Document:

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                                                                    EXHIBIT 10.7

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

              AMERICAN SPECTRUM REALTY OPERATING PARTNERSHIP, L.P.

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                                TABLE OF CONTENTS
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ARTICLE 1            DEFINED TERMS................................................................................1

ARTICLE 2            ORGANIZATIONAL MATTERS......................................................................14
         2.1         Formation...................................................................................14
         2.2         Name........................................................................................15
         2.3         Registered Office and Agent; Principal Office...............................................15
         2.4         Power of Attorney...........................................................................15
         2.5         Term........................................................................................17

ARTICLE 3            PURPOSE.....................................................................................17
         3.1         Purpose and Business........................................................................17
         3.2         Powers......................................................................................18

ARTICLE 4            CAPITAL CONTRIBUTIONS.......................................................................19
         4.1         Capital Contributions of the Partners.......................................................19
         4.2         Additional Funds; Restrictions on the General Partner.......................................19
         4.3         Issuance of Additional Partnership Interests; Admission of Additional
                     Limited Partners............................................................................21
         4.4         Contribution of Proceeds of Issuance of REIT Stock..........................................22
         4.5         Repurchase of REIT Stock; Shares-In-Trust...................................................22
         4.6         No Third-Party Beneficiary..................................................................23
         4.7         No Interest; No Return......................................................................23
         4.8         No Preemptive Rights........................................................................24

ARTICLE 5            DISTRIBUTIONS...............................................................................24
         5.1         Regular Distributions.......................................................................24
         5.2         Qualification as a REIT.....................................................................24
         5.3         Withholding.................................................................................25
         5.4         Additional Partnership Interests............................................................25
         5.5         Distributions Upon Liquidation..............................................................25

ARTICLE 6            ALLOCATIONS.................................................................................25
         6.1         Allocations.................................................................................25
         6.2         Revisions to Allocations to Reflect Issuance of Partnership Interests.......................25

ARTICLE 7            MANAGEMENT AND OPERATIONS OF BUSINESS.......................................................26
         7.1         Management..................................................................................26
         7.2         Certificate of Limited Partnership..........................................................31
         7.3         Reimbursement of the General Partner........................................................32

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                                       (i)

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         7.4         Outside Activities of the General Partner...................................................33
         7.5         Contracts with Affiliates...................................................................33
         7.6         Indemnification.............................................................................34
         7.7         Liability of the General Partner............................................................36
         7.8         Other Matters Concerning the General Partner................................................37
         7.9         Title to Partnership Assets.................................................................38
         7.10        Reliance by Third Parties...................................................................39
         7.11        Loans By Third Parties.  ...................................................................40

ARTICLE 8            RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..................................................40
         8.1         Limitation of Liability.....................................................................40
         8.2         Management of Business......................................................................40
         8.3         Outside Activities of Limited Partners......................................................40
         8.4         Return of Capital...........................................................................41
         8.5         Rights of Limited Partners Relating to the Partnership......................................41
         8.6         Exchange Rights Agreements..................................................................42

ARTICLE 9            BOOKS, RECORDS, ACCOUNTING AND REPORTS......................................................42
         9.1         Records and Accounting......................................................................42
         9.2         Fiscal Year.................................................................................43
         9.3         Reports.....................................................................................43

ARTICLE 10           TAX MATTERS.................................................................................43
         10.1        Preparation of Tax Returns..................................................................43
         10.2        Tax Elections...............................................................................44
         10.3        Tax Matters Partner.........................................................................44
         10.4        Organizational Expenses.....................................................................46
         10.5        Withholding.................................................................................46

ARTICLE 11           TRANSFERS AND WITHDRAWALS...................................................................48
         11.1        Transfer....................................................................................48
         11.2        Transfer of the General Partner's General Partner Interest..................................48
         11.3        Limited Partners' Rights to Transfer........................................................50
         11.4        Substituted Limited Partners................................................................52
         11.5        Assignees...................................................................................53
         11.6        General Provisions..........................................................................54

ARTICLE 12           ADMISSION OF PARTNERS.......................................................................56
         12.1        Admission of Successor General Partner......................................................56
         12.2        Admission of Additional Limited Partners....................................................57
         12.3        Amendment of Agreement and Certificate of Limited Partnership...............................58
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                                      (ii)

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ARTICLE 13           DISSOLUTION, LIQUIDATION AND TERMINATION....................................................59
         13.1        Dissolution.................................................................................59
         13.2        Winding Up..................................................................................60
         13.3        No Obligation to Contribute Deficit.........................................................62
         13.4        Rights of Limited Partners..................................................................62
         13.5        Notice of Dissolution.......................................................................62
         13.6        Termination of Partnership and Cancellation of Certificate of Limited
                     Partnership.................................................................................62
         13.7        Reasonable Time for Winding-Up..............................................................63
         13.8        Waiver of Partition.........................................................................63

ARTICLE 14           AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS................................................63
         14.1        Amendments..................................................................................63
         14.2        Meetings of the Partners....................................................................65

ARTICLE 15           GENERAL PROVISIONS..........................................................................66
         15.1        Addresses and Notice........................................................................66
         15.2        Titles and Captions.........................................................................67
         15.3        Pronouns and Plurals........................................................................67
         15.4        Further Action..............................................................................67
         15.5        Binding Effect..............................................................................67
         15.6        Creditors...................................................................................67
         15.7        Waiver......................................................................................67
         15.8        Counterparts................................................................................67
         15.9        Applicable Law..............................................................................68
         15.10       Invalidity of Provisions....................................................................68
         15.11       Entire Agreement............................................................................68
         15.12       Merger......................................................................................68
         15.13       No Rights as Stockholders...................................................................68

EXHIBITS

Exhibit A -          Partner's Contributions and Partnership Interests
Exhibit B -          Allocations
Exhibit E -          Exchange Rights Agreement for Partnership Units (other than Class B
                     Partnership Units)
Exhibit F -          Exchange Rights Agreement for Class B Partnership Units
Exhibit G -          Partnership Unit Designation of the Class A Cumulative
                     Preferred Partnership Units of Casden Properties Operating
                     Partnership, L.P.

Exhibit H -          Partnership Unit Designation of the Junior Cumulative
                     Preferred Partnership Units of Casden Properties Operating
                     Partnership, L.P.
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                                      (iii)

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FOR ALL INVESTORS:

THE PARTNERSHIP UNITS ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR
QUALIFIED UNDER THE APPLICABLE STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION PROVIDED IN THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION OR REGISTRATION UNDER THE APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.

IN ADDITION, THE PARTNERSHIP UNITS ISSUED UNDER THIS AGREEMENT MAY BE SOLD OR
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
HEREIN.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THE PARTNERSHIP UNITS OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY
FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE PARTNERSHIP UNITS OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR NEW YORK INVESTORS:

THIS AGREEMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS
ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.

                                      (iv)

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THIS AGREEMENT DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT
TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. STATEMENTS CONTAINED
HEREIN AS TO THE CONTENTS OF DOCUMENTS GOVERNING THIS INVESTMENT ARE SUMMARIES
AND ARE NOT COMPLETE COPIES OF THE DOCUMENTS, AND, ACCORDINGLY, REFERENCE SHOULD
BE MADE TO THE DOCUMENTS THEMSELVES FOR A MORE COMPLETE UNDERSTANDING OF THE
INVESTMENT. HOWEVER, THIS PARTNERSHIP AGREEMENT CONTAINS A FAIR SUMMARY OF THE
MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.

FOR FLORIDA INVESTORS:

THE PARTNERSHIP UNITS OFFERED HEREBY WILL BE SOLD TO, AND ACQUIRED BY, THE
PURCHASER IN A TRANSACTION EXEMPT UNDER SECTION 517.061(11) OF THE FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT. THAT SECTION PROVIDES THAT WHEN SALES
ARE MADE TO FIVE OR MORE PERSONS, ANY SALE MADE PURSUANT TO SUCH SECTION IS
VOIDABLE AT THE OPTION OF THE PURCHASER WITHIN THREE (3) DAYS AFTER THE FIRST
TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE
ISSUER, OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF
THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

                                       (v)

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                              AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
              AMERICAN SPECTRUM REALTY OPERATING PARTNERSHIP, L.P.

         THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AMERICAN
SPECTRUM REALTY OPERATING PARTNERSHIP, L.P. (this "AGREEMENT"), dated as of
December 29, 1998, is entered into by and among American Spectrum Realty Inc., a
Maryland corporation, as general partner (the "GENERAL PARTNER"), and the
Limited Partners

         WHEREAS, the General Partner and the Limited Partners have heretofore
formed American Spectrum Realty Operating Partnership, L.P. (the "PARTNERSHIP")
as a limited partnership pursuant to the Revised Uniform Limited Partnership Act
of the State of Delaware by filing a certificate of limited partnership with the
Secretary of State of the State of Delaware and entering into an agreement of
limited partnership of the Partnership, dated as of March 27, 1998 (the
"ORIGINAL LIMITED PARTNERSHIP AGREEMENT");

         WHEREAS, the General Partner and the Limited Partner desire to continue
the Partnership as a limited partnership under the Delaware Revised Uniform
Limited Partnership Act and to amend and restate the Original Limited
Partnership Agreement in its entirety;

         NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties do hereby agree that the Original
Limited Partnership Agreement is amended and restated in its entirety as
follows:

                                    ARTICLE 1
                                 DEFINED TERMS

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

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

         "ADDITIONAL LIMITED PARTNER" means a Person that has executed and
delivered an additional limited partner signature page in the form attached
hereto, has been admitted to the Partnership as a Limited Partner pursuant to
Section 4.3 hereof and that is shown as such on the books and records of the
Partnership.

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         "ADJUSTED CAPITAL ACCOUNT DEFICIT" means with respect to any Partner,
the negative balance, if any, in such Partner's Capital Account as of the end of
any relevant fiscal year, determined after giving effect to the following
adjustments:

                  (a) credit to such Capital Account any portion of such
         negative balance which such Partner (i) is treated as obligated to
         restore to the Partnership pursuant to the provisions of Section
         1.704-1(b)(2)(ii)(c) of the Regulations, or (ii) is deemed to be
         obligated to restore to the Partnership pursuant to the penultimate
         sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
         Regulations; and

                  (b) debit to such Capital Account the items described in
         Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

         "ADJUSTED CONTRIBUTION" means the Capital Contributions of any Partner
reduced by the total distributions to such Partner from Capital Events. With
respect to the General Partner, the Adjusted Contribution shall include the
difference, if any, between gross proceeds from the future issuance of REIT
Stock, if any, and the proceeds actually received by the General Partner.

         "AFFILIATE" means,

                  (a) with respect to any 25 individual Person, any member of
         the Immediate Family of such Person or a trust established for the
         benefit of such member, or

                  (b) with respect to any Entity, any Person which, directly or
         indirectly through one or more intermediaries, controls, is controlled
         by, or is under common control with, any such Entity. For purposes of
         this definition, "control," when used with respect to a ny Person,
         means the power to direct the management and policies of such Person,
         directly or indirectly, whether through the ownership of voting
         securities, by contract or otherwise, and the terms "controlling" and
         "controlled" have meanings correlative to the foregoing.

         "AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership, as originally executed and as amended, modified, supplemented or
restated from time to time, as the context requires.

         "ARTICLES OF INCORPORATION" means the General Partner's Articles of
Incorporation, filed with the Maryland State Department of Assessments and
Taxation, or other organizational document governing the General Partner, as
amended, modified, supplemented or restated from time to time.

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

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         "AVAILABLE CASH" means, with respect to the applicable period of
measurement (I.E., any period beginning on the first day of the fiscal year,
quarter or other period commencing immediately after the last day of the fiscal
year, quarter or other applicable period for purposes of the prior calculation
of Available Cash for or with respect to which a distribution has been made, and
ending on the last day of the fiscal year, quarter or other applicable period
immediately preceding the date of the calculation), the excess, if any, as of
such date, of

                  (a) the gross cash receipts of the Partnership for such period
         from all sources whatsoever, including, without limitation, the
         following:

                           (i) all rents, revenues, income and proceeds derived
                  by the Partnership from its operations, including, without
                  limitation, distributions received by the Partnership from any
                  Entity in which the Partnership has an interest;

                           (ii) all proceeds and revenues received by the
                  Partnership on account of any sales of apartment properties,
                  office properties, office/warehouse properties, shopping
                  centers, development parcels or other property of the
                  Partnership or as a refinancing of or payment of principal,
                  interest, costs, fees, penalties or otherwise on account of
                  any borrowings or loans made by the Partnership or financings
                  or refinancings of any property of the Partnership;

                           (iii) the amount of any insurance proceeds and
                  condemnation awards received by the Partnership;

                           (iv) all capital contributions and loans received by
                  the Partnership from its Partners;

                           (v) all cash amounts previously reserved by the
                  Partnership, to the extent such amounts are no longer needed
                  for the specific purposes for which such amounts were
                  reserved; and

                           (vi) the proceeds of liquidation of the Partnership's
                  property in accordance with this Agreement;

over

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

                           (i) all operating costs and expenses, including taxes
                  and other expenses of the properties directly and indirectly
                  held by the Partnership and capital expenditures made during
                  such period (without deduction, however, for

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                  any capital expenditures, charges for Depreciation or other
                  expenses not paid in cash or expenditures from reserves
                  described in (viii) below);

                           (ii) all costs and expenses expended or paid during
                  such period in connection with the sale or other disposition,
                  or financing or refinancing, of the property directly or
                  indirectly held by the Partnership or the recovery of
                  insurance or condemnation proceeds;

                           (iii) all fees provided for under this Agreement;

                           (iv) all debt service, including principal and
                  interest, paid during such period on all indebtedness
                  (including under any line of credit) of the Partnership;

                           (v) all capital contributions, advances,
                  reimbursements, loans or similar payments made to any Person
                  in which the Partnership has an interest;

                           (vi) all loans made by the Partnership in accordance
                  with the terms of this Agreement;

                           (vii) all reimbursements to the General Partner or
                  its Affiliates during such period; and

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

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

         "CAPITAL ACCOUNT" means with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following provisions:

                  (a) to each Partner's Capital Account there shall be credited

                           (i) such Partner's Capital Contributions;

                           (ii) such Partner's distributive share of Net Income
                  and any items in the nature of income or gain which are
                  specially allocated to such Partner pursuant to Paragraphs 1
                  and 2 of Exhibit B and

                           (iii) the amount of any Partnership liabilities
                  assumed by such Partner or which are secured by any asset
                  distributed to such Partner;

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                  (b) to each Partner's Capital Account there shall be debited

                           (i) the amount of cash and the Gross Asset Value of
                  any property distributed to such Partner pursuant to any
                  provision of this Agreement,

                           (ii) such Partner's distributive share of Net Losses
                  and any items in the nature of expenses or losses which are
                  specially allocated to such Partner pursuant to Paragraphs 1
                  and 2 of Exhibit B and

                           (iii) the amount of any liabilities of such Partner
                  assumed by the Partnership or which are secured by any asset
                  contributed by such Partner to the Partnership; and

                  (c) in the event all or a portion of a Partnership Interest is
         transferred in accordance with the terms of this Agreement, the
         transferee shall succeed to the Capital Account of the transferor to
         the extent it relates to the transferred Partnership Interest.

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Sections
1.704-1(b) and 1.704-2 of the Regulations, and shall be interpreted and applied
in a manner consistent with such Regulations. In the event the General Partner
shall reasonably determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed assets or which are assumed by the Partnership, the
General Partner or any Limited Partner) are computed in order to comply with
such Regulations, the General Partner may make such modification; PROVIDED that
it would not cause the amounts distributable to any Partner pursuant to Article
13 hereof upon the dissolution of the Partnership to vary from the amount
contemplated as set forth in Section 2(g) of Exhibit B.

         "CAPITAL CONTRIBUTION" means, with respect to any Partner, any cash,
cash equivalents or the Gross Asset Value of property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Article 4
hereof.

         "CAPITAL EVENT" means any Partnership transaction not in the ordinary
course of its business including, without limitation, principal payments,
prepayments, the incurrence of prepayment penalties, sales, exchanges,
foreclosures or other dispositions of property directly or indirectly owned by
the Partnership, recoveries of damage awards and insurance proceeds not used to
rebuild (other than the receipt of contributions to the capital of the
Partnership and business or rental interruption insurance proceeds not used to
rebuild).

         "CERTIFICATE" means the Certificate of Limited Partnership relating to
the Partnership to be filed in the form of Exhibit C hereto as soon as
practicable after the date hereof in the office of

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the Delaware Secretary of State, as amended from time to time in accordance with
the terms hereof and the Act.

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

         "COMMON STOCK" means a share of the capital stock of the General
Partner. Common Stock may be issued in one or more classes or series in
accordance with the terms of the Articles of Incorporation. If there is more
than one class or series of Common Stock, the term "Common Stock" shall, as the
context requires, be deemed to refer to the class or series of Common Stock that
correspond to the class or series of Partnership Interests for which the
reference to Common Stock is made.

         "COMMON STOCK AMOUNT" has the meaning set forth in the Exchange Rights
Agreements.

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

         "CONSENT OF THE OUTSIDE LIMITED PARTNERS" means the Consent of Limited
Partners (excluding for this purpose any Partnership Interests held by the
General Partner, any other Person of which the General Partner owns or controls
more than fifty percent (50%) of the voting interests and any Person directly or
indirectly owning or controlling more than fifty percent (50%) of the
outstanding voting interests of the General Partner) holding Percentage
Interests that are greater than fifty percent (50%) of the aggregate Percentage
Interest of all Limited Partners who are not excluded for the purposes hereof.

         "CONSOLIDATION" means the consolidation described in American Spectrum
Realty, Inc.'s registration statement on Form S-4, as the same may be amended
from time to time.

         "CONTRIBUTED PROPERTY" means each property, partnership interest,
contract right or other asset, in such form as may be permitted by the Act,
contributed or deemed contributed to the Partnership by any Partner, including
any interest in any successor partnership occurring as a result of a termination
of the Partnership pursuant to Section 708 of Code.

         "DEBT" means, as to any Person, as of any date of determination, (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (b) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (c) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by

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<PAGE>   13

such Person, to the extent attributable to such Person's interest in such
property, even though such Person has not assumed or become liable for the
payment thereof; and (d) obligations of such Person incurred in connection with
entering into a lease which, in accordance with generally accepted accounting
principles, should be capitalized.

         "DEPRECIATION" means, with respect to any asset of the Partnership for
any fiscal year or other period, the depreciation, depletion, amortization or
other cost recovery deduction, as the case may be, allowed or allowable for
federal income tax purposes in respect of such asset for such fiscal year or
other period; PROVIDED, HOWEVER, that except as otherwise provided in Sec tion
1.704-2 of the Regulations, if there is a difference between the Gross Asset
Value (including the Gross Asset Value, as increased pursuant to paragraph (d)
of the definition of Gross Asset Value) and the adjusted tax basis of such asset
at the beginning of such fiscal year or other period, Depreciation for such
asset shall be an amount that bears the same ratio to the beginning Gross Asset
Value of such asset as the federal income tax depreciation, depletion,
amortization or other cost recovery deduction for such fiscal year or other
period bears to the beginning adjusted tax basis of such asset; PROVIDED,
FURTHER, that if the federal income tax depreciation, depletion, amortization or
other cost recovery deduction for such asset for such fiscal year or other
period is zero, Depreciation of such asset shall be determined with reference to
the beginning Gross Asset Value of such asset using any reasonable method
selected by the General Partner.

         "EFFECTIVE DATE" means the date of closing of the Consolidation
pursuant to the Registration Statement on Form S-4 (Registration No. _____).

         "ENTITY" means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, real estate investment trust,
limited liability company, limited liability partnership, cooperative or
association.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time (or any corresponding provisions of succeeding laws).

         "EXCHANGE FACTOR" has the meaning set forth in the Exchange Rights
Agreements.

         "EXCHANGE RIGHT" has the meaning set forth in the Exchange Rights
Agreements.

         "EXCHANGE RIGHTS AGREEMENTS" has the meaning set forth in Section 8.6.

         "GAAP" means United States generally accepted accounting principles, as
in effect from time to time.

         "GENERAL PARTNER" means American Spectrum Realty Inc., a Maryland
corporation, and any successor as general partner of the Partnership.

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<PAGE>   14

         "GENERAL PARTNER INTEREST" means a Partnership Interest held by the
General Partner, in its capacity as general partner. A General Partner Interest
may be expressed as a number of Partnership Units.

         "GROSS ASSET VALUE" means, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:

                  (a) the initial Gross Asset Value of any asset contributed by
         a Partner to the Partnership shall be the gross fair market value of
         such asset, without reduction for liabilities, as determined by the
         contributing Partner and the Partnership on the date of contribution
         thereof;

                  (b) if the General Partner determines that an adjustment is
         necessary or appropriate to reflect the relative economic interests of
         the Partners, the Gross Asset Values of all Partnership assets shall be
         adjusted in accordance with Sections 1.704- 1(b)(2)(iv)(f) and (g) of
         the Regulations to equal their respective gross fair market values,
         without reduction for liabilities, as reasonably determined by the
         General Partner, as of the following times:

                           (i) a Capital Contribution (other than a DE MINIMIS
                  Capital Contribution) to the Partnership by a new or existing
                  Partner as consideration for a Partnership Interest; or

                           (ii) the distribution by the Partnership to a Partner
                  of more than a DE MINIMIS amount of Partnership assets as
                  consideration for the repurchase of a Partnership Interest; or

                           (iii) the liquidation of the Partnership within the
                  meaning of Sec tion 1.704-1(b)(2)(ii)(g) of the Regulations;

                  (c) the Gross Asset Values of Partnership assets distributed
         to any Partner shall be the gross fair market values of such assets
         (taking Section 7701(g) of the Code into account) without reduction for
         liabilities, as determined by the General Partner as of the date of
         distribution; and

                  (d) the Gross Asset Values of Partnership assets shall be
         increased (or decreased) to reflect any adjustments to the adjusted
         basis of such assets pursuant to Sections 734(b) or 743(b) of the Code,
         but only to the extent that such adjustments are taken into account in
         determining Capital Accounts pursuant to Section 1.704- 1(b)(2)(iv)(m)
         of the Regulations (as set forth in Exhibit B); PROVIDED, HOWEVER, that
         Gross Asset Values shall not be adjusted pursuant to this paragraph (d)
         to the extent that the General Partner determines that an adjustment
         pursuant to paragraph (b) above is necessary or appropriate in
         connection with a transaction that would otherwise result in an
         adjustment pursuant to this paragraph (d).

                                        8

<PAGE>   15

At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss.

         "INCAPACITY" or "INCAPACITATED" means,

                  (a) as to any individual Partner, death, total physical
         disability or entry by a court of competent jurisdiction adjudicating
         him incompetent to manage his person or his estate;

                  (b) as to any corporation which is a Partner, the filing of a
         certificate of dissolution, or its equivalent, for the corporation or
         the revocation of its charter;

                  (c) as to any partnership which is a Partner, the dissolution
         and commencement of winding up of the partnership;

                  (d) as to any estate which is a Partner, the distribution by
         the fiduciary of the estate's entire interest in the Partnership;

                  (e) as to any trustee of a trust which is a Partner, the
         termination of the trust (but not the substitution of a new trustee);
         or

                  (f) as to any Partner, the bankruptcy of such Partner, which
         shall be deemed to have occurred when

                           (i) the Partner commences a voluntary proceeding
                  seeking liquidation, reorganization or other relief under any
                  bankruptcy, insolvency or other similar law now or hereafter
                  in effect;

                           (ii) the Partner is adjudged as bankrupt or
                  insolvent, or a final and nonappealable order for relief under
                  any bankruptcy, insolvency or similar law now or hereafter in
                  effect has been entered against the Partner;

                           (iii) the Partner executes and delivers a general
                  assignment for the benefit of the Partner's creditors;

                           (iv) the Partner files an answer or other pleading
                  admitting or failing to contest the material allegations of a
                  petition filed against the Partner in any proceeding of the
                  nature described in clause (ii) above;

                           (v) the Partner seeks, consents to or acquiesces in
                  the appointment of a trustee, receiver or liquidator for the
                  Partner or for all or any substantial part of the Partner's
                  properties;

                           (vi) any proceeding seeking liquidation,
                  reorganization or other relief of or against such Partner
                  under any bankruptcy, insolvency or other similar law

                                        9

<PAGE>   16

                  now or hereafter in effect has not been dismissed within one
                  hundred twenty (120) days after the commencement thereof;

                           (vii) the appointment without the Partner's consent
                  or acquiescence of a trustee, receiver or liquidator has not
                  been vacated or stayed within ninety (90) days of such
                  appointment; or

                           (viii) an appointment referred to in clause (vii)
                  which has been stayed is not vacated within ninety (90) days
                  after the expiration of any such stay.

         "INDEMNITEE" means

                  (a) any Person made a party to a proceeding by reason of its
         status as

                           (i) the General Partner,

                           (ii) a Limited Partner, or

                           (iii) a trustee, director or officer of the
                  Partnership or the General Partner and

                           (iv) a director, trustee, member or officer of any
                  other Entity, each Person serving in such capacity at the
                  request of the Partnership or the General Partner, or

                  (b) his or its liabilities, pursuant to a loan guarantee or
         otherwise, for any indebtedness of the Partnership or any Subsidiary of
         the Partnership (including, without limitation, any indebtedness which
         the Partnership or any Subsidiary of the Partnership has assumed or
         taken assets subject to); and

                  (c) such other Persons (including Affiliates of the General
         Partner, a Limited Partner or the Partnership) as the General Partner
         may designate from time to time (whether before or after the event
         giving rise to potential liability), in its sole and absolute
         discretion.

         "IRS" shall mean the Internal Revenue Service of the United States.

         "LIEN" means any lien, security interest, mortgage, deed of trust,
charge, claim, encumbrance, pledge, option, right of first offer or first
refusal and any other right or interest of others of any kind or nature, actual
or contingent, or other similar encumbrance of any nature whatsoever.

         "LIMITED PARTNER" means, prior to the admission of the first Additional
Limited Partner to the Partnership, the Initial Limited Partner, and thereafter
any Person named as a Limited Partner in Exhibit A, as such Exhibit may be
amended from time to time, upon the execution and delivery by such Person of an
additional limited partner signature page, or any Substituted Limited Partner or
Additional Limited Partner, in such Person's capacity as a Limited Partner of
the Partnership.

                                       10

<PAGE>   17

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

         "LIQUIDATING EVENT" has the meaning set forth in Section 13.1 hereof.

         "LIQUIDATOR" has the meaning set forth in Section 13.2 hereof.

         "NET INCOME" OR "NET LOSS" means, for each fiscal year or other
applicable period, an amount equal to the Partnership's taxable income or loss
for such year or period as determined for federal income tax purposes by the
General Partner, determined in accordance with Sec tion 703(a) of the Code (for
this purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a) of the Code shall be included in taxable
income or loss), adjusted as follows:

                  (a) by including as an item of gross income any tax-exempt
         income received by the Partnership and not otherwise taken into account
         in computing Net Income or Net Loss;

                  (b) by treating as a deductible expense any expenditure of the
         Partnership described in Section 705(a)(2)(B) of the Code (or which is
         treated as a Sec tion 705(a)(2)(B) expenditure pursuant to Section
         1.704-1(b)(2)(iv)(i) of the Regulations) and not otherwise taken into
         account in computing Net Income or Net Loss, including amounts paid or
         incurred to organize the Partnership (unless an election is made
         pursuant to Section 709(b) of the Code) or to promote the sale of
         interests in the Partnership and by treating deductions for any losses
         incurred in connection with the sale or exchange of Partnership
         property disallowed pursuant to Section 267(a)(1) or 707(b) of the Code
         as expenditures described in Section 705(a)(2)(B) of the Code;

                  (c) by taking into account Depreciation in lieu of
         depreciation, depletion, amortization and other cost recovery
         deductions taken into account in computing taxable income or loss;

                  (d) by computing gain or loss resulting from any disposition
         of Partnership property with respect to which gain or loss is
         recognized for federal income tax purposes by reference to the Gross
         Asset Value of such property rather than its adjusted tax basis;

                  (e) in the event of an adjustment of the Gross Asset Value of
         any Partnership asset which requires that the Capital Accounts of the
         Partnership be adjusted pursuant to Sections 1.704-1(b)(2)(iv)(e), (f)
         and (g) of the Regulations, by taking into account the amount of such
         adjustment as if such adjustment represented additional Net Income or
         Net Loss pursuant to Exhibit B; and

                                       11

<PAGE>   18

                  (f) by not taking into account in computing Net Income or Net
         Loss items separately allocated to the Partners pursuant to Paragraphs
         1 and 2 of Exhibit B.

         "NONRECOURSE DEDUCTIONS" has the meaning set forth in Sections
1.704-2(b)(1) and 1.704-2(c) of the Regulations.

         "NONRECOURSE LIABILITIES" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.

         "OUTSIDE LIMITED PARTNERS" has the meaning set forth in "Consent of the
Outside Limited Partners."

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

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

         "PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations Sec
tion 1.704-2(b)(4).

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

         "PARTNERSHIP" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.

         "PARTNERSHIP INTEREST" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of
Partnership Units.

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

         "PARTNERSHIP RECORD DATE" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof, which record date shall be the same as the record date established by
the General Partner for a distribution to its stockholders of some or all of its
portion of such distribution.

                                       12

<PAGE>   19

         "PARTNERSHIP UNIT" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1, 4.2 and
4.3 and includes any classes or series of Partnership Units established after
the date hereof. The number of Partnership Units outstanding and the Percentage
Interests in the Partnership represented by such Partnership Units are set forth
in Exhibit A, as such Exhibit may be amended from time to time. The ownership of
Partnership Units shall be evidenced by such form of certificate for Partnership
Units as the General Partner adopts from time to time unless the General Partner
determines that the Partnership Units shall be uncertificated securities. Except
where otherwise noted, the term "Partnership Units" shall include Class B
Partnership Units.

         "PARTNERSHIP YEAR" means the fiscal year of the Partnership, as set
forth in Section 9.2 hereof.

         "PERCENTAGE INTEREST" means, as to a Partner, the fractional part of
the Partnership Interests owned by such Partner and expressed as a percentage as
specified in Exhibit A, as such Exhibit may be amended from time to time.

         "PERMITTED PARTNERS" has the meaning set forth in subparagraph 1(b) of
Exhibit B.

         "PERMITTED TRANSFEREE" means any person to whom Partnership Units are
Transferred in accordance with Section 11.3 of this Agreement.

         "PERSON" means an individual or Entity.

         "PRECONTRIBUTION GAIN" has the meaning set forth in subparagraph 3(c)
of Exhibit B.

         "QUARTER" means each of the three-month periods ending on March 31,
June 30, September 30 and December 31.

         "REGISTRATION STATEMENT" means the Registration Statement on Form S-4
to be filed by the General Partner with the Securities and Exchange Commission,
and any amendments at any time made thereto.

         "REGULATIONS" means the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

         "REIT" means a real estate investment trust as defined in Section 856
of the Code.

         "REIT REQUIREMENTS" has the meaning set forth in Section 5.2.

         "RESTRICTED PARTNER" has the meaning set forth in Section 1(b) of
Exhibit B.

         "STOCK OPTION PLANS" means, collectively, any and all plans adopted
from time to time by the General Partner pursuant to which REIT Stock is issued,
or options to acquire REIT Stock

                                       13

<PAGE>   20

are granted, to employees or directors of the General Partner, employees of the
Partnership or employees of their respective Affiliates in consideration for
services or future services.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which a majority of

                  (a) the voting power of the voting equity securities; and/or

                  (b) the outstanding equity interests (whether or not voting),
         is owned, directly or indirectly, by such Person.

         "SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof.

         "TAX ITEMS" has the meaning set forth in Exhibit B.

         "TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
(other than a deemed disposition pursuant to Section 708(b)(1)(B) and the
regulations thereunder) of all or substantially all of the assets of the
Partnership or a related series of transactions that, taken together, result in
the sale or other disposition of all or substantially all of the assets of the
Partnership.

         "TRANSFER" as a noun, means any sale, assignment, conveyance, pledge,
hypothecation, gift, encumbrance or other transfer, and as a verb, means to
sell, assign, convey, pledge, hypothecate, give, encumber or otherwise transfer.

         Certain additional terms and phrases have the meanings set forth in
Exhibit B.

                                    ARTICLE 2
                             ORGANIZATIONAL MATTERS

         2.1      FORMATION

         The Partnership is a limited partnership organized pursuant to the
provision of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.

         2.2      NAME

         The name of the Partnership is American Spectrum Realty Operating
Partnership, L.P. The Partnership's business may be conducted under any other
name or names deemed advisable by the General Partner, including the name of the
General Partner or any Affiliate thereof. The words "Limited
Partnership,""L.P.,""Ltd." or similar words or letters shall be included in the

                                       14

<PAGE>   21

Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership and shall notify the
Limited Partners of such change in the next regular communication to the Limited
Partners.

         2.3      REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE

         The address of the registered office of the Partnership in the State of
Delaware and the name and address of the registered agent for service of process
on the Partnership in the State of Delaware is the Corporation Service Company,
2711 Centerville Road Suite 400, Wilmington, Delaware 19808. The principal
office of the Partnership shall be 1800 East Deere Avenue, Santa Ana
California92705, or such other place as the General Partner may from time to
time designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner deems advisable.

         2.4      POWER OF ATTORNEY

                  (a) Each Limited Partner and each Assignee who accepts
         Partnership Units (or any rights, benefits or privileges associated
         therewith) is deemed to irrevocably constitute and appoint the General
         Partner, any Liquidator, and authorized officers and attorneys-in-fact
         of each, and each of those acting singly, in each case with full power
         of substitution, as its true and lawful agent and attorney-in-fact,
         with full power and authority in its name, place and stead to:

                           (i) execute, swear to, acknowledge, deliver, file and
                  record in the appropriate public offices

                                    (A) all certificates, documents and other
                           instruments (including, without limitation, this
                           Agreement and the Certificate and all amendments or
                           restatements thereof) that the General Partner or the
                           Liquidator deems appropriate or necessary to form,
                           qualify or continue the existence or qualification of
                           the Partnership as a limited partnership (or a
                           partnership in which the Limited Partners have
                           limited liability) in the State of Delaware and in
                           all other jurisdictions in which the Partnership may
                           or plans to conduct business or own property,
                           including, without limitation, any documents
                           necessary or advisable to convey any Contributed
                           Property to the Partnership;

                                    (B) all instruments that the General Partner
                           or any Liquidator deems appropriate or necessary to
                           reflect any amendment, change, modification or
                           restatement of this Agreement in accordance with its
                           terms;

                                    (C) all conveyances and other instruments or
                           documents that the General Partner or any Liquidator
                           deems appropriate or necessary to reflect the
                           dissolution and liquidation of the Partnership
                           pursuant to the

                                       15

<PAGE>   22

                           terms of this Agreement, including, without
                           limitation, a certificate of cancellation;

                                    (D) all instruments relating to the
                           admission, withdrawal, removal or substitution of any
                           Partner pursuant to, or other events described in,
                           Article 11, 12 or 13 hereof or the Capital
                           Contribution of any Partner;

                                    (E) all certificates, documents and other
                           instruments relating to the determination of the
                           rights, preferences and privileges of Partnership
                           Interest; and

                                    (F) amendments to this Agreement as provided
                           in Article 14 hereof; and

                           (ii) execute, swear to, seal, acknowledge and file
                  all ballots, consents, approvals, waivers, certificates and
                  other instruments appropriate or necessary, in the sole and
                  absolute discretion of the General Partner or any Liquidator,
                  to make, evidence, give, confirm or ratify any vote, consent,
                  approval, agreement or other action which is made or given by
                  the Partners hereunder or is consistent with the terms of this
                  Agreement or appropriate or necessary, in the sole discretion
                  of the General Partner or any Liquidator, to effectuate the
                  terms or intent of this Agreement.

         Nothing contained herein shall be construed as authorizing the General
         Partner or any Liquidator to amend this Agreement except in accordance
         with Article 14 hereof or as may be otherwise expressly provided for in
         this Agreement.

                  (b) (i) The foregoing power of attorney is hereby declared to
                  be irrevocable and a power coupled with an interest, in
                  recognition of the fact that each of the Partners will be
                  relying upon the power of the General Partner and any
                  Liquidator to act as contemplated by this Agreement in any
                  filing or other action by it on behalf of the Partnership, and
                  it shall survive and not be affected by the subsequent
                  Incapacity of any Limited Partner or Assignee and the Transfer
                  of all or any portion of such Limited Partner's or Assignee's
                  Partnership Units and shall extend to such Limited Partner's
                  or Assignee's heirs, successors, assigns and personal
                  representatives.

                           (ii) Each such Limited Partner or Assignee hereby
                  agrees to be bound by any representation made by the General
                  Partner or any Liquidator, acting in good faith pursuant to
                  such power of attorney, and each such Limited Partner or
                  Assignee hereby waives any and all defenses which may be
                  available to contest, negate or disaffirm the action of the
                  General Partner or any Liquidator, taken in good faith under
                  such power of attorney.

                                       16

<PAGE>   23

                           (iii) Each Limited Partner or Assignee shall execute
                  and deliver to the General Partner or the Liquidator, within
                  fifteen (15) days after receipt of the General Partner's or
                  Liquidator's request therefor, such further designation,
                  powers of attorney and other instruments as the General
                  Partner or the Liquidator, as the case may be, deems necessary
                  to effectuate this Agreement and the purposes of the
                  Partnership.

         2.5      TERM

         The term of the Partnership shall commence on the date hereof and shall
continue until December 31, 2097, unless the Partnership is dissolved sooner
pursuant to the provisions of Article 13 or as otherwise provided by law.

                                    ARTICLE 3
                                     PURPOSE

         3.1      PURPOSE AND BUSINESS

                  (a) The purpose and nature of the business to be conducted by
         the Partnership is to conduct any business that may be lawfully
         conducted by a limited partnership organized pursuant to the Act
         including, without limitation, to engage in the following activities:

                           (i) to acquire, hold, own, develop, construct,
                  improve, maintain, operate, sell, lease, transfer, encumber,
                  convey, exchange, and otherwise dispose of or deal with the
                  properties described in the prospectus/consent solicitation
                  statement contained in the Registration Statement;

                           (ii) to acquire, hold, own, develop, construct,
                  improve, maintain, operate, sell, lease, transfer, encumber,
                  convey, exchange, and otherwise dispose of or deal with real
                  and personal property of all kinds;

                           (iii) to enter into any partnership, joint venture,
                  corporation, limited liability company, trust or other similar
                  arrangement to engage in any of the foregoing;

                           (iv) to undertake such other activities as may be
                  necessary, advisable, desirable or convenient to the business
                  of the Partnership; and

                           (v) to engage in such other ancillary activities as
                  shall be necessary or desirable to effectuate the foregoing
                  purposes;

provided, however, that such business shall be limited to and conducted in such
a manner as to permit the General Partner at all times to be classified as a
REIT, unless the General Partner

                                       17

<PAGE>   24

determines not to qualify as a REIT or ceases to qualify as a REIT for any
reason not related to the business conducted by the Partnership.

                  (b) The Partnership shall have all powers necessary or
         desirable to accomplish the purposes enumerated.

         3.2      POWERS

                  (a) Subject to paragraph (c) below, the Partnership is
         empowered to do any and all acts and things necessary, appropriate,
         proper, advisable, incidental to or convenient for the furtherance and
         accomplishment of the purposes and business described herein and for
         the protection and benefit of the Partnership including, without
         limitation, full power and authority to enter into, perform, and carry
         out contracts of any kind, to borrow money and to issue evidences of
         indebtedness, whether or not secured by mortgage, trust deed, pledge or
         other Lien, and, directly or indirectly, to acquire, own, improve,
         develop and construct real property, and lease, sell, transfer and
         dispose of real property; PROVIDED, that the Partnership shall not
         take, or refrain from taking, any action which, in the judgment of the
         General Partner, in its sole and absolute discretion,

                           (i) could adversely affect the ability of the General
                  Partner to continue to qualify as a REIT, unless the General
                  Partner otherwise ceases to qualify as a REIT;

                           (ii) could subject the General Partner to any
                  additional taxes under Section 857 or Section 4981 of the
                  Code; or

                           (iii) could violate any law or regulation of any
                  governmental body or agency having jurisdiction over the
                  General Partner or its securities, unless such action (or
                  inaction) shall have been specifically consented to by the
                  General Partner in writing.

                  (b) The General Partner also is empowered to do any and all
         acts and things necessary, appropriate or advisable to ensure that the
         Partnership will not be classified as a "publicly traded partnership"
         for the purposes of Section 7704 of the Code, including but not limited
         to imposing restrictions on exchanges of Partnership Units.

                                    ARTICLE 4
                              CAPITAL CONTRIBUTIONS

         4.1      CAPITAL CONTRIBUTIONS OF THE PARTNERS

                  (a) The Partners have made or shall make at the Effective
         Date, if applicable, the Capital Contributions as set forth in Exhibit
         A to this Agreement.

                                       18

<PAGE>   25

                  (b) To the extent the Partnership acquires any property by the
         merger of any other Person into the Partnership or the contribution of
         assets by any other Person, Persons who receive Partnership Interests
         in exchange for their interests in the Person merging into or
         contributing assets to the Partnership shall become Partners and shall
         be deemed to have made Capital Contributions as provided in the
         applicable merger agreement or contribution agreement and as set forth
         in Exhibit A, as amended to reflect such deemed Capital Contributions.

                  (c) Each Partner shall own Partnership Units in the amounts
         set forth for such Partner in Exhibit A and shall have a Percentage
         Interest in the Partnership as set forth in Exhibit A, which Percentage
         Interest shall be adjusted in Exhibit A from time to time by the
         General Partner to the extent necessary to reflect accurately
         exchanges, additional Capital Contributions, the issuance of additional
         Partnership Units or similar events having an effect on any Partner's
         Percentage Interest.

                  (d) The number of Partnership Units held by the General
         Partner, in its capacity as general partner, shall be deemed to be the
         General Partner Interest.

                  (e) Except as provided in Sections 4.2 and 10.5, the Partners
         shall have no obligation to make any additional Capital Contributions
         or provide any additional funding to the Partnership (whether in the
         form of loans, repayments of loans or otherwise) and no Partner shall
         have any obligation to restore any deficit that may exist in its
         Capital Account, either upon a liquidation of the Partnership or
         otherwise.

         4.2      ADDITIONAL FUNDS; RESTRICTIONS ON THE GENERAL PARTNER

                  (a) (i) The sums of money required to finance the business and
                  affairs of the Partnership shall be derived from the initial
                  Capital Contributions made to the Partnership by the Partners
                  as set forth in Section 4.1 and from funds generated from the
                  operation and business of the Partnership, including, without
                  limitation, rents and distributions directly or indirectly
                  received by the Partnership from any Subsidiary.

                           (ii) In the event additional financing is needed from
                  sources other than as set forth in Section 4.2(a)(i) for any
                  reason, the General Partner may, in its sole and absolute
                  discretion, in such amounts and at such times as it solely
                  shall determine to be necessary or appropriate,

                                    (A) cause the Partnership to issue
                           additional Partnership Interests and admit additional
                           Limited Partners to the Partnership in accordance
                           with Section 4.3;

                                    (B) make additional Capital Contributions to
                           the Partnership (subject to the provisions of Section
                           4.2(b));

                                       19

<PAGE>   26

                                    (C) cause the Partnership to borrow money,
                           enter into loan arrangements, issue debt securities,
                           obtain letters of credit or otherwise borrow money on
                           a secured or unsecured basis;

                                    (D) make a loan or loans to the Partnership
                           (subject to Section 4.2(b)); or

                                    (E) sell any assets or properties directly
                           or indirectly owned by the Partnership.

                           (iii) In no event shall any Limited Partners be
                  required to make any additional Capital Contributions or any
                  loan to, or otherwise provide any financial accommodation for
                  the benefit of, the Partnership.

                  (b) The General Partner shall not issue any debt securities,
         any preferred stock or any common stock (including additional REIT
         Stock (other than (i) as payment of the REIT Stock Amount or (ii) in
         connection with the conversion or exchange of securities of the General
         Partner solely in conversion or exchange for other securities of the
         General Partner)) or rights, options, warrants or convertible or
         exchangeable securities containing the right to subscribe for or
         purchase any of the foregoing (collectively, "SECURITIES"), other than
         to all holders of REIT Stock, unless the General Partner shall

                           (i) in the case of debt securities, lend to the
                  Partnership the proceeds of or consideration received for such
                  Securities on the same terms and conditions, including
                  interest rate and repayment schedule, as shall be applicable
                  with respect to or incurred in connection with the issuance of
                  such Securities and the proceeds of, or consideration received
                  from, any subsequent exercise, exchange or conversion thereof
                  (if applicable);

                           (ii) in the case of equity Securities senior or
                  junior to the REIT Stock as to dividends and distributions on
                  liquidation, contribute to the Partnership the proceeds of or
                  consideration (including any property or other non-cash
                  assets) received for such Securities and the proceeds of, or
                  consideration received from, any subsequent exercise, exchange
                  or conversion thereof (if applicable), and receive from the
                  Partnership, interests in the Partnership in consideration
                  therefor with the same terms and conditions, including
                  dividend, dividend priority and liquidation preference, as are
                  applicable to such Securities; and

                           (iii) in the case of REIT Stock or other equity
                  Securities on a parity with the REIT Stock as to dividends and
                  distributions on liquidation, (including, without limitation,
                  REIT Stock or other Securities issued as a stock award or upon
                  exercise of options issued under the Stock Option Plans),
                  contribute to the Partnership the proceeds of or consideration
                  (including any property or other non- cash assets, including
                  services) received for such Securities and the proceeds of, or
                  consideration received from, any subsequent exercise, exchange
                  or conversion

                                       20

<PAGE>   27

                  thereof (if applicable), and receive from the Partnership a
                  number of additional Partnership Units in consideration
                  therefor equal to the product of

                                    (A) the number of shares of REIT Stock or
                           other equity Securities issued by the General
                           Partner, multiplied by

                                    (B) a fraction the numerator of which is one
                           and the denominator of which is the Exchange Factor
                           in effect on the date of such contribution.

         4.3      ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS; ADMISSION OF
                  ADDITIONAL LIMITED PARTNERS

                  (a) In addition to any Partnership Interests issuable by the
         Partnership pursuant to Section 4.2, the General Partner is authorized
         to cause the Partnership to issue additional Partnership Interests (or
         options therefor) in the form of Partnership Units or other Partnership
         Interests in one or more series or classes, or in one or more series of
         any such class senior or junior to the Partnership Units to any Persons
         at any time or from time to time, on such terms and conditions, as the
         General Partner shall establish in each case in its sole and absolute
         discretion subject to Delaware law, including, without limitation, (i)
         the allocations of items of Partnership income, gain, loss, deduction
         and credit to each class or series of Partnership Interests, (ii) the
         right of each class or series of Partnership Interests to share in
         Partnership distributions, and (iii) the rights of each class or series
         of Partnership Interest upon dissolution and liquidation of the
         Partnership; PROVIDED THAT, no such Partnership Interests shall be
         issued to the General Partner unless either (a) the Partnership
         Interests are issued in connection with the grant, award, or issuance
         of REIT Stock or other equity interests in the General Partner having
         designations, preferences and other rights such that the economic
         interests attributable to such REIT Stock or other equity interests are
         substantially similar to the designations, preferences and other rights
         (except voting rights) of the Partnership Interests issued to the
         General Partner in accordance with this Section 4.3(a) or (b) the
         additional Partnership Interests are issued to all Partners holding
         Partnership Interests in the same class in proportion to their
         respective Percentage interests in such class, without any approval
         being required from any Limited Partner or any other Person; PROVIDED,
         HOWEVER, that

                           (i) such issuance does not cause the Partnership to
                  become, with respect to any employee benefit plan subject to
                  Title I of ERISA or Section 4975 of the Code, a "party in
                  interest" (as defined in Section 3(14) of ERISA) or a
                  "disqualified person" (as defined in Section 4975(e) of the
                  Code); and

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<PAGE>   28

                           (ii) such issuance would not cause any portion of the
                  assets of the Partnership to constitute assets of any employee
                  benefit plan pursuant to Sec tion 2510.3-101 of the
                  regulations of the United States Department of Labor.

                  (b) Subject to the limitations set forth in Section 4.3(a),
         the General Partner may take such steps as it, in its sole and absolute
         discretion, deems necessary or appropriate to admit any Person as a
         Limited Partner of the Partnership or to issue any Partnership
         Interests, including, without limitation, amending the Certificate,
         Exhibit A or any other provision of this Agreement.

         4.4      CONTRIBUTION OF PROCEEDS OF ISSUANCE OF REIT STOCK

         In connection with any offering, grant, award, or issuance of REIT
Stock or securities, rights, options, warrants or convertible or exchangeable
securities pursuant to Section 4.2, the General Partner shall make aggregate
Capital Contributions to the Partnership of the proceeds raised in connection
with such offering, grant, award, or issuance, including any property issued to
the General Partner pursuant to a merger or contribution agreement in exchange
for Common Stock; PROVIDED, HOWEVER, that if the proceeds actually received by
the General Partner are less than the gross proceeds of such offering, grant,
award, or issuance as a result of any underwriter's discount, commission, or fee
or other expenses paid or incurred in connection with such offering, grant,
award, or issuance, then the General Partner shall be deemed to have made a
Capital Contribution to the Partnership in the amount of the gross proceeds of
such issuance and the Partnership shall be deemed simultaneously to have paid
pursuant to Section 7.3(c) for the amount of such underwriter's discount or
other expenses.

         4.5      REPURCHASE OF REIT STOCK; SHARES-IN-TRUST

                  (a) In the event that the General Partner shall elect to
         purchase from its stockholders REIT Stock for the purpose of delivering
         such REIT Stock to satisfy an obligation under any dividend
         reinvestment program adopted by the General Partner, any employee stock
         purchase plan adopted by the General Partner, or any other obligation
         or arrangement undertaken by the General Partner in the future, the
         purchase price paid by the General Partner for such REIT Stock and any
         other expenses incurred by the General Partner in connection with such
         purchase shall be considered expenses of the Partnership and shall be
         reimbursed to the General Partner, subject to the condition that:

                           (i) if such REIT Stock subsequently is to be sold by
                  the General Partner, the General Partner shall pay to the
                  Partnership any proceeds received by the General Partner from
                  the sale of such REIT Stock (provided that an exchange of REIT
                  Stock for Partnership Units pursuant to the applicable
                  Exchange Rights Agreement would not be considered a sale for
                  such purposes); and

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<PAGE>   29

                           (ii) if such REIT Stock is not re-transferred by the
                  General Partner within 30 days after the purchase thereof, the
                  General Partner shall cause the Partnership to cancel a number
                  of Partnership Units held by the General Partner (as
                  applicable) equal to the product of

                                    (x) the number of shares of such REIT Stock,
                           multiplied by

                                    (y) a fraction, the numerator of which is
                           one and the denominator of which is the Exchange
                           Factor in effect on the date of such cancellation.

                  (b) In the event the General Partner purchases Shares-in-Trust
         (as from time to time defined in the Articles of Incorporation), the
         Partnership will purchase from the General Partner a number of
         Partnership Units equal to the product of

                           (i) the number of Shares-in-Trust purchased by the
                  General Partner, multiplied by

                           (ii) a fraction, the numerator of which is one and
                  the denominator of which is the Exchange Factor in effect on
                  the date of such purchase.

         4.6      NO THIRD-PARTY BENEFICIARY

         No creditor or other third party having dealings with the Partnership
shall have the right to enforce the right or obligations of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder
or at law or in equity, it being understood and agreed that the provisions of
this Agreement shall be solely for the benefit of, and may be enforced solely
by, the parties hereto and their respective successors and assigns.

         4.7      NO INTEREST; NO RETURN

                  (a) No Partner shall be entitled to interest on its Capital
         Contribution or on such Partner's Capital Account.

                  (b) Except as provided herein or by law, no Partner shall have
         any right to demand or receive the return of its Capital Contribution
         from the Partnership.

         4.8      NO PREEMPTIVE RIGHTS

         Subject to any preemptive rights that may be granted pursuant to
Section 4.3 hereof, no Person shall have any preemptive or other similar right
with respect to

                  (a) additional Capital Contributions or loans to the
         Partnership; or

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<PAGE>   30

                  (b) issuance or sale of any Partnership Units or other
         Partnership Interests.

                                    ARTICLE 5
                                  DISTRIBUTIONS

         5.1      REGULAR DISTRIBUTIONS

         Except for distributions pursuant to Section 13.2 in connection with
the dissolution and liquidation of the Partnership, and subject to the
provisions of Sections 5.3, 5.4, 5.5 and 12.2(c), the General Partner shall
cause the Partnership to distribute, on a quarterly basis (or, at the election
of the General Partner, more frequently), an amount of Available Cash,
determined by the General Partner in its sole discretion to the Partners, as of
the applicable Partnership Record Date, in accordance with each Partner's
respective Percentage Interest; PROVIDED, HOWEVER, that in no event may a
Partner receive a distribution of Available Cash with respect to a Partnership
Unit if such Partner is entitled to receive a distribution out of such Available
Cash with respect to REIT Stock for which such a Partnership Unit has been
exchanged.

         5.2      QUALIFICATION AS A REIT

         The General Partner shall use its best efforts to cause the Partnership
to distribute sufficient amounts under this Article 5 to enable the General
Partner to pay stockholder dividends that will enable the General Partner to

                  (a) satisfy the requirements for qualification as a REIT under
         the Code and Regulations ("REIT Requirements"), and

                  (b) avoid any federal income or excise tax liability;

PROVIDED, HOWEVER, the General Partner shall not be bound to comply with this
covenant to the extent such distributions would

                  (x) violate applicable Delaware law or

                  (y) contravene the terms of any notes, mortgages or other
         types of debt obligations to which the Partnership may be subject in
         conjunction with borrowed funds.

         5.3      WITHHOLDING

         With respect to any withholding tax or other similar tax liability or
obligation to which the Partnership may be subject as a result of any act or
status of any Partner or to which the Partnership becomes subject with respect
to any Partnership Unit, the Partnership shall have the right to withhold
amounts of Available Cash distributable to such Partner or with respect to such

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<PAGE>   31

Partnership Units, to the extent of the amount of such withholding tax or other
similar tax liability or obligation pursuant to the provisions contained in
Section 10.5.

         5.4      ADDITIONAL PARTNERSHIP INTERESTS

         If the Partnership issues Partnership Interests in accordance with
Section 4.2 or 4.3, the distribution priorities set forth in Section 5.1 shall
be amended, as necessary, to reflect the distribution priority of such
Partnership Interests and corresponding amendments shall be made to the
provisions of Exhibit B.

         5.5      DISTRIBUTIONS UPON LIQUIDATION

         Proceeds from a Terminating Capital Transaction and any other cash
received or reductions in reserves made after commencement of the liquidation of
the Partnership shall be distributed to the Partners in accordance with Section
13.2.

                                    ARTICLE 6
                                   ALLOCATIONS

         6.1      ALLOCATIONS

         The Net Income, Net Loss and other Partnership items shall be allocated
pursuant to the provisions of Exhibit B.

         6.2      REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF PARTNERSHIP
                  INTERESTS

         If the Partnership issues Partnership Interests to the General Partner
or any additional Limited Partner pursuant to Article IV, the General Partner
shall make such revisions to this Article 6 and Exhibit B as it deems necessary
to reflect the terms of the issuance of such Partnership Interests, including
making preferential allocations to classes of Partnership Interests that are
entitled thereto. Such revisions shall not require the consent or approval of
any other Partner.

                                    ARTICLE 7
                      MANAGEMENT AND OPERATIONS OF BUSINESS

         7.1      MANAGEMENT

                  (a) (i) Except as otherwise expressly provided in this
                  Agreement, full, complete and exclusive discretion to manage
                  and control the business and affairs of the Partnership are
                  and shall be vested in the General Partner, and no Limited

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<PAGE>   32

                  Partner shall have any right to participate in or exercise
                  control or management power over the business and affairs of
                  the Partnership.

                           (ii) The General Partner may not be removed by the
                  Limited Partners with or without cause.

                           (iii) In addition to the powers now or hereafter
                  granted a general partner of a limited partnership under
                  applicable law or which are granted to the General Partner
                  under any other provision of this Agreement, the General
                  Partner, subject to Section 7.11, shall have full power and
                  authority to do all things deemed necessary or desirable by it
                  to conduct the business of the Partnership, to exercise all
                  powers set forth in Section 3.2 hereof and to effectuate the
                  purposes set forth in Section 3.1 hereof, including, without
                  limitation:

                                    (A) (I) the making of any expenditures, the
                           lending or borrowing of money, including, without
                           limitation, making prepayments on loans and borrowing
                           money to permit the Partnership to make distributions
                           to its Partners in such amounts as will permit the
                           General Partner (so long as the General Partner
                           qualifies as a REIT) to avoid the payment of any
                           federal income tax (including, for this purpose, any
                           excise tax pursuant to Section 4981 of the Code) and
                           to make distributions to its stockholders in amounts
                           sufficient to permit the General Partner to maintain
                           REIT status,

                                    (II) the assumption or guarantee of, or
                           other contracting for, indebtedness and other
                           liabilities,

                                    (III) the issuance of evidence of
                           indebtedness (including the securing of the same by
                           deed, mortgage, deed of trust or other lien or
                           encumbrance on the Partnership's assets) and

                                    (IV) the incurring of any obligations it
                           deems necessary for the conduct of the activities of
                           the Partnership, including the payment of all
                           expenses associated with the General Partner;

                           (B) the making of tax, regulatory and other filings,
                  or rendering of periodic or other reports to governmental or
                  other agencies having jurisdiction over the business or assets
                  of the Partnership or the General Partner;

                           (C) the acquisition, disposition, mortgage, pledge,
                  encumbrance, hypothecation or exchange of any assets of the
                  Partnership

                                       26

<PAGE>   33

                  (including the exercise or grant of any conversion, option,
                  privilege, or subscription right or other right available in
                  connection with any assets at any time held by the
                  Partnership) or the merger or other combination of the
                  Partnership with or into another entity on such terms as the
                  General Partner deems proper;

                           (D) the use of the assets of the Partnership
                  (including, without limitation, cash on hand) for any purpose
                  consistent with the terms of this Agreement and on any terms
                  it sees fit, including, without limitation,

                                    (I) the financing of the conduct of the
                           operations of the General Partner, the Partnership or
                           any of the Partnership's Subsidiaries,

                                    (II) the lending of funds to other Persons
                           (including, without limitation, the Subsidiaries of
                           the Partnership and/or the General Partner) and the
                           repayment of obligations of the Partnership and its
                           Subsidiaries and any other Person in which it has an
                           equity investment, and

                                    (III) the making of capital contributions to
                           its Subsidiaries;

                           (E) the expansion, development, construction,
                  leasing, repair, alteration, demolition or improvement of any
                  property in which the Partnership or any Subsidiary of the
                  Partnership owns an interest;

                           (F) the negotiation, execution, and performance of
                  any contracts, conveyances or other instruments that the
                  General Partner considers useful or necessary to the conduct
                  of the Partnership's operations or the implementation of the
                  General Partner's powers under this Agreement, including
                  contracting with contractors, developers, consultants,
                  accountants, legal counsel, other professional advisors and
                  other agents and the payment of their expenses and
                  compensation out of the Partnership's assets;

                           (G) the distribution of Partnership cash or other
                  Partnership assets in accordance with this Agreement;

                           (H) holding, managing, investing and reinvesting cash
                  and other assets of the Partnership;

                                       27

<PAGE>   34

                           (I) the collection and receipt of revenues and income
                  of the Partnership;

                           (J) the establishment of one or more divisions of the
                  Partnership, the selection and dismissal of employees of the
                  Partnership (including, without limitation, employees having
                  titles such as "president," "vice president," "secretary" and
                  "treasurer" of the Partnership), and agents, outside
                  attorneys, accountants, consultants and contractors of the
                  Partnership, and the determination of their compensation and
                  other terms of employment or engagement;

                           (K) the maintenance of such insurance for the benefit
                  of the Partnership and the Partners and directors and officers
                  thereof as it deems necessary or appropriate;

                           (L) the formation of, or acquisition of an interest
                  (including non-voting interests in entities controlled by
                  Affiliates of the Partnership or third parties) in, and the
                  contribution of property to, any further Entities or other
                  relationships that it deems desirable, including, without
                  limitation, the acquisition of interests in, and the
                  contributions of funds or property to, or making of loans to,
                  its Subsidiaries and any other Person from time to time, or
                  the incurrence of indebtedness on behalf of such Persons or
                  the guarantee of the obligations of such Persons; provided
                  that, as long as the General Partner has determined to elect
                  to qualify as a REIT or to continue to qualify as a REIT, the
                  Partnership may not engage in any such formation, acquisition
                  or contribution that would cause the General Partner to fail
                  to qualify as a REIT;

                           (M) the control of any matters affecting the rights
                  and obligations of the Partnership, including

                                    (I) the settlement, compromise, submission
                           to arbitration or any other form of dispute
                           resolution, or abandonment of, any claim, cause of
                           action, liability, debt or damages, due or owing to
                           or from the Partnership,

                                    (II) the commencement or defense of suits,
                           legal proceedings, administrative proceedings,
                           arbitration or other forms of dispute resolution, and

                                    (III) the representation of the Partnership
                           in all suits or legal proceedings, administrative
                           proceedings, arbitrations or other forms of dispute
                           resolution, the incurring of legal expenses, and the

                                       28

<PAGE>   35

                           indemnification of any Person against liabilities and
                           contingencies to the extent permitted by law;

                           (N) the undertaking of any action in connection with
                  the Partnership's direct or indirect investment in its
                  Subsidiaries or any other Person (including, without
                  limitation, the contribution or loan of funds by the
                  Partnership to such Persons);

                           (O) the determination of the fair market value of any
                  Partnership property distributed in kind using such reasonable
                  method of valuation as the General Partner, in its sole
                  discretion, may adopt;

                           (P) the exercise, directly or indirectly, through any
                  attorney-in-fact acting under a general or limited power of
                  attorney, of any right, including the right to vote,
                  appurtenant to any asset or investment held by the
                  Partnership;

                           (Q) the exercise of any of the powers of the General
                  Partner enumerated in this Agreement on behalf of or in
                  connection with any Subsidiary of the Partnership or any other
                  Person in which the Partnership has a direct or indirect
                  interest, or jointly with any such Subsidiary or other Person;

                           (R) the exercise of any of the powers of the General
                  Partner enumerated in this Agreement on behalf of any Person
                  in which the Partnership does not have an interest pursuant to
                  contractual or other arrangements with such Person;

                           (S) the making, execution and delivery of any and all
                  deeds, leases, notes, mortgages, deeds of trust, security
                  agreements, conveyances, contracts, guarantees, warranties,
                  indemnities, waivers, releases or legal instruments or
                  agreements in writing necessary or appropriate, in the
                  judgment of the General Partner, for the accomplishment of any
                  of the foregoing;

                           (T) the issuance of additional Partnership Units in
                  connection with Capital Contributions by Additional Limited
                  Partners and additional Capital Contributions by Partners
                  pursuant to Article 4 hereof;

                           (U) the opening of bank accounts on behalf of, and in
                  the name of, the Partnership and its Subsidiaries; and

                                       29

<PAGE>   36

                           (V) the amendment and restatement of EXHIBIT A to
                  reflect accurately at all times the Capital Contributions and
                  Percentage Interests of the Partners as the same are adjusted
                  from time to time to the extent necessary to reflect
                  redemptions, Capital Contributions, the issuance of
                  Partnership Units, the admission of any Additional Limited
                  Partner or any Substituted Limited Partner or otherwise, which
                  amendment and restatement, notwithstanding anything in this
                  Agreement to the contrary, shall not be deemed an amendment of
                  this Agreement, as long as the matter or event being reflected
                  in EXHIBIT A otherwise is authorized by this Agreement.

                  (b) (i) Each of the Limited Partners agrees that the General
         Partner is authorized to execute, deliver and perform the
         above-mentioned agreements and transactions on behalf of the
         Partnership without any further act, approval or vote of the Partners,
         notwithstanding any other provision of this Agreement to the fullest
         extent permitted under the Act or other applicable law, rule or
         regulation.

                    (ii) The execution, delivery or performance by the General
         Partner or the Partnership of any agreement authorized or permitted
         under this Agreement shall not constitute a breach by the General
         Partner of any duty that the General Partner may owe the Partnership or
         the Limited Partners or any other Persons under this Agreement or of
         any duty stated or implied by law or equity.

                  (c) At all times from and after the date hereof, the General
         Partner at the expense of the Partnership, may or may not, cause the
         Partnership to obtain and maintain

                           (i) casualty, liability and other insurance on the
                  properties of the Partnership;

                           (ii) liability insurance for the Indemnitees
                  hereunder; and

                           (iii) such other insurance as the General Partner, in
                  its sole and absolute discretion, determines to be appropriate
                  and reasonable.

                  (d) At all times from and after the date hereof, the General
         Partner may cause the Partnership to establish and maintain at any and
         all times working capital accounts and other cash or similar balances
         in such amount as the General Partner, in its sole and absolute
         discretion, deems appropriate and reasonable from time to time.

                  (e) (i) In exercising its authority under this Agreement, the
         General Partner may, but shall be under no obligation to, take into
         account the tax consequences to any Partner (including the General
         Partner) of any action taken (or not taken) by it. The General Partner
         and the Partnership shall not have

                                       30

<PAGE>   37

         liability to a Limited Partner for monetary damages or otherwise for
         losses sustained, liabilities incurred or benefits not delivered by
         such Limited Partner in connection with such decisions, provided that
         the General Partner has acted in good faith pursuant to its authority
         under this Agreement. The Limited Partners expressly acknowledge that
         the General Partner is acting on behalf of the Partnership, the General
         Partner, and the General Partner's stockholders, collectively.

                           (ii) The General Partner and the Partnership shall
                  not have liability to a Limited Partner under any
                  circumstances as a result of an income tax liability incurred
                  by such Limited Partner as a result of an action (or inaction)
                  by the General Partner taken pursuant to its authority under
                  and in accordance with this Agreement.

         7.2      CERTIFICATE OF LIMITED PARTNERSHIP

                  (a) The General Partner has previously filed the Certificate
         with the Secretary of State of Delaware as required by the Act.

                  (b) (i) The General Partner shall use all reasonable efforts
         to cause to be filed such other certificates or documents as may be
         reasonable and necessary or appropriate for the formation,
         continuation, qualification and operation of a limited partnership (or
         a partnership in which the limited partners have limited liability) in
         the State of Delaware and any other state, or the District of Columbia,
         in which the Partnership may elect to do business or own property.

                        (ii) To the extent that such action is determined by
         the General Partner to be reasonable and necessary or appropriate, the
         General Partner shall file amendments to and restatements of the
         Certificate and do all of the things to maintain the Partnership as a
         limited partnership (or a partnership in which the limited partners
         have limited liability) under the laws of the State of Delaware and
         each other state, or the District of Columbia, in which the Partnership
         may elect to do business or own property.

                        (iii) Subject to the terms of Section 8.5(a)(iv)
         hereof, the General Partner shall not be required, before or after
         filing, to deliver or mail a copy of the Certificate or any amendment
         thereto to any Limited Partner.

         7.3      REIMBURSEMENT OF THE GENERAL PARTNER

                  (a) Except as provided in this Section 7.3 and elsewhere in
         this Agreement (including the provisions of Articles 5 and 6 regarding
         distributions, payments, and

                                       31

<PAGE>   38

         allocations to which it may be entitled), the General Partner shall not
         be compensated for its services as general partner of the Partnership.

                  (b) (i) The Partnership shall be responsible for and shall pay
         all expenses relating to the Partnership's organization, the ownership
         of its assets and its operations. The General Partner shall be
         reimbursed on a monthly basis, or such other basis as it may determine
         in its sole and absolute discretion, for all expenses that it incurs on
         behalf of the Partnership relating to the ownership and operation of
         the Partnership's assets, or for the benefit of the Partnership,
         including all expenses associated with compliance by the General
         Partner and the Initial Limited Partner with laws, rules and
         regulations promulgated by any regulatory body, expenses related to the
         operations of the General Partner and to the management and
         administration of any Subsidiaries of the General Partner or the
         Partnership or Affiliates of the Partnership, such as auditing expenses
         and filing fees and any and all salaries, compensation and expenses of
         officers and employees of the General Partner, but excluding any
         portion of expenses reasonably attributable to assets not owned by or
         for the benefit of, or to operations not for the benefit of, the
         Partnership or Affiliates of the Partnership; PROVIDED, that the amount
         of any such reimbursement shall be reduced by any interest earned by
         the General Partner with respect to bank accounts or other instruments
         or accounts held by it in its name.

                  (ii) Such reimbursement shall be in addition to any
         reimbursement made as a result of indemnification pursuant to Section
         7.6 hereof.

                  (iii) The General Partner shall determine in good faith the
         amount of expenses incurred by it related to the ownership and
         operation of, or for the benefit of, the Partnership. If certain
         expenses are incurred for the benefit of the Partnership and other
         entities (including the General Partner), such expenses will be
         allocated to the Partnership and such other entities in such a manner
         as the General Partner in its reasonable discretion deems fair and
         reasonable. All payments and reimbursements hereunder shall be
         characterized for federal income tax purposes as expenses of the
         Partnership incurred on its behalf, and not as expenses of the General
         Partner.

                  (c) (i) Expenses incurred by the General Partner relating to
         the organization or reorganization of the Partnership and the General
         Partner the issuance of Common Stock in connection with the
         Consolidation and any issuance of additional Partnership Interests,
         REIT Stock or rights, options, warrants, or convertible or exchangeable
         securities pursuant to Section 4.2 hereof and all costs and expenses
         associated with the preparation and filing of any periodic reports by
         the General Partner under federal, state or local laws or regulations
         (including, without limitation, all costs, expenses, damages, and other

                                       32

<PAGE>   39

         payments resulting from or arising in connection with litigation
         related to any of the foregoing) are primarily obligations of the
         Partnership.

                  (ii) To the extent the General Partner pays or incurs such
         expenses, the General Partner shall be reimbursed for such expenses.

         7.4      OUTSIDE ACTIVITIES OF THE GENERAL PARTNER

                  (a) Without the Consent of the Outside Limited Partners, the
         General Partner shall not directly or indirectly enter into or conduct
         any business other than in connection with the ownership, acquisition,
         and disposition of Partnership Interests and the management of the
         business of the Partnership, and such activities as are incidental
         thereto.

                  (b) The General Partner and any Affiliates of the General
         Partner may acquire Limited Partner Interests and shall be entitled to
         exercise all rights of a Limited Partner relating to such Limited
         Partner Interests.

         7.5      CONTRACTS WITH AFFILIATES

                  (a) (i) The Partnership may lend or contribute funds or other
         assets to its Subsidiaries or other Persons in which it has an equity
         investment and such Subsidiaries and Persons may borrow funds from the
         Partnership, on terms and conditions established in the sole and
         absolute discretion of the General Partner.

                  (ii) The foregoing authority shall not create any right or
         benefit in favor of any Subsidiary or any other Person.

                  (b) Except as provided in Section 7.4, the Partnership may
         Transfer assets to Entities in which it is or thereby becomes a
         participant upon such terms and subject to such conditions consistent
         with this Agreement and applicable law as the General Partner, in its
         sole and absolute discretion, may determine.

                  (c) Except as expressly permitted by this Agreement, neither
         the General Partner nor any of its Affiliates shall sell, Transfer or
         convey any property to, or purchase any property from, the Partnership,
         directly or indirectly, except pursuant to transactions that are
         determined by the General Partner in good faith to be fair and
         reasonable.

                  (d) The General Partner, in its sole and absolute discretion
         and without the approval of the Limited Partners, may propose and
         adopt, on behalf of the Partnership, employee benefit plans, stock
         option plans, and similar plans funded by the Partnership for the
         benefit of employees of the Partnership, the General Partner, any
         Subsidiaries of the Partnership or any Affiliate of any of them in
         respect of services performed, directly

                                       33

<PAGE>   40

         or indirectly, for the benefit of the Partnership, the General Partner,
         any Subsidiaries of the Partnership or any Affiliate of any of them.

                  (e) The General Partner is expressly authorized to enter into,
         in the name and on behalf of the Partnership, a "right of first
         opportunity" or "right of first offer" arrangement, non-competition
         agreements and other conflict avoidance agreements with various
         Affiliates of the Partnership and the General Partner, on such terms as
         the General Partner, in its sole and absolute discretion, believes are
         advisable.

         7.6      INDEMNIFICATION

                  (a) (i) To the fullest extent permitted by Delaware law, the
         Partnership shall indemnify each Indemnitee from and against any and
         all losses, claims, damages, liabilities, joint or several, expenses
         (including, without limitation, reasonable attorneys' fees and other
         legal fees and expenses), judgments, fines, settlements, and other
         amounts arising from any and all claims, demands, actions, suits or
         proceedings, civil, criminal, administrative or investigative, that
         relate to the operations of the Partnership or the General Partner as
         set forth in this Agreement, in which such Indemnitee may be involved,
         or is threatened to be involved, as a party or otherwise, except to the
         extent it is finally determined by a court of competent jurisdiction,
         from which no further appeal may be taken, that such Indemnitee's
         action constituted intentional acts or omissions constituting willful
         misconduct or fraud.

                  (ii) Without limitation, the foregoing indemnity shall extend
         to any liability of any Indemnitee, pursuant to a loan guaranty (except
         a guaranty by a limited partner of nonrecourse indebtedness of the
         Partnership or as otherwise provided in any such loan guaranty),
         contractual obligation for any indebtedness or other obligation or
         otherwise for any indebtedness of the Partnership or any Subsidiary of
         the Partnership (including, without limitation, any indebtedness which
         the Partnership or any Subsidiary of the Partnership has assumed or
         taken subject to), and the General Partner is hereby authorized and
         empowered, on behalf of the Partnership, to enter into one or more
         indemnity agreements consistent with the provisions of this Section 7.6
         in favor of any Indemnitee having or potentially having liability for
         any such indebtedness.

                  (iii) Any indemnification pursuant to this Section 7.6 shall
         be made only out of the assets of the Partnership, and neither the
         General Partner nor any Limited Partner shall have any obligation to
         contribute to the capital of the Partnership, or otherwise provide
         funds, to enable the Partnership to fund its obligations under this
         Section 7.6.

                                       34

<PAGE>   41

                  (b) Reasonable expenses incurred by an Indemnitee who is a
         party to a proceeding shall be paid or reimbursed by the Partnership in
         advance of the final disposition of any and all claims, demands,
         actions, suits or proceedings, civil, criminal, administrative or
         investigative made or threatened against an Indemnitee upon receipt by
         the Partnership of (i) a written affirmation by the Indemnitee of the
         Indemnitee's good faith belief that the standard of conduct necessary
         for indemnification by the Partnership as authorized in this Section
         7.6 has been met; and (ii) a written undertaking by or on behalf of the
         Indemnitee to repay the amount if it shall ultimately be determined
         that the standard of conduct has not been met.

                  (c) The indemnification provided by this Section 7.6 shall be
         in addition to any other rights to which an Indemnitee or any other
         Person may be entitled under any agreement, pursuant to any vote of the
         Partners, as a matter of law or otherwise, and shall continue as to an
         Indemnitee who has ceased to serve in such capacity unless otherwise
         provided in a written agreement pursuant to which such Indemnities are
         indemnified.

                  (d) The Partnership may, but shall not be obligated to,
         purchase and maintain insurance, on behalf of the Indemnities and such
         other Persons as the General Partner shall determine, against any
         liability that may be asserted against or expenses that may be incurred
         by such Person in connection with the Partnership's activities,
         regardless of whether the Partnership would have the power to indemnify
         such Person against such liability under the provisions of this
         Agreement.

                  (e) For purposes of this Section 7.6, the Partnership shall be
         deemed to have requested an Indemnitee to serve as fiduciary of an
         employee benefit plan whenever the performance by such Indemnitee of
         its duties to the Partnership also imposes duties on, or otherwise
         involves services by, such Indemnitee to the plan or participants or
         beneficiaries of the plan; excise taxes assessed on an Indemnitee with
         respect to an employee benefit plan pursuant to applicable law shall
         constitute fines within the meaning of this Section 7.6; and actions
         taken or omitted by the Indemnitee with respect to an employee benefit
         plan in the performance of its duties for a purpose reasonably believed
         by it to be in the interest of the participants and beneficiaries of
         the plan shall be deemed to be for a purpose which is not opposed to
         the best interests of the Partnership.

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

                  (g) An Indemnitee shall not be denied indemnification in whole
         or in part under this Section 7.6 because the Indemnitee had an
         interest in the transaction with respect to which the indemnification
         applies if the transaction was otherwise permitted by the terms of this
         Agreement.

                                       35

<PAGE>   42

                  (h) (i) The provisions of this Section 7.6 are for the benefit
         of the Indemnitees, their heirs, successors, assigns and administrators
         and shall not be deemed to create any rights for the benefit of any
         other Persons.

                  (ii) Any amendment, modification or repeal of this Section 7.6
         or any provision hereof shall be prospective only and shall not in any
         way affect the Partnership's liability to any Indemnitee under this
         Section 7.6, as in effect immediately prior to such amendment,
         modification, or repeal with respect to claims arising from or relating
         to matters occurring, in whole or in part, prior to such amendment,
         modification or repeal, regardless of when such claims may arise or be
         asserted.

                  (i) If and to the extent any payments to the General Partner
         pursuant to this Section 7.6 constitute gross income to the General
         Partner (as opposed to the repayment of advances made on behalf of the
         Partnership), such amounts shall constitute guaranteed payments within
         the meaning of Section 707(c) of the Code, shall be treated
         consistently therewith by the Partnership and all Partners, and shall
         not be treated as distributions for purposes of computing the Partners'
         Capital Accounts.

                  (j) Notwithstanding anything to the contrary in this
         Agreement, the General Partner shall not be entitled to indemnification
         hereunder for any loss, claim, damage, liability or expense for which
         the General Partner is obligated to indemnify the Partnership under any
         other agreement between the General Partner and the Partnership.

         7.7      LIABILITY OF THE GENERAL PARTNER

                  (a) Notwithstanding anything to the contrary set forth in this
         Agreement, the General Partner and its officers and directors shall not
         be liable for monetary damages to the Partnership, any Partners or any
         Assignees for losses sustained or liabilities incurred as a result of
         errors in judgment or mistakes of fact or law or of any act or omission
         unless the General Partner acted in bad faith and the act or omission
         was material to the matter giving rise to the loss, liability or
         benefit not derived.

                  (b) (i) The Limited Partners expressly acknowledge that the
                  General Partner is acting on behalf of the Partnership and the
                  shareholders of the General Partner collectively, that the
                  General Partner, subject to the provisions of Sec tion 7.1(e)
                  hereof, is under no obligation to consider the separate
                  interest of the Limited Partners (including, without
                  limitation, the tax consequences to Limited Partners or
                  Assignees) in deciding whether to cause the Partnership to
                  take (or decline to take) any actions, and that the General
                  Partner shall not be liable for monetary damages for losses
                  sustained, liabilities incurred, or benefits not derived by
                  Limited Partners in connection with such decisions; provided
                  that the General Partner has acted in good faith.

                                       36

<PAGE>   43

                           (ii) With respect to any indebtedness of the
                  Partnership which any Limited Partner may have guaranteed, the
                  General Partner shall have no duty to keep such indebtedness
                  outstanding.

                  (c) (i) Subject to its obligations and duties as General
                  Partner set forth in Section 7.1(a) hereof, the General
                  Partner may exercise any of the powers granted to it by this
                  Agreement and perform any of the duties imposed upon it
                  hereunder either directly or by or through its agent.

                           (ii) The General Partner shall not be responsible for
                  any misconduct or negligence on the part of any such agent
                  appointed by the General Partner in good faith.

                  (d) The Limited Partners expressly acknowledge that in the
         event of any conflict in the fiduciary duties owed by the General
         Partner to its stockholders and by the General Partner, in its capacity
         as a general partner of the Partnership, to the Limited Partners, the
         General Partner may act in the best interests of the General Partner's
         stockholders without violating its fiduciary duties to the Limited
         Partners, and that the General Partner shall not be liable for monetary
         damages for losses sustained, liabilities incurred, or benefits not
         derived by the Limited Partners in connection with any such violation.

                  (e) Any amendment, modification or repeal of this Section 7.7
         or any provision hereof shall be prospective only and shall not in any
         way affect the limitations on the General Partner's and its officers'
         and directors' liability to the Partnership and the Limited Partners
         under this Section 7.7 as in effect immediately prior to such
         amendment, modification or repeal with respect to claims arising from
         or relating to matters occurring, in whole or in part, prior to such
         amendment, modification or repeal, regardless of when such claims may
         arise or be asserted.

         7.8      OTHER MATTERS CONCERNING THE GENERAL PARTNER

                  (a) The General Partner may rely and shall be protected in
         acting, or refraining from acting, upon any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, bond, debenture, or other paper or document believed by it in
         good faith to be genuine and to have been signed or presented by the
         proper party or parties.

                  (b) The General Partner may consult with legal counsel,
         accountants, appraisers, management consultants, investment bankers,
         architects, engineers, environmental consultants and other consultants
         and advisers selected by it, and any act taken or omitted to be taken
         in reliance upon the opinion of such Persons as to matters which such
         General Partner reasonably believes to be within such Person's
         professional or

                                       37

<PAGE>   44

         expert competence shall be conclusively presumed to have been done or
         omitted in good faith and in accordance with such opinion.

                  (c) (i) The General Partner shall have the right, in respect
                  of any of its powers or obligations hereunder, to act through
                  any of its duly authorized officers and duly appointed
                  attorneys-in-fact.

                           (ii) Each such attorney shall, to the extent provided
                  by the General Partner in the power of attorney, have full
                  power and authority to do and perform each and every act and
                  duty which is permitted or required to be done by the General
                  Partner hereunder.

                  (d) Notwithstanding any other provisions of this Agreement or
         the Act, any action of the General Partner on behalf of the Partnership
         or any decision of the General Partner to refrain from acting on behalf
         of the Partnership, undertaken in the good faith belief that such
         action or omission is necessary or advisable in order

                           (i) to protect the ability of the General Partner to
                  continue to qualify as a REIT; or

                           (ii) to avoid the General Partner incurring any taxes
                  under Section 857 or Section 4981 of the Code,

         is expressly authorized under this Agreement and is deemed approved by
         all of the Limited Partners.

         7.9      TITLE TO PARTNERSHIP ASSETS

                  (a) Title to Partnership assets, whether real, personal or
         mixed and whether tangible or intangible, shall be deemed to be owned
         by the Partnership as an entity, and no Partner, individually or
         collectively, shall have any ownership interest in such Partnership
         assets or any portion thereof.

                  (b) (i) Title to any or all of the Partnership assets may be
                  held in the name of the Partnership, the General Partner or
                  one or more nominees, as the General Partner may determine,
                  including Affiliates of the General Partner.

                           (ii) The General Partner hereby declares and warrants
                  that any Partnership asset for which legal title is held in
                  the name of the General Partner or any nominee or Affiliate of
                  the General Partner shall be held by the General Partner for
                  the use and benefit of the Partnership in accordance with the
                  provisions of this Agreement; PROVIDED, that the General
                  Partner shall use its best

                                       38

<PAGE>   45

                  efforts to cause beneficial and record title to such assets to
                  be vested in the Partnership as soon as reasonably
                  practicable.

                           (iii) All Partnership assets shall be recorded as the
                  property of the Partnership in its books and records,
                  irrespective of the name in which legal title to such
                  Partnership assets is held.

         7.10     RELIANCE BY THIRD PARTIES

                  (a) Notwithstanding anything to the contrary in this
         Agreement, any Person dealing with the Partnership shall be entitled to
         assume that the General Partner has full power and authority, without
         consent or approval of any other Partner or Person, to encumber, sell
         or otherwise use in any manner any and all assets of the Partnership
         and to enter into any contracts on behalf of the Partnership, and take
         any and all actions on behalf of the Partnership, and such Person shall
         be entitled to deal with the General Partner as if the General Partner
         were the Partnership's sole party in interest, both legally and
         beneficially.

                   (b) Each Limited Partner hereby waives any and all defenses
         or other remedies which may be available against such Person to
         contest, negate or disaffirm any action of the General Partner in
         connection with any such dealing.

                  (c) In no event shall any Person dealing with the General
         Partner or its representatives be obligated to ascertain that the terms
         of this Agreement have been complied with or to inquire into the
         necessity or expediency of any act or action of the General Partner or
         its representatives.

                  (d) Each and every certificate, document or other instrument
         executed on behalf of the Partnership by the General Partner or its
         representatives shall be conclusive evidence in favor of any and every
         Person relying thereon or claiming thereunder that

                           (i) at the time of the execution and delivery of such
                  certificate, document or instrument, this Agreement was in
                  full force and effect;

                           (ii) the Person executing and delivering such
                  certificate, document or instrument was duly authorized and
                  empowered to do so for and on behalf of the Partnership; and

                           (iii) such certificate, document or instrument was
                  duly executed and delivered in accordance with the terms and
                  provisions of this Agreement and is binding upon the
                  Partnership.

         7.11     LOANS BY THIRD PARTIES.

                                       39

<PAGE>   46

         The Partnership may incur Debt, or enter into similar credit,
guarantee, financing or refinancing arrangements for any purpose (including,
without limitation, in connection with any acquisition of property) with any
Person upon such terms as the General Partner determines appropriate.

                                    ARTICLE 8
                   RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

         8.1      LIMITATION OF LIABILITY

         The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement, including Section 10.5 hereof,
or under the Act.

         8.2      MANAGEMENT OF BUSINESS

                  (a) No Limited Partner or Assignee (other than the General
         Partner, any of its Affiliates or any officer, director, employee,
         agent or trustee of the General Partner, the Partnership or any of
         their Affiliates, in their capacity as such) shall take part in the
         operation, management or control (within the meaning of the Act) of the
         Partnership's business, transact any business in the Partnership's name
         or have the power to sign documents for or otherwise bind the
         Partnership.

                  (b) The transaction of any such business by the General
         Partner, any of its Affiliates or any officer, director, employee,
         partner, agent or trustee of the General Partner, the Partnership or
         any of their Affiliates, in their capacity as such, shall not affect,
         impair or eliminate the limitations on the liability of the Limited
         Partners or Assignees under this Agreement.

         8.3      OUTSIDE ACTIVITIES OF LIMITED PARTNERS

                  (a) Subject to any agreements entered into pursuant to Section
         7.5 hereof and any other agreements entered into by a Limited Partner
         or its Affiliates with the Partnership or any of its Subsidiaries, any
         Limited Partner and any officer, director, employee, agent, trustee,
         Affiliate or shareholder of any Limited Partner shall be entitled to
         and may have business interests and engage in business activities in
         addition to those relating to the Partnership, including business
         interests and activities that are in direct competition with the
         Partnership or that are enhanced by the activities of the Partnership.

                  (b) Neither the Partnership nor any Partners shall have any
         rights by virtue of this Agreement in any business ventures of any
         Limited Partner or Assignee.

                                       40

<PAGE>   47

                  (c) None of the Limited Partners nor any other Person shall
         have any rights by virtue of this Agreement or the Partnership
         relationship established hereby in any business ventures of any other
         Person and such Person shall have no obligation pursuant to this
         Agreement to offer any interest in any such business ventures to the
         Partnership, any Limited Partner or any such other Person, even if such
         opportunity is of a character which, if presented to the Partnership,
         any Limited Partner or such other Person, could be taken by such
         Person.

         8.4      RETURN OF CAPITAL

                  (a) Except pursuant to the Exchange Rights Agreements, no
         Limited Partner shall be entitled to the withdrawal or return of its
         Capital Contribution, except to the extent of distributions made
         pursuant to this Agreement or upon termination of the Partnership as
         provided herein.

                  (b) Except to the extent provided by Exhibit B, or as
         otherwise expressly provided in this Agreement, no Limited Partner or
         Assignee shall have priority over any other Limited Partner or
         Assignee, either as to the return of Capital Contributions or as to
         profits, losses or distributions.

         8.5      RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP

                  (a) In addition to the other rights provided by this Agreement
         or by the Act, and except as limited by Section 8.5(d) hereof, each
         Limited Partner shall have the right, for a purpose reasonably related
         to such Limited Partner's interest as a limited partner in the
         Partnership, upon written demand with a statement of the purpose of
         such demand and at such Limited Partner's own expense (including such
         reasonable copying and administrative charges as the General Partner
         may establish from time to time):

                           (i) to obtain a copy of the most recent annual and
                  quarterly reports filed with the Securities and Exchange
                  Commission by the General Partner pursuant to the Securities
                  Exchange Act of 1934;

                           (ii) to obtain a copy of the Partnership's federal,
                  state and local income tax returns for each Partnership Year;

                  (b) Notwithstanding any other provision of this Section 8.5,
         the General Partner may keep confidential from the Limited Partners,
         for such period of time as the General Partner determines in its sole
         and absolute discretion to be reasonable, any information that

                                       41

<PAGE>   48

                           (i) the General Partner reasonably believes to be in
                  the nature of trade secrets or other information, the
                  disclosure of which the General Partner in good faith believes
                  is not in the best interests of the Partnership or could
                  damage the Partnership or its business; or

                           (ii) the Partnership is required by law or by
                  agreements with an unaffiliated third party to keep
                  confidential.

         8.6      EXCHANGE RIGHTS AGREEMENTS

                  (a) The Limited Partners have been granted the right, but not
         the obligation, to exchange all or a portion of their Partnership Units
         for cash or, at the option of the General Partner, for shares of REIT
         Stock on the terms and subject to the conditions and restrictions
         contained in certain Exchange Rights Agreements between the General
         Partners and the Limited Partners (as amended from time to time, the
         "Exchange Rights Agreements"). The forms of Exchange Rights Agreement
         governing the exchange of Partnership Units is attached hereto as
         Exhibit E.

                  (b) The Limited Partners and all successors, assignees and
         transferees (whether by operation of law, including by merger or
         consolidation, dissolution or liquidation of an entity that is a
         Limited Partner, or otherwise) shall be bound by the provisions of the
         Exchange Rights Agreement.

                                    ARTICLE 9
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

         9.1      RECORDS AND ACCOUNTING

                  (a) The General Partner shall keep or cause to be kept at the
         principal office of the Partnership those records and documents
         required to be maintained by the Act and other books and records deemed
         by the General Partner to be appropriate with respect to the
         Partnership's business, including, without limitation, all books and
         records necessary for the General Partner to comply with applicable
         REIT Requirements and to provide to the Limited Partners any
         information, lists and copies of documents required to be provided
         pursuant to Sections 8.5(a) and 9.3 hereof.

                  (b) Any records maintained by or on behalf of the Partnership
         in the regular course of its business may be kept on, or be in the form
         of, punch cards, magnetic tape, photographs, micrographics or any other
         information storage device, provided that the records so maintained are
         convertible into clearly legible written form within a reasonable
         period of time.

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<PAGE>   49

                  (c) The books of the Partnership shall be maintained, for
         financial and tax reporting purposes, on an accrual basis in accordance
         with generally accepted accounting principles, or such other basis as
         the General Partner determines to be necessary or appropriate.

         9.2      FISCAL YEAR

         The fiscal year of the Partnership shall be the calendar year.

         9.3      REPORTS

                  (a) As soon as practicable, but in no event later than the
         date on which the General Partner mails its annual report to its
         stockholders, the General Partner shall cause to be mailed to each
         Limited Partner as of the close of the Partnership Year, an annual
         report containing financial statements of the Partnership, or of the
         General Partner, if such statements are prepared on a consolidated
         basis with the Partnership, for such Partnership Year, presented in
         accordance with GAAP, such statements to be audited by a nationally
         recognized firm of independent public accountants selected by the
         General Partner in its sole discretion.

                  (b) If and to the extent that the General Partner mails
         quarterly reports to its stockholders, then as soon as practicable, but
         in no event later than the date such reports are mailed, the General
         Partner shall cause to be mailed to each Limited Partner a report
         containing unaudited financial statements as of the last day of the
         calendar quarter of the Partnership, or of the General Partner, if such
         statements are prepared on a consolidated basis with the Partnership,
         and such other information as may be required by applicable law or
         regulation, or as the General Partner determines to be appropriate.

                                   ARTICLE 10
                                   TAX MATTERS

         10.1     PREPARATION OF TAX RETURNS

         The General Partner shall arrange for the preparation and timely filing
of all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by Limited Partners
for federal and state income tax reporting purposes.

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<PAGE>   50

         10.2     TAX ELECTIONS

                  (a) Except as otherwise provided herein, the General Partner
         shall, in its sole and absolute discretion, determine whether to make
         any available election pursuant to the Code; PROVIDED, HOWEVER, that
         the General Partner shall make the election under Section 754 of the
         Code in accordance with applicable regulations thereunder effective for
         the first calendar year following the Effective Date.

                  (b) The General Partner shall elect a permissible method
         (which need not be the same method for each item or property) of
         eliminating the disparity between the book value and the tax basis for
         each item of property contributed to the Partnership or to a Subsidiary
         of the Partnership pursuant to the regulations promulgated under the
         provisions of Section 704(c) of the Code.

                  (c) The General Partner shall have the right to seek to revoke
         any tax election it makes, including, without limitation, the election
         under Section 754 of the Code, upon the General Partner's
         determination, in its sole and absolute discretion, that such
         revocation is in the best interests of the Partners.

         10.3     TAX MATTERS PARTNER

                       (a) (i) The General Partner shall be the "tax matters
                  partner" of the Partnership for federal income tax purposes.

                           (ii) Pursuant to Section 6230(e) of the Code, upon
                  receipt of notice from the Internal Revenue Service of the
                  beginning of an administrative proceeding with respect to the
                  Partnership, the tax matters partner shall furnish the
                  Internal Revenue Service with the name, address, taxpayer
                  identification number, and profit interest of each of the
                  Limited Partners and the Assignees; PROVIDED, that such
                  information is provided to the Partnership by the Limited
                  Partners and the Assignees.

                           (iii) The tax matters partner is authorized, but not
                  required:

                                    (A) to enter into any settlement with the
                           Internal Revenue Service with respect to any
                           administrative or judicial proceedings for the
                           adjustment of Partnership items required to be taken
                           into account by a Partner for income tax purposes
                           (such administrative proceedings being referred to as
                           a "tax audit" and such judicial proceedings being
                           referred to as "judicial review"), and in the
                           settlement agreement the tax matters partner may
                           expressly state that such agreement shall bind all
                           Partners, except that such settlement agreement shall
                           not bind any Partner

                                       44

<PAGE>   51

                                          (I) who (within the time prescribed
                                    pursuant to the Code and Regulations) files
                                    a statement with the Internal Revenue
                                    Service providing that the tax matters
                                    partner shall not have the authority to
                                    enter into a settlement agreement on behalf
                                    of such Partner; or

                                          (II) who is a "notice partner" (as
                                    defined in Section 6231(a)(8) of the Code)
                                    or a member of a "notice group" (as defined
                                    in Section 6223(b)(2) of the Code);

                                    (B) in the event that a notice of a final
                           administrative adjustment at the Partnership level of
                           any item required to be taken into account by a
                           Partner for tax purposes (a "final adjustment") is
                           mailed to the tax matters partner, to seek judicial
                           review of such final adjustment, including the filing
                           of a petition for readjustment with the Tax Court or
                           the filing of a complaint for refund with the United
                           States Claims Court or the District Court of the
                           United States for the district in which the
                           Partnership's principal place of business is located;

                                    (C) to intervene in any action brought by
                           any other Partner for judicial review of a final
                           adjustment;

                                    (D) to file a request for an administrative
                           adjustment with the Internal Revenue Service and, if
                           any part of such request is not allowed by the
                           Internal Revenue Service, to file an appropriate
                           pleading (petition or complaint) for judicial review
                           with respect to such request;

                                    (E) to enter into an agreement with the
                           Internal Revenue Service to extend the period for
                           assessing any tax which is attributable to any item
                           required to be taken account of by a Partner for tax
                           purposes, or an item affected by such item; and

                                    (F) to take any other action on behalf of
                           the Partners or the Partnership in connection with
                           any tax audit or judicial review proceeding to the
                           extent permitted by applicable law or regulations.

                  The taking of any action and the incurring of any expense by
                  the tax matters partner in connection with any such
                  proceeding, except to the extent required by law, is a matter
                  in the sole and absolute discretion of the tax matters partner
                  and the provisions relating to indemnification of the General
                  Partner set forth in Section 7.6 of this Agreement shall be
                  fully applicable to the tax matters partner in its capacity as
                  such.

                                       45

<PAGE>   52

                  (c)      (i) The tax matters partner shall receive no
                  compensation for its services.

                           (ii) All third party costs and expenses incurred by
                  the tax matters partner in performing its duties as such
                  (including legal and accounting fees and expenses) shall be
                  borne by the Partnership.

                           (iii) Nothing herein shall be construed to restrict
                  the Partnership from engaging an accounting firm to assist the
                  tax matters partner in discharging its duties hereunder, so
                  long as the compensation paid by the Partnership for such
                  services is reasonable.

         10.4     ORGANIZATIONAL EXPENSES

         The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60) month period as provided
in Section 709 of the Code.

         10.5     WITHHOLDING

                  (a) Each Limited Partner hereby authorizes the Partnership to
         withhold from, or pay on behalf of or with respect to, such Limited
         Partner any amount of federal, state, local, or foreign taxes that the
         General Partner determines that the Partnership is required to withhold
         or pay with respect to any amount distributable or allocable to such
         Limited Partner pursuant to this Agreement, including, without
         limitation, any taxes required to be withheld or paid by the
         Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code.

                  (b) (i) Any amount paid on behalf of or with respect to a
                  Limited Partner shall constitute a loan by the Partnership to
                  such Limited Partner, which loan shall be repaid by such
                  Limited Partner within fifteen (15) days after notice from the
                  General Partner that such payment must be made unless

                                    (A) the Partnership withholds such payment
                           from a distribution which would otherwise be made to
                           the Limited Partner; or

                                    (B) the General Partner determines, in its
                           sole and absolute discretion, that such payment may
                           be satisfied out of the available funds of the
                           Partnership which would, but for such payment, be
                           distributed to the Limited Partner.

                           (ii) Any amounts withheld pursuant to the foregoing
                  clauses (i)(A) or (B) shall be treated as having been
                  distributed to such Limited Partner.

                                       46

<PAGE>   53

                  (c) (i) Each Limited Partner hereby unconditionally and
                  irrevocably grants to the Partnership a security interest in
                  such Limited Partner's Partnership Interest to secure such
                  Limited Partner's obligation to pay to the Partnership any
                  amounts required to be paid pursuant to this Section 10.5.

                           (ii) (A) In the event that a Limited Partner fails to
                           pay when due any amounts owed to the Partnership
                           pursuant to this Section 10.5, the General Partner
                           may, in its sole and absolute discretion, elect to
                           make the payment to the Partnership on behalf of such
                           defaulting Limited Partner, and in such event shall
                           be deemed to have loaned such amount to such
                           defaulting Limited Partner and shall succeed to all
                           rights and remedies of the Partnership as against
                           such defaulting Limited Partner.

                                    (B) Without limitation, in such event, the
                           General Partner shall have the right to receive
                           distributions that would otherwise be distributable
                           to such defaulting Limited Partner until such time as
                           such loan, together with all interest thereon, has
                           been paid in full, and any such distributions so
                           received by the General Partner shall be treated as
                           having been distributed to the defaulting Limited
                           Partner and immediately paid by the defaulting
                           Limited Partner to the General Partner in repayment
                           of such loan.

                           (iii) Any amount payable by a Limited Partner
                  hereunder shall bear interest at the highest base or prime
                  rate of interest published from time to time by any of
                  Citibank, N.A., Chemical Bank, Morgan Guaranty Trust Company
                  of New York and Chase Manhattan Bank, N.A., plus four (4)
                  percentage points, but in no event higher than the maximum
                  lawful rate of interest on such obligation, such interest to
                  accrue from the date such amount is due (I.E., fifteen (15)
                  days after demand) until such amount is paid in full.

                           (iv) Each Limited Partner shall take such actions as
                  the Partnership or the General Partner shall request in order
                  to perfect or enforce the security interest created hereunder.

                                   ARTICLE 11
                            TRANSFERS AND WITHDRAWALS

         11.1     TRANSFER

                  (a) (i) The term "Transfer," when used in this Article 11 with
                  respect to a Partnership Interest or a Partnership Unit, shall
                  be deemed to refer to a transaction by which the General
                  Partner purports to assign all or any part of its General

                                       47

<PAGE>   54

                  Partner Interest to another Person or a Limited Partner
                  purports to assign all or any part of its Limited Partner
                  Interest to another Person, and includes a sale, assignment,
                  gift, pledge, encumbrance, hypothecation, mortgage, exchange
                  or any other disposition by law or otherwise.

                           (ii) The term "Transfer" when used in this Article 11
                  does not include any exchange of Partnership Units for cash or
                  REIT Stock pursuant to the Exchange Rights Agreement.

                  (b)      (i)      No Partnership Interest shall be
                  Transferred, in whole or in part, except in accordance with
                  the terms and conditions set forth in this Article 11.

                           (ii) Any Transfer or purported Transfer of a
                  Partnership Interest not made in accordance with this Article
                  11 shall be null and void.

         11.2     TRANSFER OF THE GENERAL PARTNER'S GENERAL PARTNER INTEREST

                  (a) The General Partner may not Transfer any of its General
         Partner Interest or withdraw as General Partner, or Transfer any of its
         Limited Partner Interest, except

                           (i) if Limited Partners holding at least a majority
                  of the Percentage Interests of the Limited Partners (other
                  than Limited Partner Interests held by the General Partner or
                  any Affiliate thereof) consent to such Transfer or withdrawal,

                           (ii) if such Transfer is to an entity which is wholly
                  owned by the General Partner and is a Qualified REIT
                  Subsidiary as defined in Section 856(i) of the Code or

                           (iii) in connection with a transaction described in
                  Section 11.2(c) or 11.2(d) (as applicable).

                  (b) In the event the General Partner withdraws as general
         partner of the Partnership in accordance with Section 11.2(a), the
         General Partner's General Partner Interest shall immediately be
         converted into a Limited Partner Interest.

                  (c) Except as otherwise provided in Section 11.2(d), the
         General Partner shall not engage in any merger, consolidation or other
         combination of the General Partner with or into another Person (other
         than a merger in which the General Partner is the surviving entity) or
         sale of all or substantially all of its assets, or any
         reclassification, or any recapitalization of outstanding REIT Stock
         (other than a change in par value, or from par value to no par value,
         or as a result of a subdivision or combination of REIT Stock) (a
         "Transaction"), unless

                                       48

<PAGE>   55

                           (i) in connection with the Transaction all Limited
                  Partners will either receive, or will have the right to elect
                  to receive, for each Partnership Unit an amount of cash,
                  securities, or other property equal to the product of the
                  Exchange Factor and the greatest amount of cash, securities or
                  other property or value paid in the Transaction to or received
                  by a holder of one share of REIT Stock corresponding to such
                  Partnership Unit in consideration of one share of REIT Stock
                  at any time during the period from and after the date on which
                  the Transaction is consummated; PROVIDED that if, in
                  connection with the Transaction, a purchase, tender or
                  exchange offer ("Offer") shall have been made to and accepted
                  by the holders of more than 50% of the outstanding REIT Stock,
                  each holder of Partnership Units shall be given the option to
                  exchange its Partnership Units for the greatest amount of
                  cash, securities, or other property which a Limited Partner
                  would have received had it

                                    (A)     exercised its Exchange Right and

                                    (B) sold, tendered or exchanged pursuant to
                           the Offer the REIT Stock received upon exercise of
                           the Exchange Right immediately prior to the
                           expiration of the Offer.

                           The foregoing is not intended to, and does not,
                  affect the ability of (i) a stockholder of the General Partner
                  to sell its stock in the General Partner or (ii) the General
                  Partner to perform its obligations (under agreement or
                  otherwise) to such stockholders (including the fulfillment of
                  any obligations with respect to registering the sale of stock
                  under applicable securities laws).

                  (d) (i) Notwithstanding Section 11.2(c), the General Partner
                  may merge into or consolidate with another entity if
                  immediately after such merger or consolidation

                                    (A) substantially all of the assets of the
                           successor or surviving entity (the "Surviving General
                           Partner"), other than Partnership Units held by the
                           General Partner, are contributed to the Partnership
                           as a Capital Contribution in exchange for Partnership
                           Units with a fair market value equal to the value of
                           the assets so contributed as determined by the
                           Surviving General Partner in good faith and

                                    (B) the Surviving General Partner expressly
                           agrees to assume all obligations of the General
                           Partner hereunder.

                           (ii) (A) Upon such contribution and assumption, the
                  Surviving General Partner shall have the right and duty to
                  amend this Agreement and the Exchange Rights Agreement as set
                  forth in this Section 11.2(d).

                                       49

<PAGE>   56

                                    (B) (I) The Surviving General Partner shall
                                    in good faith arrive at a new method for the
                                    calculation of the Exchange Factor for a
                                    Partnership Unit after any such merger or
                                    consolidation so as to approximate the
                                    existing method for such calculation as
                                    closely as reasonably possible.

                                            (II) Such calculation shall take
                                    into account, among other things, the kind
                                    and amount of securities, cash and other
                                    property that was receivable upon such
                                    merger or consolidation by a holder of REIT
                                    Stock or options, warrants or other rights
                                    relating thereto, and which a holder of
                                    Partnership Units could have acquired had
                                    such Partnership Units been redeemed for
                                    REIT Stock immediately prior to such merger
                                    or consolidation.

                                    (C) Such amendment to this Agreement shall
                           provide for adjustment to such method of calculation,
                           which shall be as nearly equivalent as may be
                           practicable to the adjustments provided for with
                           respect to the Exchange Factor.

                           (iii) The above provisions of this Section 11.2(d)
                  shall similarly apply to successive mergers or consolidations
                  permitted hereunder.

         11.3     LIMITED PARTNERS' RIGHTS TO TRANSFER

                  (a) Subject to the provisions of Sections 11.3(c), 11.3(d),
         11.3(e), 11.4 and 11.6, a Limited Partner may, without the consent of
         the General Partner, Transfer all or any portion of its Limited
         Partnership Interest, or any of such Limited Partner's economic right
         as a Limited Partner. In order to effect such transfer, the Limited
         Partner must deliver to the General Partner a duly executed copy of the
         instrument making such transfer and such instrument must evidence the
         written acceptance by the assignee of all of the terms and conditions
         of this Agreement and represent that such assignment was made in
         accordance with all applicable laws and regulations.

                  (b) (i) If a Limited Partner is Incapacitated, the executor,
                  administrator, trustee, committee, guardian, conservator or
                  receiver of such Limited Partner's estate shall have all of
                  the rights of a Limited Partner, but not more rights than
                  those enjoyed by other Limited Partners, for the purpose of
                  settling or managing the estate and such power as the
                  Incapacitated Limited Partner possessed to Transfer all or any
                  part of his or its interest in the Partnership.

                           (ii) The Incapacity of a Limited Partner, in and of
                  itself, shall not dissolve or terminate the Partnership.

                                       50

<PAGE>   57

                  (c) The General Partner may prohibit any Transfer by a Limited
         Partner of its Partnership Units if, in the opinion of legal counsel to
         the Partnership, such Transfer would require filing of a registration
         statement under the Securities Act of 1933, as amended, or would
         otherwise violate any federal or state securities laws or regulations
         applicable to the Partnership or the Partnership Units.

                  (d) No Transfer by a Limited Partner of its Partnership Units
         may be made to any Person if

                           (i) in the opinion of legal counsel of the
                  Partnership, it would adversely affect the ability of the
                  General Partner to continue to qualify as a REIT or would
                  subject the General Partner to any additional taxes under
                  Section 857 or Section 4981 of the Code;

                           (ii) in the opinion of legal counsel for the
                  Partnership, it would result in the Partnership being treated
                  as an association taxable as a corporation for federal income
                  tax purposes;

                           (iii) such Transfer would cause the Partnership to
                  become, with respect to any employee benefit plan subject to
                  Title I of ERISA, a "party-in-interest" (as defined in Section
                  3(14) of ERISA) or a "disqualified person" (as defined in
                  Section 4975(c) of the Code);

                           (iv) such Transfer would, in the opinion of legal
                  counsel for the Partnership, cause any portion of the assets
                  of the Partnership to constitute assets of any employee
                  benefit plan pursuant to Department of Labor Regulations
                  Section 2510.2-101;

                           (v) such Transfer would subject the Partnership to
                  regulation under the Investment Company Act of 1940, the
                  Investment Advisors Act of 1940 or the Employee Retirement
                  Income Security Act of 1974, each as amended;

                           (vi) without the consent of the General Partner,
                  which consent may be withheld in its sole and absolute
                  discretion, such Transfer is a sale or exchange, and such sale
                  or exchange would, when aggregated with all other sales and
                  exchanges during the 12-month period ending on the date of the
                  proposed Transfer, result in 50% or more of the interests in
                  Partnership capital and profits being sold or exchanged during
                  such 12-month period; or

                           (vii) such Transfer is effectuated through an
                  "established securities market" or a "secondary market (or the
                  substantial equivalent thereof)" within the meaning of Section
                  7704 of the Code.

                                       51

<PAGE>   58

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

                  (f) Any Transfer in contravention of any of the provisions of
         this Section 11.3 shall be void and ineffectual and shall not be
         binding upon, or recognized by, the Partnership.

         11.4     SUBSTITUTED LIMITED PARTNERS

                  (a) (i) No Limited Partner shall have the right to substitute
                  a Permitted Transferee for a Limited Partner in his place.

                           (ii) The General Partner shall, however, have the
                  right to consent to the admission of a Permitted Transferee of
                  the Partnership Interest of a Limited Partner pursuant to this
                  Section 11.4 as a Substitute Limited Partner, which consent
                  may be given or withheld by the General Partner in its sole
                  and absolute discretion.

                           (iii) The General Partner's failure or refusal to
                  permit such transferee to become a Substituted Limited Partner
                  shall not give rise to any cause of action against the
                  Partnership or any Partner.

                  (b) A transferee who has been admitted as a Substituted
         Limited Partner in accordance with this Article 11 shall have all the
         rights and powers and be subject to all the restrictions and
         liabilities of a Limited Partner under this Agreement.

                  (c) (i) No Permitted Transferee will be admitted as a
                  Substituted Limited Partner unless such transferee has
                  furnished to the General Partner

                                    (A) evidence of acceptance in form
                           satisfactory to the General Partner of all of the
                           terms and conditions of this Agreement and the
                           Exchange Rights Agreement, including, without
                           limitation, the power of attorney granted in Section
                           2.4 hereof, and

                                       52

<PAGE>   59

                                    (B) such other documents or instruments as
                           may be required in the reasonable discretion of the
                           General Partner in order to effect such Person's
                           admission as a Substituted Limited Partner.

                           (ii) Upon the admission of a Substituted Limited
                  Partner, the General Partner shall amend Exhibit A to reflect
                  the name, address, number of Partnership Units, and Percentage
                  Interest of such Substituted Limited Partner and to eliminate
                  or adjust, if necessary, the name, address and interest of the
                  predecessor of such Substituted Limited Partner.

         11.5     ASSIGNEES

                  (a) If the General Partner, in its sole and absolute
         discretion, does not consent to the admission of any transferee as a
         Substituted Limited Partner, as described in Section 11.4(a), such
         transferee shall be considered an Assignee for purposes of this
         Agreement.

                  (b) An Assignee shall be deemed to have had assigned to it,
         and shall be entitled to receive distributions from the Partnership and
         the share of Net Income, Net Losses and any other items of gain, loss,
         deduction or credit of the Partnership attributable to the Partnership
         Units assigned to such transferee, but shall not be deemed to be a
         holder of Partnership Units for any other purpose under this Agreement,
         and shall not be entitled to vote such Partnership Units in any matter
         presented to the Limited Partners for a vote (such Partnership Units
         being deemed to have been voted on such matter in the same proportion
         as all other Partnership Units held by Limited Partners are voted).

                  (c) In the event any such transferee desires to make a further
         assignment of any such Partnership Units, such transferee shall be
         subject to all of the provisions of this Article 11 to the same extent
         and in the same manner as any Limited Partner desiring to make an
         assignment of Partnership Units.

         11.6     GENERAL PROVISIONS

                  (a) No Limited Partner may withdraw from the Partnership other
         than as a result of a permitted Transfer of all of such Limited
         Partner's Partnership Units in accordance with this Article 11 or
         pursuant to exchange of all of its Partnership Units pursuant to the
         applicable Exchange Rights Agreement.

                  (b) (i) Any Limited Partner which shall Transfer all of its
                  Partnership Units in a Transfer permitted pursuant to this
                  Article 11 shall cease to be a Limited Partner upon the
                  admission of all Assignees of such Partnership Units as
                  Substituted Limited Partners.

                                       53

<PAGE>   60

                           (ii) Similarly, any Limited Partner which shall
                  Transfer all of its Partnership Units pursuant to an exchange
                  of all of its Partnership Units pursuant to an Exchange Rights
                  Agreement shall cease to be a Limited Partner.

                  (c) Other than pursuant to the Exchange Rights Agreement or
         with the consent of the General Partner, transfers pursuant to this
         Article 11 may only be made as of the first day of a fiscal quarter of
         the Partnership.

                  (d) (i) If any Partnership Interest is transferred or assigned
                  during the Partnership's fiscal year in compliance with the
                  provisions of this Article 11 or exchanged pursuant to the
                  applicable Exchange Rights Agreement on any day other than the
                  first day of a Partnership Year, then Net Income, Net Losses,
                  each item thereof and all other items attributable to such
                  interest for such Partnership Year shall be divided and
                  allocated between the transferor Partner and the transferee
                  Partner by taking into account their varying interests during
                  the Partnership Year in accordance with Section 706(d) of the
                  Code, using the interim closing of the books method.

                           (ii) Solely for purposes of making such allocations,
                  each of such items for the calendar month in which the
                  Transfer or assignment occurs shall be allocated to the
                  transferee Partner, and none of such items for the calendar
                  month in which an exchange occurs shall be allocated to the
                  exchanging Partner, PROVIDED, HOWEVER, that the General
                  Partner may adopt such other conventions relating to
                  allocations in connection with transfers, assignments, or
                  exchanges as it determines are necessary or appropriate.

                           (iii) All distributions of Available Cash
                  attributable to Partnership Units, with respect to which the
                  Partnership Record Date is before the date of such transfer,
                  assignment, or exchange of such Partnership Units, shall be
                  made to the transferor Partner or the exchanging Partner, as
                  the case may be, and in the case of a transfer or assignment
                  other than an exchange, all distributions of Available Cash
                  thereafter attributable to such Partnership Units shall be
                  made to the transferee Partner.

                  (e) In addition to any other restrictions on transfer herein
         contained, including without limitation the provisions of this Article
         11, in no event may any transfer or assignment of a Partnership
         Interest by any Partner (including pursuant to Section 8.6) be made
         without the express consent of the General Partner, in its sole and
         absolute discretion, (i) to any person or entity who lacks the legal
         right, power or capacity to own a Partnership Interest; (ii) in
         violation of applicable law; (iii) of any component portion of a
         Partnership Interest, such as the Capital Account, or rights to
         distributions, separate and apart from all other components of a
         Partnership Interest; (iv) if in the opinion of legal counsel to the
         Partnership such transfer would cause a termination of the Partnership
         for

                                       54

<PAGE>   61

         federal or state income tax purposes (except as a result of the
         exchange for REIT Stock of all Partnership Units held by all Limited
         Partners or pursuant to a transaction expressly permitted under Section
         7.11 or Section 11.2); (v) if in the opinion of counsel to the
         Partnership, such transfer would cause the Partnership to cease to be
         classified as a partnership for federal income tax purposes (except as
         a result of the exchange for REIT Stock of all Partnership Units held
         by all Limited Partners or pursuant to a transaction expressly
         permitted under Section 7.11 or Section 11.2); (vi) if such transfer
         would cause the Partnership to become, with respect to any employee
         benefit plan subject to Title I of ERISA, a "party-in-interest" (as
         defined in Section 3(14) of ERISA) or a "disqualified person" (as
         defined in Section 4975 of the Code); (vii) if such transfer would, in
         the opinion of counsel to the Partnership, cause any portion of the
         assets of the Partnership to constitute assets of any employee benefit
         plan pursuant to Department of Labor Regulations Section 2510.1-101;
         (viii) if such transfer requires the registration of such Partnership
         Interest pursuant to any applicable federal or state securities laws;
         (ix) if such transfer is effectuated through an "established securities
         market" or a "secondary market" (or the substantial equivalent thereof)
         within the meaning of Section 7704 of the Code or such transfer causes
         the Partnership to become a "publicly traded partnership," as such term
         is defined in Section 469(k)(2) or Section 7704(b) of the Code
         (provided that this clause (ix) shall not be the basis for limiting or
         restricting in any manner the exercise of the Exchange Right under
         Section 8.6 unless, and only to the extent that, outside tax counsel
         provides to the General Partner an opinion to the effect that, in the
         absence of such limitation or restriction, there is a significant risk
         that the Partnership will be treated as a "publicly traded partnership"
         and, by reason thereof, taxable as a corporation); (x) if such transfer
         subjects the Partnership to regulation under the Investment Company Act
         of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended;
         (xi) such transfer could adversely affect the ability of the General
         Partner to remain qualified as a REIT; or (xii) if in the opinion of
         legal counsel for the transferring Partner (which opinion and counsel
         shall be reasonably satisfactory to the Partnership) or legal counsel
         for the Partnership, if the General Partner has elected to be qualified
         as a REIT, such transfer would adversely affect the ability of the
         General Partner to continue to qualify as a REIT or subject the General
         Partner to any additional taxes under Section 857 or Section 4981 of
         the Code.

                  (f) The General Partner shall monitor the transfers of
         interests in the Partnership to determine (i) if such interests are
         being traded on an "established securities market" or a "secondary
         market (or the substantial equivalent thereof)" within the meaning of
         Section 7704 of the Code; and (ii) whether additional transfers of
         interests would result in the Partnership being unable to qualify for
         at least one of the "safe harbors" set forth in Regulations Section
         1.7704-1 (or such other guidance subsequently published by the IRS
         setting forth safe harbors under which interests will not be treated as
         "readily tradable on a secondary market (or the substantial equivalent
         thereof)" within the meaning of Section 7704 of the Code) (the "Safe
         Harbors"). The General Partner shall take all steps reasonably
         necessary or appropriate to prevent any trading of interests or

                                       55

<PAGE>   62

         any recognition by the Partnership of transfers made on such markets
         and, except as otherwise provided herein, to insure that at least one
         of the Safe Harbors is met; provided, however, that the foregoing shall
         not authorize the General Partner to limit or restrict in any manner
         the right of any holder of a Partnership Unit to exercise the Exchange
         Right in accordance with the terms of the applicable Exchange Rights
         Agreement unless, and only to the extent that, outside tax counsel
         provides to the General Partner an opinion to the effect that, in the
         absence of such limitation or restriction, there is a significant risk
         that the Partnership will be treated as a "publicly traded partnership"
         and, by reason thereof, taxable as a corporation.

                                   ARTICLE 12
                              ADMISSION OF PARTNERS

                  12.1     ADMISSION OF SUCCESSOR GENERAL PARTNER

                  (a) (i) A successor to all of the General Partner Interest
         pursuant to Section 11 hereof who is proposed to be admitted as a
         successor General Partner shall be admitted to the Partnership as the
         General Partner, effective immediately following such transfer and the
         admission of such successor General Partner as a general partner of the
         Partnership upon the satisfaction of the terms and conditions set forth
         in Section 12.1(b).

                           (ii) Any such transferee shall carry on the business
                  of the Partnership without dissolution.

                  (b) A Person shall be admitted as a substitute or successor
         General Partner of the Partnership only if the following terms and
         conditions are satisfied:

                           (i) the Person to be admitted as a substitute or
                  additional General Partner shall have accepted and agreed to
                  be bound by all the terms and provisions of this Agreement by
                  executing a counterpart thereof and such other documents or
                  instruments as may be required or appropriate in order to
                  effect the admission of such Person as a General Partner;

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

                           (iii) counsel for the Partnership shall have rendered
                  an opinion (relying on such opinions from other counsel as may
                  be necessary) that the admission of the person to be admitted
                  as a substitute or additional General Partner is in

                                       56

<PAGE>   63

                  conformity with the Act, that none of the actions taken in
                  connection with the admission of such Person as a substitute
                  or additional General Partner will cause

                                    (A) the Partnership to be classified other
                           than as a partnership for federal income tax
                           purposes, or

                                    (B) the loss of any Limited Partner's
                           limited liability.

                  (c) In the case of such admission on any day other than the
         first day of a Partnership Year, all items attributable to the General
         Partner Interest for such Partnership Year shall be allocated between
         the transferring General Partner and such successor as provided in
         Section 11.6(d) hereof.

                  12.2     ADMISSION OF ADDITIONAL LIMITED PARTNERS

                  (a) A Person who makes a Capital Contribution to the
         Partnership in accordance with this Agreement shall be admitted to the
         Partnership as an Additional Limited Partner only upon furnishing to
         the General Partner

                           (i) evidence of acceptance in form satisfactory to
                  the General Partner of all of the terms and conditions of this
                  Agreement and the applicable Exchange Rights Agreement,
                  including, without limitation, the power of attorney granted
                  in Section 2.4 hereof, and

                           (ii) such other documents or instruments as may be
                  required in the discretion of the General Partner in order to
                  effect such Person's admission as an Additional Limited
                  Partner.

                  (b) (i) Notwithstanding anything to the contrary in this
                  Section 12.2, no Person shall be admitted as an Additional
                  Limited Partner without the consent of the General Partner,
                  which consent may be given or withheld in the General
                  Partner's sole and absolute discretion.

                           (ii) The admission of any Person as an Additional
                  Limited Partner shall become effective on the date upon which
                  the name of such Person is recorded on the books and records
                  of the Partnership, following the consent of the General
                  Partner to such admission.

                  (c) (i) If any Additional Limited Partner is admitted to the
                  Partnership on any day other than the first day of a
                  Partnership Year, then Net Income, Net Losses, each item
                  thereof and all other items allocable among Partners and
                  Assignees for such Partnership Year shall be allocated among
                  such Additional Limited Partner and all other Partners and
                  Assignees by taking into account their

                                       57

<PAGE>   64

                  varying interests during the Partnership Year in accordance
                  with Section 706(d) of the Code, using the interim closing of
                  the books method.

                           (ii) (A) Solely for purposes of making such
                           allocations, each of such items for the calendar
                           month in which an admission of any Additional Limited
                           Partner occurs shall be allocated among all of the
                           Partners and Assignees, including such Additional
                           Limited Partner.

                                    (B) distributions of Available Cash with
                           respect to which the Partnership Record Date is
                           before the date of such admission shall be made
                           solely to Partners and Assignees, other than the
                           Additional Limited Partner, and all distributions of
                           Available Cash thereafter shall be made to all of the
                           Partners and Assignees, including such Additional
                           Limited Partner.

                  (d) Upon the admission of the first Additional Limited Partner
                  to the Partnership, the Initial Limited Partner's original
                  interest in the Partnership shall automatically, and without
                  further action on the part of the Initial Limited Partner or
                  the Partnership, be withdrawn.

                  12.3     AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED
                           PARTNERSHIP

         For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.

                                   ARTICLE 13
                    DISSOLUTION, LIQUIDATION AND TERMINATION

                  13.1     DISSOLUTION

                  (a) The Partnership shall not be dissolved by the admission of
         Substituted Limited Partners or Additional Limited Partners or by the
         admission of a successor General Partner in accordance with the terms
         of this Agreement. Upon the withdrawal of the General Partner, any
         successor General Partner shall continue the business of the
         Partnership.

                  (b) The Partnership shall dissolve, and its affairs shall be
         wound up, only upon the first to occur of any of the following
         ("Liquidating Events"):

                                       58

<PAGE>   65

                           (i) the expiration of its term as provided in Section
                  2.5 hereof;

                           (ii) an event of withdrawal of the General Partner,
                  as defined in the Act (other than an event of bankruptcy),
                  unless, within ninety (90) days after such event of
                  withdrawal, a "majority in interest" (as defined below) of the
                  remaining Partners Consent in writing to continue the business
                  of the Partnership and to the appointment, effective as of the
                  date of withdrawal, of a successor General Partner;

                           (iii) an election to dissolve the Partnership made by
                  the General Partner, with the Consent of Limited Partners
                  holding at least a majority of the Percentage Interest of the
                  Limited Partners (including Limited Partner Interests held by
                  the General Partner);

                           (iv) entry of a decree of judicial dissolution of the
                  Partnership pursuant to the provisions of the Act;

                           (v) the sale of all or substantially all of the
                  assets and properties of the Partnership;

                           (vi) a final and non-appealable judgment is entered
                  by a court of competent jurisdiction ruling that the General
                  Partner is bankrupt or insolvent, or a final and
                  non-appealable order for relief is entered by a court with
                  appropriate jurisdiction against the General Partner, in each
                  case under any federal or state bankruptcy or insolvency laws
                  as now or hereafter in effect, unless prior to the entry of
                  such order or judgment a "majority in interest" (as defined
                  below) of the remaining Partners Consent in writing to
                  continue the business of the Partnership and to the
                  appointment, effective as of a date prior to the date of such
                  order or judgment, of a substitute General Partner.

         As used herein, a "majority in interest" shall refer to Partners
(excluding the General Partner) who hold more than fifty percent (50%) of the
outstanding Percentage Interests not held by the General Partner.

                  13.2     WINDING UP

                  (a) (i) Upon the occurrence of a Liquidating Event, the
                  Partnership shall continue solely for the purposes of winding
                  up its affairs in an orderly manner, liquidating its assets,
                  and satisfying the claims of its creditors and Partners.

                           (ii) No Partner shall take any action that is
                  inconsistent with, or not necessary to or appropriate for, the
                  winding up of the Partnership's business and affairs.

                                       59

<PAGE>   66

                           (iii) The General Partner, or, in the event there is
                  no remaining General Partner, any Person elected by Limited
                  Partners holding at least a "majority in interest" (the
                  General Partner or such other Person being referred to herein
                  as the "Liquidator"), shall be responsible for overseeing the
                  winding up and dissolution of the Partnership and shall take
                  full account of the Partnership's liabilities and property and
                  the Partnership property shall be liquidated as promptly as is
                  consistent with obtaining the fair value thereof, and the
                  proceeds therefrom (which may, to the extent determined by the
                  General Partner, include shares of common stock or other
                  securities of the General Partner) shall be applied and
                  distributed in the following order:

                                    (A) First, to the payment and discharge of
                           all of the Partnership's debts and liabilities to
                           creditors other than the Partners;

                                    (B) Second, to the payment and discharge of
                           all of the Partnership's debts and liabilities to the
                           General Partner;

                                    (C) Third, to the payment and discharge of
                           all of the Partnership's debts and liabilities to the
                           other Partners; and

                                    (D) The balance, if any, to the General
                           Partner and Limited Partners to the extent of and in
                           accordance with the positive balances in their
                           Capital Accounts, after giving effect to all
                           contributions, distributions, and allocations for all
                           periods.

                           (iv) The General Partner shall not receive any
                  additional compensation for any services performed pursuant to
                  this Article 13.

                           (v) Any distributions pursuant to this Section
                  13.2(a) shall be made by the end of the Partnership's taxable
                  year in which the liquidation occurs (or, if later, within 90
                  days after the date of the liquidation).

                  (b) (i) Notwithstanding the provisions of Section 13.2(a)
                  hereof which require liquidation of the assets of the
                  Partnership, but subject to the order of priorities set forth
                  therein, if prior to or upon dissolution of the Partnership
                  the Liquidator determines that an immediate sale of part or
                  all of the Partnership's assets would be impractical or would
                  cause undue loss to the Partners, the Liquidator may, in its
                  sole and absolute discretion, defer for a reasonable time the
                  liquidation of any asset except those necessary to satisfy
                  liabilities of the Partnership (including to those Partners as
                  creditors) or distribute to the Partners, in lieu of cash, as
                  tenants in common and in accordance with the provisions of
                  Section 13.2(a) hereof, undivided interests in such
                  Partnership assets as the Liquidator deems not suitable for
                  liquidation.

                                       60

<PAGE>   67

                           (ii) Any such distributions in kind shall be made
                  only if, in the good faith judgment of the Liquidator, such
                  distributions in kind are in the best interests of the
                  Partners, and shall be subject to such conditions relating to
                  the disposition and management of such properties as the
                  Liquidator deems reasonable and equitable and to any
                  agreements governing the operation of such properties at such
                  time.

                           (iii) The Liquidator shall determine the fair market
                  value of any property distributed in kind using such
                  reasonable method of valuation as it may adopt.

                  (c) In the discretion of the Liquidator, a pro rata portion of
                  the distributions that would otherwise be made to the General
                  Partner and Limited Partners pursuant to this Article 13 may
                  be:

                                    (A) distributed to a trust established for
                           the benefit of the General Partner and Limited
                           Partners for the purposes of liquidating Partnership
                           assets, collecting amounts owed to the Partnership,
                           and paying any contingent or unforeseen liabilities
                           or obligations of the Partnership or the General
                           Partner arising out of or in connection with the
                           Partnership; the assets of any such trust shall be
                           distributed to the General Partner and Limited
                           Partners from time to time, in the reasonable
                           discretion of the Liquidator, in the same proportions
                           as the amount distributed to such trust by the
                           Partnership would otherwise have been distributed to
                           the General Partner and Limited Partners pursuant to
                           this Agreement; or

                                    (B) withheld or escrowed to provide a
                           reasonable reserve for Partnership liabilities
                           (contingent or otherwise) and to reflect the
                           unrealized portion of any installment obligations
                           owed to the Partnership, provided that such withheld
                           or escrowed amounts shall be distributed to the
                           General Partner and Limited Partners in the manner
                           and order of priority set forth in Section 13.2(a) as
                           soon as practicable.

         13.3     NO OBLIGATION TO CONTRIBUTE DEFICIT

         If any Partner has a deficit balance in his Capital Account (after
giving effect to all contributions, distributions and allocations for all
taxable years, including the year during which such liquidation occurs), such
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.

                                       61

<PAGE>   68

         13.4     RIGHTS OF LIMITED PARTNERS

                  (a) Except as otherwise provided in this Agreement, each
         Limited Partner shall look solely to the assets of the Partnership for
         the return of its Capital Contributions and shall have no right or
         power to demand or receive property other than cash from the
         Partnership.

                  (b) Except as otherwise provided in this Agreement, no Limited
         Partner shall have priority over any other Partner as to the return of
         its Capital Contributions, distributions, or allocations.

         13.5     NOTICE OF DISSOLUTION

         In the event a Liquidating Event occurs or an event occurs that would,
but for the provisions of an election or objection by one or more Partners
pursuant to Section 13.1, result in a dissolution of the Partnership, the
General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners.

         13.6     TERMINATION OF PARTNERSHIP AND CANCELLATION OF CERTIFICATE OF
                  LIMITED PARTNERSHIP

         Upon the completion of the liquidation of the Partnership's assets, as
provided in Section 13.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed, and all qualifications of the
Partnership as a foreign limited partnership in jurisdictions other than the
state of Delaware shall be canceled and such other actions as may be necessary
to terminate the Partnership shall be taken.

         13.7     REASONABLE TIME FOR WINDING-UP

         A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect among the Partners during the period of liquidation.

         13.8     WAIVER OF PARTITION

         Each Partner hereby waives any right to partition of the Partnership
property.

                                       62

<PAGE>   69

                                   ARTICLE 14
                  AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

         14.1     AMENDMENTS

                  (a) (i) Amendments to this Agreement may be proposed by the
                  General Partner or by any Limited Partners holding in the
                  aggregate 25 percent or more of the Partnership Interests.

                           (ii) (A) Following such proposal, the General Partner
                           shall submit any proposed amendment to the Limited
                           Partners.

                                    (B) The General Partner shall seek the
                           written vote of the Partners on the proposed
                           amendment or shall call a meeting to vote thereon and
                           to transact any other business that it may deem
                           appropriate.

                                    (C) For purposes of obtaining a written
                           vote, the General Partner may require a response
                           within a reasonable specified time, but not less than
                           fifteen (15) days, and failure to respond in such
                           time period shall constitute a vote which is
                           consistent with the General Partner's recommendation
                           with respect to the proposal.

                                    (D) Except as provided in Section 14.1(b),
                           14.1(c) or 14.1(d), a proposed amendment shall be
                           adopted and be effective as an amendment hereto if it
                           is approved by the General Partner and it receives
                           the Consent of Limited Partners holding at least a
                           majority of the Percentage Interests of the Limited
                           Partners (including Limited Partner Interests held by
                           the General Partner).

                  (b) (i) Notwithstanding Section 14.1(a), the General Partner
                  shall have the power, without the consent of the Limited
                  Partners, to amend this Agreement as may be required to
                  facilitate or implement any of the following purposes:

                                    (A) to add to the obligations of the General
                           Partner or surrender any right or power granted to
                           the General Partner or any Affiliate of the General
                           Partner for the benefit of the Limited Partners;

                                    (B) to reflect the admission, substitution,
                           termination, or withdrawal of Partners in accordance
                           with this Agreement (which may be effected through
                           the amendment or replacement of Exhibit A);

                                       63

<PAGE>   70

                                    (C) to set forth the designations, rights,
                           powers, duties, and preferences of the holders of any
                           additional Partnership Interests issued pursuant to
                           Section 4.3 hereof;

                                    (D) to reflect a change that does not
                           adversely affect the Limited Partners in any material
                           respect, or to cure any ambiguity, correct or
                           supplement any provision in this Agreement not
                           inconsistent with law or with other provisions, or
                           make other changes with respect to matters arising
                           under this Agreement that will not be inconsistent
                           with law or with the provisions of this Agreement;
                           and

                                    (E) to satisfy any requirements, conditions,
                           or guidelines contained in any order, directive,
                           opinion, ruling or regulation of a federal or state
                           agency or contained in federal or state law.

                           (ii) The General Partner shall provide notice to the
                  Limited Partners when any action under this Section 14.1(b) is
                  taken in the next regular communication to the Limited
                  Partners.

                  (c) Notwithstanding Section 14.1(a) and 14.1(b) hereof, this
         Agreement shall not be amended with respect to any Partner adversely
         affected without the Consent of such Partner adversely affected if such
         amendment would

                           (i) convert a Limited Partner's interest in the
                  Partnership into a General Partner Interest;

                           (ii) modify the limited liability of a Limited
                  Partner in a manner adverse to such Limited Partner; or

                           (iii) amend this Section 14.1(c).

This Section 14.1(c) does not require unanimous consent of all Partners
adversely affected unless the amendment is to be effective against all Partners
adversely affected.

                  (d) Notwithstanding Section 14.1(a) or Section 14.1(b) hereof,
         the General Partner shall not amend, without the Consent of the Outside
         Limited Partners, Section 4.3 (a), Article 5, Article 6 (except that
         Articles V and VI may be amended as permitted pursuant to Sections 4.3,
         5.4, 6.2 and 14.1(b)(i)(c)), Section 7.4 or 11.2.

         14.2     MEETINGS OF THE PARTNERS

                                       64

<PAGE>   71

                  (a) (i) Meetings of the Partners may be called by the General
                  Partner and shall be called upon the receipt by the General
                  Partner of a written request by Limited Partners holding 25
                  percent or more of the Partnership Interests.

                           (ii) The request shall state the nature of the
                  business to be transacted.

                           (iii) Notice of any such meeting shall be given to
                  all Partners not less than seven (7) days nor more than thirty
                  (30) days prior to the date of such meeting.

                           (iv) Partners may vote in person or by proxy at such
                  meeting.

                           (v) Whenever the vote or Consent of the Limited
                  Partners is permitted or required under this Agreement, such
                  vote or Consent may be given at a meeting of the Partners or
                  may be given in accordance with the procedure prescribed in
                  Section 14.1(a) hereof.

                           (vi) Except as otherwise expressly provided in this
                  Agreement, the Consent of holders of a majority of the
                  Percentage Interests held by Partners (including the General
                  Partner) shall control.

                  (b) (i) Any action required or permitted to be taken at a
                  meeting of the Partners may be taken without a meeting if a
                  written consent setting forth the action so taken is signed by
                  a majority of the Percentage Interests of the Partners (or
                  such other percentage as is expressly required by this
                  Agreement).

                           (ii) Such consent may be in one instrument or in
                  several instruments, and shall have the same force and effect
                  as a vote of a majority of the Percentage Interests of the
                  Partners (or such other percentage as is expressly required by
                  this Agreement).

                           (iii) Such consent shall be filed with the General
                  Partner.

                           (iv) An action so taken shall be deemed to have been
                  taken at a meeting held on the effective date of the consent
                  as certified by the General Partner.

                  (c) (i) Each Limited Partner may authorize any Person or
                  Persons to act for him by proxy on all matters in which a
                  Limited Partner is entitled to participate, including waiving
                  notice of any meeting, or voting or participating at a
                  meeting.

                           (ii) Every proxy must be signed by the Limited
                  Partner or his attorney-in-fact and a copy thereof delivered
                  to the Partnership.

                                       65

<PAGE>   72

                           (iii) No proxy shall be valid after the expiration of
                  eleven (11) months from the date thereof unless otherwise
                  provided in the proxy.

                           (iv) Every proxy shall be revocable at the pleasure
                  of the Limited Partner executing it, such revocation to be
                  effective upon the General Partner's receipt of written notice
                  of such revocation from the Limited Partner executing such
                  proxy.

                  (d) (i) Each meeting of the Partners shall be conducted by the
                  General Partner or such other Person as the General Partner
                  may appoint pursuant to such rules for the conduct of the
                  meeting as the General Partner or such other Person deems
                  appropriate.

                           (ii) Meetings of Partners may be conducted in the
                  same manner as meetings of the stockholders of the General
                  Partner and may be held at the same time, and as part of,
                  meetings of the stockholders of the General Partner.

                                   ARTICLE 15
                               GENERAL PROVISIONS

         15.1     ADDRESSES AND NOTICE

         Any notice, demand, request or report required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or five days after being
sent by first class United States mail or by overnight delivery or via facsimile
to the Partner or Assignee at the address set forth in Exhibit A or such other
address of which the Partner shall notify the General Partner in writing.

         15.2     TITLES AND CAPTIONS

         All article or section titles or captions in this Agreement are for
convenience of reference only, shall not be deemed part of this Agreement and
shall in no way define, limit, extend or describe the scope or intent of any
provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.

         15.3     PRONOUNS AND PLURALS

         Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.

                                       66

<PAGE>   73

         15.4     FURTHER ACTION

         The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

         15.5     BINDING EFFECT

         This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

         15.6     CREDITORS

         Other than as expressly set forth herein with respect to the
Indemnities, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.

         15.7     WAIVER

         No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

         15.8     COUNTERPARTS

         This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.

         15.9     APPLICABLE LAW

         This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.

         15.10    INVALIDITY OF PROVISIONS

         If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

                                       67

<PAGE>   74

         15.11    ENTIRE AGREEMENT

         This Agreement contains the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersedes any other
prior written or oral understandings or agreements among them with respect
thereto.

         15.12    MERGER

         Subject to Section 4.2 herein, the Partnership may merge with, or
consolidate into, any Person or Entity in accordance with Section 17-211 of the
Act.

         15.13    NO RIGHTS AS STOCKHOLDERS

         Nothing contained in this Agreement shall be construed as conferring
upon the holders of the Partnership Units any rights whatsoever as stockholders
of the General Partner, including, without limitation, any right to receive
dividends or other distributions made to shareholders or to vote or to consent
or receive notice as shareholders in respect to any meeting or shareholders for
the election of directors of the General Partner or any other matter.

                            [SIGNATURE PAGE FOLLOWS]

                                       68

<PAGE>   75

         SIGNATURE PAGE TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF AMERICAN SPECTRUM REALTY OPERATING PARTNERSHIP, L.P., BY AND AMONG THE
UNDERSIGNED AND THE OTHER PARTIES THERETO.

                                       GENERAL PARTNER:

                                       AMERICAN SPECTRUM REALTY, INC.

                                       By:
                                          -------------------------------------
                                             Name:
                                             Title:

                                       LIMITED PARTNER:

                                       69

<PAGE>   76

         CORPORATE/LIMITED LIABILITY COMPANY ADDITIONAL LIMITED PARTNER
SIGNATURE PAGE TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
AMERICAN SPECTRUM REALTY OPERATING PARTNERSHIP, L.P., BY AND AMONG THE
UNDERSIGNED AND THE OTHER PARTIES THERETO.

Dated: __________ __, 199__            [Name of Corporation/LLC]

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:

                                       70

<PAGE>   77

         INDIVIDUAL ADDITIONAL LIMITED PARTNER SIGNATURE PAGE TO AMENDED AND
RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AMERICAN SPECTRUM REALTY OPERATING
PARTNERSHIP, L.P., BY AND AMONG THE UNDERSIGNED AND THE OTHER PARTIES THERETO.

Dated __________ __, 199__

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

                                       71

<PAGE>   78

         PARTNERSHIP LIMITED PARTNER SIGNATURE PAGE TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF AMERICAN SPECTRUM REALTY OPERATING
PARTNERSHIP, L.P., BY AND AMONG THE UNDERSIGNED AND THE OTHER PARTIES THERETO.

Dated __________ __, 199__

                                              [Name of LP]

                                              By:
                                                 ------------------------------
                                                       Name:
                                                       Title:

                                       72

<PAGE>   79

                                    EXHIBIT A

                PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>

                                  TYPE OF            CAPITAL         NUMBER OF PARTNERSHIP UNITS      PERCENTAGE       SECURITY
NAME AND ADDRESS OF PARTNER      INTEREST         CONTRIBUTION                 ("OPUs")                INTEREST       INTERESTS
---------------------------      --------         ------------       ---------------------------      ----------      ---------
<S>                              <C>              <C>                <C>                              <C>             <C>

</TABLE>

                                       A-1

<PAGE>   80

                                    EXHIBIT B

                                   ALLOCATIONS

1.       ALLOCATION OF NET INCOME AND NET LOSS.

         (a) NET INCOME. Subject to the terms and conditions established by the
General Partner for additional Partnership Interests or Partnership Units issued
pursuant to Section 4.3(a) hereof, and except as otherwise provided in this
Exhibit B, Net Income (or items thereof) (other than Net Income, or items
thereof, arising in connection with a Terminating Capital Transaction) for any
fiscal year or other applicable period shall be allocated to the Partners in
accordance with their respective Percentage Interests, including Partners owning
Class B Partnership Units.

         (b) NET LOSS. Subject to the terms and conditions established by the
General Partner for additional Partnership Interests or Partnership Units issued
pursuant to Section 4.3(a) hereof, and except as otherwise provided in this
Exhibit B, Net Loss (or items thereof) of the Partnership for each fiscal year
or other applicable period shall be allocated to the Partners in accordance with
the Partners' respective Percentage Interests, including Partners owning Class B
Partnership Units; provided, however, that Net Loss (or items thereof) may only
be allocated to Partners owning Class B Partnership Units in amounts equal to
the Net Income (or items thereof) allocated to such Partners pursuant to the
provisions of subparagraph (a) of this Section 1. Notwithstanding the preceding
sentence, to the extent any Net Loss (or items thereof) allocated to a Partner
(other than a Partner owning Class B Partnership Units) under this subparagraph
(b) would cause such Partner (hereinafter, a "Restricted Partner") to have an
Adjusted Capital Account Deficit, or increase the amount of an existing Adjusted
Capital Account Deficit, as of the end of the fiscal year or other applicable
period to which such Net Loss relates, such Net Loss shall not be allocated to
such Restricted Partner and instead shall be allocated to the other Partner(s)
(hereinafter, the "Permitted Partners") PRO RATA in accordance with each
Permitted Partner's Percentage Interest.

         (c) TERMINATING CAPITAL TRANSACTION; LIQUIDATION. Allocations of Net
Income or Net Loss (or items thereof) in connection with a Terminating Capital
Transaction or liquidation of the Partnership shall first be made so that, to
the extent possible, and subject to the terms and conditions established by the
General Partner for additional Partnership Interests and Partnership Units
issued pursuant to Section 4.3(a) hereof, each Partner's Capital Account balance
is equal to such Partner's Adjusted Contribution, and the remainder of such Net
Income or Net Loss (or items thereof) shall be allocated to the Partners in
accordance with their Percentage Interests. Notwithstanding the preceding
sentence, to the extent any Net Loss (or items thereof) would be allocated to a
Restricted Partner under this subparagraph (c), such Net Loss shall not be
allocated to such Restricted Partner and instead shall be allocated to the
Permitted Partners PRO RATA in accordance with each Permitted Partner's
Percentage Interest.

                                       B-2

<PAGE>   81

         (d)      RULES OF CONSTRUCTION.

                  (1) CAPITAL ACCOUNT INCREASES. For purposes of making
allocations pursuant to subparagraph 1(c) of this Exhibit B, a Partner's Capital
Account balance shall be deemed to be increased by such Partner's share of any
Partnership Minimum Gain and Partner Minimum Gain remaining at the close of the
fiscal period in respect of which such allocations are being made.

                  (2) CHANGE IN PERCENTAGE INTERESTS. In the event any Partner's
Percentage Interest changes during a fiscal year for any reason, including
without limitation, the Transfer of any interest in the Partnership, the tax
allocations contained in this Exhibit B shall be applied as necessary to reflect
the varying interests of the Partners during such year.

2.       SPECIAL ALLOCATIONS.  Notwithstanding any provisions of paragraph 1 of
this Exhibit B, the following special allocations shall be made.

         (a) MINIMUM GAIN CHARGEBACK (NONRECOURSE LIABILITIES). Except as
otherwise provided in Section 1.704-2(f) of the Regulations, if there is a net
decrease in Partnership Minimum Gain for any Partnership fiscal year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain to the extent
required by Regulations Section 1.704-2(f). The items to be so allocated shall
be determined in accordance with Sections 1.704-2(f) and (i) of the Regulations.
This subparagraph 2(a) is intended to comply with the minimum gain chargeback
requirement in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this subparagraph 2(a) shall be
made in proportion to the respective amounts required to be allocated to each
Partner pursuant hereto.

         (b) PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(i)(4) of the Regulations, if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal year,
each Partner who has a share of the Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of
the Regulations, shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to
that Partner's share of the net decrease in the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt to the extent and in the manner
required by Section 1.704-2(i) of the Regulations. The items to be so allocated
shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the
Regulations. This subparagraph 2(b) is intended to comply with the minimum gain
chargeback requirement with respect to Partner Nonrecourse Debt contained in
said section of the Regulations and shall be interpreted consistently therewith.
Allocations pursuant to this subparagraph 2(b) shall be made in proportion to
the respective amounts required to be allocated to each Partner pursuant hereto.

         (c)      QUALIFIED INCOME OFFSET.  In the event a Partner unexpectedly
receives any adjustments, allocations or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Regulations, and such Partner has an
Adjusted Capital Account Deficit, items of

                                       B-3

<PAGE>   82

Partnership income (including gross income) and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit as quickly as possible as required by the
Regulations. This subparagraph 2(c) is intended to constitute a "qualified
income offset" under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted consistently therewith.

         (d) OTHER CHARGEBACK OF IMPERMISSIBLE NEGATIVE CAPITAL ACCOUNT. To the
extent any Partner has an Adjusted Capital Account Deficit at the end of any
Partnership fiscal year, each such Partner shall be specially allocated items of
Partnership income (including gross income) and gain in the amount of such
excess as quickly as possible, PROVIDED that an allocation pursuant to this
paragraph 2(d) shall be made if and only to the extent that such Partner would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Exhibit B have been tentatively made as if this paragraph 2(d) were
not in the Agreement.

         (e) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any fiscal year
or other applicable period shall be allocated to the Partners in accordance with
their respective Percentage Interests.

         (f) PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse Deductions for
any fiscal year or other applicable period with respect to a Partner Nonrecourse
Debt shall be specially allocated to the Partner that bears the economic risk
of loss for such Partner Nonrecourse Debt (as determined under Sections
1.704-2(b)(4) and 1.704-2(i)(1) of the Regulations).

         (g) INTENT OF ALLOCATIONS. The parties intend that the allocation
provisions of this Exhibit B shall result in final Capital Account balances of
the Partners that initially are equal to each Partner's Adjusted Contribution
and are then in proportion to the Partners' respective Percentage Interests, so
that when liquidating distributions are made in accordance with such final
Capital Account balances under Section 13.2(a)(iii)(D) hereof, such
distributions will be able to return to each Partner its Adjusted Contribution
and then will be made in proportion to the Partners' respective Percentage
Interests. To the extent that such final Capital Account balances do not so
reflect the provisions of this Exhibit B, income and loss of the Partnership for
the current year and future years, as computed for book purposes, shall be
allocated among the Partners so as to result in final Capital Account balances
reflecting the provisions of this Exhibit B and to the extent such allocations
of items of income (including gross income) and deduction do not result in such
final Capital Account balances, then, income and loss of the Partnership for
prior open years, as computed for book purposes (or items of gross income and
deduction of the Partnership for such years, as computed for book purposes)
shall be reallocated among the Partners consistent with the foregoing. This
subparagraph shall control notwithstanding any reallocation of income, loss, or
items thereof, as computed for book purposes, by the Internal Revenue Service or
any other taxing authority.

         (h) SECTION 754 ADJUSTMENT. To the extent an adjustment to the adjusted
tax basis of any asset of the Partnership pursuant to Section 734(b) of the Code
or Section 743(b) of the Code is required, pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations, to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital Accounts shall be

                                       B-4

<PAGE>   83

treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis) and such gain or loss shall be
specially allocated among the Partners in a manner consistent with the manner in
which each of their respective Capital Accounts are required to be adjusted
pursuant to such section of the Regulations.

         (i) GROSS INCOME ALLOCATION. There shall be specially allocated to the
General Partner an amount of Partnership income and gain during each Partnership
Year or portion thereof, before any other allocations are made hereunder, which
is equal to the excess, if any, of the cumulative distributions of cash made to
the General Partner under Section 7.3(b) hereof over the cumulative allocations
of Partnership income and gain to the General Partner pursuant to this Section
2(i) of this Exhibit B.

3.       TAX ALLOCATIONS.

         (a) ITEMS OF INCOME OR LOSS. Except as is otherwise provided in this
Exhibit B, an allocation of Partnership Net Income or Net Loss to a Partner
shall be treated as an allocation to such Partner of the same share of each item
of income, gain, loss, deduction and item of tax- exempt income or Section
705(a)(2)(B) expenditure (or item treated as such expenditure pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i)) ("Tax Items") that is taken into
account in computing Net Income or Net Loss.

         (b) SECTION 1245/1250 RECAPTURE. If any portion of gain from the sale
of Partnership assets is treated as gain which is ordinary income by virtue of
the application of Code Sections 1245 or 1250 ("Affected Gain"), then such
Affected Gain shall be allocated among the Partners in the same proportion that
the depreciation and amortization deductions giving rise to the Affected Gain
were allocated. This subparagraph 3(b) shall not alter the amount of Net Income
(or items thereof) allocated among the Partners, but merely the character of
such Net Income (or items thereof). For purposes hereof, in order to determine
the proportionate allocations of depreciation and amortization deductions for
each fiscal year or other applicable period, such deductions shall be deemed
allocated on the same basis as Net Income and Net Loss for such respective
period.

         (c) PRECONTRIBUTION GAIN, REVALUATIONS. With respect to any Contributed
Property, the Partnership shall use any permissible method contained in the
Regulations promulgated under Section 704(c) of the Code selected by the General
Partner, in its sole discretion, to take into account any variation between the
adjusted basis of such asset and the fair market value of such asset as of the
time of the contribution ("Precontribution Gain"). Each Partner hereby agrees to
report income, gain, loss and deduction on such Partner's federal income tax
return in a manner consistent with the method used by the Partnership. If any
asset has a Gross Asset Value which is different from the Partnership's adjusted
basis for such asset for federal income tax purposes because the Partnership has
revalued such asset pursuant to Regulations Section 1.704- 1(b)(2)(iv)(f), the
allocations of Tax Items shall be made in accordance with the principles of
Section 704(c) of the Code and the Regulations and the methods of allocation
promulgated thereunder. The intent of this subparagraph 3(c) is that each
Partner who contributed to the capital of the Partnership a Contributed Property
will bear, through reduced allocations of

                                       B-5

<PAGE>   84

depreciation, increased allocations of gain or other items, the tax detriments
associated with any Precontribution Gain. This subparagraph 3(c) is to be
interpreted consistently with such intent.

         (d) EXCESS NONRECOURSE LIABILITY SAFE HARBOR. Pursuant to Regulations
Section 1.752-3(a)(3), solely for purposes of determining each Partner's
proportionate share of the "excess nonrecourse liabilities" of the Partnership
(as defined in Regulations Section 1.752-3(a)(3)), the Partners' respective
interests in Partnership profits shall be determined in accordance with each
Partner's Percentage Interest; PROVIDED, HOWEVER, that each Partner who has
contributed an asset to the Partnership shall be allocated, to the extent
possible, a share of "excess nonrecourse liabilities" of the Partnership which
results in such Partner being allocated nonrecourse liabilities in an amount
which is at least equal to the amount of income pursuant to Section 704(c) of
the Code and the Regulations promulgated thereunder (the "Liability Shortfall").
In the event there is an insufficient amount of nonrecourse liabilities to
allocate to each Partner an amount of nonrecourse liabilities equal to the
Liability Shortfall, then an amount of nonrecourse liabilities in proportion to,
and to the extent of, the Liability Shortfall shall be allocated to each
Partner.

         (e) REFERENCES TO REGULATIONS. Any reference in this Exhibit B or the
Agreement to a provision of proposed and/or temporary Regulations shall, in the
event such provision is modified or renumbered, be deemed to refer to the
successor provision as so modified or renumbered, but only to the extent such
successor provision applies to the Partnership under the effective date rules
applicable to such successor provision.

         (f) SUCCESSOR PARTNERS. For purposes of this Exhibit B, a transferee of
a Partnership Interest shall be deemed to have been allocated the Net Income,
Net Loss and other items of Partnership income, gain, loss, deduction and credit
allocable to the transferred Partnership Interest that previously have been
allocated to the transferor Partner pursuant to this Agreement.

                                       B-6

<PAGE>   85

                                    EXHIBIT E

                            EXCHANGE RIGHTS AGREEMENT

         THIS EXCHANGE RIGHTS AGREEMENT (this "AGREEMENT"), dated as of ______,
199_, is entered into by and among American Spectrum Realty Inc., a Maryland
corporation (the "COMPANY"), American Spectrum Realty Operating Partnership,
L.P., a Delaware limited partnership (the "OPERATING PARTNERSHIP"), and the
Persons whose names are set forth on EXHIBIT A attached hereto (as it may be
amended from time to time).

                                R E C I T A L S:

                  (a)      The Company, together with certain other limited
                           partners, has formed the Operating Partnership
                           pursuant to the Amended and Restated Agreement of
                           Limited Partnership of the Operating Partnership
                           dated June __, 1998 (as such agreement may be amended
                           or amended and restated from time to time, the
                           "PARTNERSHIP AGREEMENT").

                  (b)      Pursuant to the Partnership Agreement, the Limited
                           Partners (as defined below) directly or indirectly
                           hold units of limited partnership interest
                           ("PARTNERSHIP UNITS") in the Operating Partnership.

                  (c)      The Operating Partnership has agreed to provide the
                           Limited Partners with certain direct or indirect
                           rights to exchange their Partnership Units for cash
                           or, at the election of the Company, for shares of the
                           Company's common stock, $0.01 par value per share
                           (the "REIT STOCK").

         Accordingly, the parties hereto do hereby agree as follows:

                                    ARTICLE I
                                  DEFINED TERMS

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

         "ASSIGNEE" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under the Partnership Agreement, but who
has not become a substituted Limited Partner in accordance therewith.

         "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

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<PAGE>   86

         "CASH AMOUNT" means an amount of cash per Partnership Unit equal to the
Value on the Valuation Date of the REIT Stock Amount.

         "EXCHANGE FACTOR" means 1.0, PROVIDED, that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Stock in REIT
Stock or makes a distribution to all holders of its outstanding REIT Stock in
REIT Stock; (ii) subdivides its outstanding REIT Stock; or (iii) combines its
outstanding REIT Stock into a smaller number of shares of REIT Stock, the
Exchange Factor shall be adjusted by multiplying the Exchange Factor by a
fraction, the numerator of which shall be the number of shares of REIT Stock
issued and outstanding on the record date for such dividend, contribution,
subdivision or combination (assuming for such purpose that such dividend,
distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of shares of REIT Stock
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any adjustment
to the Exchange Factor shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event.

         "EXCHANGING PARTNER" has the meaning set forth in Section 2.1 hereof.

         "EXCHANGE RIGHT" has the meaning set forth in Section 2.1 hereof.

         "LIEN" means any lien, security interest, mortgage, deed of trust,
charge, claim, encumbrance, pledge, option, right of first offer or first
refusal and any other right or interest of others of any kind or nature, actual
or contingent, or other similar encumbrance of any nature whatsoever.

         "LIMITED PARTNER" means any Person, other than the Company, named as a
Limited Partner on Exhibit A, as such Exhibit may be amended from time to time.

         "NOTICE OF EXCHANGE" means the Notice of Exchange substantially in the
form of Exhibit B to this Agreement.

         "PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.

         "REIT STOCK AMOUNT" means that number of shares of REIT Stock equal to
the product of the number of Partnership Units offered for exchange by an
Exchanging Partner, multiplied by the Exchange Factor as of the Valuation Date,
PROVIDED, that in the event the Company or the Operating Partnership issues to
all holders of REIT Stock rights, options, warrants or convertible or
exchangeable securities entitling the stockholders to subscribe for or purchase
REIT Stock, or any other securities or property (collectively, the "rights"),
then the REIT Stock Amount shall also include such rights that a holder of that
number of shares of REIT Stock would be entitled to receive.

                                       E-2

<PAGE>   87

         "SEC" means the Securities and Exchange Commission.

         "SPECIFIED EXCHANGE DATE" means the tenth (10th) Business Day after
receipt by the Operating Partnership and the Company of a Notice of Exchange;
provided, however, that if the Operating Partnership has more than 99 partners,
as determined in accordance with the provisions of Treasury Regulation Section
1.7704-1(h), then the Specified Exchange Date shall mean the thirty-first
(31st) calendar day after receipt by the Operating Partnership and the Company
of a Notice of Exchange.

         "VALUATION DATE" means the date of receipt by the Operating Partnership
and the Company of a Notice of Exchange or, if such date is not a Business Day,
the first Business Day thereafter.

         "VALUE" means, with respect to shares of REIT Stock, the average of the
daily market price for the five (5) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be:

                  (i) if the REIT Stock are listed or admitted to trading on the
         New York Stock Exchange (the "NYSE"), any other national securities
         exchange or the Nasdaq Stock Market ("Nasdaq"), the closing price on
         such day, or if no such sale takes place on such day, the average of
         the closing bid and asked prices on such day; or

                  (ii) if the REIT Stock are not listed or admitted to trading
         on the NYSE, any national securities exchange or Nasdaq, the last
         reported sale price on such day; or

                  (iii) if no sale takes place on such day, the average of the
         closing bid and asked prices on such day, as reported by a reliable
         quotation source designated by the Company or if the REIT Stock is not
         then traded on any market, as determined in good faith by the Company's
         Independent Directors (as defined by the Company's charter).

In the event the REIT Stock Amount includes rights that a holder of REIT Stock
would be entitled to receive, then the Value of such rights shall be determined
by the independent directors of the Company acting in good faith on the basis of
such quotations and other information as they consider, in their reasonable
judgment, appropriate.

                                   ARTICLE II
                                 EXCHANGE RIGHT

         2.1 EXCHANGE RIGHT. (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5
hereof, and subject to any limitations under applicable law, the Operating
Partnership hereby grants to each Limited Partner and each Limited Partner
hereby accepts the right (the "EXCHANGE RIGHT"), exercisable on or after the
date that is one (1) year after the closing of the Consolidation [add to
definitions], to exchange on a Specified Exchange Date all or a portion of the
Partnership Units held by such Limited Partner at an exchange price equal to and
in the form of the Cash Amount.

                                       E-3

<PAGE>   88

         (b) The Exchange Right shall be exercised pursuant to a Notice of
Exchange delivered to the Operating Partnership, with a copy delivered to the
Company, by the Limited Partner who is exercising the Exchange Right (the
"EXCHANGING PARTNER"); PROVIDED, however, that the Company, on behalf of the
Operating Partnership, may elect, after a Notice of Exchange is delivered, to
satisfy the Exchange Right which is the subject of such notice in accordance
with Section 2.2.

         (c) A Limited Partner may exercise the Exchange Right from time to time
with respect to part or all of the Partnership Units that it owns, as selected
by the Limited Partner, provided that, except as provided in the Agreement, a
Limited Partner may not exercise the Exchange Right for less than one thousand
(1,000) Partnership Units unless such Limited Partner then holds less than one
thousand (1,000) Partnership Units, in which event the Limited Partner must
exercise the Exchange Right for all of the Partnership Units held by such
Limited Partner.

         (d) An Exchanging Partner shall have no right with respect to any
Partnership Units so exchanged to receive any distributions paid after the
Specified Exchange Date with respect to such Partnership Units.

         (e) Any Assignee of a Limited Partner may exercise the rights of such
Limited Partner pursuant to this Article 2, and such Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Assignee.

         (f) In connection with any exercise of such rights by an Assignee on
behalf of a Limited Partner, the Cash Amount or the REIT Stock Amount, as the
case may be, shall be satisfied by the Operating Partnership or the Company, as
the case may be, directly to such Assignee and not to such Limited Partner.

         2.2 OPTION OF COMPANY TO EXCHANGE FOR REIT STOCK. (a) Notwithstanding
the provisions of Section 2.1, the Company may, on behalf of the Operating
Partnership, in its sole and absolute discretion (subject to the limitations on
ownership and transfer of REIT Stock set forth in the Company's charter), elect
to assume directly and satisfy an Exchanging Partner's Exchange Right by
exchanging REIT Stock and rights equal to the REIT Stock Amount on the Specified
Exchange Date for the Partnership Units offered for exchange by the Exchanging
Partner, whereupon the Company shall acquire the Partnership Units offered for
exchange by the Exchanging Partner and shall be treated for all purposes of the
Partnership Agreement as the owner of such Partnership Units. Unless the
Company, in its sole and absolute discretion, shall exercise its right to assume
directly and satisfy the Exchange Right, the Company shall not have any
obligation to the Exchanging Partner or to the Operating Partnership with
respect to the Exchanging Partner's exercise of the Exchange Right. If the
Company shall exercise its right to satisfy the Exchange Right in the manner
described in the first sentence of this Section 2.2 and shall fully perform its
obligations in connection therewith, the Operating Partnership shall have no
right or obligation to pay any amount to the Exchanging Partner with respect to
such Exchanging Partner's exercise of the Exchange Right, and each of the
Exchanging Partner, the Operating Partnership and the Company shall, for federal
income tax purposes, treat the transaction between the Company and the
Exchanging Partner as a sale of the Exchanging

                                       E-4

<PAGE>   89

Partner's Partnership Units to the Company. Nothing contained in this Section
2.2 shall imply any right of the Company to require any Limited Partner to
exercise the Exchange Right afforded to such Limited Partner pursuant to Section
2.1.

         (b) In the event the Company shall elect to satisfy, on behalf of the
Operating Partnership, an Exchanging Partner's Exchange Right by exchanging REIT
Stock for the Partnership Units offered for exchange,

                  (i) the Company hereby agrees so to notify the Exchanging
         Partner within five (5) Business Days after the receipt by the Company
         of such Notice of Exchange,

                  (ii) each Exchanging Partner hereby agrees to execute such
         documents and instruments as the Company may reasonably require in
         connection with the issuance of REIT Stock upon exercise of the
         Exchange Right, and

                  (iii) the Company hereby agrees to deliver stock certificates
         representing fully paid and nonassessable shares of REIT Stock.

         2.3 PROHIBITION OF EXCHANGE FOR REIT STOCK. Notwithstanding anything
herein to the contrary, the Company shall not be entitled to satisfy an
Exchanging Partner's Exchange Right pursuant to Section 2.2 if the delivery of
REIT Stock to such Limited Partner by the Company pursuant to Section 2.2
(regardless of the Operating Partnership's obligations to the Limited Partner
under Section 2.1)

                  (a) would be prohibited under the Articles of Incorporation of
         the Company,

                  (b) if the Company has elected REIT status, would otherwise
         jeopardize the REIT status of the Company, or

                  (c) would cause the acquisition of the REIT Stock by the
         Limited Partner to be "integrated" with any other distribution of REIT
         Stock by the Company for purposes of complying with the registration
         provisions of the Securities Act.

         2.4 PAYMENT DATE. Any Cash Amount to be paid to an Exchanging Partner
shall be paid on the Specified Exchange Date; PROVIDED, HOWEVER, that the
Operating Partnership may elect to cause the Specified Exchange Date to be
delayed for up to an additional 180 days to the extent required for the Company
to cause additional REIT Shares to be issued to provide financing to be used to
make such payment of the Cash Amount by the Operating Partnership.

         2.5 EXPIRATION OF EXCHANGE RIGHT. The Exchange Right shall expire with
respect to any Partnership Units for which an Exchange Notice has not been
delivered to the Operating Partnership and the Company on or before December 31,
2097.

         2.6      EFFECT OF EXCHANGE. (a) Any exchange of Partnership Units
pursuant to this Article 2 shall be deemed to have occurred as of the Specified
Exchange Date for all purposes,

                                       E-5

<PAGE>   90

including without limitation the payment of distributions or dividends in
respect of Partnership Units or REIT Stock, as applicable.

         (b) Any Partnership Units acquired by the Company pursuant to an
exercise by any Limited Partner of an Exchange Right shall be deemed to be
acquired by and reallocated or reissued to the Company.

         (c) The Company, as general partner of the Operating Partnership, shall
amend the Partnership Agreement to reflect each such exchange and reallocation
or reissuance of Partnership Units and each corresponding recalculation of the
Partnership Units of the Limited Partners.

                                   ARTICLE III
                                OTHER PROVISIONS

         3.1 COVENANTS OF THE COMPANY. (a) At all times during the pendency of
the Exchange Right, the Company shall reserve for issuance such number of shares
of REIT Stock as may be necessary to enable the Company to issue such shares in
full payment of the REIT Stock Amount in regard to all Partnership Units held by
Limited Partners which are from time to time outstanding.

         (b) During the pendency of the Exchange Right, the Company shall
deliver to Limited Partners in a timely manner all reports filed by the Company
with the SEC to the extent the Company also transmits such reports to its
stockholders and all other communications transmitted from time to time by the
Company to its stockholders generally.

         (c) The Company shall notify each Limited Partner, upon request, of the
then current Exchange Factor and such notice will include a reasonable
explanation of the Exchange Factor calculation to be applied at such time.

         3.2       FRACTIONAL SHARES. (a) No fractional shares of REIT Stock
shall be issued upon exchange of Partnership Units.

         (b) The number of full shares of REIT Stock which shall be issuable
upon exchange of Partnership Units (or the cash equivalent amount thereof if the
Cash Amount is paid) shall be computed on the basis of the aggregate amount of
Partnership Units so surrendered.

         (c) Instead of any fractional shares of REIT Stock which would
otherwise be issuable upon exchange of any Partnership Units, the Operating
Partnership shall pay a cash adjustment in respect of such fraction in an amount
equal to the Cash Amount of an Partnership Unit multiplied by such fraction.

         3.3       INVESTMENT REPRESENTATIONS AND WARRANTIES.  By delivering
to the Company a Notice of Exchange, each Exchanging Partner will be deemed to
represent and warrant to the

                                       E-6

<PAGE>   91

Company and the Operating Partnership that such Exchanging Partner is aware of
the Company's option to exchange such Exchanging Partner's Partnership Units for
REIT Stock pursuant to Section 2.2 hereof and that:

         (a)      (i) Such Exchanging Partner has received and reviewed

                           (A) a copy of the prospectus/consent solicitation
                  statement contained in the Registration Statement on Form S-4
                  filed by the Company in connection with the Consolidation, any
                  prospectus contained in any Registration Statement
                  subsequently filed by the Company, and any supplement or
                  amendment thereto (each, a "PROSPECTUS"), and

                           (B) if the Company is filing reports under the
                  Securities Exchange Act of 1934, as amended, copies of all
                  reports and other filings (the "SEC REPORTS"), including
                  Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
                  and Current Reports on Form 8-K, made by the Company with the
                  SEC pursuant to the Securities Exchange Act of 1934, as
                  amended, and the rules and regulations thereunder,

and understands the risks of, and other considerations relating to, an
investment in REIT Stock.

                  (ii) Such Exchanging Partner, by reason of its business and
         financial experience, together with the business and financial
         experience of those persons, if any, retained by it to represent or
         advise it with respect to its investment in REIT Stock,

                           (A) has such knowledge, sophistication and experience
                  in financial and business matters and in making investment
                  decisions of this type that it is capable of evaluating the
                  merits and risks of and of making an informed investment
                  decision with respect to an investment in REIT Stock,

                           (B) is capable of protecting its own interest or has
                  engaged representatives or advisors to assist it in protecting
                  its interests and

                           (C) is capable of bearing the economic risk of such
                  investment.

                  (iii) (A) Such Exchanging Partner is an "accredited investor"
                  as defined in Rule 501 of the regulations promulgated under
                  the Securities Act.

                           (B) If such Exchanging Partner has retained or
                  retains a person to represent or advise it with respect to its
                  investment in REIT Stock, such Exchanging Partner will advise
                  the Company of such retention and, at the Company's request,
                  such Exchanging Partner shall, prior to or at delivery of the
                  REIT Stock hereunder,

                                    (I) acknowledge in writing such
                           representation and

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<PAGE>   92

                                    (II) cause such representative or advisor to
                           deliver a certificate to the Company containing such
                           representations as may be reasonably requested by the
                           Company.

         (b)      (i) Such Exchanging Partner understands that an investment
         in the Company involves substantial risks.

                  (ii) Such Exchanging Partner has been given the opportunity to
         make a thorough investigation of the activities of the Company and has
         been furnished with materials relating to the Company and its
         activities, including, without limitation, each Prospectus and the SEC
         Reports.

                  (iii) Such Exchanging Partner has relied and is making its
         investment decision based upon the Prospectus/Consent Solicitation
         Statement relating to the Consolidation and any subsequent Prospectus,
         the SEC Reports and other written information provided to the
         Exchanging Partner by or on behalf of the Company and, as applicable,
         such Exchanging Partner's position as a director or executive officer
         of the Company.

         (c) (i) The REIT Stock to be issued to such Exchanging Partner
         hereunder will be acquired by such Exchanging Partner for its own
         account, for investment only and not with a view to, or with any
         intention of, a distribution or resale thereof, in whole or in part, or
         the grant of any participation therein.

                  (ii) Such Exchanging Partner was not formed for the specific
         purpose of acquiring an interest in the Company.

         (d)      (i) Such Exchanging Partner acknowledges that

                           (A) the shares of REIT Stock to be issued to such
                  Exchanging Partner hereunder have not been registered under
                  the Securities Act or state securities laws by reason of a
                  specific exemption or exemptions from registration under the
                  Securities Act and applicable state securities laws and, the
                  certificates representing such shares of REIT Stock will bear
                  a legend to such effect,

                           (B) the Company's and the Operating Partnership's
                  reliance on such exemptions is predicated in part on the
                  accuracy and completeness of the representations and
                  warranties of such Exchanging Partner contained herein,

                           (C) the REIT Stock to be issued to such Exchanging
                  Partner hereunder may not be resold or otherwise distributed
                  unless registered under the Securities Act and applicable
                  state securities laws, or unless an exemption from
                  registration is available,

                           (D) there may be no market for unregistered shares of
                  REIT Stock, and

                                       E-8

<PAGE>   93

                           (E) the Company has no obligation or intention to
                  register such REIT Stock under the Securities Act or any state
                  securities laws or to take any action that would make
                  available any exemption from the registration requirements of
                  such laws, except as provided in the Registration Rights
                  Agreement entered into by the Company and the Exchanging
                  Partner (the "REGISTRATION RIGHTS AGREEMENT").

                  (ii) Such Exchanging Partner acknowledges that because of the
         restrictions on transfer or assignment of such REIT Stock to be issued
         hereunder, such Exchanging Partner may have to bear the economic risk
         of its investment in REIT Stock issued hereunder for an indefinite
         period of time, although the holder of any such REIT Stock will be
         afforded certain rights to have such REIT Stock registered under the
         Securities Act and applicable state securities laws pursuant to the
         Registration Rights Agreement.

         (e) The address set forth under such Exchanging Partner's name in the
Notice of Exchange is the address of the Exchanging Partner's principal place of
business or, if a natural person, the address of the Exchanging Partner's
residence, and such Exchanging Partner has no present intention of becoming a
resident of any country, state or jurisdiction other than the country and state
in which such principal place of business or residence is situated.

                                   ARTICLE IV
                               GENERAL PROVISIONS

         4.1 ADDRESSES AND NOTICE. Any notice, demand, request or report
required or permitted to be given or made to the Operating Partnership, the
Company, a Limited Partner or Assignee, as the case may be, under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other similarly reliable
means of written communication to the Operating Partnership, the Company, a
Limited Partner or Assignee, as the case may be, (i) at the address listed on
the records of the Operating Partnership, with respect to a Limited Partner or
Assignee, and (ii) at [insert address], Attn: President, with respect to the
Operating Partnership or the Company.

         4.2 TITLES AND CAPTIONS. All article or section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.

         4.3 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.

                                       E-9

<PAGE>   94

         4.4 FURTHER ACTION AND ADDITIONAL RESTRICTIONS. The parties shall
execute and deliver all documents, provide all information and take or refrain
from taking action as may be necessary or appropriate to achieve the purposes of
this Agreement.

         4.5      BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, legal representatives and permitted
assigns.

         4.6 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

         4.7 COUNTERPARTS. This Agreement may be executed in counterparts, all
of which together shall constitute one agreement binding on all of the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.

         4.8      APPLICABLE LAW. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Maryland,
without regard to the principles of conflicts of law thereof.

         4.9 INVALIDITY OF PROVISIONS. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.

         4.10 ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement among the Limited Partners, the Operating Partnership and the
Company with respect to the subject matter hereof and supersedes any other prior
written or oral understandings or agreements among them with respect thereto.

         4.11 AMENDMENT. This Agreement may be amended from time to time with
the consent of the Company by a vote of the Limited Partners in the same manner
as the Partnership Agreement (in accordance with Section 14.1(a) thereof) may be
amended as provided therein, PROVIDED, HOWEVER, that the Company shall vote its
limited partnership interests in proportion to the votes of the other Limited
Partners.

                                      E-10

<PAGE>   95

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

                                  THE COMPANY:

                                  AMERICAN SPECTRUM REALTY, INC.

                                  By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                  OPERATING PARTNERSHIP:

                                  AMERICAN SPECTRUM REALTY OPERATING
                                  PARTNERSHIP, L.P.

                                  BY:      AMERICAN SPECTRUM REALTY, INC., its
                                           general partner

                                           By:
                                                    ---------------------------
                                                    Name:
                                                    Title:

                                      E-11

<PAGE>   96

                                    EXHIBIT A

NAME AND ADDRESS OF LIMITED PARTNER

                                      E-12

<PAGE>   97

                                    EXHIBIT B

                               NOTICE OF EXCHANGE

         The undersigned Limited Partner hereby irrevocably (i) exchanges
___________ Partnership Units in American Spectrum Realty Operating Partnership,
L.P., in accordance with the terms of the Exchange Rights Agreement, dated as of
_______, 199_ (the "EXCHANGE RIGHTS AGREEMENT"), and the Exchange Right referred
to therein; (ii) surrenders such Partnership Units and all right, title and
interest therein; and (iii) directs that the Cash Amount or REIT Stock Amount
(as determined by the Company) deliverable upon exercise of the Exchange Right
be delivered to the address specified below, and if REIT Stock is to be
delivered, such REIT Stock will be registered or placed in the name(s) and at
the address(es) specified below.

         The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such Partnership Units,
free and clear, other than any encumbrance arising pursuant to the Partnership
Agreement, of the rights or interests of any other person or entity; (b) has the
full right, power, and authority to exchange and surrender such Partnership
Units as provided herein; and (c) has obtained the consent or approval of all
persons or entities, if any, (other than consent or approval that may be
required of the Company or the Operating Partnership) having the right to
consent or approve such exchange and surrender on the part of the undersigned.

         The undersigned hereby makes the representations and warranties
contained in Section 3.3 of the Exchange Rights Agreement as if such
representations and warranties had been set forth in full in this Notice of
Exchange.

Dated:
      ------------------------

                                      --------------------------------------
                                      Name of Limited Partner (Please Print)
Signature guaranteed by:
                                      --------------------------------------
                                      (Signature of Limited Partner)
-----------------------------
                                      --------------------------------------
                                      (Street Address)

                                      --------------------------------------
                                      (City) (State)              (Zip Code)

                                      If REIT Stock is to be issued, issue to:

                                      Name:
                                             ---------------------------------

                                      E-13

<PAGE>   98

                                    EXHIBIT B

                               NOTICE OF EXCHANGE

         The undersigned Limited Partner hereby irrevocably (i) exchanges
___________ Class B Partnership Units in American Spectrum Realty Operating
Partnership, L.P., in accordance with the terms of the Exchange Rights
Agreement, dated as of _______, 199_ (the "EXCHANGE RIGHTS AGREEMENT"), and the
Exchange Right referred to therein; (ii) surrenders such Class B Partnership
Units and all right, title and interest therein; and (iii) directs that the Cash
Amount or REIT Stock Amount (as determined by the Company) deliverable upon
exercise of the Exchange Right be delivered to the address specified below, and
if REIT Stock is to be delivered, such REIT Stock will be registered or placed
in the name(s) and at the address(es) specified below.

         The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such Class B
Partnership Units, free and clear, other than any encumbrance arising pursuant
to the Partnership Agreement, of the rights or interests of any other person or
entity; (b) has the full right, power, and authority to exchange and surrender
such Class B Partnership Units as provided herein; and (c) has obtained the
consent or approval of all persons or entities, if any, (other than consent or
approval that may be required of the Company or the Operating Partnership)
having the right to consent or approve such exchange and surrender on the part
of the undersigned.

         The undersigned hereby makes the representations and warranties
contained in Section 3.3 of the Exchange Rights Agreement as if such
representations and warranties had been set forth in full in this Notice of
Exchange.

Dated:
      ------------------------

                                      --------------------------------------
                                      Name of Limited Partner (Please Print)
Signature guaranteed by:
                                      --------------------------------------
                                      (Signature of Limited Partner)
-----------------------------
                                      --------------------------------------
                                      (Street Address)

                                      --------------------------------------
                                      (City) (State)              (Zip Code)

                                      If REIT Stock is to be issued, issue to:

                                      Name:
                                             ---------------------------------

                                       F-1<PAGE>   1
                                                                   EXHIIBT 10.17

                           RESTRICTED STOCK AGREEMENT

         THIS AGREEMENT, made as of the ____ day of ________, ____, by and
between American Spectrum Realty, Inc., a Maryland corporation with its
principal office at 1800 East Deere Avenue, Santa Ana, California 97206 (the
"Company"), and ___________, residing at
____________________________________________ (the "Participant").

         WHEREAS, the Board of Directors of the Company (the "Board") approved
and the stockholders adopted the American Spectrum Realty, Inc. 2000 Omnibus
Stock Incentive Plan (the "Plan");

         WHEREAS, the Board has determined that the Participant receive an award
of Restricted Stock under the Plan.

         NOW, THEREFORE, the Company and the Participant agree as follows:

         1. Grant of Shares.

         Subject to the restrictions, terms and conditions of the Plan and this
Agreement, the Company hereby awards to the Participant _______________ (______)
shares of the validly issued common stock of the Company, par value $.01 per
share (the "Shares"). The Participant shall pay the Company $.01 per Share for
each Share awarded hereunder Pursuant to Section 3 hereof, the Shares are
subject to certain restrictions, which restrictions shall expire in accordance
with the provisions of Section 2 hereof. While such restrictions are in effect,
the Shares subject to such restrictions shall be referred to herein as
"Restricted Stock."

         2. Vesting. The Restricted Stock shall become vested and cease to be
Restricted Stock (but shall remain subject to the other terms of this Agreement)
as follows if the Participant has been continuously employed by the Company or
an Affiliate until such date:

         ----------------------------------------------------------
         VESTING DATE                       NUMBER OF SHARES
         ----------------------------------------------------------
                  Grant Date
         ----------------------------------------------------------
         1st anniversary of Grant Date
         ----------------------------------------------------------
         2nd anniversary of Grant Date
         ----------------------------------------------------------
         3rd anniversary of Grant Date
         ----------------------------------------------------------

         There shall be no proportionate or partial vesting in the periods prior
to the applicable vesting dates and all vesting shall occur only on the
appropriate vesting date.

         In addition, all shares shall become immediately vested and cease to be
Restricted Stock upon any Change in Control.

<PAGE>   2

         3. Restrictions on Transfer. The Participant shall not sell, negotiate,
transfer, pledge, hypothecate, assign or otherwise dispose of the Shares, except
as set forth in the Plan or this Agreement. Any attempted sale, negotiation,
transfer, pledge, hypothecation, assignment or other disposition of the Shares
in violation of the Plan or this Agreement shall be void and of no effect and
the Company shall have the right to disregard the same on its books and records
and to issue "stop transfer" instructions to its transfer agent.

         4. Forfeiture. If the Participant's employment with the Company or any
Affiliate is terminated for any reason (other than death), including, without
limitation, retirement, disability or for Cause during the relevant Restriction
Period, the Participant shall forfeit to the Company, without compensation, any
and all unvested Restricted Stock; provided however that the Participant shall
not forfeit any unvested Restricted Stock if Participant is employed pursuant to
an employment agreement and the termination of employment is for a breach by the
Company or the Participant terminates for "Good Reason" (as defined in the
employment agreement).

         5. Rights as a Holder of Restricted Stock. From and after the Grant
Date, the Participant shall have the right to vote the Restricted Stock, to
receive and retain all cash dividends payable to holders of Shares of record on
and after the Grant Date (although such dividends will be treated, to the extent
required by applicable law, as additional compensation for tax purposes), and to
exercise all other rights, powers and privileges of a holder of Shares with
respect to the Restricted Stock, with the exceptions that the Participant shall
not transfer the Restricted Stock during the Restriction Period.

         6. Adjustments. In the event of any stock dividend, split up,
split-off, spin-off, distribution, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or liquidation or the like, the
Restricted Stock shall, where appropriate in the sole discretion of the Board,
receive the same distributions as other Shares or be adjusted either on the same
basis as other Shares or on some other basis as determined by the Board. In any
such event, the Board may, in its sole discretion, determine to award additional
Restricted Stock in lieu of the distribution or adjustment being made with
respect to other Shares. In any such event, the determination made by the Board
shall be conclusive.

         7. Taxes; Section 83(b) Election. The Participant acknowledges, subject
to the last sentence of this paragraph, that (i) no later than the date on which
any Restricted Stock shall have become vested, the Participant shall pay to the
Company, or make arrangements satisfactory to the Company regarding payment of,
any Federal, state or local taxes of any kind required by law to be withheld
with respect to any Restricted Stock which shall have become so vested; (ii) the
Company shall, to the extent permitted by law, have the right to deduct from any
payment of any kind otherwise due to the Participant any Federal, state or local
taxes of any kind required by law to be withheld with respect to any Restricted
Stock which shall have become so vested, including that the Company may, but
shall not be required to, sell a number of Shares sufficient to cover applicable
withholding taxes; and (iii) in the event that the Participant does not satisfy
(i) above on a timely basis, the Company may, but shall not be required to, pay
such required withholding and treat such amount as a demand loan to you at

                                       -2-

<PAGE>   3

the maximum rate permitted by law, with such loan, at the Company's sole
discretion and provided the Company so notifies the Participant within 30 days
of the making of the loan, secured by the Shares and any failure by you to pay
the loan upon demand shall entitle the Company to all of the rights at law of a
creditor secured by the Shares. The Company may hold as security any
certificates representing any Shares and, upon demand of the Company, the
Participant shall deliver to the Company any certificates in his or her
possession representing Shares together with a stock power duly endorsed in
blank. The Participant also acknowledges that it is his or her sole
responsibility, and not the Company's, to file timely and properly any election
under Section 83(b) of the Internal Revenue Code and any corresponding
provisions of state tax laws, if you wish to utilize such election.

         8. Legend. In the event that a certificate evidencing Restricted Stock
is issued, the certificate representing the Shares shall have endorsed thereon
the following legends:

            (a) "THE ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE,
ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF AMERICAN SPECTRUM REALTY,
INC. (THE "COMPANY") 2000 OMNIBUS STOCK INCENTIVE PLAN AND AN AGREEMENT ENTERED
INTO BETWEEN THE REGISTERED OWNER AND THE COMPANY DATED AS OF THE ___ DAY OF
________, ____. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY."

            (b) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."

            (c) Any legend required to be placed thereon by applicable blue sky
laws of any state.

         Notwithstanding the foregoing, in no event shall the Company be
obligated to issue a certificate representing the Restricted Stock prior to
vesting as set forth in Section 2 hereof.

                                       -3-

<PAGE>   4

               9. Company Call Rights. In the event of the Participant's
termination of employment by the Company for Cause, the Company may repurchase
from the Participant any shares of Common Stock previously acquired by the
Participant through the award of Restricted Stock under the Plan at a repurchase
price equal to the lesser of (i) the par value paid for such Restricted Stock or
(ii) the Fair Market Value of a Share as of the date of termination.

               10. Securities Representations. The Shares are being issued to
the Participant and this Agreement is being made by the Company in reliance upon
the following express representations and warranties of the Participant.

               The Participant acknowledges, represents and warrants that:

                   (a) the Shares are being acquired for his own account and not
with a view to, or for sale in connection with, the distribution thereof, nor
with any present intention of distributing or selling any of such Shares;

                   (b) he has been advised that the Shares have not been
registered under the Securities Act of 1933 (the "Act") on the ground that no
distribution or public offering of the Shares is to be effected, and in this
connection the Company is relying in part on his representations set forth in
this Section;

                   (c) in the event that the Participant is permitted to sell,
transfer, pledge, hypothecate, assign or otherwise dispose of the Shares, the
Participant may only do so pursuant to a registration statement under the Act
and qualification under applicable state securities laws or pursuant to an
opinion of counsel satisfactory to the Company that such registration and
qualification are not required, and that the transaction (if it involves a sale
in the over-the-counter market or on a securities exchange) does not violate the
provisions of Rule 144 under the Act. A stop-transfer order will be placed on
the books of the Company respecting the certificates evidencing the Shares, and
such certificates shall bear, until such time as the Shares evidenced by such
certificates shall have been registered under the Act or shall have been
transferred in accordance with an opinion of counsel for the Company that such
registration is not required, the legends set forth in Section 8 thereof;

                   (d) the transfer of the Shares has not been registered under
the Act, and the Shares must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available and the
Company is under no obligation to register the Shares; and

                   (e) he understands that the Shares are restricted securities
within the meaning of Rule 144 promulgated under the Act; that the exemption
form registration under Rule 144 will not be available unless: (i) a public
trading market then exists for the common stock of the Company; (ii) adequate
information concerning the Company is then available to the public; and (iii)
other terms and conditions of Rule 144 or any exemption therefrom are complied
with; and that any sale of the Shares may be made only in limited amounts in
accordance with such terms and conditions.

                                       -4-

<PAGE>   5

         11. LOCK UP. Participant agrees that in connection with any
registration of the Company's securities that, upon request of the Company or
the underwriter managing any public offering of the Company's securities,
Participant will not sell or otherwise dispose of any shares of Common Stock
without the prior written consent of the Company or such underwriter, as the
case may be, for a period of time (not to exceed one (1) year) from the
effective date of such registration as the Company or the underwriter may
specify for persons of Participant's status.

         12. Not an Employment Agreement. Neither the execution of this
Agreement nor the issuance of the Shares hereunder constitute an agreement by
the Company to employ or to continue to employ the Participant during the
entire, or any portion of, the term of this Agreement, including but not limited
to any period during which any Restricted Stock is outstanding.

         13. Power of Attorney. The Company, its successors and assigns, is
hereby appointed the attorney-in-fact, with full power of substitution, of the
Participant for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instruments which such attorney-in-fact may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Participant, may in the name and stead of the
Participant, make and execute all conveyances, assignments and transfers of the
Restricted Stock, other RS Property, Shares and property provided for herein,
and the Participant hereby ratifies and confirms all that the Company, as said
attorney-in-fact, shall do by virtue hereof. Nevertheless, the Participant
shall, if so requested by the Company, execute and deliver to the Company all
such instruments as may, in the judgment of the Company, be advisable for this
purpose.

         14. Uncertificated Shares. Notwithstanding anything else herein, the
Committee may, in its sole and absolute discretion, subject to the terms of the
Plan, issue the Shares in the form of uncertificated shares. Such uncertificated
shares of Restricted Stock shall be credited to a book entry account maintained
by the Company (or its designee) on behalf of the Participant. If thereafter
certificates are issued with respect to such uncertificated shares of Restricted
Stock, such issuance and delivery of certificates shall be in accordance with
the applicable terms of this Agreement.

         15. Miscellaneous.

            15.1 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, personal legal
representatives, successors, trustees, administrators, distributees, devisees
and legatees. The Company may assign to, and require, any successor (whether
direct or indirect, by purchase, merger, consolidation or

                                       -5-

<PAGE>   6

otherwise) to all or substantially all of the business and/or assets of the
Company or any Affiliate by which you the Participant is employed to expressly
assume and agree in writing to perform this Agreement. Notwithstanding the
foregoing, the Participant may not assign this Agreement.

            15.2 This award of Restricted Stock shall not affect in any way the
right or power of the Board or stockholders of the Company to make or authorize
an adjustment, recapitalization or other change in the capital structure or the
business of the Company, any merger or consolidation of the Company or
subsidiaries, any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock, the dissolution or liquidation of
the Company or any Affiliate, any sale or transfer of all or part of its assets
or business or any other corporate act or proceeding.

            15.3 The Participant agrees that the award of the Restricted Stock
hereunder is special incentive compensation and that it, any dividends paid
thereon (even if treated as compensation for tax purposes) will not be taken
into account as "salary" or "compensation" or "bonus" in determining the amount
of any payment under any pension, retirement or profit-sharing plan of the
Company or any life insurance, disability or other benefit plan of the Company.

            15.4 No modification or waiver of any of the provisions of this
Agreement shall be effective unless in writing and signed by the party against
whom it is sought to be enforced.

            15.5 This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one contract.

            15.6 The failure of any party hereto at any time to require
performance by another party of any provision of this Agreement shall not affect
the right of such party to require performance of that provision, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.

            15.7 The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
modify any of the terms or provisions hereof.

                                       -6-

<PAGE>   7

            15.8 The Company shall pay all fees and expenses necessarily
incurred by the Company in connection with the Plan and this Agreement and will
from time to time use its reasonable efforts to comply with all laws and
regulations which, in the opinion of counsel to the Company, are applicable
thereto.

            15.9 All notices, consents, requests, approvals, instructions and
other communications provided for herein shall be in writing and validly given
or made when delivered, or on the second succeeding business day after being
mailed by registered or certified mail, whichever is earlier, to the persons
entitled or required to receive the same, at the addresses set forth at the
heading of this Agreement or to such other address as either party may designate
by like notice. Notices to the Company shall be addressed to the Chairman of the
Committee with a copy similarly sent to the General Counsel.

            15.10 This Agreement and the award hereunder is subject to all the
restrictions, terms and provisions of the Plan which are incorporated herein by
reference. In the event of an inconsistency between any provision of the Plan
and this Agreement, unless otherwise indicated, the terms of the Plan shall
control. The capitalized terms in this Agreement that are not otherwise defined
shall have the same meaning as set forth in the Plan.

            15.11 By executing this Agreement and by paying the price (if any)
required hereunder within 90 days after the day and year first above written,
the award of Restricted Stock shall be accepted by the Participant.

            15.12 This Agreement shall be construed, interpreted and governed
and the legal relationships of the parties determined in accordance with the
internal laws of the State of Maryland without reference to rules relating to
conflicts of law.

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.

                                             AMERICAN SPECTRUM REALTY, INC.

                                             By
                                                --------------------------------
                                                (Title)

                                             -----------------------------------
                                                (Participant)

                                       -7-

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