Document:

VAIL RANCH LIMITED PARTNERSHIP
                                 AMENDMENT NO. 1

THIS  AGREEMENT  is entered  into as of the 25th day of  January,  1996,  by and
between Landgrant Corporation, hereinafter referred to as "General Partner," and
Old  Vail  Partners,  L.P.,  as  successor  in  interest  to Old  Vail  Partners
hereinafter referred to as "Limited Partner."

                                    RECITALS

A. WHEREAS,   General  Partner  and  Limited  Partner  entered  into  a  written
   Partnership Agreement  (hereinafter referred to as the "Partnership"),  dated
   April 1, 1994,  (hereinafter  referred  to as the  "Formation  Date") for the
   purpose of  developing,  financing,  constructing,  leasing,  and  managing a
   Shopping  Center  on  that  certain  land  hereinafter  referred  to  as  the
   "Project,"  located in the City of Temecula,  County of  Riverside,  State of
   California.  Said  shopping  center  and the  Project  are more  particularly
   described and illustrated in Exhibit "A" of the Partnership Agreement.

B. WHEREAS,  prior  to  the  Formation  Date,  Riverside  County  started  legal
   proceedings to foreclose liens against the "Real Property" (as defined in the
   Partnership  Agreement) securing certain delinquent  assessments.  The fourth
   sentence of Section  3.4(b)3 of Partnership  Agreement  provided in pertinent
   part:

      The  Limited  Partner  hereby  agrees,  within  thirty (30) days after the
      Partnership   Agreement  is  executed,  to  cure  the  County  foreclosure
      proceeding by either paying in full the delinquent  taxes or negotiating a
      partial settlement with installment payments.

   As used in this amendment, the term "Assessment Resolution" shall mean either
   paying in full the delinquent taxes or negotiating a partial  settlement with
   installment payments. As of the date of this amendment,  the County continues
   to prosecute the foreclosure proceedings.

C. WHEREAS, the General Partner has alleged the failure to perfect an Assessment
   Resolution has thwarted its efforts to procure financing for the Project.  By
   this amendment,  the Parties intend to: (a) mitigate the adverse  impact,  if
   any, on the General Partner  resulting from the alleged failure to perfect an
   Assessment  Resolution;  and  (b)  effective  as of the  date  the  Project's
   financing is procured, evidence the Partnership's,  the General Partner's and
   the Limited Partner's mutual release of each other's  liability,  if any, for
   any and all loss,  claims or damages  resulting  from the alleged  failure to
   perfect an Assessment Resolution.

                                      TERMS

NOW,  THEREFOR,  for good and valuable  consideration  and the mutual agreements
herein contained, the Parties agree as follows:

1. Amendment of  Partnership.  The Parties  hereby agree to amend Section 3.1 by
   deleting it in its entirety and substituting in lieu thereof the following:

         The General Partner shall be Landgrant  Corporation,  which shall own a
         fifty percent (50%)  interest in the  Partnership's  profits and losses
         associated  with Phase I eleven acres and the General Partner shall own
         a forty percent (40%) interest in the Partnership's  profits and losses
         associated with the Phase II-sixteen acres.

2. Amendment of  Partnership.  The Parties  hereby agree to amend Section 3.2 by
   deleting it in its entirety and substituting in lieu thereof the following:

         3.2. The Limited  Partner shall be Old Vail Partners,  L.P. which shall
         own a fifty percent  (50%)  interest in the  Partnership's  profits and
         losses associated with the Phase I-eleven acres and the Limited Partner
         shall own a sixty percent (60%)  interest in the  Partnerships  profits
         and losses associated with the Phase II-sixteen acres.

3. Amendment of Partnership.,  The Parties hereby agree to amend Section 3.4(b)l
   by  deleting  it in  its  entirety  and  substituting  in  lieu  thereof  the
   following:

         The Limited  Partner  shall be deemed to have  contributed  the Phase I
         land with an imputed value of  $1,918,382.00  as of the Formation Date.
         The imputed value is a negotiated  amount derived by an agreement among
         the Parties based upon Phase I-eleven acres of land valued at $4.00 per
         square foot.  This gross amount is subject to an  allocation  among the
         specific   parcels  by  the  Parties,   in   consultation   with  other
         consultants, who can help determine a more accurate allocation of value
         attributed to each of the parcels within the Phase I- eleven acres.

         The  Limited  Partners  imputed  land  value  shall  accrue,  as of the
         Formation  Date an increase in value in an amount  equal to "prime plus
         one percent"  through the Effective  Date of this  Agreement.  From the
         Effective Date of this Agreement the amount of the accrued  increase in
         value shall be 5% per annum.  In each instance the accrued  increase in
         value shall be computed as simple interest non-compounded.

         The Limited Partner's capital account on Phase I will be reduced by the
         delinquent   property  taxes  and  delinquent   assessments   prior  to
         Partnership  formation  (April 1, 1994),  Phase II  property  taxes and
         assessments  during the period from Partnership  formation to execution
         of Vail Ranch Limited  Partnership  Amendment #1 (January 25, 1996) and
         Presley lien (excluding  improvement  costs for County Glen and Presley
         dirt which will be Partnership expense) if paid off by Partnership.

         The Parties  agree that there shall be no other  imputed  value for any
         other land contributed by the Limited Partner.

4. Amendment of  Partnership.  The Parties hereby agree to amend Section 3.4(b)2
   by  deleting  it in  its  entirety  and  substituting  in  lieu  thereof  the
   following:

         The General  Partner shall be deemed to have  contributed  value to the
         Partnership   in  the  amount  of  $350,000.   Said   contribution   is
         attributable  to  those  contract  rights  which it has  obtained  from
         various  retailers  listed on Exhibit "C" of the Partnership as well as
         those  entitlement  rights which it has obtained from the  governmental
         agencies  with  regard to the  Project.  The General  Partners  Capital
         Account  will  accrue an  increase in value under the same terms as the
         Limited Partners Capital Account.

5. Amendment  of  Partnership.   The  Parties  hereby  agree  to  amend  Section
   3.5.2.2(e),  by deleting the first full paragraph thereof and substituting in
   lieu thereof the following:

         Whether or not  operating  revenues  are  available  to pay the cost to
         carry taxes and  assessments  on the Phase II sixteen  acres of land or
         portion  thereof  prior  to its  Development  Completion,  neither  the
         Limited  Partner nor the General  Partner shall have the  obligation to
         provide  the funds  necessary.  If  either  Party  desires  to make the
         necessary funds available unilaterally, the Partnership shall quitclaim
         to the party so  desiring  all of the  Partnership's  right,  title and
         interest in that  particular  parcel upon three (3) days written demand
         to do so.

6. Amendment of Partnership. The Parties hereby agree to amend Section 4.1(f) by
   deleting the entire paragraph and substituting in lieu thereof the following:

         4.1(f) If General Partner and Limited Partner agree,  pay carry cost of
         Phase II property (Assessment District and real property taxes).

7. Amendment of  Partnership.  The Parties hereby agree to amend the Partnership
   by adding Section 2.31. as follows:

         2.31.  Maintenance of Economic Substance.  The Parties acknowledge that
         the  maintenance of Capital  Accounts for tax and  accounting  purposes
         must  adhere  to  technical   standards  as  is  evidenced  in  certain
         provisions of the Partnership.  However  notwithstanding such technical
         requirements,   the  Parties  agree  that  the  economic  substance  as
         negotiated  between  the  Parties  makes use of the  concept of Imputed
         Value Accounts evidencing their relative  contributions.  Additionally,
         the  Parties  have agreed to  provisions  which  provide for  ownership
         percentages and priority distributions that differ for Phase I-11 acres
         and Phase  II-sixteen  acres and therefor the Parties agree to maintain
         separate  Imputed  Value  Accounts for each Partner and for each Phase.
         These  Imputed  Value  Accounts  will be used to determine the priority
         distributions  between them.  To the extent cash is generated  from one
         phase and is used to pay the  expenses or costs of another  phase,  the
         Imputed  Value  Account  will be  adjusted  as though  there was a cash
         distribution to the Partners from the one phase  generating the cash in
         accordance  with  the  required  distribution  for  that  phase  and  a
         corresponding  cash capital  contribution  by the Partners to the other
         phase. For example, the Parties agree that to the extent any portion of
         the  Phase  II-sixteen  acres  is sold and if any  portion  of the sale
         proceeds are used to pay off the  construction  loan or permanent  loan
         for the Phase  I-eleven  acres and  thereby not be  distributed  to the
         Partners  then  the  General  Partner  shall  have its  "Imputed  Value
         Account"  increased  equal to  forty  percent  (40%)  of any such  sale
         proceeds and the Limited Partner shall have its "Imputed Value Account"
         increased  by sixty  percent  (60%).  This is  intended  to  allow  the
         Partners  to  receive  the  proper  amount  of sale  proceeds  upon the
         ultimate sale of Phase I-eleven acres.

8. Effective  Date. This Amendment of Partnership  shall become  effective as of
   the opening of the business day of January 25,  1996,  herein  referred to as
   the "Effective Date".

9. Effectiveness of Partnership. Except as expressly provided herein, nothing in
   this  Agreement  shall be deemed to waive or modify any of the  provisions of
   the Partnership,  or any amendment or addendum  thereto.  In the event of any
   conflict  between the  Partnership,  this Agreement or any other amendment or
   addendum thereof, the document later in time shall prevail.

10.Successors  and Assigns.  This  Agreement  shall be binding upon and inure to
   the benefit of the heirs, executors,  administrators,  successors and assigns
   of the respective Parties hereto.

11.Counterparts.  This Agreement may be executed in several  counterparts,  each
   of  which  may be  deemed  an  original,  but  all of  which  together  shall
   constitute one and the same Agreement.

12. Release and Waiver.

         12.1  Effective only if project  financing  occurs and as of such date,
         the  Partnership,  the General  Partner and the Limited Partner (each a
         "Releasor") hereby releases and forever discharges each other Releasor,
         it's   agents,   directors,   employees,   officers,   representatives,
         attorneys,  successors,  and assigns from any and all claims,  demands,
         and causes or causes of action or any nature  whatsoever,  whether know
         or unknown,  fixed or  contingent,  matured or unmatured,  or otherwise
         existing or hereafter  arising out of, related to or connected with the
         alleged  failure to perfect the  Assessment  Resolution.  Each Releasor
         represents  and warrants  that it has not  heretofore  sold,  assigned,
         hypothecated or otherwise  transferred to any third party any rights or
         interests  in or to any such  claims,  demands  or cause or  causes  of
         action.  12.2 Upon the effective  date of such  release,  each Releasor
         acknowledges  that it may have claims  against  each other  Releasor of
         which it has no knowledge at the time of the execution of this release.
         This  release  extends to any and all claims in' any way based upon any
         obligation of any Releasor to perfect an Assessment Resolution prior to
         the effective date of the release,  whether known or unknown, as of the
         date of this amendment.  As further consideration and inducement,  each
         Releasor waives the provisions of Section 1542 of the California  Civil
         Code, which reads as follows:

         "A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS  WHICH THE CREDITOR  DOES
         NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING  THE
         RELEASE,  WHICH  IF  KNOWN BY HIM MUST  HAVE  MATERIALLY  AFFECTED  HIS
         SETTLEMENT WITH THE DEBTOR."

IN WITNESS  WHEREOF,  the Parties  hereto have executed this Agreement as of the
day and year first above written.

"General Partner"                            "Limited Partner" i
LANDGRANT CORPORATION,                       OLD VAIL PARTNERS, L.P.,
a California corporation                       a California limited partnership
By: /S/ C. Samuel Marasco                        By: OVGP, INC.,
          C. Samuel Marasco, President             a California corporation,
                                                   its general partner

By: /S/ Christopher Smith                        By: /S/ Harold S. Elkan
        Christopher Smith,                          Harold S. Elkan, President
          Executive Vice PresidentOLD VAIL PARTNERS, L.P.,
                                    a California Limited Partnership

                                           TABLE OF CONTENTS

Section                                   Description                  Page #
-------        ------------------------------------------------------- ------

1.             Name and place of Business                                 2

2.             Definition and Glossary of Terms                           2

3.             Business of the Partnership                                2

4.             Term                                                       2

5.             General Partner's Interests                                3
  5.01            Admission                                               3
  5.02            Additional Capital Contributions                        3
  5.03            Additional Funds                                        3
  5.04            Negation of Other Obligations to Contribute Capital     3

6.             Original and Additional Limited Partners                   3
  6.01            Original Limited Partners                               3
    6.01.1           Original Class A Limited Partner                     3
    6.01.2           Original Class B Limited Partner                     3
  6.02            Additional Limited Partners                             3
  6.03            Amendment of Agreement                                  3
  6.04            Amendment of Certificate                                3

7.             Status of Limited Partners                                 4

8.             Status of Units                                            4

9.             Compensation to the General Partner and Affiliates         4
  9.01            Compensation in General                                 4
  9.02            Partnership Administration Fee                          4
  9.03            Loan Fees and Interest                                  4

10.            Partnership Expenses                                       4
  10.01           General Partner's Expenses                              4
  10.02           Partnership Expenses                                    4

11.            Partnership Allocations and Distributions                  4
  11.01           Distributions                                           4
  11.02           Minimum Distributions to Class B Units                  5
  11.03           Liquidation of Interest Held by
                    Holders of Class B Units                              6
  11.04           Deficit Restoration                                     6
  11.05           Distributions on Liquidation                            6
  11.06           Partnership Allocations                                 6

<PAGE>

                                        OLD VAIL PARTNERS, L.P.,
                                    a California Limited Partnership

                                           TABLE OF CONTENTS

Section                                   Description                  Page #
-------        ------------------------------------------------------- ------

12.            Assignment of Partnership Interests                        6
  12.01           Right of Assignment                                     6
  12.02           Rights of Assignee of Record                            7
  12.03           General Partner Consent                                 7
  12.04           Right of First Refusal Affecting Units                  8
  12.05           Effect of Prohibited Assignment                         9
  12.06           Restrictions on Assignment of General
                    Partner's Partnership Interest                        9

13.            Substituted Limited Partners                              9
  13.01           Conditions Precedent                                   9
  13.02           No Consent of Other Limited Partners                   9
  13.03           Amendment of Books and Records                         9

14.            Books, Records, Accountings and Reports                   9
  14.01           Maintenance and Inspection                             9
  14.02           Annual Financial Statements                            10
  14.03           Tax Returns                                            10

15.            Rights, Authority, Responsibilities and
                 Duties of General Partner                               10
  15.01           Powers of General Partner                              10
  15.02           Prohibited Acts                                        10
  15.03           Duties                                                 10
  15.04           Additional General Partners                            11
  15.05           Tax Matters Partner                                    11

16.            Rights, Powers and Voting Rights of Limited Partners      11
  16.01           No Control                                             11
  16.02           Voting Rights                                          11
  16.03           Vote Required to Approve                               11
  16.04           Meetings and Votes Without a Meeting                   12
  16.05           Voting                                                 12
  16.06           Limited Partner Prohibited Acts                        12
  16.07           Court Directed Winding Up                              12
  16.08           Return of Capital Contributions                        12

17.            Disqualification of a General Partner                     12
  17.01           Expulsion by Majority Vote                             12
  17.02           Rights After Disqualification                          12
  17.03           Relinquishment Rights                                  13

18.            Certain Transactions                                      13

19             Termination and Dissolution of the Partnership            13
  19.01           Events Causing Dissolution                             13
  19.02           Winding Up                                             13

<PAGE>

                                        OLD VAIL PARTNERS, L.P.,
                                    a California Limited Partnership

                                           TABLE OF CONTENTS

Section                                   Description                    Page #
-------        -------------------------------------------------------  ------

20.            Special and Limited Power of Attorney                      13
  20.01           Appointment of Attorney-in-Fact                         13
  20.02           Nature of Power                                         13

21.            Indemnification                                            14

22.            Miscellaneous                                              14
  22.01           Counterparts                                            14
  22.02           Successors                                              14
  22.03           Severability                                            14
  22.04           Notices                                                 14
  22.05           Governing Law and Trial By Reference                    14
  22.06           Titles and Captions                                     15
  22.07           Interpretation                                          15
  22.08           Integration                                             15
  22.09           General Partner's Address                               15
  22.10           Limited Partners' Addresses                             15
  22.11           Recitals and Exhibits                                   15
  22.12           Time                                                    15
  22.13           Reasonable Consent and Approval                         15
  22.14           Waivers                                                 15

               EXHIBIT A- Definitions                                     17-19

               EXHIBIT B- Partnership Allocations                         20-21

               EXHIBIT C- Names and addresses of Partners                 22

<PAGE>

   THE LIMITED PARTNER INTERESTS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF  1933,  AS  AMENDED,  AND MAY NOT BE  SOLD,  PLEDGED  OR
OTHERWISE TRANSFERRED UNLESS (a) COVERED BY AN EFFECTIVE  REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (b) THE  PARTNERSHIP  HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE TO THE PARTNERSHIP TO THE EFFECT
THAT NO REGISTRATION IS LEGALLY REQUIRED FOR SUCH TRANSFER

                            Old Vail Partners, L.P.,
                        a California limited partnership

         (formerly Old Vail Partners, a California general partnership)

                                    AGREEMENT
                                       OF
                               LIMITED PARTNERSHIP

This Agreement of Limited Partnership (the "Partnership  Agreement") is executed
to be  effective  as of the  twenty  third  (23),  day of  September,  1994 (the
"Effective Date") by and between:

   (a) OVGP,  Inc., a California corporation  ("OVGP"),  as the initial  General
         Partner;

   (b) RCSA Holdings, Inc., a California  corporation  ("RCSA"),  as an original
        Limited Partner holding Class "A" Units; and

   (c)  OVGP as an original Limited Partner holding Class "A" Units; and

   (d)       Peter Werner Edelmann, a married man as his sole and separate
             property ("Edelmann"), as an original Limited Partner holding Class
             "B" Units;

all of whom desire to form a limited partnership under the California Revised
Limited Partnership Act and the laws of the State of California on the following
terms and conditions.

                                                RECITALS

A.   Old Vail Partners, a California general partnership ("OVP"),  was formed on
     October 1, 1988.

B.   Prior to the Effective Date, the Partnership owned a 32 acre parcel (the
     "32 Acre Parcel") and a 40 acre parcel (the "40 Acre Parcel") of
     substantially unimproved real estate in Riverside County, California. OVP
     has significant current and future cash flow shortages due to the carrying
     costs of the undeveloped land. Currently, only RCSA has the demonstrated
     ability to fund the cash flow shortages. The outstanding liabilities of OVP
     for property taxes and assessments due the County of Riverside total
     $414,000 as of September 30, 1994. In addition, approximately $300,000 may
     be due to Vail Ranch Limited Partnership ("Vail Ranch") to extinguish OVP's
     share of past due property taxes on the 32 Acre Parcel, which OVP
     contributed to Vail Ranch Limited Partnership. The property taxes and
     assessments due November 1,1994 for the 40 Acre Parcel total $110,000. The
     same amount is due March 1, 1995.

C.   Edelmann's partnership interest is currently subject to liens by the
     Internal Revenue Service (IRS) and the State of California for income taxes
     due from 1989. The IRS has also filed a lien that appears in title reports
     as though it is a lien against the property owned by the Partnership.

D. RCSA's  partnership  interest  is  collateral  for a loan from First  Pacific
     National Bank.

                                       1
<PAGE>

E.   A Memorandum Of Understanding dated September 23, 1994, which outlined
     RCSA's and Edelmann's intentions to modify the OVP partnership agreement,
     provided Edelmann with 45 days from September 23, 1994 to advance his
     two-thirds share of OVP's current and past due property taxes and
     assessments which, if other conditions were met, would have resulted in
     different modifications to the OVP partnership agreement. The 45 day period
     has expired and Edelmann hereby waives the benefits he would have been
     entitled to if he had advanced his two-thirds share of funds. Both Edelmann
     and RCSA acknowledge that this Partnership Agreement supersedes and voids
     all other previous written and oral agreements affecting the ownership of
     partnership interests in OVP, OVP's Property or liabilities, or the
     ownership operation, maintenance or financing of OVP's Property..

F.   Due to the circumstances noted in B, by this Agreement, RCSA and Edelmann
     intend to convert OVP to a limited partnership with RCSA as a Limited
     Partner holding 33-1/3 Class A Units, OVGP as a Limited Partner holding
     15-2/3 Class A Units, Edelmann as Limited Partner holding 50 Class B Units
     and OVGP as its sole General Partner with a one percent (1%) share in
     Partnership capital and Partnership Allocations. OVGP is committed to
     advance the Partnership such amounts as are required to fund all of the
     Partnership's Cash Flow Deficits to the extent that Partnership borrowings
     are insufficient to provide funds. The Class B Units will entitle Edelmann,
     as a Holder thereof, to 50 percent of the Partnership Distributions up to
     $2,500,000, with minimum Distributions as described in Paragraph 11.01.1.
     Once Edelmann, as a Holder of Class B Units, receives aggregate
     Distributions of $2,500,000, the Class B Units will be totally and
     completely redeemed, the interest in the partnership terminated, and the
     Units canceled. The Class B Units will entitle Edelmann as a Holder thereof
     to potentially receive minimum distributions, as described in paragraph
     11.01.1, regardless of cash flow available for distribution, if Edelmann
     reaches settlements with and extinguishes his 1989 tax obligations with the
     IRS and the State of California. The intent of the Partners is to provide
     for the liquidation of all interests held by the Holders of Class B Units.

H.   By this Agreement, the partners of OVP intend to admit OVGP as both a
     General Partner and Limited Partner and convert OVP into a limited
     partnership to be governed under the terms of the Revised Limited
     Partnership Act. The Partners also intend to change the name of the
     Partnership to "Old Vail Partners, L.P., a California limited partnership."

1. Name and Place of Business

   The name of the Partnership is Old Vail Partners, L.P., a California limited
   partnership, and its principal place of business is 5230 Carroll Canyon Road,
   Suite 310, San Diego, California 92121, or such other place or places as the
   General Partner may hereafter determine.

2. Definition and Glossary of Terms

   Words and terms having their initial letter capitalized in this Partnership
   Agreement shall (unless otherwise expressly provided herein or unless the
   context otherwise requires) have the respective meanings set forth in Exhibit
   "A", attached hereto.

3. Business of the Partnership

   The Partnership may engage in any business activity permitted under the
   California Revised Limited Partnership Act.

4. Term

   The Partnership shall be converted from a general partnership to a limited
   partnership on the date the Certificate is filed in the Office of the
   Secretary of State of the State of California, and shall continue until
   December 31, 2052, unless earlier terminated in accordance with the
   provisions of this Partnership Agreement.

                                       2
<PAGE>

5. General Partner's Interests

   5.01    Admission. Immediately prior to the conversion of OVP from a general
           partnership to a limited partnership,, OVGP will be admitted as a
           general partner of OVP entitled to a one percent (1%) interest in the
           Partnership Capital and Allocations of OVP. The admission of OVGP
           will not dissolve OVP. As part of the conversion of OVP into the
           Partnership, OVGP's general partnership interest in OVP shall be
           converted into a Partnership Interest in this Partnership and become
           the General Partner of the Partnership retaining a one percent (1%)
           interest in Partnership Allocations

   5.02    Additional Capital Contributions. The General Partner shall make
           additional contributions to the Partnership's capital equal to 1/99th
           of any additional capital contribution made by any Limited Partner
           within 10 days after such additional contribution.

   5.03    Additional Funds. The General Partner is obligated to loan amounts to
           the Partnership sufficient to fund Cash Flow Deficits to the extent
           they cannot be funded from Partnership borrowings. The General
           Partner will only be obligated to advance funds so long as the Net
           Fair Market Value of the Partnership Property (as reasonably
           determined by the General Partner) reasonably exceeds the amount of
           funds to be advanced by the General Partner.

   5.04    Negation of Other Obligations to Contribute Capital. Except as
           otherwise provided herein, the General Partner shall have no
           obligation to advance funds to the Partnership or make additional
           contributions to the capital of the Partnership.

6.  Original and Additional Limited Partners

   6.01  Original Limited Partners.

        6.01.1    Original Class A Limited Partner. As part of OVP's conversion
                  to this Partnership, the Partnership shall issue 33-1/3 Class
                  A Units to RCSA and admit RCSA as an original Class A Limited
                  Partner. In exchange for OVGP's commitment as the General
                  Partner to advance funds (as either a loan or capital
                  contribution) to fund the Partnership's Cash Flow Deficits,
                  the Partnership shall issue 15-2/3 Class A Units to OVGP and
                  admit OVGP as an original Class A Limited Partner.

        6.01.2    Original Class B Limited Partner. As part of OVP's conversion
                  to this Partnership, the Partnership shall issue 50 Class B
                  Units to Edelmann and admit Edelmann as the Original Class B
                  Limited Partner. Once Edelmann, as the Holder of Class B
                  Units, has received cumulative Distributions equal to
                  $2,500,000 while a Holder of Class B Units, the Partnership
                  will redeem Edelmann's Class B Units for $1 and Edelmann will
                  cease to be a Limited Partner.

   6.02  Additional Limited Partners. The Partnership shall neither admit
         additional Class B Limited Partners nor issue additional Class B Units.
         Except as otherwise approved by the General Partner and the Class A
         Limited Partners, the Partnership shall neither admit additional Class
         A Limited Partners, issue additional Class A Units or interests in the
         Partnership, accept any offer to contribute property or services in
         exchange for additional Units or interests in the Partnership nor
         permit additional contributions to the capital of the Partnership by
         any Limited Partner.

   6.03  Amendment of Agreement. The General Partner shall amend this
         Partnership Agreement to reflect the admission of additional Limited
         Partners not later than 30 days after each Admission Date when Limited
         Partners are admitted to the Partnership.

   6.04  Amendment of Certificate. The General Partner shall amend the
         Certificate, and cause such amended Certificate to be filed with the
         California Secretary of State, within 30 days of the happening of an
         event resulting in a change of the information contained in the then
         current Certificate.

                                       3
<PAGE>

7.  Status of Limited Partners

   Limited Partners shall not be bound by, or be personally liable for, the
   expenses, liabilities or obligations of the Partnership.

8.  Status of Units

   Each Unit, when issued, shall be fully paid and nonassessable.

9.  Compensation to the General Partner and Affiliates

   9.01    Compensation in General. In addition to compensation payable for
           services under Paragraph 9 of this Agreement, the General Partner may
           cause the Partnership to purchase goods or services from any Partner
           or its Affiliates and pay such consideration or compensation therefor
           as the General Partner shall determine in its sole and absolute
           discretion. The amount of consideration or compensation payable
           hereunder shall be reasonable and not in excess of the consideration
           or compensation which would otherwise be payable for similar goods or
           services in the same geographic locale.

   9.02    Partnership Administration Fee. The Partnership shall pay the General
           Partner, its Affiliates or unaffiliated persons an annual
           administration fee of $5,000. This administration fee is to provide
           compensation for preparation and maintenance of the Partnership's
           records and reports while the Partnership is engaged in minimal
           business activities.

   9.03    Loan Fees and Interest. Any Partner or any Affiliate thereof may lend
           or advance money to or for the Partnership's benefit with the consent
           of the General Partner. If any Partner or an Affiliate thereof lends
           money to the Partnership, such loan shall be a debt of the
           Partnership to that Partner or Affiliate and shall bear a variable
           rate of interest at the lowest of: (a) two percent (2%) per annum
           plus the prevailing prime rate published from time to time in the
           WALL STREET JOURNAL; or (b) the maximum amount permitted to be
           charged by an individual to the Partnership under applicable law.

10.  Partnership Expenses

   10.01  General Partner's  Expenses.  The General Partner or its Affiliates at
          its own  expense and at no expense to the  Partnership,  shall pay all
          overhead expenses of the General Partner or its Affiliates not related
          to the operation of the Partnership business.

   10.02   Partnership Expenses. To the extent practicable, Partnership expenses
           shall be billed directly to and paid by the Partnership. However, the
           General Partner or any of its Affiliates shall be reimbursed for the
           actual cost of all expenses allocable to the operation and management
           of the Partnership's operations. The Partnership shall pay or
           reimburse the General Partner or its Affiliates for all expenses
           which are appropriate to the formation, operation, dissolution or
           winding up of the Partnership. In addition, the Partnership shall pay
           the costs and expenses of organizing and forming the Partnership and
           issuing of Units.

11.  Partnership Allocations and Distributions

   11.01   Distributions. Immediately upon execution of this agreement, the
           Partnership shall distribute $50,000 in cash to the Holders of Class
           B Units, as a group. Thereafter, and except as otherwise provided in
           this Paragraph 11, the General Partner shall cause the Partnership to
           make Distributions of Cash Available for Distribution in the priority
           set forth below:

         (a) first, to the General Partner and the Holders of Units until each
             has received aggregate Distributions pursuant to this subpart (a)
             of Paragraph 11.01 in an amount equal to 100 percent of the
             aggregate cash capital contributions by each Partner since

                                       4
<PAGE>

             September 23, 1994(b) second, one percent (1%) to the General
             Partner, forty nine percent (49%) to the Holders of Class A Units,
             as a group, and fifty percent (50%) to the Holders of Class B
             Units, as a group, until the Holders of the Class B Units, as a
             group, have received Distributions pursuant to this Paragraph 11.01
             and pursuant to Paragraph 11.02 in the aggregate amount of
             $2,500,000; and

         (c) thereafter, one percent (1%) to the General Partner and ninety nine
             percent (99%) to the Holders of Class A Units, as a group.

         The General Partner shall cause the Partnership to make Distributions
         of such amounts of Cash Available for Distribution as may determined by
         the General Partner in its sole and absolute discretion.

   11.02   Minimum Distributions to Class B Units. Notwithstanding the
           foregoing, if Edelmann reaches a settlement with both the IRS and the
           State of California and extinguishes his 1989 income tax obligation,
           thereby removing the related liens on Partnership Property, if any,
           the Partnership shall make the minimum Distributions to the Holders
           of Class B Units, as a group, in accordance with the terms of this
           Paragraph 11.02.

      11.02.1   The amount of a minimum Distribution each year will vary
                depending on the net cumulative advances (by loan or capital
                contribution) to the Partnership by the General Partner or the
                Holders of Class A Units since September 23, 1994 through each
                annual anniversary date of the issuance of the Class B Units
                ("Anniversary"). The following is a schedule of the minimum
                Distribution applicable to each Anniversary based on the
                cumulative advances at that date, which shall be made within 90
                days of each Anniversary :
                                                                      Minimum
 Anniversary                     Cumulative Advances               Distribution
 -----------        ---------------------------------------------  ------------

    First                       Greater than $299,999                   None

                                 Less than $300,000                    $50,000

   Second                       Greater than $399,999                   None

                    Less than $400,000 but greater than $299,999       $50,000

                                 Less than $300,000                   $100,000

    Third                       Greater than $499,999                   None

                    Less than $500,000 but greater than $399,999       $50,000

                                 Less than $400,000                   $100,000

   Fourth                       Greater than $599,999                   None

                    Less than $600,000 but greater than $499,999       $50,000

                                 Less than $500,000                   $100,000

    Fifth                       Greater than $699,999                   None

                    Less than $700,000 but greater than $599,999       $50,000

                                 Less than $600,000                   $100,000

                                       5
<PAGE>

                     There  will be no minimum distributions after the fifth
                            anniversary of the issuance of the Class B Units.

         11.02.2   The cumulative Distributions made pursuant to this Paragraph
                   11.02 shall offset the cumulative Distributions the Holders
                   of Class B Units, as a group, would be entitled to receive
                   pursuant to Paragraph 11.01. For example, if the Partnership
                   made a $100,000 minimum Distribution on the first Anniversary
                   and thereafter has $300,000 of Cash Available for
                   Distribution and no Distributions are required under subpart
                   (a) of Paragraph 11.01, the Partnership will make
                   Distributions pursuant to subpart (b) of Paragraph 11.01 as
                   if it had $400,000 of Cash Available for Distribution, of
                   which $100,000 had already been distributed to the Holders of
                   Class B Units as a portion of their share of the
                   Distributions. Therefore, the General Partner will receive
                   $4,000 (1% of $400,000), the Holders of Class A Units
                   $196,000 (49% of $400,000), and the Holders of Class B Units
                   $100,000 (50% of $400,000 less $100,000 already distributed).

   11.03   Liquidation of Interest Held by Holders of Class B Units. The intent
           of the Partners in setting forth the Distributions in Paragraphs
           11.01 and 11.02 is to provide for the liquidation of all interests
           held by the Holders of Class B Units. After the Holders of Class B
           Units, as a group, have received Distributions pursuant to Paragraphs
           11.01 and 11.02 in the aggregate amount of $2,500,000, their
           interests shall be totally and completely redeemed, their interests
           in the Partnership shall be terminated, and their Units shall be
           canceled.

   11.04   Deficit Restoration. Notwithstanding any other provision of this
           Agreement, if the General Partner has a deficit balance in its
           Capital Account upon Liquidation of its Partnership Interest (after
           taking into account all Capital Account adjustments incidental to
           such Liquidation), the General Partner shall have an obligation to
           contribute to the Partnership by the end of the taxable year or, if
           later, within 90 days after the date of such Liquidation, cash in an
           amount equal to the General Partner's negative Capital Account
           Balance determined as of the date of Liquidation.

   11.05   Distributions on Liquidation. After taking into account any
           restorations required under Paragraph 11.04, the Partnership shall
           make Distributions upon Liquidation of the Partnership or of a
           Holder's Partnership Interest: (a) in accordance with Paragraphs
           11.01 and 11.02, until the Holders of Class B Units have received
           aggregate distributions pursuant to Paragraphs 11.01 and 11.02 in the
           total amount of $2,500,000, after which such Holders shall not be
           entitled to any further Distributions and the Capital Account
           Balances of such Holders shall be deemed to be zero; and thereafter
           (b) in proportion to and in accordance with the positive Capital
           Account Balances of the Holders after taking into account any
           adjustments that would be made to the Capital Account Balance on a
           deemed sale of all the Partnership assets immediately prior to the
           Liquidation; and (c) by the end of the taxable year in which the
           Liquidation occurred or, if later, within 90 days of such
           Liquidation. Notwithstanding the foregoing, the General Partner in
           its sole and absolute discretion may cause the Partnership to retain
           (on a proportional basis) from the liquidating Distributions owed to
           the Holders reasonable amounts for reserves or for contingent
           liabilities, provided the Partnership distributes such amounts as
           soon as is practical after final and full satisfaction of all
           outstanding Partnership obligations.

   11.06   Partnership Allocations. The timing and method of allocations of Net
           Income, Net Loss, and other Partnership Allocations, including
           Definitions relating to such allocations, are set forth on Exhibit B,
           attached hereto, and by this reference such exhibit is incorporated
           herein as if fully set forth at this point.

                                       6
<PAGE>

12.     Assignment of Partnership Interests

   12.01   Right of Assignment. Subject to the terms and conditions of this
           Agreement (including the rights of first refusal pursuant to
           Paragraph 12.04), a Limited Partner (but not an Assignee or Assignee
           of Record) shall have the right to assign its Partnership Interest by
           a written instrument of assignment duly executed by the assignor, the
           terms of which are not in contravention of any of the provisions of
           this Partnership Agreement. No assignment shall be effective unless:
           (a) at least 10 days prior to delivering the written instrument of
           assignment, the Partner proposing to assign its Partnership Interest
           delivers to the General Partner notice of such Partner's intent to
           assign; and (b) prior to the effective date of such assignment,
           either the proposed assignor or Assignee reimburses the Partnership
           for all costs, including without limitation attorneys and accounting
           fees, incurred in evaluating the proposed assignment. No assignment,
           sale, transfer, exchange or other disposition of any Partnership
           Interest may be made except in compliance with the then applicable
           law.

         12.01.1   The Partnership and the General Partner shall be entitled to
                   treat the assignor of any Partnership Interest as the
                   absolute owner thereof in all respects and shall incur no
                   liability for allocations affecting the Capital Account
                   Balance attributable to such Partnership Interest, or for the
                   transmittal of reports or accountings which are made in good
                   faith to such assignor until such time as the written
                   instrument of assignment has been received by the Partnership
                   and recorded on its books and the effective date of the
                   assignment has passed.

         12.01.2   The effective date of an assignment (on which date the
                   Assignee shall be deemed to be an Assignee of Record) shall
                   be the first day of the month following the date on which the
                   Partnership receives actual notice of the assignment of a
                   Partnership Interest.

         12.01.3   The granting of a security interest in a Partner's Units
                   shall not be deemed an assignment of such Units for the
                   purposes of this agreement until the secured party thereunder
                   forecloses its security interest. The effective date of any
                   assignment resulting from such a foreclosure (on which date
                   the Assignee shall be deemed to be an Assignee of Record)
                   shall be the first day of the month following the date on
                   which the Partnership receives actual notice of the
                   foreclosure.

   12.02   Rights of Assignee of Record. An Assignee of Record shall be entitled
           to receive Partnership reports and accountings and Partnership
           Allocations and Distributions attributable to such person's assigned
           Partnership Interest from and after the effective date of the
           assignment. Unless and until a person is admitted to the Partnership
           as a substituted Limited Partner, an Assignee or Assignee of Record
           shall have no right to: (a) inspect the Partnership books or records;
           (b) vote on Partnership matters; or (c) exercise any other right or
           privilege as a Limited Partner. A Partner assigning his or her
           Partnership Interest shall not agree as a condition of such
           assignment to act on behalf of or under the direction of an Assignee
           or Assignee of Record with regard to the exercise of any right or
           privilege which a Partner would have with respect to such Partnership
           Interest. Any attempt to act in such capacity shall be void and of no
           effect and shall not be recognized by the Partnership.

      12.03 General  Partner  Consent.  No assignment of a Partnership  Interest
            shall be permitted  without the prior written consent of the General
            Partner.  Such  consent may be  unreasonably  withheld.  The General
            Partner, however, shall withhold such consent if:

         (a)    in the opinion of Partnership counsel, the Partnership Interest
                to be assigned when added to the total of all other Partnership
                Interests assigned within the 12 months immediately preceding
                the proposed assignment may result in the termination of the
                Partnership under the Code;

         (b)    in the opinion of Partnership counsel, the proposed assignment
                may adversely affect the availability to the Partnership of the
                exemptions from registration or qualification under federal or
                state securities laws relied upon by the Partnership in
                connection with the issuance of Partnership securities; or

                                       7
<PAGE>

         (c)    in the opinion of the General Partner, the proposed assignment
                is likely to create a secondary market in the Units (or a
                substantial equivalent thereto) within the meaning of Code
                Section 7704.

   12.04   Right of First Refusal Affecting Units. Limited Partners holding
           Units may assign any number of Units if and only if such assignment
           complies with all provisions of this Partnership Agreement governing
           the assignment of Partnership Interests. In addition, such Limited
           Partner shall afford each Optionee Class the option to purchase the
           Units as set forth in this paragraph.

      12.04.1   Any Limited Partner holding Units desiring to assign any of such
                Limited Partner's Units shall first give notice thereof to the
                Partnership, the General Partner and each of the other Limited
                Partners. Such notice shall contain a true copy of the offer to
                purchase from the proposed Assignee, if any, and a statement of
                the number of the Units proposed to be assigned, the price per
                Unit, payment terms offered by the proposed Assignee for such
                Units and the identity of the proposed Assignee.

      12.04.2   Each Optionee Class, in the order of priority set forth as
                follows, shall have the option to purchase the Units proposed
                for assignment for the same price per Unit specified in the
                notice of the proposed assignment: (a) the Limited Partners, (b)
                the Partnership, and (c) the General Partner

      12.04.3   The option to purchase Units proposed for assignment shall: (a)
                except as otherwise provided, be exercisable as to all or any
                lesser number of Units or remaining Units proposed for
                assignment; (b) remain in effect during the applicable Option
                Exercise Period; and (c) be exercised by notice from the
                acquiring Optionee to the General Partner and the proposed
                assignor during the applicable Option Exercise Period.

      12.04.4 The Option Exercise Period for each Optionee Class shall be as
follows:

                                         Number of Days From Notice of Proposed
                 Optionee Class                              Assignment

                 Limited Partners                               0-15

                 Partnership                                    16-30

                 General Partner                                31-40

      12.04.5   If Optionees in any Optionee Class as a group have exercised
                options to purchase more Units than the total number of
                remaining Units proposed for assignment, each such Optionee's
                option to purchase Units shall be reduced to the number of Units
                that equals: (a) the ratio of the number of Units each such
                Optionee has opted to purchase bears to the total number of
                Units that all Optionees in the Optionee Class as a group have
                opted to purchase; multiplied by (b) the total number of
                remaining Units proposed for assignment.

      12.04.6   If the Optionees have exercised their options such that all of
                the Units proposed for assignment will be purchased, such
                purchases shall be consummated on or before the 75th day
                following the notice of proposed assignment. Each such
                purchasing Optionee shall pay the price per Unit pursuant to the
                terms set forth in the notice of proposed assignment.

      12.04.7   If the Optionees fail to opt to purchase all of the Units
                proposed for assignment, none of the options so exercised shall
                be effective. Thereafter, the Limited Partner proposing to
                assign Units: (a) shall not be obligated to sell and the
                Optionees exercising options shall not be obligated to purchase
                the Units proposed for assignment; and (b) may assign such Units
                at any time between the 41st day and the 90th day after the

                                       8
<PAGE>

                notice of proposed assignment, but only to the proposed Assignee
                and only for the price and terms stated in the notice of
                proposed assignment.

   12.05   Effect of Prohibited Assignment. Any assignment, sale, exchange or
           other transfer in contravention of the provisions of this Agreement
           governing such transfer shall be void and shall not bind or be
           recognized by the Partnership.

   12.06   Restrictions on Assignment of General Partner's Partnership Interest.
           Notwithstanding anything to the contrary contained herein, the
           General Partner shall not assign, sell, exchange or otherwise
           transfer its Partnership Interest unless such transfer is approved by
           a Majority Vote of the Limited Partners. For purposes of this
           paragraph, a transfer of more than 49 percent of the outstanding
           voting stock of the General Partner shall constitute a transfer of
           its Partnership Interest.

13.  Substituted Limited Partners

   13.01   Conditions Precedent. No Assignee or Assignee of Record shall have
           the right to become a substituted Limited Partner unless the General
           Partner has given its consent, which consent may be unreasonably
           withheld, and such Assignee or Assignee of Record:

        (a)    has filed with the Partnership a duly executed and acknowledged
               written instrument of assignment, which instrument shall specify
               the number of Units being assigned and set forth the intention of
               the assignor that the Assignee or Assignee of Record succeed the
               assignor's interest as a substituted Limited Partner in the
               assignor's place;

        (b)    has executed and acknowledged such other instruments as the
               General Partner may deem necessary or desirable to effect such
               substitution, including the written acceptance and adoption by
               such person of the provisions of this Partnership Agreement and
               the Assignee's execution, acknowledgment and delivery to the
               General Partner of a special power of attorney, the form and
               content of which are more fully described herein; and

        (c)    delivered to the General Partner a non-refundable substitution
               fee in an amount determined in the sole and absolute discretion
               of the General Partner to reimburse the Partnership or the
               General Partner for estimated or actual administrative costs in
               evaluating the proposed substitution.

   13.02   No Consent of Other Limited Partners. No consent of any of the
           Limited Partners shall be required to admit an Assignee as a
           substituted Limited Partner. By executing or adopting this
           Partnership Agreement, each Limited Partner consents to the admission
           of additional or substituted Limited Partners and to any Assignee
           becoming a substituted Limited Partner as approved by the General
           Partner.

   13.03   Amendment of Books and Records. The General Partner shall cause the
           Partnership Agreement and the books and records of the Partnership to
           be amended to reflect the substitution of Limited Partners not less
           frequently than once in each calendar quarter in which any such
           substitution occurs.

14.  Books, Records, Accountings and Reports

   14.01   Maintenance & Inspection. The Partnership's books and records, the
           Agreement and all amendments thereto, and any separate certificates
           of limited partnership shall be maintained at the principal office of
           the Partnership or such other place as the General Partner may
           determine and, pursuant to California Corporations Code ss.15634(b),
           shall be open to the inspection, examination or copying by Limited
           Partners or their duly authorized representatives within a reasonable
           time after written request therefor. Upon written request, the
           General Partner shall provide to any Limited Partner or such Limited
           Partner's duly authorized representative copies of: (a) the most
           recent listing of Partners' names, addresses, capital contributions
           and share of profits and losses; (b) the Certificate; (c) the
           Partnership Agreement, and (d) financial statements..

                                       9
<PAGE>

   14.02 Annual  Financial  Statements.  At least once each year, the General
            Partner  shall cause the  preparation  of  financial  statements  at
            Partnership expense.

   14.03   Tax Returns. The General Partner shall cause income tax returns for
           the Partnership to be prepared and timely filed with the appropriate
           authorities at Partnership expense. Within 90 days after the end of
           each taxable year, the General Partner shall furnish to the Limited
           Partners such information as is necessary to complete federal or
           state income tax or information returns.

15.  Rights, Authority, Powers, Responsibilities and Duties of General Partner
     -------------------------------------------------------------------------

   15.01   Powers of General Partner. Except as otherwise provided in this
           Agreement, the General Partner shall have the broadest authorities,
           rights and powers as are permitted by law, possessed by a partner in
           a partnership without limited partners and required or appropriate to
           the management of the Partnership business, including without
           limitation the right to require in any Partnership contract that the
           General Partner will not be personally liable thereon and that the
           remedy for a breach of such contract shall be satisfied solely from
           the assets of the Partnership.

      15.02 Prohibited  Acts.  Unless approved by a Majority Vote of the Limited
            Partners  holding Units , neither the General Partner nor any of its
            Affiliates shall have the authority to:

            (a)    continue the Partnership business or enter into contracts
                   which would bind the Partnership after a sole remaining
                   General Partner suffers a Disqualification Event;

            (b)   knowingly  use or permit any other  person to use  Partnership
                  funds or assets in any manner except for the exclusive benefit
                  of the Partnership;

            (c)   do any act in contravention  of this Partnership  Agreement or
                  which  would  make it  impossible  to  carry  on the  ordinary
                  business of the Partnership;

            (d)   confess a judgment  against the Partnership in connection with
                  any threatened or pending legal action;

            (e)   do any act or fail to take any  action for which a vote of the
                  Limited  Partners is  permitted  or required  under  Paragraph
                  16.02;

            (f)   possess Partnership property, or assign its rights in specific
                  Partnership property, for other than a Partnership purpose;

            (g)   sell  or  otherwise  dispose  of the  40  Acre  Parcel  or the
                  Partnership's  interest  in Vail  Ranch  Limited  Partnership,
                  excluding  a possible  sale of a portion of the 40 Acre Parcel
                  to Presley Homes in exchange for extinguishment of Partnership
                  obligations;

            (h)   Encumber  any of the  Partnership  assets  for the  purpose of
                  obtaining  financing  for  which  any of the funds are used to
                  make distributions to the Partners;

            (I)   Elect  to  dissolve  the  Partnership.   Partnership  and  the
                  Partners  and  the  duty  and   responsibility  for  providing
                  continuing administrative and executive

                                       10
<PAGE>

   support, advice, consultation, analysis and supervision with respect to the
           Partnership business and Property.

      15.04 Additional  General  Partners.  If additional  General  Partners are
            admitted to the Partnership such that more than one person is acting
            as a General Partner of this Partnership:

            (a)    unless otherwise provided under this Agreement, the rights,
                   powers, authority, responsibilities and duties of the General
                   Partner under this Agreement shall be the rights,
                   authorities, powers, responsibilities and duties of each
                   General Partner; and

            (b)    such General Partners shall govern, manage and control this
                   Partnership and exercise the rights, powers and authority of
                   the General Partner under this Agreement as shall be
                   determined by a majority of such General Partners, subject to
                   the limitations on such rights, powers and authority of the
                   General Partner under this Agreement.

            If the Partnership has an even number of General Partners who are
            evenly divided and cannot agree as to the management of the
            Partnership's business affairs so that the Partnership's business
            can no longer be conducted to advantage or so that there is danger
            that the Partnership's property or business will be impaired or
            lost, the General Partners shall submit the matters related thereto
            to a vote of the Limited Partners holding Units, who shall decide
            such matters by a Majority Vote of the Limited Partners entitled to
            vote.

      15.05 Tax  Matters  Partner.  The  General  Partner  shall act as the "tax
            matters partner" as defined in Code Section 6231(a)(7).

16.  Rights, Powers and Voting Rights of the Limited Partners
     --------------------------------------------------------

   16.01   No Control. Neither any Limited Partner, Assignee or Assignee of
           Record shall take part in or interfere in any manner with the
           control, conduct or operation of the Partnership, nor shall any of
           them have any right or authority to act for or bind the Partnership.

   16.02   Voting Rights. In addition to matters requiring the approval of the
           Limited Partners either set forth elsewhere in this Agreement,
           Limited Partners holding Units (but not their Assignees or Assignees
           of Record) shall have the right to vote only upon:

      (a)   amendment  of  this  Partnership  Agreement,   except  as  otherwise
            provided in this Agreement;

        (b)    advice to the General Partner on matters relating to the
               Partnership's business upon which the General Partner in its sole
               and absolute discretion requests a vote of the Limited Partners;

        (c)    the admission of a General Partner or an election to continue the
               business of the Partnership after a General Partner ceases to be
               a General Partner other than by removal where there is no
               remaining or surviving General Partner;

        (d)    the admission of a General Partner or an election to continue the
               business of the Partnership after the removal of a General
               Partner when there is no remaining or surviving General Partner.

       (e)   the admission   of  a  General   Partner   other  than  under  the
            circumstances  described  in subparts  (c) or (d) of this  Paragraph
            16.02;

   16.03   Vote Required to Approve. Matters upon which the Limited Partners may
           vote shall require the Majority Vote of the Limited Partners entitled
           to vote to pass and become effective. Each Class of Units is entitled
           to one (1) vote per Class as a group. Notwithstanding the foregoing,
           the actions specified in subpart (d) of Paragraph 16.02 may only be
           taken by the affirmative vote of a majority of the Limited Partners
           entitled to vote. On all matters requiring approval of the Limited
           Partners, such approval shall not be unreasonably withheld and shall

                                       11
<PAGE>

           be given or denied within five (5) business days after receipt of the
           General Partner's written request for approval. Should there be no
           written response received by certified mail or other verifiable
           service of delivery, then such approval will be deemed given.

   16.04  Meetings  &  Votes  Without  A  Meeting.  Meetings  and  votes  of the
          Partners   shall  be  governed  by  the   provisions   of   California
          Corporations Codess.15637 as from time to time amended.

   16.05   Voting. Except as otherwise provided in this paragraph, a Limited
           Partner holding Units of any class shall be entitled to cast one vote
           for each Unit owned. Neither Assignees nor Assignees of Record shall
           be entitled to vote on Partnership matters.

   16.06   Limited Partner Prohibited Acts. No Limited Partner or Holder shall
           have the right or power to: (a) withdraw from the Partnership or
           reduce his or her contribution to the capital of the Partnership
           except as a result of the dissolution of the Partnership or as
           otherwise specified in this Agreement; (b) bring an action for
           partition against the Partnership; (c) cause the dissolution and
           winding up of the Partnership by court decree or otherwise, except as
           set forth in this Partnership Agreement; or (d) demand or receive
           property other than cash in return for such Partner's contribution to
           the capital of the Partnership.

   16.07   Court Directed Winding Up. Upon a petition executed by Limited
           Partners holding five percent (5%) or more of the issued and
           outstanding Units, a court of competent jurisdiction may enter a
           decree ordering the winding up of the Partnership if: (a) it is not
           reasonably practicable to carry on the business in conformity with
           the Agreement; (b) the General Partner has been guilty, or has
           knowingly countenanced persistent and pervasive fraud or abuse of
           authority, or persistent unfairness toward any Partner or the
           Partnership Property is being misapplied or wasted by the General
           Partner; or (c) dissolution is reasonably necessary for the
           protection of the rights or interests of any Partners who petition
           under this paragraph. Any decree entered pursuant to this paragraph
           shall designate the Partners who are to wind up the affairs of the
           Partnership. Except as otherwise provided, Limited Partners
           designated to wind up the affairs of the Partnership shall be
           entitled to reasonable compensation. Notwithstanding the foregoing,
           no compensation or expenses shall be allowed to the Limited Partners
           designated to wind up the affairs of the Partnership if the petition
           is brought solely under subpart (c) of this paragraph.

   16.08   Return of Capital Contributions. Except as provided in this
           Partnership Agreement, no Limited Partner or Holder shall have
           priority over any other Limited Partner or Holder either as to the
           return of contributions of capital or as to Partnership Allocations.
           Other than upon the dissolution and winding up of the Partnership as
           provided by this Partnership Agreement, there has been no time agreed
           upon when the contribution of each Limited Partner or Holder to the
           capital of the Partnership is to be returned. Notwithstanding any
           provision of this Agreement to the contrary, a Limited Partner shall
           return any Distribution made to such Limited Partner to the extent
           that immediately after the Distribution: (a) all Partnership
           liabilities, other than liabilities to Partners on account of their
           Partnership Interests and liabilities to which the recourse of
           creditors is limited to specific items of Partnership Property;
           exceed (b) the fair salable value of the Partnership Property,
           provided the fair salable value of any Property which is subject to a
           liability as to which recourse of creditors is so limited shall be
           included in the Partnership Property only to the extent that the fair
           value of the Property exceeds such liability.

17.  Disqualification of a General Partner

   17.01  Expulsion  By  Majority  Vote.  A General  Partner may be removed as a
          General Partner from the Partnership at any time by a Majority Vote of
          the Limited Partners holding Units.

   17.02   Rights After Disqualification. Upon the sufferance of a
           Disqualification Event by a General Partner, the disqualified General
           Partner shall have the Partnership Interest, rights (including voting
           rights) and liabilities set forth under subdivision (b) of California
           Corporations Code ss.15662. Solely for purposes of voting, the
           disqualified General Partner shall be deemed to own one Unit of each
           class of Units.

                                       12
<PAGE>

   17.03   Relinquishment of Rights. Upon sufferance of a Disqualification Event
           by a General Partner, the disqualified General Partner, or any
           successor in interest thereto, including but not limited to any
           trustee in bankruptcy or debtor-in-possession, shall relinquish any
           and all rights it may have under federal bankruptcy law or similar
           state insolvency laws to continue to act as a General Partner of this
           Partnership.

18.  Certain Transactions

   Except as otherwise provided in this Agreement, the General Partner, any
   Limited Partner, Holder, Assignee of Record or any Affiliates thereof, or any
   shareholder, officer, director, employee or any person owning a legal or
   beneficial interest therein, may engage in or possess an interest in any
   other business or venture of every nature and description, independently or
   with others, and no Partner, Holder or such other person shall have any
   interest therein by reason of such person's interest in the Partnership.

19.  Termination and Dissolution of the Partnership

   19.01   Events Causing Dissolution. The Partnership shall be wound up and
           dissolved, except as set forth below, upon the earlier to occur of:
           (a) the sufferance of a Disqualification Event by a General Partner
           unless within 120 days thereafter a successor General Partner, if
           any, elects to continue the business of the Partnership; (b) the
           entry of a decree of judicial dissolution; (c) a Majority Vote of the
           Limited Partners holding Units in favor of winding up and dissolution
           of the Partnership; (d) the expiration of the term of the
           Partnership; or (e) the written decision of the General Partner to
           wind up and dissolve the Partnership.

   19.02   Winding Up. Upon the dissolution and winding up of the Partnership
           for any reason, the General Partner shall take full account of the
           Partnership assets and liabilities and liquidate the assets as
           promptly as is consistent with obtaining the fair market value
           thereof. Thereafter the General Partner shall apply and distribute
           the proceeds from any liquidation to: (a) first, the payment of
           creditors of the Partnership, including Partners who are creditors,
           to the extent permitted by law, but excluding secured creditors whose
           obligations will be assumed or otherwise transferred on the
           liquidation of Partnership assets; and (b) second, the Partners and
           Assignees of Record pursuant to the provisions of Paragraph 11 of
           this Partnership Agreement.

20.  Special and Limited Power of Attorney

   20.01   Appointment of Attorney-in-Fact. The General Partner shall at all
           times during the term of the Partnership have a special and limited
           power of attorney as the attorney-in-fact for each Limited Partner,
           with power and authority to act in the name and on the behalf of each
           such Limited Partner to execute, acknowledge and swear to in the
           execution, acknowledgment and filing of documents, which shall
           include but not be limited to: (a) this Agreement, any separate
           certificates of limited partnership, as well as any amendments to the
           foregoing which, under the laws of the State of California or the
           laws of any other state, are required to be filed or which the
           General Partner shall deem it advisable to file; (b) any other
           instrument or document which may be required to be filed by the
           Partnership under the laws of any state or by any governmental agency
           or which the General Partner shall deem it advisable to file; and (c)
           any instrument or document which may be required to effect the
           continuation of the Partnership, the admission of additional or
           substituted Limited Partners or the dissolution and winding up of the
           Partnership (provided such continuation, admission or dissolution and
           winding up are in accordance with the terms of this Partnership
           Agreement) or to reflect any reductions in the amount of capital
           contributions made by the Partners.

   20.02   Nature of Power. The special and limited power of attorney of the
           General Partner: (a) as a special power of attorney coupled with an
           interest, is irrevocable, shall survive the death of the granting
           Limited Partner, and is limited to those matters herein set forth;
           (b) may be exercised by the General Partner for each of the Limited
           Partners by the authorized signature of the General Partner; and (c)

                                       13
<PAGE>

           shall survive an assignment by a Limited Partner of all or any
           portion of his or her Units.

21.  Indemnification

        The Partnership shall protect, defend, indemnify and hold harmless the
        General Partner, its Affiliates, officers, directors, employees, agents
        and assigns from any liability, loss or damage incurred partially or
        entirely, directly or indirectly in connection with the business of the
        Partnership, including but not limited to reasonable attorneys' fees and
        costs and any amounts expended in the settlement of any claims for loss
        or damages. Any such indemnification shall be recoverable only from the
        assets of the Partnership and not from the assets of the Limited
        Partners. Notwithstanding the foregoing, the Partnership shall have no
        obligation to indemnify and hold harmless if: (a) the claim or liability
        resulting solely from any action or inaction of the General Partner or
        any of its Affiliates; and (b) such action or inaction was undertaken in
        bad faith, constituted gross negligence or intentional misconduct.

22.  Miscellaneous

   22.01  Counterparts.  This  Partnership  Agreement may be executed in several
          counterparts.   All  executed   counterparts   shall   constitute  one
          Partnership Agreement.

   22.02   Successors. The terms and provisions of this Partnership Agreement
           shall be binding upon and shall inure to the benefit of the
           successors and assigns of the respective Partners.

   22.03   Severability. If any provision of this Partnership Agreement is
           declared by a court of competent jurisdiction to be void, such
           provision shall be deemed severed from the remainder of the
           Partnership Agreement and the balance of the Partnership Agreement
           shall remain in full force and effect.

   22.04   Notices. All notices, consents or other communications required or
           permitted under this Partnership Agreement shall be in writing. Any
           such communication may be served personally, transmitted by facsimile
           or nationally recognized overnight delivery service (i.e., Federal
           Express) or sent by prepaid, first class mail posted to the address
           maintained by the Partnership for such person or at such other
           address as such person may specify in writing, which communication
           shall be deemed effective upon personal delivery, confirmed receipt
           of any communication transmitted by facsimile, two days after
           transmission by nationally recognized overnight delivery service or
           three days after mailing in accordance with this paragraph.

   22.05   Governing Law & Trial by Reference. This Partnership Agreement shall
           be governed by and construed in accordance with the laws of the State
           of California. Any action brought to interpret or enforce this
           Agreement shall be tried by the reference procedures set forth in
           California Code of Civil Procedure Section 638 et seq. upon motion by
           a party to the Superior Court for the County of San Diego,
           California. A single referee shall be appointed to try the matter and
           such referee shall be a retired judge of the California Superior
           Court, California Court of Appeals or California Supreme Court. Each
           party may reject two judges appointed by the court and hereby waives
           the right to trial by jury. The referee shall be compensated at the
           rate per hour charged by senior attorneys in major San Diego County
           law firms. During the pendency of the referenced proceeding, each
           party shall pay its proportionate share of the cost thereof based
           upon such the parties relative interests in Partnership Allocations.
           Upon the conclusion of the referenced proceeding, the losing party or
           parties shall pay all of remaining unpaid costs of the referenced
           proceeding and reimburse the prevailing party or parties for any such
           costs previously paid by the prevailing parties. Such reimbursement
           shall be included in any judgment or final order issued in the
           referenced proceeding. Except as otherwise required by law, each
           party shall exercise its best efforts to keep the referenced
           proceeding and the testimony and evidence presented therein
           confidential.

                                       14
<PAGE>

   22.06   Titles & Captions. Paragraph titles or captions contained in this
           Partnership Agreement are inserted only as a matter of convenience
           and for reference. Such titles and captions in no way define, limit,
           extend or describe the scope of this Partnership Agreement or the
           intent of any provision hereof.

   22.07   Interpretation. Wherever the context of this Agreement requires, all
           words used in the singular shall be construed to have been used in
           the plural, and vice versa, and the use of any gender specific
           pronoun shall include any other appropriate gender. The term "person"
           shall refer to any individual, corporation or legal entity having
           standing to bring an action in its own name under California law,
           whether or not such person has qualified to do business in California
           or filed a fictitious business name statement. The conjunctive "or"
           shall mean "and/or" unless otherwise required by the context in which
           the conjunctive "or" is used.

   22.08   Integration. This Partnership Agreement constitutes the entire
           understanding of the Partners with respect to any matter mentioned
           herein. No prior agreement or understanding pertaining to any such
           matter shall be effective. This Agreement may be modified or amended
           only in writing as provided for herein.

   22.09  General  Partner's  Address.  The  name  and  address  of the  General
          Partner is as follows:

                     OVGP, Inc.
                     c/o Sports Arenas, Inc.
                     5230 Carroll Canyon Road, Suite 310
                     San Diego, CA 92121
                     (619) 587-1060
                     (619) 587-0425 -Fax

   22.10   Limited Partner Addresses. The names, addresses and capital
           contributions of the Limited Partners shall be set forth in Exhibit C
           to this Partnership Agreement, which exhibit may, in the discretion
           of the General Partner, be separately recorded and a copy thereof
           maintained at the principal place of business of the Partnership.

   22.11   Recitals and Exhibits. All recitals and exhibits referred to in this
           Agreement are a part of this Agreement and hereby incorporated by
           reference.

   22.12  Time.  Time is of the  essence  to the  performance  of each and every
          obligation under this Agreement.

   22.13   Reasonable Consent and Approval. Except as otherwise provided in this
           Agreement, whenever a party is required or permitted to give its
           consent or approval under this Agreement, such consent or approval
           shall not be unreasonably withheld or delayed. If a party is required
           or permitted to give its consent or approval in its sole and absolute
           discretion, such consent or approval may be unreasonably withheld but
           shall not be unreasonably delayed.

   22.14   Waivers. Any waiver by any party shall be in writing and shall not be
           construed as a continuing waiver. No waiver will be implied from any
           delay or failure to take action on account of any default by any
           party. Consent by any party to any act or omission by another party
           shall not be construed to be a consent to any other subsequent act or
           omission or to waive the requirement for consent to be obtained in
           any future or other instance.

                                       15
<PAGE>

IN WITNESS WHEREOF, the undersigned have set their hands to this Agreement of
Limited Partnership on the date first set forth in the preamble hereof.

        GENERAL PARTNER:            OVGP, INC., a California corporation

                                        BY: /S/Harold S. Elkan
                                            ------------------------
                                              Harold S. Elkan, President

        LIMITED PARTNERS:
                                     /S/ Peter Werner Edelmann
                                    -------------------------------------
                                    PETER WERNER EDELMANN,  a married man
                                       as his sole and separate property

                                   RCSA HOLDINGS, INC., a California corporation

                                     BY: /S/ Harold S. Elkan
                                         -----------------------
                                             Harold S. Elkan, President

                                            SPOUSAL CONSENT
        The undersigned certifies she:

            (a) is the spouse of Peter Werner Edelmann

            (b)   agrees to be bound by and accept the provisions of this
                  Agreement in lieu of all other interest she may have,
                  including, without limitation, any community property interest
                  in the transaction.
                                     /S/Kay Moore Edelmann
                                     ---------------------------------------
                                     Spouse of Peter Werner Edelmann

                                       16
<PAGE>

                                    EXHIBIT A

                                   DEFINITIONS

Adjusted Capital Account Balance shall mean the amount of the Capital Account
        Balance of any Partner as of the close of a taxable year after adding to
        the unadjusted Capital Account Balance of such Partner the total amount
        of capital such Partner is obligated by the terms of this Agreement to
        contribute to the Partnership and subtracting therefrom any capital
        contributions actually made by such Partner.

Affiliate shall mean: (a) any person directly or indirectly controlling,
        controlled by or under common control with another person; (b) a person
        owning or controlling more than 50 percent of the outstanding voting
        securities of such other person; (c) any officer, director or partner of
        such person; or (d) if such other person is an officer, director, or
        partner, any company for which such person acts in any capacity.

Agreement, Partnership Agreement or Limited Partnership Agreement shall mean
        this Agreement of Limited Partnership, together with all amendments,
        attached exhibits or other documents which may be incorporated herein by
        reference.

Assignee shall mean a person who has acquired a beneficial interest in a
        Partnership Interest but who has not been admitted to the Partnership as
        a Partner.

Assignee of Record shall mean an Assignee who has acquired a beneficial interest
        in a Partnership Interest, as evidenced by a written instrument of
        assignment, the effective date of which has passed, and whose ownership
        of such Partnership Interest has been recorded on the books of the
        Partnership but who has not been admitted to the Partnership as a
        Partner.

Capital Account and Capital Account Balance shall mean an account, and the
        balance of such account, maintained in accordance with Regulation
        Section 1.704-1(b)(2)(iv), except that the Partnership shall compute its
        Net Income and Net Loss in accordance with the adjusted tax basis of
        Partnership Property. The Partnership expects to comply with he economic
        equivalence test of Regulation Section 1.704-1(b)(2)(ii)(i).

Cash Available for Distribution shall mean the sum of:

   (a)   gross  revenues  generated by the  Partnership,  excluding  revenues
            derived from the sale, financing or other disposition of Property;

   (b)     the net cash realized by the Partnership from the sale, refinancing
           or other disposition of the Partnership Property after retirement of
           affected mortgage debt and payment of all expenses related to the
           transaction;

   (c) cash realized from any other source; and

   (d)     less all cash funds used to pay Partnership expenses and obligations,
           including without limitation cash withheld in operating or capital
           reserves. The amount withheld for reserves may include, without
           limitation, amounts for contingent liabilities until such time as the
           General Partner has concluded the probability of assertion is remote
           or the statute of limitations has expired.

Cash    Flow Deficit shall mean the amount by which the Partnership's cash is
        exceeded by amounts that the General Partner has determined are
        currently due and payable by the Partnership.

Certificate shall refer to the certificate of limited partnership for the
        Partnership as shall be filed with the Secretary of State of the State
        of California, and as such certificate may be amended.

                                       17
<PAGE>

Code    shall mean the Internal Revenue Code of 1986, as amended, or
        corresponding provisions of subsequent federal revenue laws.

Disqualification Event shall mean the removal of a General Partner as provided
        in these Agreement or any event set forth in California Corporations
        Code ss.15642 upon the happening of which a person ceases to be a
        general partner of a limited partnership.

Distributions shall refer to any cash or other property distributed to Partners
        or other Holders in connection with their Partnership Interests, but
        shall not include any payments made under provisions regarding
        Compensation of General Partner or Partnership Expense of this
        agreement.

General Partner shall mean each person initially named as a General Partner in
        this Agreement, or any person who succeeds it in such capacity under
        this Agreement, or any person who is admitted as an additional General
        Partner under this Agreement.

Holder  shall refer to an owner of a Partnership Interest who is either a
        Partner, Assignee, or Assignee of Record.

Limited Partner shall refer to any person who has been admitted to the
        Partnership as an original, additional or substituted Limited Partner.

Liquidation shall mean a termination of a Partner's entire interest in the
        Partnership by means of a Distribution, of a series of Distributions, to
        the Partner by the Partnership, as set forth in Regulation sections
        1.761-1(d) and 1.704-1(b)(2)(ii)(g).

Majority Vote shall mean the vote of written consent of the Limited Partners
        holding more than 55 percent of the issued and outstanding Units
        entitled to vote and which approves a proposal that is required or
        permitted to be approved by such Limited Partners.

Minimum Gain shall have the meaning set forth in Regulation Section 1.704-2(d).

Net     Fair Market Value shall mean the fair market value of property less the
        amount of liabilities, if any, to which the property is subject or that
        are assumed by transferee in connection with a transfer of the property.

Net     Income and Net Loss shall mean the net income, including tax exempt
        income, or the net loss of the Partnership computed with reference to
        the adjusted tax basis for items of the Partnership Property. Minimum
        Gain and Nonrecourse Deductions shall not be taken into account in
        computing Net Income and Net Loss..

Nonrecourse Deductions shall have the meaning set forth in Regulation Section
1.704-2(c).

Nonrecourse Proceeds shall mean the cash proceeds of a nonrecourse loan secured
        by Partnership Property which results in an increase in the Minimum Gain
        of the Partnership for such year or, in the case described in Regulation
        Section 1.704-2(h)(4), for the next taxable year. Whether proceeds of a
        nonrecourse loan are properly allocable to a nonrecourse liability shall
        be determined by the General Partner using any reasonable method. Such
        adjustments as are required by the Regulations shall be made if the
        Nonrecourse Proceeds are derived in whole or in part from a Partner
        Nonrecourse Liability.

Option  Exercise Period shall mean the period during which Optionees in a
        specified Optionee Class have the right to exercise their options to
        purchase Units proposed for assignment.

Optionee shall mean the Partnership or any Partner having the option to purchase
        Units which have been proposed for assignment.

Optionee Class shall mean a class of Optionees having a right of equal priority
        to exercise options to purchase Units proposed for assignment.

                                       18
<PAGE>

Partner Nonrecourse Liability shall be determined in accordance with Regulation
        Section 1.704-2(I), which provides, in part, that a debt which would
        otherwise be a nonrecourse debt under local law, but for which a partner
        bears an economic risk of loss due to particular partnership
        relationships, shall be treated as a partners nonrecourse debt to the
        extent any partner bears an economic risk of loss with respect to such
        liability.

Partners shall refer collectively to the General Partners and to the Limited
        Partners holding Units and a reference to a Partner shall be to any one
        of the Partners unless the context shall otherwise require.

Partnership shall refer to the limited partnership created under this
Partnership Agreement.

Partnership Allocation shall mean allocations of Partnership Net Income, Net
        Loss, Minimum Gain, items specially allocated pursuant to Paragraphs
        B.02 and B.03 of Exhibit B, Nonrecourse Deductions and Distributions of
        cash made to the Partners with respect to their Partnership Interests.

Partnership Interest shall refer to Units of any class, the interest of the
        General Partner, an Assignee, or Assignee of Record.

Property or Partnership Property shall mean all the real and personal property
        owned or leased by the Partnership.

Regulation shall mean regulations issued by the Department of Treasury pursuant
        to authority granted in the Code.

Unit    shall represent an interest of a Limited Partner, its Assignee or its
        Assignee of Record subject to the terms of this Partnership Agreement.

                                       19
<PAGE>

                                    EXHIBIT B

                             PARTNERSHIP ALLOCATIONS

B.01    Definitions. Words and terms having their initial letters capitalized in
        this Exhibit B shall have the respective meanings set forth in Exhibit
        A, attached to the Partnership Agreement, unless otherwise expressly
        provided herein or unless the context otherwise requires.

B.02    Priority Allocations. Notwithstanding any other provision of this
        Partnership Agreement, the Partnership shall allocate the first items of
        income, gain, loss and deduction of the Partnership and adjust the
        Capital Account Balances of the Partners in the manner and order of
        priority set forth below.

      B.02.1 First,  if any  portion  of a  Partnership  liability  is a Partner
         Nonrecourse  Liability,  the  Partnership  shall  allocate  Nonrecourse
         Deductions  and Minimum Gain  attributable  to the Partner  Nonrecourse
         Liability in accordance with Treas. Reg. Section 1.704-2(i).

      B.02.2 After the adjustments set forth in Paragraph B.02.1, above, if
             there is a net decrease in the Partnership's Minimum Gain during a
             taxable year, the Partnership shall allocate to each Partner the
             first items of income or gain (or positive adjustments) of the
             Partnership in an amount equal to the decrease in such Partner's
             share of Minimum Gain. Each Partner's share of the Minimum Gain
             shall be computed in accordance with the provisions of Regulation
             Section 1.704-2(g). This allocation need not be made with respect
             to Partners affected by transactions described in Regulation
             Sections 1.704-2(f)(2), (3) and (5). Any waiver described in
             Regulation Section 1.704-2(f)(4) may be made only by the General
             Partner in its sole and absolute discretion. This Paragraph B.02.2
             is intended to qualify as a "minimum gain chargeback" within the
             meaning of Regulation Section 1.704-2(f).

      B.02.3 Nonrecourse Deductions shall be allocated one percent (1%) to the
             General Partner and 99 percent to the Holders of Class A Units, as
             a group.

      B.02.4 If any Partner's Adjusted Capital Account Balance (as adjusted by
             adding thereto such Partner's share of Minimum Gain) is
             unexpectedly reduced below zero by virtue of an adjustment,
             allocation or Distribution under Regulation Section
             1.704-1(b)(2)(ii)(d)(4), (5) or (6), then the Partnership shall
             allocate the first items of income or gain (or positive
             adjustments) of the Partnership so as to eliminate the deficit in
             each such Partner's Adjusted Capital Account Balance as quickly as
             possible. An allocation shall be made pursuant to this Paragraph
             B.02.4 only if a Partner's Adjusted Capital Account Balance is less
             than zero as of the close of the taxable year and after all other
             allocations under Paragraph 11 (including this Exhibit B) have been
             tentatively made as if this Paragraph B.02.4 was not a part of this
             Agreement. This Paragraph B.02.4 is intended to qualify as a
             "qualified income offset" within the meaning of Regulation Section
             1.704-1(b)(2)(ii)(d).

      B.02.5 If any Partner's Adjusted Capital Account Balance is reduced below
             zero as of the close of the taxable year by any Partnership
             Allocation or Distribution other than an allocation of Nonrecourse
             Deductions or a Distribution of Nonrecourse Proceeds, the
             Partnership shall allocate the first items of income or gain (or
             positive adjustments) of the Partnership so as to eliminate the
             deficit in each such Partner's Adjusted Capital Account Balance as
             quickly as possible. An allocation shall be made pursuant to this
             Paragraph B.02.5 only if a Partner's Adjusted Capital Account
             Balance is less than zero as of the close of the taxable year and
             after all other allocations under Paragraph 11 (including this
             Exhibit B) have been tentatively made as if Paragraph B.02.4 and
             this Paragraph B.02.5 were not a part of this Agreement.

      B.02.6 Any special allocations made pursuant to Paragraphs B.02.1 through
             B.02.5, inclusive, shall be taken into account in computing
             subsequent allocations under this Exhibit B, so that the net amount
             of Partnership Allocations shall be equal, to the extent possible,
             to the net amount that would have been allocated to such Partner or
             Partners pursuant to this Exhibit B if allocations pursuant to
             Paragraphs B.02.1 through B.02.5 had not been made.

                                       20
<PAGE>

B.03    Special Allocations. After taking into account the allocations under
        Paragraph B.02 and prior to making allocations under Paragraph B.04,
        Partnership gain and loss shall be specially allocated among the
        Partners as follows:

      B.03.1 If interest income is imputed with respect to an obligation owed by
             a Partner to the Partnership, the Partnership shall allocate such
             income to the obligor Partner.

      B.03.2 To the extent compensation paid the General Partner under Paragraph
             9 is not a guaranteed payment under Section 707(c) of the Code and
             is not paid the General Partner other than in its capacity as a
             Partner within the meaning of Section 707(a) of the Code, the
             Partnership shall allocate to the General Partner to the extent
             permitted by the Code such items of income or gain of the
             Partnership at a time and in an amount equal to the amount of such
             compensation.

      B.03.3 The Partnership shall allocate Revaluation Adjustments as if such
             adjustments were Net Income or Net Loss arising from the sale or
             exchange of Partnership Property.

B.04    Allocation of Net Income, Net Loss and Chargeable Expense. The
        Partnership shall allocate Net Income and Net Loss among the Partners
        and Holders, and adjust their respective Capital Account Balances, as
        provided in this paragraph.

      B.04.1    Except as otherwise provided in this Exhibit B, the Partnership
                shall allocate the Net Income of the Partnership one percent
                (1%) to the General Partner and the balance to the Holders of
                Class A Units, as a group.

      B.04.2 The Partnership shall allocate the Net Loss of the Partnership to
             the Partners as follows:

            (a)    first, one percent (1%) to the General Partner and the
                   balance to Holders of Class A Units as a group, until the
                   aggregate Net Loss allocated pursuant to this subpart for
                   this fiscal year and for all previous fiscal years equals the
                   aggregate Net Income allocated during all previous years
                   pursuant to subpart (c) of Paragraph B.04.1;

            (b)    second, one percent (1%) to the General Partner and the
                   balance to the Holders of Class A Units, to be reallocated
                   among the Holders of Class A Units in proportion to and in
                   accordance with their positive Adjusted Capital Account
                   Balances, until the Adjusted Capital Account Balances of all
                   Holders of Class A Units are reduced to zero; and

            (c) thereafter,  any  additional Net Loss shall be  allocated to the
                  General Partner.

B.05 Special Adjustments and the Maintenance of Capital Accounts. The provisions
   of this  Partnership  Agreement  regarding the maintenance of Capital Account
   Balances are intended to comply with Regulation Section 1.704-1(b)(2)(iv) and
   shall  be  interpreted   and  applied  in  a  manner   consistent  with  such
   Regulations.  If the General  Partner  determines it is prudent to modify the
   manner in which the Capital Account  Balances of the Partners are computed in
   order to comply with such  Regulations,  the  General  Partner may amend this
   Agreement to make any such  modification if it is unlikely to have a material
   effect on the amounts  distributable  to any Partner upon the  Liquidation of
   the  Partnership.  The  General  Partner  shall  also  make  any  appropriate
   modifications  for  unanticipated  events (such as the acquisition of oil and
   gas properties) in order to comply with such Regulations. In addition, if the
   basis of Partnership  Property is adjusted under Code Sections 732(d), 734 or
   743,  the  Capital  Account  Balances  and the  Book  Value  of the  affected
   Partnership Property shall reflect appropriate Basis Adjustments, if any.

                                       21
<PAGE>

                                    EXHIBIT C

                       NAMES AND ADDRESSES OF THE PARTNERS

                      OVGP, INC.
                      5230 Carroll Canyon Road, Suite 310
                      San Diego, CA  92121

                      RCSA HOLDINGS, INC.
                      5230 Carroll Canyon Road, Suite 310
                      San Diego, CA  92121

                      PETER WERNER EDELMANN
                      15135 Paseo Del Sol
                      Del Mar, CA  92014

                                       22

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