prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

         VII.9      AMENDMENTS AND WAIVERS.

                    Any term of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.

         VII.10     SEVERABILITY.

                    If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

         VII.11     ENTIRE AGREEMENT.

                    The Transaction Documents constitute the entire agreement
among the parties with respect to the subject matter hereof and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein.

                            [SIGNATURE PAGE FOLLOWS]

                                       33
<PAGE>

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

                                   SECURITY CAPITAL PREFERRED
                                   GROWTH INCORPORATED

                                   By: /s/ DAVID ROSENBAUM
                                       -------------------------------------
                                   Name:  David Rosenbaum
                                   Its:   Senior Vice President

                                   PRENTISS PROPERTIES TRUST

                                   By: /s/ MICHAEL A. ERNST
                                       -------------------------------------
                                   Name:  Michael A. Ernst
                                   Its:   Senior Vice President and Chief
                                          Financial Officer

                                   PRENTISS PROPERTIES ACQUISITION
                                   PARTNERS, L.P.

                                   By: Prentiss Properties I, Inc., its
                                       general partner

                                   By: /s/ MICHAEL A. ERNST
                                       ------------------------------------
                                   Name:  Michael A. Ernst
                                   Its:   Senior Vice President

                                       34

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