<PAGE>

                                                                     EXHIBIT 3.2

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                       AMERICAN REAL ESTATE PARTNERS, L.P

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                                TABLE OF CONTENTS

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         PREAMBLE .............................................................................................       1

I.       CERTAIN DEFINITIONS ..................................................................................       1

II.      FORMATION; NAME; PLACE OF BUSINESS; TERM..............................................................      10
         2.01     Formation of Partnership; Certificate of Limited Partnership ................................      10
         2.02     Name of Partnership .........................................................................      11
         2.03     Place of Business ...........................................................................      11
         2.04     Registered Office and Registered Agent.......................................................      11
         2.05     Term.........................................................................................      12

III.     PURPOSES; NATURE OF BUSINESS..........................................................................      12
         3.01     Purposes and Business .......................................................................      12

IV.      CAPITAL ..............................................................................................      12

         4.01     Capital Contributions of General Partner.....................................................      12
         4.02     Capital Contribution of Organizational Limited Partner ......................................      12
         4.03     Initial Capital Contributions ...............................................................      12
         4.04     Non-Assessability of Units...................................................................      13
         4.05     Additional Issuance of Units; Additional Issuance of Securities..............................      13
         4.06     Splits and Combinations .....................................................................      15
         4.07     No Preemptive Rights.........................................................................      15
         4.08     Capital Accounts ............................................................................      16
         4.09     Negative Capital Accounts ...................................................................      18
         4.10     No Interest on Amounts in Capital Accounts...................................................      19
         4.11     Loans by the General Partner and Record Holders .............................................      19
         4.12     Liability of Record Holders .................................................................      19

V.       ALLOCATIONS OF INCOME AND LOSS; DISTRIBUTIONS  .......................................................      19
         5.01     Capital Account Allocations .................................................................      19
         5.02     Tax Allocations .............................................................................      20
         5.03     Distributions of Cash Flow and Capital Proceeds..............................................      23
         5.04     Distributions and Allocations of Income and Loss With Respect to Interests Transferred ......      24
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VI.      MANAGEMENT............................................................................................      25
         6.01     Management and Control of Partnership .......................................................      25
         6.02     Powers of General Partner ...................................................................      25
         6.03     Purchase or Sale of Units ...................................................................      26
         6.04     Compensation Plans ..........................................................................      26
         6.05     Distributions ...............................................................................      26
         6.06     Election to Be Governed by Successor Limited Partnership Law ................................      26
         6.07     Operating Partnership .......................................................................      27
         6.08     Restrictions on Authority of General Partner.................................................      27
         6.09     Reliance by Third Parties ...................................................................      28
         6.10     Title to Partnership Assets .................................................................      28
         6.11     Other Business Activities of Partners .......................................................      29
         6.12     Transactions with General Partner or Affiliates..............................................      29
         6.13     Audit Committee; Resolution of Conflicts of Interest ........................................      29
         6.14     Liability of General Partner to Partnership and Limited Partners.............................      30
         6.15     Indemnification of General Partner and Affiliates............................................      31
         6.16     No Management by Record Holders .............................................................      32
         6.17     National Securities Exchange Listing.........................................................      33
         6.18     Other Matters Concerning General Partner.....................................................      33

VII.     REIMBURSEMENT OF EXPENSES ............................................................................      34
         7.01     Reimbursement of Expenses of General Partner ................................................      34
         7.02     Remuneration of General Partner and Affiliates ..............................................      34

VIII.    BANK ACCOUNTS; BOOKS AND RECORDS; FISCAL YEAR;
         REPORTS; TAX MATTERS .................................................................................      35
         8.01     Bank Accounts ...............................................................................      35
         8.02     Books and Records ...........................................................................      35
         8.03     Fiscal Year .................................................................................      36
         8.04     Reports .....................................................................................      36
         8.05     Accounting Decisions ........................................................................      37
         8.06     Where Maintained ............................................................................      37
         8.07     Preparation of Tax Returns...................................................................      37
         8.08     Tax Elections ...............................................................................      38
         8.09     Tax Controversies ...........................................................................      38
         8.10     Taxation as a Partnership ...................................................................      38
         8.11     Determination of Adjusted Basis in Connection With Section 754 Election......................      38
         8.12     FIRPTA and State Income Tax Withholding .....................................................      39
         8.13     Loss of Partnership Status...................................................................      39
         8.14     Opinions Regarding Taxation .................................................................      40
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IX.      ISSUANCE AND DEPOSIT OF CERTIFICATES OF PARTNERSHIP INTEREST .........................................      40
         9.01     Issuance of Certificates.....................................................................      40
         9.02     Lost, Stolen, Destroyed or Mutilated Certificates or Depositary Receipts ....................      40
         9.03     Record Holder ...............................................................................      41

X.       TRANSFER OF INTERESTS AND UNITS ......................................................................      42
         10.01    Transfer ....................................................................................      42
         10.02    Transfers of Interest of General Partner ....................................................      42
         10.03    Transfer of Units ...........................................................................      43
         10.04    Transfer of Depositary Units ................................................................      43

XI.      ADMISSION OF PARTNERS ................................................................................      45
         11.01    Admission of Limited Partners................................................................      45
         11.02    Admission of Substituted Limited Partner.....................................................      46
         11.03    Admission of Successor General Partner ......................................................      48
         11.04    Admission of Additional Limited Partners ....................................................      48

XII.     WITHDRAWAL OR REMOVAL OF GENERAL PARTNER..............................................................      49
         12.01    Withdrawal of General Partner................................................................      49
         12.02    Removal of General Partner ..................................................................      49
         12.03    Amendment of Agreement and Certificate of Limited Partnership................................      50
         12.04    Interests of Departing General Partner and Successor ........................................      50

XIII.    DISSOLUTION AND LIQUIDATION ..........................................................................      53
         13.01    No Dissolution ..............................................................................      53
         13.02    Events Causing Dissolution ..................................................................      53
         13.03    Right to Continue Business of Partnership ...................................................      54
         13.04    Dissolution .................................................................................      54
         13.05    Liquidation..................................................................................      56
         13.06    Reasonable Time for Winding Up...............................................................      56
         13.07    Termination of Partnership ..................................................................      56

XIV.     AMENDMENTS; MEETINGS; VOTING; RECORD DATE ............................................................      56
         14.01    Amendments to be Adopted Solely by General Partner ..........................................      56
         14.02    Amendment Procedures ........................................................................      58
         14.03    Amendment Restrictions ......................................................................      58
         14.04    Meetings ....................................................................................      59
         14.05    Notice of Meeting............................................................................      60
         14.06    Record Date..................................................................................      60
         14.07    Adjournment..................................................................................      60
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         14.08    Waiver of Notice; Consent to Meeting; Approval of Minutes....................................      60
         14.09    Quorum ......................................................................................      61
         14.10    Conduct of Meeting...........................................................................      61
         14.11    Voting Rights................................................................................      62
         14.12    Voting Rights Conditional....................................................................      63
         14.13    Action Without a Meeting ....................................................................      64

XV.      POWER OF ATTORNEY ....................................................................................      64

XVI.     MISCELLANEOUS PROVISIONS..............................................................................      66
         16.01    Additional Actions and Documents ............................................................      66
         16.02    Notices......................................................................................      66
         16.03    Severability ................................................................................      67
         16.04    Survival ....................................................................................      67
         16.05    Waivers......................................................................................      67
         16.06    Exercise of Rights ..........................................................................      68
         16.07    Binding Effect ..............................................................................      68
         16.08    Limitation on Benefits of this Agreement ....................................................      68
         16.09    Force Majeure................................................................................      68
         16.10    Consent of Record Holders....................................................................      68

         16.11    Entire Agreement ............................................................................      69
         16.12    Pronouns.....................................................................................      69
         16.13    Headings ....................................................................................      69
         16.14    Governing Law................................................................................      69
         16.15    Execution in Counterparts....................................................................      69

                                LIST OF EXHIBITS

Exhibit

         A        Certificate for Limited Partner Units of American Real Estate Partners, L.P..................      71
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                              AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                       AMERICAN REAL ESTATE PARTNERS, L.P.

         This Amended and Restated Agreement of Limited Partnership (this
"Agreement") is entered into as of May 12, 1987, by and among American Property
Investors, Inc., a Delaware corporation, as general partner (the "General
Partner"), and Julia DeSantis, as the organizational limited partner (the
"Organizational Limited Partner"), and all other persons and entities who shall
in the future become limited partners of this limited partnership in accordance
with the provisions hereof (the "Limited Partners"). (The General Partner and
the Limited Partners are sometimes hereinafter referred to individually as a
"Partner" and collectively as the "Partners".)

         Whereas, the General Partner and the Organizational Limited Partner
entered into an Agreement of Limited Partnership, dated as of April 29, 1987
(the "Partnership Agreement"); and

         Whereas, the General Partner and the Organizational Limited Partner now
desire to amend the Partnership Agreement in certain respects;

         Now, Therefore, in consideration of the foregoing and of the covenants
and agreements hereinafter set forth, the Partnership Agreement is hereby
amended and restated in its entirety to read as follows:

                                    ARTICLE I

                               Certain Definitions

         Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for all purposes of this Agreement, have the meanings
herein specified.

         Accounting Firm: The firm of Touche Ross & Co. or such other nationally
recognized firm of independent public accountants as shall be selected and
approved by the General Partner from time to time.

         Additional Limited Partner: A Person admitted to the Partnership as a
Limited Partner pursuant to Section 11.04 and shown as a Limited Partner on the
books and records of both the Partnership and the Depositary.

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         Adjusted Property: Any property the Carrying Value of which has been
adjusted pursuant to Section 4.08(d) (i).

         Affiliate: (a) Any Person directly or indirectly owning, controlling or
holding power to vote ten percent (10%) or more of the outstanding voting
securities of the Person in question; (b) any Person ten percent (10%) or more
of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote by the Person in question; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the Person in question; (d) if the Person in question is a corporation, any
executive officer or director of the Person in question or of any corporation
directly or indirectly controlling the Person in question; and (e) if the Person
in question is a partnership, any general partner owning or controlling ten
percent (10%) or more of either the capital or profit interests in such
partnership. As used in this definition of "Affiliate," the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

         Agreed Value: The fair market value of a Contributed Property as of the
date of contribution, as determined by the General Partner using such reasonable
methods as may be adopted by the General Partner.

         Agreement: This Amended and Restated Agreement of Limited Partnership,
as it may be amended or supplemented from time to time.

         API Certificate: A certificate evidencing limited partner interests in
any one of the API Partnerships.

         API Investor: A Person who was a general partner of one or more API
Partnerships, an Affiliate of one or more such API general partners who
performed certain services for one or more of the API Partnerships and a Person
who was a limited partner in one or more of the API Partnerships.

         API Partnerships: The thirteen American Property Investors limited
partnerships, as described in the Registration Statement.

         API Property: Any interest in real estate held by any of the API
Partnerships.

         Audit Committee: The committee comprised of directors of the General
Partner not affiliated with the General Partner or its Affiliates, other than as
a director of the General Partner, formed to review certain conflicts of
interest and certain other

                                       2

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         matters and to perform certain other functions pursuant to Section
5.13.

         Book-Tax Disparities: The differences between a Partner's Capital
Account balance, as maintained pursuant to Section 4.08, and such balance had
the Capital Account been maintained strictly in accordance with tax accounting
principles (such disparities reflecting the differences between the Carrying
Value of either Contributed Properties or Adjusted Properties, as adjusted from
time to time, and the adjusted basis thereof for federal income tax purposes).

         Business Day: Monday through Friday of each week, except that a legal
holiday recognized as such by the Government of the United States or the State
of New York shall not be regarded as a Business Day.

         Capital Account: The capital account established and maintained for the
General Partner and each Record Holder pursuant to Section 4.08.

         Capital Contribution: Any cash, cash equivalents or Contributed
Property contributed to the Partnership by or on behalf of a Contributing
Partner pursuant to Article IV.

         Capital Transaction: Any (1) incurring of indebtedness secured by
Partnership Assets, (2) refinancing of any indebtedness secured by Partnership
Assets, (3) sale or exchange, liquidation or other disposition of any
Partnership Assets, (4) net condemnation award or casualty loss recovery with
respect to any Partnership Assets, (5) elimination of any funded reserve or (6)
liquidation or dissolution of the Partnership.

         Carrying Value: With respect to (a) Contributed Property, the Agreed
Value of such Property reduced (but not below zero) by all deductions for
depreciation, amortization, cost recovery and expense in lieu of depreciation
debited to the Capital Accounts of a General Partner and the Record Holders
pursuant to Section 4.08(a) with respect to such Property as of the time of
determination, and (b) any other property, the adjusted basis of such property
for federal income tax purposes as of the time of determination. The Carrying
Value of any property shall be adjusted in accordance with Section 4.08(d), and
to reflect changes, additions, or other adjustments to the Carrying Value for
dispositions, acquisitions or improvements of Partnership Assets, as deemed
appropriate by the General Partner.

         Cash Flow: Cash Flow shall have the same meaning as "Net Cash Flow" in
the Registration Statement.

                                       3

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         Certificate: A non-negotiable certificate issued by the Partnership
substantially in the form of Exhibit A to this Agreement, evidencing ownership
of one or more Units.

         Certificate of Limited Partnership: The certificate of limited
partnership filed on behalf of the Partnership with the Secretary of State of
the State of Delaware, as the same may be amended and/or restated from time to
time.

         Closing: The "closing time" as defined in the Merger Agreement.

         Closing Date: The date on which the Closing occurs.

         Code: The Internal Revenue Code of 1986, in effect from time to time,
and 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.

         Commission: The Securities and Exchange Commission.

         Consent Form: The form of consent distributed to API Investors who are
limited partners in the API Partnerships soliciting their approval of the
Exchange and all transactions contemplated thereby, a form of which is attached
as Appendix D to the Proxy Statement/Prospectus included as part of the
Registration Statement.

         Contributed Property: A Contributing Partner's interest in each
property or other consideration, in such form as may be permitted by the
Delaware Act, but excluding cash and cash equivalents, contributed to the
Partnership by such Contributing Partner (or deemed contributed to the
Partnership upon termination thereof pursuant to Section 708 of the Code). Once
the Carrying Value of a Contributed Property is adjusted pursuant to Section
4.08(d) (i), such property shall no longer constitute a Contributed Property for
purposes of Section 5.02(b) but shall be deemed an Adjusted Property for such
purposes.

         Contributing Partner: Each Partner contributing (or deemed to have
contributed upon termination of the Partnership pursuant to Section 708 of the
Code) a Contributed Property.

         Delaware Act: The Delaware Revised Uniform Limited Partnership Act
(Del. Code Ann. tit. 6 Sections 17-101 et seq.), as amended to date and as it
may be amended from time to time hereafter, and any successor to such Act.

                                       4

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         Deposit Account: The account established by the Depositary pursuant to
the Depositary Agreement.

         Depositary Agreement: The agreement so designated to be entered into by
and among the General Partner, in its capacity both as General Partner and as
attorney-in-fact of the Record Holders, the Partnership and the Depositary, as
it may be amended or supplemented from time to time.

         Depositary: The Partnership's depositary, as selected and approved by
the General Partner from time to time, in its sole and absolute discretion, or
any successor to it as depositary under the Depositary Agreement.

         Depositary Receipt: A depositary receipt, issued by the Depositary or
agents appointed by the Depositary in accordance with the Depositary Agreement,
evidencing ownership of one or more Depositary Units.

         Depositary Unit: A Unit on deposit with the Depositary.

         Exchange: The acquisition by the Operating Partnership of the API
Properties and other assets, subject to the liabilities, of the API Partnerships
in connection with which the API Investors will be issued Units and the
Partnership will acquire a 99% limited partner interest in the Operating
Partnership, as described in the Registration Statement.

         Exchange Act: The Securities Exchange Act of 1934, as amended, and the
regulations of the Commission promulgated thereunder.

         FIRPTA: The Foreign Investment in Real Property Tax Act of 1980, as
amended from time to time, and applicable regulations thereunder.

         Fiscal year: The fiscal year of the Partnership for financial
accounting purposes, and for federal, state, and local income tax purposes,
which shall be the calendar year unless changed by the General Partner in
accordance with Section 8.03.

         General Partner: American Property Investors, Inc., a Delaware
corporation, or any successor appointed pursuant to Sections 11.03, 12.01 or
12.02 hereof, as the case may be.

         Limited Partner: A Record Holder or other limited partner admitted to
the Partnership pursuant to Section 11.04. "Limited Partners" means all Record
Holders and all other limited partners admitted to the Partnership pursuant to
Section 11.04.

                                       5

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         Liquidating Trustee: The General Partner, unless the dissolution of the
Partnership is caused by the withdrawal, bankruptcy, removal or dissolution of
the General Partner, in which event the Liquidating Trustee shall be the Person
or Persons selected pursuant to Section 13.05.

         Lost Certificate Affidavit: The section of the Consent Form (or a
similar form providing indemnification) to be executed in favor of the
Partnership by an API Investor who has lost or misplaced an API Certificate or
whose API Certificate has been mutilated or destroyed.

         Majority Interest: Record Holders who are Record Holders with respect
to more than fifty percent (50%) of the total number of all outstanding Units.

         Merger: The merger of the API Partnerships that approve the Exchange
with and into the Operating Partnership, as described in the Registration
Statement.

         Merger Agreements: Agreements pursuant to which the API Partnerships
that approve the Exchange are merged into the Operating Partnership and pursuant
to which the API Properties and the other assets, subject to the liabilities, of
the API Partnerships are contributed to the Operating Partnership pursuant to
Section 4.03 of the OLP Partnership Agreement, a form of which is attached as
Appendix B to the Proxy Statement/Prospectus included as part of the
Registration Statement.

         NASDAQ: The National Association of Securities Dealers Automated
Quotations System.

         National Securities Exchange: An exchange registered with the
Commission under Section 6(a) of the Exchange Act.

         New Property: Any direct or indirect interest in real estate acquired
by the Partnership or by the Operating Partnership subsequent to the
consummation of the Exchange.

         Nominee: API Nominee Corp., a Delaware corporation, to whom Depositary
Receipts evidencing Depositary Units are issued pursuant to the Exchange to be
held for the account of Non-Consenting Investors, as described in the
Registration Statement.

         Non-Consenting Investor: As used herein, this term shall have the same
meaning assigned to it in the Registration Statement. Non-Consenting Investors
may only be admitted as Limited Partners as provided in Section 11.01(b) hereof.

         OLP Partnership Agreement: The Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, as it may be amended or
supplemented from time to time.

         Operating Partnership: American Real Estate Holdings Limited
Partnership, a Delaware limited partnership.

         Organizational Limited Partner: Julia DeSantis.

                                       6

<PAGE>

         Partner: The General Partner or a Limited Partner. "Partners" means the
General Partner and all Limited Partners.

         Partnership: The limited partnership governed by this Agreement and any
successor limited partnership thereto continuing the business of the Partnership
which is a reformation or reconstitution of the limited partnership governed by
this Agreement.

         Partnership Assets: All assets and property, whether tangible or
intangible and whether real, personal or mixed, at any time owned by the
Partnership.

         Partnership Interest: As to any Partner, all of the interests of that
Partner in the Partnership, including, without limitation, such Partner's (i)
right to a distributive share of the profits and losses of the Partnership, (ii)
right to a distributive share of Partnership Assets and (iii) right, if the
General Partner, to participate in the management of the business and affairs of
the Partnership.

         Percentage Interest: The Percentage Interest of the General Partner
shall be one percent (1%). The Percentage Interest of each Record Holder is
equal to the product of (i) ninety-nine percent (99%) multiplied by (ii) the
Unit Fraction for such Record Holder.

         Person: Any individual, corporation, association, partnership, joint
venture, trust, estate, unincorporated organization, association or other
entity.

         Property Management Agreement: The agreement to be entered into on the
Closing Date by and between the Operating Partnership and Resources Property
Management Corp., a Delaware corporation, pursuant to which Resources Property
Management Corp. will perform certain property management and supervisory
services in respect of the New Properties.

         Recapture Income: Any gain recognized by the Partnership (but computed
without regard to any adjustment required by Sections 734 or 743 of the Code) on
the disposition of any Partnership Asset that does not constitute capital gain
for federal income tax purposes because such gain represents the recapture of

                                       7

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         deductions previously taken with respect to such property or assets.

         Record Date: The date established by the General Partner, in its
discretion, subject to Section 5.04(b) in the case of the Record Date for a
distribution pursuant to Article V, for determining (i) the identity of Record
Holders entitled to notice of or to vote at any meeting of Record Holders or
entitled to exercise rights in respect of any other lawful action of Record
Holders, or (ii) the identity of Partners entitled to receive any report
pursuant to Section 8.04 or distribution pursuant to Article V.

         Record Holder: As applied to a Depositary Unit, the Limited Partner or
Subsequent Transferee in whose name the Depositary Receipt evidencing such
Depositary Unit is issued on the books of the Depositary or a Transfer Agent as
of the close of business on a particular day; and as applied to a Unit that is
not on deposit in the Deposit Account, the Person shown as the owner of such
Unit on the records of the Partnership as of the close of business on a
particular day.

         Registration Statement: The Registration Statement on Form S-4 to be
filed by the Partnership with the Commission under the Securities Act to
register the offering and sale of the Depositary Units pursuant to the Exchange,
as the same may be amended from time to time.

         Residual Gain or Residual Loss: Any net gain or net loss, as the case
may be, of the Partnership recognized for federal income tax purposes resulting
from a sale, exchange or other disposition of a Contributed Property or Adjusted
Property, to the extent such net gain or net loss is not allocated pursuant to
Section 5.02(b) to eliminate Book-Tax Disparities.

         Section 754 Election: The election which may be made by the Partnership
pursuant to Section 754 of the Code.

         Securities Act: The Securities Act of 1933, as amended, and the
regulations of the Commission promulgated thereunder.

         Subsequent Transferee: A Person to whom one or more Depositary Units
have been transferred, by assignment of a Depositary Receipt or otherwise, in a
manner permitted under this Agreement, but who has not been admitted to the
Partnership as a Substituted Limited Partner with respect to such Depositary
Units. The rights of any such Person in the Partnership with respect to
Depositary Units for which such Person has not been admitted to the Partnership
as a Substituted Limited Partner shall be limited to the right to freely
transfer the Depositary Units held by such Person. Unless and until such Person
executes and delivers a

                                       8

<PAGE>

Transfer Application to the Depositary, such Person will not become a Record
Holder or a Substituted Limited Partner and will not be entitled to any of the
rights to which Limited Partners or Record Holders are entitled under the
Delaware Act or this Agreement.

         Substituted Limited Partner: A Person who is admitted to the
Partnership as a Limited Partner in place of, and with all the rights of, a
Limited Partner in accordance with Section 11.02.

         Termination Date: December 31, 2085.

         Transfer Agent: The Depositary or any bank, trust company or other
Person (including the General Partner or any of its Affiliates) appointed by the
General Partner from time to time, in its sole and absolute discretion, to act
as transfer agent for Depositary Units.

         Transfer Application: An application and agreement for transfer of
Depositary Units in the form set forth on the back of the Depositary Receipt or
in a form substantially to the same effect in a separate instrument (A) upon the
execution and submission of which a Non-Consenting Investor (in addition to the
submission of his API Certificates or, in lieu thereof, his execution of a Lost
Certificate Affidavit) or Subsequent Transferee requests the Depositary to
recognize him as a Record Holder and (B) by which such a Non-Consenting Investor
or Subsequent Transferee (i) requests admission to the Partnership as a
Substituted Limited Partner, (ii) agrees to be bound by the terms and conditions
of this Agreement and the Depositary Agreement, (iii) represents that he has the
capacity and authority to enter into this Agreement and the Depositary
Agreement, (iv) grants a power of attorney to the General Partner and (v) makes
the consents and waivers contained herein.

         Unit: A Partnership Interest in the Partnership, other than the General
Partner's Partnership Interest as a General Partner, acquired or issued pursuant
to this Agreement, provided that each Unit at any time outstanding shall
represent the same fractional part of the Partnership Interests of all Record
Holders as each other Unit (unless any class or series of Units issued pursuant
to Section 4.05 shall have designations, preferences or special rights such that
a Unit of such class or series shall represent a greater or lesser part of the
Partnership Interests of all Record Holders than a Unit of any other class or
series of Units, in which event the Partnership Interest represented by a Unit
of such class or series shall be determined in accordance with such
designations, preferences and special rights as are fixed by the General Partner
pursuant to Section 4.05 with respect to such class or series of Units).

                                       9

<PAGE>

         Unit Fraction: With respect to any Record Holder, a fraction, the
numerator of which is the number of Depositary Units and held by such Record
Holder as of the date of such determination and the denominator of which is the
total number of Depositary Units and Units outstanding as of the date of such
determination.

         Unit Price: Of a Depositary Unit, as of any date of determination: (i)
if the Depositary Units are listed or admitted to trading on one or more
National Securities Exchanges, the last reported sale price per Depositary Unit
regular way or, in case no such reported sale takes place on any such day, the
last reported bid price per Depositary Unit regular way, in either case on the
principal National Securities Exchange on which the Depositary Units are listed
or admitted to trading, on the date of determination; (ii) if the Depositary
Units are not listed or admitted to trading on a National Securities Exchange
but are quoted by NASDAQ, the closing bid price per Depositary Unit, on the date
of determination, as furnished by the National Quotation Bureau Incorporated or
such other nationally recognized quotation service as may be selected by the
General Partner for such purpose, if such Bureau is not at the time furnishing
quotations; or (iii) if the Depositary Units are not listed or admitted to
trading on a National Securities Exchange or quoted by NASDAQ, an amount equal
to the fair market value of a Unit as of such date of determination, as
determined by the General Partner using any reasonable method of valuation.

         Unrealized Gain: The excess, if any, of the fair market value of a
Partnership Asset as of the date of determination over the Carrying Value of
such Partnership Asset as of the date of determination (prior to any adjustment
to be made pursuant to Section 4.08(d) as of such date).

         Unrealized Loss: The excess, if any, of the Carrying Value of a
Partnership Asset as of the date of determination over the fair market value of
such Partnership Asset as of the date of determination (prior to any adjustment
to be made pursuant to Section 4.08(d) as of such date).

                                   ARTICLE II

                    Formation; Name; Place of Business; Term

         2.01.    Formation of Partnership: Certificate of Limited Partnership.
The General Partner and the Organizational Limited Partner heretofore have
formed and hereby agree to continue the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act. Except as expressly provided
herein to the contrary, the rights and obligations of the Partners and the ad-

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ministration and termination of the Partnership shall be governed by the
Delaware Act. In accordance with the Delaware Act, the General Partner has filed
with the Secretary of State of the State of Delaware the Certificate of Limited
Partnership. If the laws of any jurisdiction in which the Partnership transacts
business so require, the General Partner also shall file with the appropriate
office in that jurisdiction a copy of the Certificate of Limited Partnership and
any other documents necessary to establish and maintain the Record Holders'
limited liability in such jurisdiction. The Partners further agree and obligate
themselves to execute, acknowledge, and cause to be filed for record, in the
place or places and manner prescribed by law, any amendments to The Certificate
of Limited Partnership as may be required, either by the Delaware Act, by the
laws of a jurisdiction in which the Partnership transacts business, or by this
Agreement, to reflect changes in the information contained therein or otherwise
to comply with the requirements of law for the continuation, preservation, and
operation of the Partnership as a limited partnership pursuant to the Delaware
Act. Subject to Section 8.02(b), the General Partner shall not be required to
deliver or mail a copy of the Certificate of Limited Partnership or any
amendment thereto or restatement thereof to any Record Holder.

         2.02.    Name of Partnership. The name under which the Partnership
shall conduct its business is American Real Estate Partners, L.P. The business
of the Partnership may be conducted under any other name deemed necessary or
desirable by the General Partner, in its sole and absolute discretion, except
that such other name may not include the surname of any Record Holder unless
such surname is also the name or surname of the General Partner. The General
Partner promptly shall execute, file, and record any assumed or fictitious name
certificates or other statements or certificates as are required by the laws of
Delaware or any other state in which the Partnership transacts business. The
General Partner, in its sole and absolute discretion, may change the name of the
Partnership at any time and from time to time.

         2.03.    Place of Business. The principal place of business of the
Partnership shall be located at such place or places within the United States as
the General Partner shall, in its sole and absolute discretion, determine. The
General Partner may, in its sole and absolute discretion, establish and maintain
such other offices and additional places of business of the Partnership, either
within or without the State of Delaware, as it deems appropriate.

         2.04.    Registered Office and Registered Agent. The address of the
registered office of the Partnership in the State of Delaware shall be
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and
the registered agent for service

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of process on the Partnership in the State of Delaware at such address shall be
The Corporation Trust Company.

         2.05.    Term. The Partnership commenced on the date upon which the
Certificate of Limited Partnership was duly filed with the Secretary of State of
the State of Delaware pursuant to Section 2.01 and shall continue until the
Termination Date unless dissolved and liquidated before the Termination Date in
accordance with the provisions of Article XIII.

                                   ARTICLE III

                          Purposes; Nature of Business

         3.01.    Purposes and Business. The purposes of the Partnership shall
be (a) to directly or indirectly invest in, acquire, own, hold, manage, operate,
sell, exchange and otherwise dispose of interests in real estate (including,
without limitation, a limited partner interest in the Operating Partnership) and
(b) to enter into any lawful transaction and engage in any lawful activities in
furtherance of the foregoing purposes (including, without limitation, any
transaction or activity outside the normal scope of the Partnership's business).

                                   ARTICLE IV

                                     Capital

         4.01.    Capital Contributions of General Partner. From time to time,
the General Partner shall make Capital Contributions to the Partnership, which
contributions have an Agreed Value reduced by any indebtedness either assumed by
the Partnership upon such contribution or to which such contribution is subject
when contributed, in an amount necessary to enable it at all times to maintain
its aggregate Capital Contributions in an amount proportionally equal to its
Percentage Interest in the Partnership.

         4.02.    Capital Contribution of Organizational Limited Partner. Upon
the formation of the Partnership, the Organizational Limited Partner made a
Capital Contribution in the amount of Ninety-Nine Dollars ($99) in cash.
Concurrently with the Closing, the Capital Contribution of the Organizational
Limited Partner shall be returned, without interest, the Organizational Limited
Partner shall withdraw from the Partnership, and the Organizational Limited
Partner, as such, shall have no further rights, claims or interests as a Partner
in and to the Partnership.

         4.03.    Initial Capital Contributions. On the Closing Date, API
Investors in API Partnerships that participate in the Exchange

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shall contribute to the Partnership the limited partner interests the Operating
Partnership received by them pursuant to the Merger. Each such API Investor who
returns both an executed Consent Form and his API Certificates (or, in lieu
thereof, executes the Lost Certificate Affidavit) in connection with the
Exchange shall be deemed a Record Holder and shall be issued one (1) Unit for
each limited partner interest in the Operating Partnership contributed to the
Partnership pursuant to this Section 4.03, as described in the Registration
Statement. Units issuable pursuant to the Exchange in respect of limited partner
interests in the Operating Partnership owned by Non-Consenting Investors shall
be issued to the Nominee to be held for the account of such Non-Consenting
Investors subject to the terms of Section 11.01(b) hereof.

         4.04.    Non-Assessability of Units. Each Unit shall be fully paid and
nonassessable, and no Limited Partner, Record Holder, Non-Consenting Investor or
Subsequent Transferee shall be required to make any additional Capital
Contribution, except as provided in the Delaware Act.

         4.05.    Additional Issuance of Units: Additional Issuance of.
Securities.

         (a)      In order to raise additional capital or to acquire assets, to
redeem or retire Partnership debt, to comply with any provision of the OLP
Partnership Agreement or for any other Partnership purpose, the General Partner
is authorized to cause the Partnership to issue Units or classes thereof in
addition to those issued pursuant to Section 4.03 hereof from time to time to
Partners or to other Persons and to admit them to the Partnership as Additional
Limited Partners pursuant to Section 11.04 hereof, all without the consent or
approval of the Record Holders or any percentage thereof. There shall be no
limit on the number of Units that may be so issued. The Partnership may assume
liabilities in connection with any such issuance. Subject to the provisions of
Section 4.05(c) hereof, the General Partner shall have sole and absolute
discretion in determining the consideration and terms and conditions with
respect to any future issuance of Units. The General Partner shall do all things
necessary to comply with the Delaware Act and is authorized and directed to do
all things it deems to be necessary or advisable in connection with any such
future issuance, including, without limitation, amending this Agreement and
complying with any statute, rule, regulation or guideline of any federal, state
or other governmental agency or any National Securities Exchange on which the
Depositary Units are listed for trading.

         (b)      Notwithstanding anything in this Agreement to the contrary,
Units to be issued by the Partnership shall be issuable

                                       13

<PAGE>

from time to time in one or more classes with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to existing classes of Units, all as
shall be fixed by the General Partner in the exercise of its sole and absolute
discretion, including, without limitation, (i) the allocation, for federal
income and other tax purposes, to such class of Units of items of Partnership
income, gain, loss, deduction and credit; (ii) the right of such class of Units
to share in Partnership distributions; (iii) the rights of such class of Units
upon dissolution and liquidation of the Partnership; (iv) whether such class of
Units is redeemable by the Partnership and, if so, the price at, and the terms
and conditions on, which such class of Units may be redeemed by the Partnership;
(v) whether such class of Units is issued with the privilege of conversion and,
if so, the rate at and the terms and conditions upon which such class of Units
may be converted into any other class of Units; (vi) the terms and conditions of
the issuance of such class of Units, the deposit of such class of Units with the
Depositary, the issuance of Depositary Receipts in respect thereof, and all
other matters relating to the assignment thereof; and (vii) the rights of such
class of Units to vote on matters relating to the Partnership and this
Agreement. Upon the issuance of any class of Units, the General Partner
(pursuant to the General Partner's powers of attorney from the Record Holders),
without the approval at the time of any Record Holder (each Person accepting
Units being deemed to approve of such amendment) may amend any provision of this
Agreement and execute, swear to, acknowledge, deliver, file and record, if
required, an amended Certificate of Limited Partnership and such other documents
as may be required in connection therewith, as shall be necessary or desirable
to reflect the authorization and issuance of such class of Units and the
relative rights and preferences of such class of Units as to the matters set
forth in the preceding sentence. The General Partner is also authorized to cause
the issuance of any other type of security of the Partnership from time to time
to Partners or other Persons on terms and conditions established in the sole and
absolute discretion of the General Partner. Such securities may include, without
limitation, unsecured and secured debt obligations of the Partnership, debt
obligations of the Partnership convertible into any class of Units that may be
issued by the Partnership, options, rights or warrants to purchase any such
class of Units or any combination of any of the foregoing.

         (c)      The General Partner or any Affiliate of the General Partner
may, but shall not be obligated to, make contributions to the Partnership in
exchange for Units, provided that the number of Units issued in exchange for any
such contribution shall not exceed the Agreed Value of the contribution reduced
by any indebtedness either assumed by the Partnership upon such contributions

                                       14

<PAGE>

or to which such property is subject when contributed, divided by the average
closing Unit Price for the twenty (20) trading days immediately preceding such
contribution.

         4.06.    Splits and Combinations.

         (a)      The General Partner, in its sole and absolute discretion, may
(i) make a distribution in Units to all Record Holders or (ii) effect a
subdivision or combination of Units, but in each case only on a pro rata basis
so that, after such distribution, subdivision or combination, each Record Holder
shall, subject to Section 4.06(d), have the same Percentage Interest in the
Partnership as before such distribution, subdivision or combination.

         (b)      Whenever such a distribution, subdivision, or combination is
declared, the General Partner shall select a Record Date as of which the
distribution, subdivision or combination shall be effective and shall send
notice of the distribution, subdivision or combination at least twenty (20) days
prior to such Record Date to each Record Holder as of the date ten (10) days
prior to the date of such notice.

         (c)      Promptly following any such distribution, subdivision or
combination, the General Partner may cause Certificates or Depositary Receipts,
as the case may be, to be issued to the Record Holders as of the applicable
Record Date representing the new number of Units or Depositary Units held by
such Record Holder, or the General Partner may adopt such other procedures as it
may deem appropriate to reflect such distribution, subdivision or combination;
provided, however, that in the event any such distribution, subdivision or
combination results in a smaller total number of Units outstanding, the General
Partner may require, as a condition to the delivery to a Record Holder of such
new Certificate or Depositary Receipt, the surrender of any Certificate or
Depositary Receipt representing the Units held by such Record Holder immediately
prior to such Record Date.

         (d)      The Partnership shall not be required to issue fractional
Units upon any distribution, subdivision or combination of Units. In the event
any distribution, subdivision or combination of Units would result in the
issuance of fractional Units but for the provisions of Section 4.05 and this
Section 4.06(d), each fractional Unit shall be rounded to the nearest whole
Unit.

         4.07.    No Preemptive Rights. Neither the General Partner nor any
Record Holder shall have any preemptive right with respect to (a) additional
Capital Contributions, (b) issuance or sale of Units, whether unissued, held in
the treasury or hereafter created, (c) issuance of any obligations, evidences of
indebtedness or other securities of the Partnership convertible into

                                       15

<PAGE>

or exchangeable for, or carrying or accompanied by any rights to receive,
purchase or subscribe to, any such unissued Units or Units held in treasury, (d)
issuance of any right of, subscription to or right to receive, or any warrant or
option for the purchase of, any of the foregoing securities or (e) issuance or
sale of any other securities that may be issued or sold by the Partnership.

         4.08.    Capital Accounts.

         (a)      A separate Capital Account shall be established and maintained
for the General Partner and each Record Holder. The Capital Account of the
General Partner and each Record Holder shall be credited with the cash and the
Agreed Value of any property, contractual rights or other non-cash consideration
(net of liabilities assumed by the Partnership and liabilities to which the
contributed property is subject) contributed or deemed contributed to the
Partnership by such General Partner or Record Holder, plus all income, gain, or
profits of the Partnership computed in accordance with Section 4.08(b) and
allocated to such General Partner or Record Holder pursuant to Section 5.01, and
shall be debited with the sum of (i) all losses or deductions of the Partnership
computed in accordance with Section 4.08(b) and allocated to such General
Partner or Record Holder, pursuant to Section 5.01, (ii) such General Partner's
or Record Holder's distributive share of expenditures of the Partnership
described in Section 705(a)(2)(B) of the Code (including expenditures made in
respect of the offering and sale of Units that are not depreciable, deductible
or amortizable for federal income tax purposes), and (iii) all cash and the fair
market value of any property (net of liabilities assumed by such General Partner
or Record Holder and liabilities to which such property is subject) distributed
or deemed distributed by the Partnership to such General Partner or Record
Holder. Notwithstanding anything to the contrary contained herein, the Capital
Account of a General Partner or Record Holder shall be determined in all events
solely in accordance with the rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv), as the same may be amended or revised hereafter. Any
references in any Section or subsection of this Agreement to the Capital Account
of a General Partner or Record Holder shall be deemed to refer to such Capital
Account as the same may be credited or debited from time to time.

         (b)      For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Capital Accounts, the
determination, recognition and classification of each such item shall be the
same as its determination, recognition and classification for federal income tax
purposes (including any method of depreciation, cost recovery or amortization
used for this purpose), provided that:

                                       16

<PAGE>

                  (i)      In accordance with the requirements of Section 704(c)
         of the Code, any deductions for depreciation, cost recovery,
         amortization or expense in lieu of depreciation, attributable to a
         Contributed Property shall be determined as if the adjusted basis of
         the property on the date it was acquired by the Partnership was equal
         to the Agreed Value of such Partnership Asset as of such date. Upon an
         adjustment pursuant to Section 4.08(d)(i) to the Carrying Value of any
         Partnership Asset subject to depreciation, cost recovery or
         amortization, any further deductions for such depreciation, cost
         recovery or amortization attributable to such Asset shall be determined
         as if the adjusted basis of such Asset was equal to the Carrying Value
         of such Asset immediately following such adjustment.

                  (ii)     Any income, gain or loss attributable to the taxable
         disposition of any Partnership Asset shall be determined by the
         Partnership as if the adjusted basis of such Partnership Asset as of
         such date of disposition was equal to the amount of the Carrying Value
         of such Partnership Asset as of such date;

                  (iii)    The computation of all items of income, gain, loss,
         and deduction shall be made without regard to the Section 754 Election;
         and

                  (iv)     For purposes of the application of the provisions of
         this Section 4.08, the Partnership shall be treated as owning directly
         its proportionate share (as determined by the General Partner) of all
         property owned by the Operating Partnership.

         (c)      In general, any Substituted Limited Partner shall succeed to
the Capital Account relating to the Partnership Interest transferred. However,
if the transfer causes a termination of the Partnership under Section
708(b)(1)(B) of the Code, the Partnership Assets shall be deemed to have been
distributed in liquidation of the Partnership to the General Partner and the
Record Holders (including the Substituted Limited Partners) and deemed
reconstibuted by such General Partner, the Record Holders and Substituted
Limited Partners in reconstitution of the Partnership. The Capital Accounts of
the reconstituted Partnership shall be maintained in accordance with the
principles of this Section 4.08.

         (d)      (i) Upon an issuance of additional Units for cash or
Contributed Property pursuant to Section 4.05, the Capital Accounts of the
General Partner and the Record Holders and the Carrying Values of all
Partnership Assets shall, immediately prior to such issuance, be adjusted
(consistent with the provisions hereof) upwards or downwards to reflect any
Unrealized Gain or Unrealized

                                       17

<PAGE>

Loss attributable to each Partnership Asset (as if such Unrealized or Urealized
Loss had been recognized upon an actual sale of each such Partnership Asset,
immediately prior to such issuance, and had been allocated to the General
Partner and the Record Holders, at such time, pursuant to Section 5.01). In
determining such Unrealized Gain or Unrealized Loss, the fair market value of
Partnership Assets shall be determined (1) first, by multiplying the number of
Units outstanding, as of the date of determination, by the Unit Price of a Unit
determined as of such date, (2) second, by dividing the value determined under
clause (1) by 99%, and (3) third, by adding to the value determined under clause
(2) the amount of any Partnership indebtedness as of the date of determination.

         (ii)     Immediately prior to an actual distribution of any Partnership
Asset, the Capital Accounts of the General Partner and the Record Holders and
the Carrying Values of all Partnership Assets shall be adjusted (consistent with
the provisions hereof and of Section 704 of the Code) upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to each Partnership
Asset (as if such Unrealized Gain or Unrealized Loss had been recognized upon an
actual sale of each Partnership Asset, immediately prior to such distribution,
and had been allocated to the General Partner and the Record Holders, at such
time, pursuant to Section 5.01). In determining such Unrealized Gain or
Unrealized Loss, the fair market value of Partnership Assets shall be determined
by the General Partner using such reasonable methods of valuation as it may
adopt.

         4.09.    Negative Capital Accounts.

         (a)      Except to the extent provided in Section 4.09(b), neither the
General Partner nor any Record Holder shall be required to pay to the
Partnership or to any other General Partner or Record Holder any deficit or
negative balance which may exist from time to time in such General Partner's or
Record Holder's Capital Account.

         (b)      Notwithstanding the foregoing, on the dissolution and
termination of the Partnership, if the General Partner shall have a deficit or
negative balance in its Capital Account following the payment of the Capital
Contribution provided for in Section 4.01 and the allocation of all income and
loss from Capital Transactions pursuant to Section 5.02, then the General
Partner shall be required to pay the lesser of (i) the amount of such deficit or
negative balance or (ii) the excess of one and one-hundredth percent (1.01%) of
the Capital Contributions of the Record Holders over the Capital Contribution of
the General Partner to the Partnership. After the payment of any remaining debts
and liabilities of the Partnership as provided for in

                                       18

<PAGE>

sections 5.02 and 13.05, any such amount paid to the Partnership be distributed
to the Partners and Record Holders in accordance with their respective positive
Capital Account balances, as provided for in Section 5.03.

         4.10.    No Interest on Amounts in Capital Accounts. Neither the
General Partner nor any Record Holder shall be entitled to receive any interest
on its outstanding Capital Account balance.

         4.11.    Loans by the General Partner and Record Holders. Loans by the
General Partner or Record Holders to the Partnership shall not be considered
Capital Contributions. If the General Partner or a Record Holder shall advance
funds to the Partnership in excess of the amounts required hereunder to be
contributed by it to the capital of the Partnership, the making of such advances
shall not result in any increase in the amount of the Capital Account of such
General Partner or Record Holder or entitle such General Partner or Record
Holder to any increase in its Percentage Interest (as defined in Article V). The
amounts of any such advances shall be a debt of the Partnership to such General
Partner or Record Holder and shall be payable or collectible only out of the
Partnership Assets in accordance with the terms and conditions upon which such
advances are made.

         4.12.    Liability of Record Holders. Except as provided in the
Delaware Act, none of the Record Holders shall be personally liable for any
debts, liabilities, contracts or obligations of the Partnership.

                                    ARTICLE V

                  Allocations of Income and Loss; Distributions

         5.01.    Capital Account Allocations. For purposes of maintaining the
Capital Accounts and determining the rights of the General Partner and the
Record Holders among themselves, each item of income, gain, loss and deduction
shall be allocated among the General Partner and the Record Holders in the
following manner:

                  (a)      Except as otherwise provided in this Section 5.01,
         all items of income, gain, loss and deduction of the Partnership,
         computed in accordance with Section 4.08(b), and any income of the
         Partnership described in Section 705(a)(1)(B) of the Code shall be
         allocated to the General Partner and the Record Holders in accordance
         with their respective Percentage Interests.

                  (b)      In the event the General Partner or a Record Holder
         receives an adjustment, allocation or distribution described in
         Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5)

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<PAGE>

         or (6), such General Partner or Record Holder shall be specially
         allocated items of income and gain in an amount and manner sufficient
         to eliminate, as quickly as possible, any deficit balance in such
         General Partner's or Record Holder's Capital Account created by such
         adjustment, allocation or distribution. This Section 5.01(b) is
         intended to constitute a "qualified income offset" within the meaning
         of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3).

                  (c)      If the Capital Account of the General Partner or a
         Record Holder has a deficit balance resulting in whole or in part from
         allocations of loss or deduction attributable to nonrecourse debt that
         is secured by Partnership Assets, which deficit balance exceeds such
         General Partner's or Record Holder's share of Minimum Gain (as defined
         below), then such General Partner or Record Holder shall first be
         allocated items of income and gain in the amount and in the proportions
         needed to eliminate such excess as quickly as possible. For purposes of
         this Section 5.01(c), "minimum gain" means the excess of the
         outstanding principal balance of nonrecourse debt that is secured by
         Partnership Assets over the Partnership's adjusted tax basis of such
         Assets. This Section 5.01(c) is intended to comply with the
         requirements of Treasury Regulation Section 1.704-1(b)(4)(iv).

                  (d)      To preserve the uniformity of Units, the General
         Partner shall have sole discretion in conjunction with Section 5.02(g)
         to make special allocations of income or deductions. The General
         Partner may make such allocations only if they would not have a
         material adverse effect on the Record Holders and if they are
         consistent with, and supportable under, the principles of Section 704
         of the Code.

         5.02.    Tax Allocations. For federal income tax purposes, each item of
income, gain, loss and deduction of the Partnership shall be allocated among the
General Partner and the Record Holders in the following manner:

                  (a)      Except as otherwise provided in this Section 5.02,
         all such items of income, gain, loss and deduction of the Partnership
         shall be allocated to the General Partner and the Record Holders in
         accordance with their Percentage Interests.

                  (b)      In the case of a Contributed Property or Adjusted
         Property, items of income, gain, loss, depreciation and cost recovery
         deductions attributable thereto shall be allocated for federal income
         tax purposes among the General Partner and the Record Holders as
         follows:

                                       20

<PAGE>

                           (1)      In the case of a Contributed Property, such
                  items shall be allocated among the General Partner and the
                  Record Holders in a manner that takes into account the
                  variation between the Agreed Value of such property and its
                  adjusted basis at the time of contribution in attempting to
                  eliminate Book-Tax Disparities. Except as otherwise provided
                  in Section 5.02(c) and 5.02(d) below, any item of Residual
                  Gain or Residual Loss attributable to a Contributed Property
                  shall be allocated among the General Partner and the Record
                  Holders in accordance with their Percentage Interests;

                                    (2)      In the case of an Adjusted
                  Property, such items shall (a) first, be allocated among the
                  General Partner and the Record Holders in a manner consistent
                  with the principles of Section 704(c) of the Code to take into
                  account the Unrealized Gain or Unrealized Loss attributable to
                  such property and the allocations thereof pursuant to Section
                  4.08(d)(i) in attempting to eliminate Book-Tax Disparities,
                  and (b) second, in the event such property was originally a
                  Contributed Property, be allocated among the General Partner
                  and the Record Holders in a manner consistent with the first
                  sentence of paragraph (b) (1) above. Except as otherwise
                  provided in Sections 5.02(c) and 5.02(d) below, any items of
                  Residual Gain or Residual Loss attributable to an Adjusted
                  Property shall be allocated among the General Partner and the
                  Record Holders in accordance with the provisions of Section
                  5.02(a).

         (c)      If the General Partner or a Record Holder receives any
adjustments, allocations or distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of Partnership income and
gain shall be specially allocated to such General Partner or Record Holder in an
amount and manner consistent with the allocation of income and gain pursuant to
Section 5.01(b).

         (d)      If the General Partner's or a Record Holder's Capital Account
has a deficit balance as described in Section 5.01(c), items of income and gain
of the Partnership shall be allocated to such General Partner or Record. Holder
in an amount and manner consistent with the allocation of income and gain
pursuant to Section 5.01(c).

         (e)      To the extent of any Recapture Income resulting from the sale
or other taxable disposition of Partnership Assets, the amount of any gain from
such disposition allocated to (or recognized by) the General Partner or a Record
Holder (or its successor in interest) for federal income tax purposes

                                       21

<PAGE>

pursuant to the above provisions shall be deemed to be Recapture Income to the
extent such General Partner or Record Holder has been allocated or has claimed
any deduction directly or indirectly giving rise to the treatment of such gain
as Recapture Income.

         (f)      All items of income, gain, loss, deduction and basis
allocation recognized by the Partnership for federal income tax purposes and
allocated to the General Partner and the Record Holders in accordance with the
provisions hereof shall be determined without regard to the Section 754 Election
which may be made by the Partnership; provided, however, such allocations, once
made, shall be adjusted as necessary or appropriate to take into account those
adjustments permitted by Sections 734 and 743 of the Code and, where
appropriate, to provide only the General Partner and the Record Holders
recognizing gain on Partnership distributions covered by Section 734 of the Code
with the federal income tax benefits attributable to the increased basis in
Partnership Assets resulting from the Section 754 Election.

         (g)      It is intended that the allocations prescribed in Sections
5.02(b)(l) and (b)(2) constitute allocations for federal income tax purposes
that are consistent with Section 704 of the Code and comply with any limitations
or restrictions therein, to the extent reasonably possible without causing Units
to lack uniform characteristics for federal income tax purposes. If uniformity
of the Units cannot be preserved by application of Sections 5.02(b)(l) and
(b)(2), then the General Partner shall have sole discretion to (i) adopt such
conventions as it deems appropriate in determining the amount of depreciation
and cost recovery deductions; (ii) make special allocations of income or
deduction and (iii) amend the provisions of this Agreement as appropriate (a) to
reflect the proposal or promulgation of Treasury Regulations under Section
704(c) of the Code, or (b) otherwise to preserve the uniformity of Units issued
or sold from time to time; provided, however, that the General Partner may adopt
such conventions, make such allocations or amend this Agreement as provided in
this Section 5.02(g) only if the same would not have a material adverse effect
on the Limited Partners and if such allocations are consistent with and
supportable under the principles of Section 704 of the Code.

         (h)      For purposes of the interpretation and application of this
Article V, the Partnership shall be treated as owning its proportionate share of
all properties owned by the Operating Partnership.

                                       22

<PAGE>

5.03.    Distributions of Cash Flow and Capital Proceeds.

         (a)      Cash Flow of the Partnership for each Fiscal Year or portion
thereof shall be distributed quarter-annually, or at any other time to the
extent deemed appropriate by the General Partner in its sole and absolute
discretion, to Record Holders on the Record Date or Record Dates established for
such distribution, in the following order of priority:

                  (i)      first, to the payment of any debts and liabilities of
         the Partnership which shall then be due and payable;

                  (ii)     next, to the establishment of such reserves as the
         General Partner deems reasonably necessary to provide for any future,
         contingent or unforeseen liabilities or obligations of the Partnership;

                  (iii)    the balance, if any, to the General Partner and the
         Record Holders, pro rata, in accordance with their respective
         Percentage Interests.

         (b)      If distributed, proceeds of Capital Transactions, other than
on liquidation or dissolution of the Partnership, shall be distributed as
follows:

                  (i)      first, to discharge (to the extent required by any
         lender or creditor other than any Partner in its capacity as such)
         debts and obligations of the Partnership which are then due and
         payable;

                  (ii)     next, to the establishment of such reserves as the
         General Partner deems reasonably necessary to provide for any future
         contingent or unforeseen liabilities or obligations of the Partnership;

                  (iii)    the balance, if any, to the. General Partner and the
         Record Holders in accordance with their respective Percentage
         Interests.

         (c)      The General Partner shall convert all non-cash assets of the
Partnership to cash before any distribution upon liquidation or dissolution of
the Partnership. Distribution of proceeds on liquidation or dissolution of the
Partnership, and any other remaining assets of the Partnership to be distributed
to the General Partner and the Record Holders in connection with the dissolution
and liquidation of the Partnership pursuant to Article XIII, shall be made as
follows:

                  (i)      first, to the payment of any debts and liabilities of
         the Partnership which shall then be due and payable;

                                       23

<PAGE>

                  (ii)     next, to the establishment of such reserves as the
         General Partner deems reasonably necessary to provide for any future,
         contingent or unforeseen liabilities or obligations of the Partnership;
         and

                  (iii)    next, pro rata in accordance with and to the extent
         of the positive balances in the General Partner's and Record Holders'
         respective Capital Accounts.

         (d)      At the General Partner's election, exercisable in its sole
discretion, each quarterly distribution made pursuant to Section 5.03(a) hereof
may be allocated monthly among the General Partner and the Record Holders of
record as of the last day of each month during the quarter in respect of which
such quarterly distribution is made; provided, however, that no such allocation
shall be made unless the General Partner concludes, in its sole discretion, that
such monthly allocation convention does not result in a material adverse effect
to the Record Holders, taken as a whole. For all purposes of this Agreement, any
Partner's allocable share of the aggregate amount withheld from any distribution
hereunder in respect of state income taxes paid or payable by the Partnership on
behalf of such Partner shall be treated as having been distributed to such
Partner.

         5.04.    Distributions and Allocations of Income and Loss With Respect
to Interests Transferred.

         (a)      Distributions of Partnership Assets (including cash) in
respect of a Unit or Depositary Unit shall be made only to the Person who,
according to the books and records of the Partnership and the Depositary, is the
Record Holder of such Unit or Depositary Unit in respect of which such
distribution is being made on the Record Date for such distribution.

         (b)      Each item of Partnership income, gain, loss and deduction
shall, for federal income tax purposes, be determined on an annual basis (or
other basis as required or permitted by Section 706 of the Code), apportioned
equally among the constituent calendar months, and allocated to the General
Partner and the Record Holders in accordance with their Percentage Interests as
of the last day of the month; provided, however, that gain or loss from a
Capital Transaction shall (subject to the provisions of Section 5.02(b) hereof)
be allocated to the General Partner and the Record Holders as of the last day of
the calendar month in which the Capital Transaction giving rise to such gain or
loss occurred; provided, further, however, that, if gain from a Capital
Transaction is recognized by the Partnership over more than one calendar year,
gain recognized by the Partnership in years subsequent to the year in which the
Capital Transaction occurred shall be allocated in the same manner as income of
the Partnership is allocated

                                       24

<PAGE>

in such year pursuant to the first sentence of this subparagraph (b). The
General Partner may revise, alter or otherwise modify such methods of
determination and allocation as it deems necessary to the extent permitted by
Section 706 of the Code and regulations rulings promulgated thereunder.

         (c)      The General Partner shall incur no liability for making
allocations and distributions in accordance with the provisions of this Section
5.04, whether or not the General Partner has knowledge or notice of any transfer
or purported transfer of ownership of any Unit.

                                   ARTICLE VI

                                   Management

         6.01.    Management and Control of Partnership. Except as otherwise
expressly provided or limited by the provisions of this Agreement (including,
without limitation, the provisions of Article VII), the General Partner shall
have full, exclusive and complete discretion to manage and control the business
and affairs of the Partnership, to make all decisions affecting the business and
affairs of the Partnership, and to take all such actions as it deems necessary
or appropriate to accomplish the purposes of the Partnership as set forth
herein. The General Partner shall use reasonable efforts to carry out the
purposes of the Partnership and shall devote to the management of the business
and affairs of the Partnership such time as the General Partner, in its sole and
absolute discretion, shall deem to be reasonably required for the operation
thereof. No Limited Partner, Record Holder, Non-Consenting Investor or
Subsequent Transferee shall have any authority, right or power to bind the
Partnership, or to manage or control, or to participate in the management or
control of, the business and affairs of the Partnership in any manner
whatsoever.

         6.02.    Powers of General Partner. Subject to Section 6.08, the
General Partner (acting on behalf of and at the expense of the Partnership)
shall have the right, power and authority, in the management and control of the
business and affairs of the Partnership, to do or cause to be done any and all
acts deemed by the General Partner to be necessary or appropriate to carry out
the purposes and business of the Partnership. The power and authority of the
General Partner pursuant to this Agreement shall be liberally construed to
encompass all acts and activities in which a limited partnership may engage
under the Delaware Act, subject to the provisions of Section 3.01 hereof. The
expression of any power, authority or right of the General Partner in this
Agreement shall not limit or exclude any other power, authority or right which
is not specifically or expressly set forth in this Agreement or the Delaware
Act.

                                       25

<PAGE>

         6.03.    Purchase or Sale of Units. The General Partner may, on behalf
of and for the account of the Partnership, at such times and on such terms as
the General Partner, in its sole and absolute discretion, deems to be in the
best interests of the Partnership, the Limited Partners, Record Holders,
Non-Consenting Investors and Subsequent Transferees, purchase or otherwise
acquire Units or Depositary Units and, following any such purchase or
acquisition, may sell or otherwise dispose of such Units and Depositary Units.
So long as such Units or Depositary Units shall be held by or on behalf of the
Partnership, such Units or Depositary Units shall not be considered outstanding
for any purpose. In addition to the foregoing, the General Partner and its
Affiliates also may purchase or otherwise acquire Units or Depositary Units for
their own account and may, subject to the provisions of Sections 10.03 and
10.04, sell or otherwise dispose of such Units or Depositary Units.

         6.04.    Compensation Plans. In addition to the Unit Option Plan
described in the Registration Statement, the General Partner shall have the
power and authority to cause the Partnership to pay pensions, and establish and
carry out pension, profit- sharing, bonus, purchase, option, savings, thrift and
other retirement, incentive and benefit plans, trusts and provisions for the
General Partner, employees of the General Partner or the Partnership, and any
partner, director or officer of the General Partner, including plans, trusts and
provisions which may provide for the ownership, acquisition, holding or
disposition of Units or any other securities of the Partnership, and to the full
extent permitted by law the General Partner may indemnify and maintain insurance
on behalf of any fiduciary of such plans, trusts or provisions, including,
without limitation, health insurance, medical and dental reimbursement, life
insurance, accident insurance, disability insurance and other plans, trusts or
provisions.

         6.05.    Distributions. The General Partner shall have the power and
authority to cause the Partnership, from time to time and to the extent deemed
appropriate by the General Partner in its sole and absolute discretion, to
distribute cash or Partnership Assets to the General Partner and the Record
Holders in accordance with Article V. Nothing in this Agreement or this Section
6.05 shall serve as a limitation on the General Partner's right to retain or use
Partnership Assets or the revenues of the Partnership as, in the sole and
absolute discretion of the General Partner, may be required to satisfy the
anticipated present and future cash needs of the Partnership, whether for
operations, expansion, improvements, acquisitions or otherwise.

         6.06.    Election to the Governed by Successor Limited Partnership Law.
The General Partner may, in its sole and absolute discretion and without any
vote or concurrence of the Record Holders,

                                       26

<PAGE>

elect for the Partnership to be governed by any statutes adopted to succeed or
replace the Delaware Act on or after the date any part of such successor or
replacement statute takes effect and procure any permits, orders or approvals of
any governmental authority in connection with such election.

         6.07.    Operating Partnership. The General Partner, in its sole and
absolute discretion, may cause the Operating Partnership to be dissolved or to
be merged into, consolidated or combined with the Partnership without the need
for any vote or consent by the Record Holders. Upon any such merger,
consolidation or combination, the interests of the Limited Partners and Record
Holders in the Partnership and the compensation and reimbursements to the
General Partner shall be adjusted and this Agreement shall be amended without
the need for any vote of the Record Holders to provide the same relative
interests, compensation and reimbursements as they had in the Partnership and
Operating Partnership, taken together, prior to such merger, consolidation or
combination.

         6.08.    Restrictions on Authority of General Partner.

         (a)      Anything in this Agreement to the contrary notwithstanding,
the General Partner shall have no authority to cause the Partnership to
terminate the Depositary Agreement unless such termination (i) is in connection
with the Partnership entering into a similar agreement with another depositary
selected by the General Partner, in its sole and absolute discretion, (ii) is as
a result of the receipt of an opinion of counsel for the Partnership to the
effect that such termination is necessary in order for the Partnership to avoid
being treated as an association taxable as a corporation for federal income tax
purposes or to avoid being in violation of any applicable federal or state
securities laws, or (iii) is in connection with the dissolution of the
Partnership pursuant to Article XIII.

         (b)      Anything in this Agreement to the contrary notwithstanding,
the General Partner shall have no authority to cause the Partnership, in its
capacity as sole limited partner of the Operating Partnership, to consent to any
proposal submitted for the approval of the limited partners of the Operating
Partnership unless the Record Holders, pursuant to Section 14.11(b) hereof, vote
to approve such proposal in at least the same percentage as is required by the
OLP Partnership Agreement for the approval of such proposal by the limited
partners of the Operating Partnership.

         6.09.    Reliance by Third Parties. Notwithstanding any other provision
of this Agreement to the contrary, no lender or purchaser, including any
purchaser of property from the Partnership

                                       27

<PAGE>

or any other Person dealing with the Partnership, shall be required to look to
the application of proceeds hereunder to verify any representation by the
General Partner as to the extent of the interest in the assets of the
Partnership that the General Partner is entitled to encumber, sell or otherwise
use, and any such lender or purchaser shall be entitled to rely exclusively on
the representations of the General Partner as to its authority to enter into
such financing or sale arrangements and shall be entitled to deal with the
General Partner as if it were the sole party in interest therein, both legally
and beneficially. Each Record Holder hereby waives any and all defenses or other
remedies that may be available against such lender, purchaser or other Person to
contest, negate or disaffirm any action of the General Partner in connection
with any sale or financing. In no event shall any Person dealing with the
General Partner or the General Partner's representative with respect to any
business or property of the Partnership be obligated to ascertain that the terms
of this Agreement have been complied with, or be obligated to inquire into the
necessity or expedience of any act or action of the General Partner or the
General Partner's representative; and every contract, agreement, deed, mortgage,
security agreement, promissory note or other instrument or document executed by
the General Partner or the General Partner's representative with respect to any
business or property of the Partnership shall be conclusive evidence in favor of
any and every Person relying thereon or claiming thereunder that (a) at the time
of the execution and/or delivery thereof this Agreement was in full force and
effect, (b) such instrument or document was duly executed in accordance with the
terms and provisions of this Agreement and is binding upon the Partnership, and
(c) the General Partner or the General Partner's representative was duly
authorized and empowered to execute and deliver any and every such instrument or
document for and on behalf of the Partnership.

         6.10.    Title to Partnership Assets. Title to Partnership Assets,
whether real, personal or mixed, tangible or intangible, shall be deemed to be
owned by the Partnership as an entity, and no Partner or Record Holder
individually or collectively, shall have any ownership interest in such
Partnership Assets or any portion thereof. Title to any or all of the
Partnership Assets may be held in the name of the Partnership or the General
Partner, or of one or more nominees, as the General Partner may determine. The
General Partner hereby declares and warrants that any Partnership Assets for
which legal title is held in the name of the General Partner shall be held in
trust by the General Partner for the use and benefit of the Partnership in
accordance with the terms or provisions of this Agreement. All Partnership
Assets shall be recorded as the property of the Partnership on its books and
records, irrespective of the name in which legal title to such Partnership
Assets is held.

                                       28

<PAGE>

         6.11.    Other Business Activities of Partners. Any Partner, Record
Holder or Affiliate thereof (including, without limitation, the General Partner
and any of its Affiliates) may have other business interests or may engage in
other business ventures of any nature or description whatsoever, whether
presently existing or hereafter created, including, without limitation, the
ownership, leasing, management, operation, franchising, syndication and/or
development of real estate, and may compete, directly or indirectly, with the
business of the Partnership. No Partner, Record Holder or Affiliate thereof
shall incur any liability to the Partnership as the result of such Partner's,
Record Holder's or Affiliate's pursuit of such other business interests and
ventures and competitive activity, and neither the Partnership nor any of the
Partners or Record Holders shall have any right to participate in such other
business interests or ventures or to receive or share in any income or profits
derived therefrom.

         6.12.    Transactions with General Partner or Affiliates. In addition
to transactions specifically contemplated by the terms and provisions of this
Agreement, the Partnership is expressly permitted to enter into other
transactions with the General Partner or any of its Affiliates, including,
without limitation, buying and selling properties from or to the General Partner
and any of its Affiliates and borrowing and lending money from or to the General
Partner or any of its Affiliates, subject to the limitations contained in this
Agreement, the Delaware Act and in the Registration Statement.

         6.13.    Audit Committee; Resolution of Conflicts of Interest.

         (a)      On the Closing Date, the General Partner shall form an Audit
Committee to be comprised of directors of the General Partner not affiliated
with the General Partner or its Affiliates other than as a director of the
General Partner. The functions of the Audit Committee shall be: (i) to review
the Partnership's financial and accounting policies and procedures; (ii) to
review the results of any audits of the books and records of the Partnership
made by the Accounting Firm or other outside auditors; (iii) to review the
allocation of overhead expenses in connection with the reimbursement of the
expenses of the General Partner pursuant to Section 7.01; (iv) to review any
resolutions of conflicts of interest made by the General Partner pursuant to
Section 6.13(b); and (v) to review certain other determinations of the General
Partner made pursuant to this Agreement.

         (b)      Unless otherwise expressly provided in this Agreement, (i)
whenever a conflict of interest exists or arises between the General Partner or
any of its Affiliates, on the one hand, and the Partnership, the Operating
Partnership, or any Record Holder, on the other hand, or (ii) whenever this
Agreement or any other

                                       29

<PAGE>

agreement contemplated herein provides that the General Partner shall act in a
manner which is, or provide terms which are, fair and/or reasonable to the
Partnership, the Operating Partnership, or any Record Holder, the General
Partner shall resolve such conflict of interest, take such action or provide
such terms considering, in each case, the relative interests of each party to
such conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles, and in the
absence of bad faith by the General Partner, the resolution, action or terms so
made, taken or provided by the General Partner shall not constitute a breach of
this Agreement or any other agreement contemplated herein.

         (c)      The Audit Committee shall periodically review any
determinations of the General Partner made pursuant to Section 6.13(b).

         (d)      Whenever in this Agreement the General Partner is permitted or
required to make a decision (i) in its "sole discretion" or "discretion", with
"absolute discretion" or under a grant of similar authority or latitude, the
General Partner shall be entitled to consider only such interests and factors as
it desires and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Partnership, the Operating Partnership or
the Record Holders, or (ii) in its "good faith" or under another express
standard, the General Partner shall act under such express standard and shall
not be subject to any other or different standards imposed by this Agreement or
any other agreement contemplated herein.

         6.14.    Liability of General Partner to Partnership and Limited
Partners.

         (a)      The General Partner and its Affiliates and all partners,
shareholders, directors, officers, employees or agents of the General Partner
and its Affiliates shall not be liable (for monetary damages or otherwise) to
the Partnership, the Limited Partners, the Record Holders, the Non-Consenting
Investors or the Subsequent Transferees for errors in judgment or for breach of
fiduciary duty as the General Partner of the Partnership or as a partner,
shareholder, director, officer, employee or agent of the General Partner of the
Partnership or any of its Affiliates, except for liability (i) for any breach of
such Person's duty of loyalty to the Partnership, as such duty of loyalty may be
set forth in or modified by this Agreement, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or knowing violation of law
or (iii) for any transaction from which such Person has derived an improper
benefit.

                                       30

<PAGE>

         (b)      The General Partner may exercise any of the powers granted to
it by this Agreement and may perform any of the duties imposed upon it hereunder
either directly or indirectly or by or through its agents, and 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.

         6.15.    Indemnification of General Partner and Affiliates.

         (a)      The Partnership shall, to the fullest extent permitted by law,
indemnify and hold harmless the General Partner, its Affiliates, and all
officers, directors, employees and agents of the General Partner and its
Affiliates (individually, an "Indemnitee") from and against any and all losses,
claims, demands, costs, damages, liabilities, joint and several, expenses of any
nature (including attorneys' fees and disbursements), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, whether civil, criminal, administrative or
investigative, in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise by reason of its status as (x) the General
Partner or an Affiliate thereof or (y) a partner, shareholder, director,
officer, employee or agent of the General Partner or an Affiliate thereof or (z)
a Person serving at the request of the Partnership in another entity in a
similar capacity, which relate to, arise out of or are incidental to the
Partnership, its property, business, affairs or the Exchange, including, without
limitation, liabilities under the federal and state securities laws, regardless
of whether the Indemnitee continues to be a General Partner, an Affiliate, or an
officer, director, employee or agent of the General Partner or of an Affiliate
thereof at the time any such liability or expense is paid or incurred, if (i)
the Indemnitee acted in good faith and in a manner it believed to be in, or not
opposed to, the best interests of the Partnership, and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was unlawful
and (ii) the Indemnitee's conduct did not constitute willful misconduct. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, in
and of itself, create a presumption or otherwise constitute evidence that the
Indemnitee acted in a manner contrary to that specified in (i) or (ii) above.

         (b)      Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 6.15 shall, from time
to time, be advanced by the Partnership prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Indemnitee to repay such amount unless it

                                       31

<PAGE>

shall be determined that such Person is entitled to be indemnified as authorized
in this Section 6.15.

         (c)      The indemnification provided by this Section 6.15 shall be in
addition to any other rights to which those indemnified may be entitled under
any agreement, vote of the Record Holders, as a matter of law or equity, or
otherwise, both as to an action in the Indemnitee's capacity as a General
Partner, an Affiliate or as an officer, director, employee or agent of a General
Partner or an Affiliate, and as to an action in another capacity, and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.

         (d)      The Partnership may purchase and maintain insurance on behalf
of the General Partner and such other Persons as the General Partner shall
determine against any liability that may be asserted against or expense that may
be incurred by such Person in connection with the Exchange and the activities of
the Partnership, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.

         (e)      Except as set forth in the next sentence below, any
indemnification hereunder shall be satisfied solely out of the assets of the
Partnership. The Record Holders shall not be subject to personal liability by
reason of these indemnification provisions.

         (f)      An Indemnitee shall not be denied indemnification in whole or
in part under this Section 6.15 by reason of the fact that 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.

         (g)      The provisions of this Section 6.15 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other Persons.

         6.16.    No Management by Record Holders. No Record Holder (other than
the General Partner or any agent or employee of the General Partner, in its
capacity as such, if such Person shall also be a Record Holder) shall take part
in the day-to-day management, operation or control of the business and affairs
of the Partnership. The Record Holders shall not have any right, power or
authority to transact any business in the name of the Partnership or to act for
or on behalf of or to bind the Partnership. The Record Holders shall have no
rights other than those specifically provided herein or granted by law where
consistent with a valid provision hereof. In the event any laws, rules or
regulations

                                       32

<PAGE>

applicable to the Partnership, or to the sale or issuance of the Units in
connection with the Exchange, require a Record Holder, or any group or class
thereof, to have certain rights, options, privileges or consents not granted by
the terms of this Agreement, then such Record Holders shall have and enjoy such
rights, options, privileges and consents so long as (but only so long as) the
existence thereof does not result in a loss of the limitation on liability
enjoyed by the Record Holders and the Partnership (as the sole limited partner
of the Operating Partnership) under the Delaware Act or the applicable laws of
any other jurisdiction.

         6.17     National Securities Exchange Listing. The General Partner
shall have full power and authority on behalf of the Partnership to file all
documents and instruments and to do all things necessary or advisable to list
the Depositary Units for trading on a National Securities Exchange and to comply
with any rule, regulation or guideline of any National Securities Exchange on
which the Depositary Units are listed for trading.

         6.18.    Other Matters Concerning 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 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 and other
consultants and advisers selected by it and any opinion of any such Person as to
matters that the General Partner reasonably believes to be within its
professional or expert competence (including, without limitation, any opinion of
legal counsel to the effect that the Partnership would "more likely than not"
prevail with respect to any matter) shall be full and complete authorization and
protection in respect to any action taken or suffered or omitted by the General
Partner hereunder in good faith and in accordance with such opinion.

         (c)      Anything in this Agreement to the contrary notwithstanding,
the General Partner represents, covenants, warrants and agrees with the Record
Holders and the Partnership as follows:

         (i)      It shall not permit any Person who makes a non-recourse loan
         to the Partnership to acquire, at any time as a result of making the
         loan, any direct or indirect interest in the profits, capital or
         property of the Partnership, other than as a secured creditor; and
         fees, insurance brokerage commissions and real estate brokerage
         commissions.

                                       33

<PAGE>

         (ii)     It shall not provide any Record Holder with any mandatory or
         discretionary right to purchase any type of security the General
         Partner or of Affiliates thereof in connection with such Record
         Holder's Partnership Interest.

         (d)      The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through a duly appointed attorney or
attorneys-in-fact. Each such attorney or attorney-in-fact shall, to the extent
provided by the General Partner in the power of attorney, have full power and
authority to do and perform, under the supervision of the General Partner, all
and every act and duty which is permitted or required to be done by the General
Partner hereunder. Each such appointment shall be evidenced by a duly executed
power of attorney giving and granting to each such attorney or attorney-in-fact
full power and authority to do and perform all and every act and thing requisite
and necessary to be done by the General Partner in connection with the
Partnership.

                                   ARTICLE VII

                            Reimbursement of Expenses

         7.01.    Reimbursement of Expenses of General Partner.

         (a)      The Partnership shall reimburse the General Partner for all
expenses, disbursements and advances reasonably incurred by the General Partner
in connection with the organization of the Partnership, the qualification of the
Partnership and the General Partner to do business in any state in which the
General Partner determines that such qualification is advisable, the
registration of the Units under applicable federal and state securities laws in
connection with the Exchange, the offering, sale and distribution of the Units
pursuant to the Exchange and the listing of the Depositary Units on a National
Securities Exchange.

         (b)      The Partnership shall reimburse the General Partner for all
allocable direct and indirect overhead expenses, including, without limitation,
salaries and rent, incurred by the General Partner in connection with its
conduct of the business and affairs of the Partnership. Such allocations shall
be subject to periodic review by the Audit Committee.

         7.02.    Remuneration of General Partner and Affiliates. It is hereby
acknowledged by the parties hereto that the Operating Partnership shall pay to
the General Partner and its Affiliates certain forms of compensation and fees.
Such compensation and fees are described with more particularity in the OLP
Partnership Agreement or the Registration Statement and include soliciting
dealer fees, property management fees, reinvestment incentive

                                       34

<PAGE>

fees, insurance brokerage commissions and real estate brokerage commissions.

                                  ARTICLE VIII

                        Bank Accounts; Books and Records;
                        Fiscal Year; Reports; Tax Matters

         8.01.    Bank Accounts. All funds of the Partnership shall be deposited
in its name in such checking and savings accounts, time deposits, certificates
of deposit or other accounts at such banks or other financial institutions as
shall be designated by the General Partner from time to time, and the General
Partner shall arrange for the appropriate conduct of any such account or
accounts. The General Partner shall not permit funds of the Partnership to be
commingled with funds of the General Partner, any Affiliate of the General
Partner, or any other Person; provided, however, that nothing herein shall
preclude any investment of Partnership funds in a mutual fund or similar entity
for which a separate account is maintained on behalf of each participant. The
General Partner may use the funds of the Partnership as compensating balances
for its benefit, provided that such funds do not directly or indirectly secure,
and are not otherwise at risk on account of, any indebtedness or other
obligation of the General Partner or any director, officer, partner, employee or
Affiliate thereof.

         8.02.    Books and Records.

         (a)      The General Partner shall keep, or cause to be kept, accurate,
full, and complete books and accounts with respect to the Partnership, showing
assets, liabilities, income, operations, transactions and the financial
condition of the Partnership. Such books and accounts shall be prepared and
maintained on the accrual basis of accounting in accordance with generally
accepted accounting principles. The General Partner shall maintain and preserve
all Partnership books and records for such period as the General Partner, in its
sole and absolute discretion, shall determine necessary or appropriate, subject
to any requirements of state or federal law.

         (b)      Except for information kept confidential by the General
Partner pursuant to Section 8.02(c), all books, records, reports and accounts of
the Partnership shall be open to inspection by any Record Holder or duly
authorized representatives of such Record Holder on reasonable notice at any
reasonable time during business hours, for any purpose reasonably related to the
Person's interest as a Record Holder, as the case may be, and such Person or its
representatives at its expense shall have the further right to make copies or
excerpts therefrom. Record Holders may request an

                                       35

<PAGE>

accounting of Partnership affairs whenever circumstances render it just and
reasonable, but the cost of furnishing of such information or conducting such
accounting shall be at such Person's expense. None of the Record Holders or
their representatives shall divulge to any other Person any confidential or
proprietary data, information or property or any trade secrets of the
Partnership. A copy of the list of names and addresses of all Record Holders
shall be furnished to any Partner, Record Holder or their representatives upon
request in person or by mail to the General Partner. The Person requesting such
list shall pay the cost of copying the list and mailing before the list is
delivered.

         (c)      Anything in this Section 8.02 to the contrary notwithstanding,
the General Partner may keep confidential from the Record Holders, and each
Record Holder's duly authorized representatives, for such period of time as the
General Partner deems reasonable, any information that 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 which the Partnership is required by law or by agreements with third
parties to keep confidential.

         8.03.    Fiscal Year. The Fiscal Year of the Partnership for financial
and federal, state, and local income tax purposes initially shall be the
calendar year. The General Partner shall have authority to change the beginning
and ending dates of the Fiscal Year if the General Partner, in its sole and
absolute discretion, subject to approval by the Internal Revenue Service, shall
determine such change to be necessary or appropriate to the business of the
Partnership, and shall give written notice of any such change to the Record
Holders within thirty (30) days after the occurrence thereof.

         8.04.    Reports.

         (a)      The General Partner shall use its best efforts to prepare and
furnish within ninety (90) days after the close of the calendar year to each
Person who was a Record Holder on the last day of any month during the Fiscal
Year the information necessary for the preparation of such Person's United
States federal income tax return and any United States or state income tax
returns or the tax returns of any other jurisdiction required of such Person as
a result of the operations of the Partnership. The Record Holders agree to
furnish the General Partner with such information as may be necessary or helpful
in preparing the tax returns or other filings of the Partnership.

                                       36

<PAGE>

         (b)      As soon as practicable, but in no event later than one hundred
twenty (120) days after the close of each Fiscal Year, the General Partner shall
mail or deliver to each Record Holder as of the last day of that Fiscal Year
reports containing financial statements of the Partnership for such Fiscal Year,
including a balance sheet, statements of operations, changes in Partners' equity
and changes in financial position. Such statements are to be prepared in
accordance with generally accepted accounting principles and audited and
certified by the Accounting Firm.

         (c)      After the close of each fiscal quarter, except the last fiscal
quarter of each Fiscal Year, the General Partner shall mail or otherwise furnish
to each Record Holder as of the last day of such fiscal quarter a quarterly
report for the fiscal quarter containing such financial and other information as
the General Partner deems appropriate.

         (d)      The General Partner shall provide to the Record Holders such
other reports and information concerning the business and affairs of the
Partnership (i) as the General Partner, in its sole and absolute discretion, may
deem necessary or appropriate, or (ii) to the extent not provided for in this
Agreement, as may be specifically required by the Delaware Act or by any other
law or any regulation of any regulatory body applicable to the Partnership.

         (e)      The General Partner shall provide any of the reports or other
information referred to in this Section 8.04 to such federal, state or local
governments, governmental agencies or other regulatory entities as the General
Partner, in its sole and absolute discretion, may deem necessary or appropriate.

         8.05.    Accounting Decisions. All decisions as to accounting matters,
except as specifically provided to the contrary herein, shall be made by the
General Partner.

         8.06.    Where Maintained. The books, accounts and records of the
Partnership at all times shall be maintained at the Partnership's principal
office or, at the option of the General Partner, at the principal place of
business of the General Partner.

         8.07.    Preparation of Tax Returns. The General Partner, at the
expense of the Partnership, shall arrange for the preparation and timely filing
of all returns of the Partnership showing all income, gains, deductions, and
losses necessary for federal and state income tax purposes. The classification,
realization and recognition of income, gains, losses and deductions and other
items of the Partnership shall be on the accrual method of accounting for
federal income tax purposes.

                                       37

<PAGE>

         8.08.    Tax Elections. Except as otherwise specifically provided
herein, the General Partner shall, in its sole and absolute discretion,
determine whether to make any available income tax election. The General Partner
shall cause the Partnership to make the Section 754 Election in accordance with
applicable regulations thereunder. The General Partner shall have the right to
seek to revoke any such election upon the General Partner's determination that
such revocation is in the interests of the Record Holders; provided, however,
that the General Partner shall not seek to revoke any such election unless the
General Partner has received an opinion of counsel for the Partnership to the
effect that such revocation would not cause (a) the loss of limited liability of
the Record Holders under this Agreement or of the Partnership as the sole
limited partner of the Operating Partnership and (b) the Partnership to be
treated as an association taxable as a corporation for federal income tax
purposes.

         8.09.    Tax Controversies. Subject to the provisions hereof, the
General Partner is designated as the "tax matters partner" (as defined in
Section 6231 of the Code) of the Partnership and is authorized and required to
represent the Partnership (at the expense of the Partnership) in connection with
all examinations of the affairs of the Partnership, by any federal, state or
local tax authorities, including any resulting administrative and judicial
proceedings, and to expend funds of the Partnership for professional services
and costs associated therewith. Each Record Holder agrees to cooperate with the
General Partner and to do or refrain from doing any or all things reasonably
required by the General Partner in connection with the conduct of all such
proceedings.

         8.10.    Taxation as a Partnership. No election shall be made by the
Partnership, the General Partner, any Limited Partner, Record Holder,
Non-Consenting Investor or Subsequent Transferee to be excluded from the
application of any of the provisions of Subchapter K, Chapter I of Subtitle A of
the Code or from any similar provisions of any state tax laws.

         8.11.    Determination of Adjusted Basis in Connection with Section 754
Election. In determining adjustments to the General Partner's or a Record
Holder's proportional share of the adjusted basis of Partnership Assets in
connection with the Section 754 Election, the General Partner, for purposes of
accounting simplicity, shall treat each General Partner or Record Holder who
acquires one or more Units or Depositary Units at any time during a calendar
month as having acquired all such Units or Depositary Units on the last day of
such calendar month at a price equal to the lowest Unit Price of the Units or
Depositary Units during such month, irrespective of the date on or price at
which such Units or Depositary Units actually were acquired by such General
Partner or

                                       38

<PAGE>

Record Holder during such month. The General Partner shall be authorized to
alter these accounting conventions to conform with any regulations issued by the
Treasury Department or rulings or advice of the Internal Revenue Service, as the
General Partner shall determine necessary or appropriate. To the extent the
General Partner is required to determine the adjusted basis of any Partnership
Assets with respect to which the Code requires that records of such adjusted
basis be kept and maintained by the Record Holders, the General Partner may
request information regarding such adjusted basis from such Record Holders, in
writing, and such Record Holders shall furnish such information to the General
Partner within thirty (30) calendar days after such request is mailed by the
General Partner.

         8.12.    FIRPTA and State Income Tax Withholding.

         (a)      Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under Sections 1445 and 1446 of the Code with regard to
(i) the sale of "United States real property interests" (as defined in the
Code), (ii) the distribution of cash or property to the General Partner or any
Record Holder who is a "foreign person" (as defined in Treasury Regulation
Section 1.1445-2T(b)(2)(i)(c)) or (iii) the transfer of Units or Depositary
Units.

         (b)      In its sole and absolute discretion and as provided for in
Treasury Regulations under Sections 1445 and 1446 of the Code, the General
Partner may elect to withhold a portion of any distributions made to the General
Partner and any Record Holder who are "foreign persons" or who fail to provide
to the Partnership an appropriate certificate in accordance with the applicable
provisions of such Treasury Regulations. In addition, the General Partner may
elect, in its sole and absolute discretion, to withhold from amounts
distributable to the General Partner and any Record Holder, portions of such
amounts in respect of any state income tax payable in respect of such Partner's
allocable share of the Partnership's taxable income.

         8.13.    Loss of Partnership Status. In the event that the General
Partner at any time shall determine that the Partnership does not qualify, or no
longer will qualify, as a partnership for federal income tax purposes, then the
General Partner shall have the right, but not the obligation, without the
consent of the Record Holders, to take any such action as it, in its sole and
absolute discretion, determines to be in the interests of the Record Holders in
connection therewith or as a result thereof, including, without limitation to
cause the Partnership to be

                                       39

<PAGE>

reorganized so as to qualify as a "real estate investment trust" within the
meaning of Section 856 of the Code.

         8.14.    Opinions Regarding Taxation. Notwithstanding any other
provision of this Agreement, the requirement, as a condition to any action
proposed to be taken under this Agreement, that the Partnership be furnished an
opinion of counsel for the Partnership to the effect that the proposed
transaction would not result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes, shall not be
applicable if the Partnership is at such time treated in all material respects
as an association taxable as a corporation for federal income tax purposes.

                                   ARTICLE IX

          Issuance and Deposit of Certificates of Partnership Interest

         9.01.    Issuance of Certificates. On the Closing Date, the General
Partner shall cause the Partnership to issue one or more Certificates evidencing
the aggregate whole number of Units to which the API Investors in API
Partnerships that participate in the Exchange are entitled to be issued pursuant
to the Exchange and shall deposit such Certificate(s) with the Depositary and
cause the Depositary to issue Depositary Units as specified in the Merger
Agreements. Such Certificates shall be substantially in the form attached hereto
as Exhibit A. Upon the issuance of Units to Additional Limited Partners pursuant
to Section 4.05, the General Partner shall cause the Partnership to issue one or
more Certificates representing in the aggregate the whole number of units to be
so issued to each such Additional Limited Partner. Upon the transfer of a Unit
in accordance with Article X, the General Partner shall cause the Partnership to
issue replacement Certificates, according to such procedures as the General
Partner shall establish. The Certificates issued pursuant to this Section 9.01
shall, upon issuance, be deposited with the Depositary pursuant to the
Depositary Agreement, and the Depositary will issue Depositary Receipts for the
Depositary Units represented thereby.

         9.02.    Lost, Stolen, Destroyed or Mutilated Certificates or
Depositary Receipts. The Partnership shall issue or cause to be issued a new
Certificate or Depositary Receipt in place of any Certificate or Depositary
Receipt previously issued if the Record Holder of such Certificate or Depositary
Receipt:

         (a)      makes proof, in form and substance satisfactory to the General
Partner, of the loss, theft or destruction, and of such Record Holder's
ownership, of such previously issued Certificate or Depositary Receipt;

                                       40

<PAGE>

         (b)      surrenders any mutilated Certificate or Depositary Receipt;

         (c)      requests the issuance of a new Certificate or Depositary
Receipt before the Partnership has notice that such previously issued
Certificate or Depositary Receipt has been acquired by a purchaser for value in
good faith and without notice of an adverse claim;

         (d)      if requested by the General Partner, delivers to the
Partnership a bond, in form and substance satisfactory to the General Partner,
with such surety or sureties and with fixed or open penalty, as the General
Partner may direct, to indemnify the Partnership and the Depositary against any
claim that may be made on account of the alleged loss, theft, destruction or
mutilation of such previously issued Certificate or Depositary Receipt; and

         (e)      satisfies any other reasonable requirements imposed by the
General Partner.

         When a previously issued Certificate or Depositary Receipt has been
lost, stolen, destroyed or mutilated and the Record Holder fails to notify the
Partnership within a reasonable time after he has notice of such event, and a
transfer of Units represented by the Certificate or Depositary Receipt is
registered before such Partnership receives such notification, the Record Holder
shall be precluded from making any claim against the Partnership, the Depositary
or any Transfer Agent with respect to such transfer or for a new Certificate or
Depositary Receipt.

         9.03.    Record Holder. The Partnership shall be entitled to treat each
Record Holder as the beneficial owner of any Units, Depositary Units or other
securities of the Partnership, as the case may be, and, accordingly, shall not
be required to recognize any equitable or other claim or interest in or with
respect to such Units, Depositary Units or other securities of the Partnership
on the part of any other Person, regardless of whether it shall have actual or
other notice thereof, except as otherwise provided by this Agreement or required
by law or any applicable rule, regulation, guideline, or requirement of any
National Securities Exchange on which the Units, Depositary Units or other
securities of the Partnership are listed for trading. Without limiting the
foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing) is acting as a
nominee, agent or in some other representative capacity for another Person in
acquiring and/or holding Units, Depositary Units or other securities of the
Partnership, as between the Person and such representative Persons, such
representative Persons (a) shall be the Record

                                       41

<PAGE>

Holder with respect to such Units, Depositary Units or other securities of the
Partnership, (b) must execute a Transfer Application and (c) shall be bound by
the Partnership Agreement and shall have the obligations of a Record Holder
hereunder and as provided for herein.

                                    ARTICLE X

                         Transfer of Interests and Units

         10.01.   Transfer.

         (a)      The term "transfer," when used in this Article X with respect
to a Partnership Interest or Unit, shall be deemed to refer to a transaction by
which the Record Holder of a Unit assigns the Partnership Interest evidenced
thereby to another Person as Subsequent Transferee and includes any sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or
other disposition.

         (b)      No Partnership Interest or Unit shall be transferred, in whole
or in part, except in accordance with the terms and conditions set forth in this
Article X. Any transfer or purported transfer of any Partnership Interest or
Unit not made in accordance with this Article X shall be null and void.

         10.02.   Transfers of Interest of General Partner.

         (a)      Prior to the tenth anniversary of the Closing Date, the
General Partner is prohibited from transferring its Partnership Interest as a
General Partner to any Person other than an Affiliate of the General Partner.
If, after the tenth anniversary of the Closing Date, the General Partner desires
to sell or transfer all or any portion of the General Partner's Partnership
Interest as a General Partner to a Person who is not a General Partner, such
transfer shall be permitted if (and only if):

                  (i)      such transfer and the admission of the transferee as
         a general partner of the Partnership is approved by a Majority
         Interest, unless the transferee is an Affiliate of the transferring
         General Partner, in which case no such approval of the Record Holders
         shall be required unless provided for in the Delaware Act.

                  (ii)     the transferee consents to be bound by this Agreement
         and has the necessary legal authority to act as a general partner of a
         partnership; and

                                       42

<PAGE>

                  (iii)    the Partnership receives an opinion of counsel that
         such transfer and admission (A) would not cause the loss of limited
         liability of the Record Holders under this Agreement or of the
         Partnership as the sole limited partner or the Operating Partnership
         and (B) would not cause the Partnership to be treated as an association
         taxable as a corporation for federal income tax purposes.

         (b)      Neither Section 10.01(a) nor any other provision of this
Agreement shall be construed to prevent (and each Partner, by requesting and
being granted admission to the Partnership, is deemed to consent to):

                  (i)      the transfer by any corporate General Partner of such
         corporate General Partner's Partnership Interest as a General Partner
         upon its merger or consolidation with another Person or the transfer by
         it of all or substantially all of its assets to another Person,
         provided such Person (A) has a net worth not less than that of the
         General Partner, (B) accepts and agrees to be bound by the terms and
         conditions of this Agreement and (C) furnishes to the Partnership an
         opinion of counsel to the effect that such merger, consolidation,
         transfer or assumption (1) would not cause the loss of limited
         liability of the Record Holders under this Agreement or of the
         Partnership as the sole limited partner of the Operating Partnership
         and (2) would not cause the Partnership or the Operating Partnership to
         be treated as an association taxable as a corporation for federal
         income tax purposes;

                  (ii)     the transfer by the General Partner of all or any
         part of its interest in items of Partnership income, gains, losses,
         deduction, credits, distributions or surplus; or

                  (iii)    the General Partner's mortgaging, pledging,
         hypothecating or granting a security interest in all or any part of its
         Partnership Interest as a General Partner as collateral for a loan or
         loans.

         10.03.   Transfer of Units. Units that are not on deposit in the
Deposit Account are not transferable except upon death, by operation of law, by
transfer to the General Partner for the account of the Partnership or to the
Depositary for deposit in the Deposit Account; provided, however, that the
General Partner and its Affiliates may, without restriction, transfer between or
among themselves Units that are not on deposit in the Deposit Account.

         10.04.   Transfer of Depositary Units.

         (a)      Except as specifically provided in Section 10.03, the
Partnership shall not recognize any transfer of Units or interests

                                       43

<PAGE>

herein except by a transfer of Depositary Units. Depositary units may be
transferred only in the manner provided in and subject to the conditions set
forth in the Depositary Agreement.

         (b)      No transfer of Depositary Units shall be recorded or otherwise
recognized by the Partnership or the Depositary unless and until the Subsequent
Transferee of such Depositary Units shall execute and deliver a Transfer
Application to the Depositary. By executing and delivering a Transfer
Application to the Depositary, a Subsequent Transferee shall be deemed (i) to
have applied to be admitted to the Partnership as a Substituted Limited Partner
pursuant to Article XI with respect to the Depositary Units transferred, (ii) to
have agreed to comply with and be bound by this Agreement, whether or not such
Subsequent Transferee is admitted as a Substituted Limited Partner with respect
to the Depositary Units transferred, and to execute any document that the
General Partner may reasonably require to be executed in connection with such
transfer or with the admission of such Subsequent Transferee as a Substituted
Limited Partner pursuant to Article XI with respect to the Depositary Units
transferred, (iii) to have granted to the General Partner and authorized
officers and attorneys-in-fact of the General Partner the powers of attorney
provided for in Article XV of this Agreement and the Depositary Agreement and
(iv) to have made the waivers and given the approvals contained in this
Agreement and the Depositary Agreement. A transferor of Depositary Units shall
have no duty or obligation to ensure the execution and delivery of a Transfer
Application by a Subsequent Transferee and shall not be liable to such
Subsequent Transferee if such Subsequent Transferee neglects or determines not
to execute and deliver a Transfer Application to the Depositary. After executing
and delivering a Transfer Application to the Depositary and pending admission as
a Substituted Limited Partner pursuant to Article XI with respect to Depositary
Units transferred pursuant to this Section 10.04, the Subsequent Transferee of
one or more such Depositary Units transferred pursuant to this Section 10.04
shall be a Record Holder in respect of such Depositary Units and shall be
entitled to all rights of assignees under the Delaware Act and all rights of
Record Holders under this Agreement, whether or not such Subsequent Transferee
is a Limited Partner with respect to other Depositary Units or Units.

         (c)      Each distribution in respect of a Depositary Unit (or a Unit
withdrawn from the Deposit Account) shall be paid by the Partnership, directly
or through the Depositary or through any other person or agent, only to the
Record Holder of such Depositary Unit (or such Unit withdrawn from the Deposit
Account) as of the Record Date or Record Dates set for such distribution. Such
payment shall constitute full payment and satisfaction of the Partnership's
liability in respect of such payment, regardless of

                                       44

<PAGE>

any claim of any Person who may have an interest in or with respect to such
payment by reason of any assignment or otherwise.

         (d)      Notwithstanding anything to the contrary herein, the
Partnership shall not recognize for any purpose any purported transfer by a
Record Holder of all or any part of a Depositary Unit held by such Record Holder
until the Partnership shall have received (A) the written advice by the
Depositary of the transfer of the Depositary Receipts evidencing such Depositary
Units or (B) in the case of Depositary Units held by the same nominee for the
transferor and the transferee, the receipt of written notification in accordance
with Section 16.02 hereof from the nominee holder of the date of the transfer of
such Depositary Units.

         (e)      Any holder of a Unit or a Depositary Receipt (including a
Subsequent Transferee thereof) conclusively shall be deemed, by acceptance of
such Unit or Depositary Receipt, to have agreed to comply with and be bound by
all terms and conditions of this Agreement, with the same effect as if such
holder had executed a Transfer Application, whether or not such holder in fact
has executed such a Transfer Application. A request by any broker, dealer, bank,
trust company, clearing corporation or nominee holder to register transfer of a
Depositary Unit, however signed (including by any stamp, mark or symbol executed
or adopted with intent to authenticate the Depositary Receipt), shall be deemed
to be an execution of a Transfer Application by and on behalf of the beneficial
owner of such Depositary Unit.

                                   ARTICLE XI

                              Admission of Partners

         11.01.   Admission of Limited Partners.

         (a)      On the Closing Date, the General Partner shall admit to the
Partnership as Record Holders all those Persons to whom Units are issued in
accordance with Section 4.03 hereof. Each such party shall be deemed to execute
a counterpart of this Agreement (either individually or by its attorney or
agent) by signing the Consent Form and thereby agree to be bound by the terms of
this Agreement.

         (b)      A Non-Consenting Investor shall neither become a Record Holder
with respect to Units issued to the Nominee in respect of such Non-Consenting
Investor's interests in the API Partnerships nor be admitted to the Partnership
as a Substituted Limited Partner in respect of such Units until such
Non-Consenting Investor has delivered to the Depositary (i) a duly executed
Transfer Application and (ii) to the extent not theretofore delivered pursuant
to the Exchange, all API Certificates, or, if such certificates

                                       45

<PAGE>

are lost or misplaced or have been destroyed or mutilated, an executed Lost
Certificate Affidavit. Upon compliance with the preceding sentence, the
Depositary shall take such actions as may be appropriate to cause such
Non-Consenting Investor to become a Record Holder and be admitted as a
Substituted Limited Partner with respect to Units held by the Nominee for the
account of such Non-Consenting Investor.

         11.02.   Admission of Substituted Limited Partners.

         (a)      Upon a transfer of a Depositary Unit in accordance with
Article X, the transferor shall, subject to the provisions of Section I0.04(d),
have the power to give, and by transfer of a Depositary Unit, shall be deemed to
have given, the Subsequent Transferee of such Person's Depositary Unit the right
to apply to become a Substituted Limited Partner with respect to the Depositary
Unit acquired, subject to the conditions of and in the manner permitted under
this Agreement. Subject to the foregoing, each Subsequent Transferee of a
Depositary Unit (including any Person, such as a broker, dealer, bank, trust
company, clearing corporation, other nominee holder or an agent of any of the
foregoing, acquiring such Depositary Unit for the account of another Person)
shall be deemed to have applied to become a Substituted Limited Partner with
respect to the Depositary Unit transferred to such Person by executing and
delivering a Transfer Application at the time of such transfer as provided in
Section 10.04. A Subsequent Transferee of a Depositary Unit who does not execute
and deliver a Transfer Application to the Depositary shall not be a Record
Holder, shall not be admitted as a Substituted Limited Partner and shall only
have the right to transfer or assign the Depositary Units held by him to a
purchaser or other transferee. Such a Subsequent Transferee in addition shall
not be entitled to receive distributions made by the Partnership pursuant to
Article V nor be entitled to vote on Partnership matters or any other rights to
which Limited Partners are entitled under the Delaware Act or pursuant to this
Agreement. After executing and delivering a Transfer Application to the
Depositary and pending admission to the Partnership as a Substituted Limited
Partner with respect to the Depositary Units transferred to him pursuant to
Section 10.04, a Subsequent Transferee shall be a Record Holder with respect to
such Depositary Units and shall be entitled to all rights of assignees under the
Delaware Act and all rights of Record Holders under this Agreement.

         (b)      Under the terms of the Depositary Agreement, the Depositary is
obligated to prepare as of the close of business on the last Business Day of
each month, a list or other appropriate evidence of all transfers of Depositary
Units registered by the Transfer Agent since the last Business Day of the
preceding month (hereinafter called the "transfer record") and, as promptly as

                                       46

<PAGE>

practicable after the last Business Day of each month, to submit transfer record
to the General Partner. Within thirty (30) days after receipt of the transfer
record by the General Partner the General Partner shall determine whether or not
to admit as a Substituted Limited Partner any one or more of the Subsequent
Transferees listed in such transfer record, and shall, if required, amend (or
cause to be amended) this Agreement in accordance with Section 14.01 and shall
prepare and record (or cause to be prepared and recorded) in such jurisdictions
(if any) as shall be necessary, an amendment to the Certificate of Limited
Partnership pursuant to Section 2.01, or to any other filing made in such
jurisdiction, to reflect the admission as Substituted Limited Partners of those
Subsequent Transferees that the General Partner, in its sole and absolute
discretion, determines shall be admitted as Substituted Limited Partners.

         (c)      Anything in this Section 11.02 to the contrary
notwithstanding, no Person shall be admitted as a Substituted Limited Partner
with respect to a Depositary Unit acquired by transfer without the written
consent of the General Partner (whether or not such Record Holder is a Limited
Partner with respect to other Units or Depositary Units), which consent may be
withheld or granted in the sole and absolute discretion of the General Partner.
Each Record Holder consents to the admission of each Substituted Limited Partner
pursuant to the terms of this Agreement, and no further consent of the Record
Holders, other than that of the General Partner as aforesaid, shall be required
to effect such admission.

         (d)      The admission of a Subsequent Transferee as a Substituted
Limited Partner with respect to a Depositary Unit acquired by transfer shall
become effective on the date that the General Partner gives its written consent
to such admission and the name of such Subsequent Transferee is recorded on the
books and records of the Partnership.

         (e)      Any Record Holder who transfers all of his Depositary Units
with respect to which he had been admitted as a Record Holder shall cease to be
a Record Holder of the Partnership upon a transfer of such Depositary Units in
accordance with Article X and shall have no further rights as a Record Holder in
or with respect to the Partnership (whether or not the Subsequent Transferee of
such former Record Holder is admitted to the Partnership as a Substituted
Limited Partner).

         (f)      No person shall be entitled to become a Substituted Limited
Partner with respect to any Depositary Units except in accordance with this
Section 11.02.

                                       47

<PAGE>

         11.03.   Admission of Successor General Partner. A successor General
Partner selected pursuant to Sections 12.01 or 12.02 or the transferee of all or
any portion of the Partnership Interest of a General Partner pursuant to Section
10.02 shall be admitted to the Partnership as a General Partner (in the place,
in whole or in part, of the transferor or former General Partner), effective as
of the date that an amendment of the Certificate of Limited Partnership, adding
the name of such successor General Partner and other required information, is
filed pursuant to Section 2.01 (which date, in the event the successor General
Partner is in the place in whole of the transferor or former General Partner,
shall be contemporaneous with the withdrawal of such transferor or former
General Partner), and upon receipt by the transferor or former General Partner,
of all of the following:

         (a)      the successor General Partner's acceptance of, and agreement
         to be bound by, all of the terms and provisions of this Agreement, in
         form and substance satisfactory to the transferor or former General
         Partner;

         (b)      evidence of the authority of such successor General Partner to
         become a General Partner and to be bound by all of the terms and
         conditions of this Agreement;

         (c)      the written agreement of the successor General Partner to
         continue the business of the Partnership in accordance with the terms
         and provisions of this Agreement; and

         (d)      such other documents or instruments as may be required in
         order to effect the admission of the successor General Partner as the
         General Partner under this Agreement and applicable law.

         11.04.   Admission of Additional Limited Partners. A Person who makes a
Capital Contribution to the Partnership pursuant to Section 4.05 in return for
the issuance of Units or other securities of the Partnership shall be admitted
to the Partnership as an Additional Limited Partner upon furnishing to the
General Partner (a) acceptance, in form satisfactory to the General Partner, of
all the terms and conditions of this Agreement, including, without limitation,
the power of attorney granted in Article XV, and (b) such other documents or
instruments as may be required in order to effect his admission as a limited
partner, and such admission shall become effective on the date that the General
Partner determines, in its sole discretion, that such conditions have been
satisfied and when any such admission is shown on the books and records of the
Partnership.

                                       48

<PAGE>

                                   ARTICLE XII

                    Withdrawal or Removal of General Partner

         12.01.   Withdrawal of General Partner.

         (a)      The General Partner shall not withdraw as the general partner
in the Partnership and transfer its Partnership Interest to any Person other
than its Affiliate until after the tenth anniversary of the Closing Date.
Thereafter, the General Partner shall not withdraw as the General Partner in the
Partnership for the remainder of the term of the Partnership unless (i) the
General Partner's shall have transferred all of its Partnership Interest as a
General Partner in accordance with Section 10.02 or (ii) such withdrawal shall
have been approved by a Majority Interest.

         (b)      After the tenth anniversary of the Closing Date and upon the
occurrence of any one of the conditions set forth in Section 12.01(a) above, the
General Partner may withdraw from the Partnership effective on at least thirty
(30) days' advance written notice to the Record Holders, such withdrawal to take
effect on the date specified in such notice. The General Partner shall have no
liability to the Partnership or the Record Holders on account of any withdrawal
in accordance with the terms of this Section 12.01. If the General Partner shall
give a notice of withdrawal pursuant to this Section 12.01, then a Majority
Interest may elect a successor General Partner, who shall be admitted as a
successor General Partner pursuant to Article XI. If no successor General
Partner shall be elected in accordance with this Section 12.01 and there shall
be no remaining General Partner, then the Partnership shall be dissolved
pursuant to Article XIII.

         12.02.   Removal of General Partner.

         (a)      The General Partner may be removed as General Partner, with or
without cause, only upon the written consent or affirmative vote of Record
Holders owning at least seventy-five percent (75%) of the total number of Units
then outstanding held by all Record Holders. Any such action by the Record
Holders also must provide for the election of a successor General Partner and
shall become effective only upon admission of the successor General Partner
pursuant to Article XI.

         (b)      Written notice of the removal of the General Partner pursuant
to this Section 12.02 shall be served upon such General Partner in the manner
set forth in Section 16.02. Such notice shall set forth the day upon which such
removal is to become effective, which date shall not be less than thirty (30)
days after the service of the notice upon the General Partner.

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<PAGE>

         (c)      A General Partner removed as a General Partner pursuant to
this Section 12.02 shall not have any right to participate in the management or
control of the business of the Partnership from and after the effective date of
such removal.

         (d)      A General Partner removed as a General Partner in the
Partnership pursuant to this Section 12.02 shall also be removed as a general
partner in the Operating Partnership pursuant to Section 10.02 of the OLP
Partnership Agreement.

         12.03.   Amendment of Agreement and Certificate of Limited Partnership.
This Agreement and the Certificate of Limited Partnership shall be amended to
reflect the withdrawal, removal or succession of a General Partner.

         12.04.   Interests of Departing General Partner and Successor.

         (a)      Upon the withdrawal or removal of a General Partner, such
departing General Partner shall, at its option exercisable prior to the
effective date of its departure, promptly receive from its successor (if any) in
exchange for its Partnership Interest as a General Partner, an amount in cash
equal to the fair market value of such departing General Partner's Partnership
Interest as a General Partner in both the Partnership and the Operating
Partnership, as determined as of the effective date of its departure. If the
departing General Partner exercises its option to have its Partnership Interest
as a General Partner acquired by its successor, such successor must also acquire
at such time the interests of the departing General Partner as a general partner
in the Operating Partnership, for an amount in cash equal to the fair market
value of such interest, as determined as of the effective date of its departure.
If the option is exercised, the departing General Partner shall, as of the
effective date of its departure, cease to share in allocations and distributions
with respect to its Partnership Interest as a General Partner.

         (b)      Upon the withdrawal or removal of the General Partner pursuant
to Section 12.01 or 12.02, respectively, if the business of the Partnership is
continued pursuant to Section 13.03 hereof, and if a departing General Partner
shall not exercise the option described in Section 12.04(a), such departing
General Partner shall become a Record Holder and its interests as a General
Partner in both the Partnership and the Operating Partnership shall be converted
into the number of Units determined by dividing (i) the fair market value of
such departing General Partner's Partnership Interest as a General Partner in
both the Partnership and the Operating Partnership, determined as set forth in
Section 12.04(c) as of the effective date of its departure, by (ii) the

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<PAGE>

average closing Unit Price for the twenty (20) trading days immediately
preceding the effective date of the departure of such departing General Partner.

         (c)      For purposes of this Section 12.04, the "fair market value" of
such General Partner's Partnership Interest as a General Partner in both the
Partnership and the Operating Partnership shall be the amount that would be
distributed to such General Partner pursuant to Section 5.03 of both this
Agreement and the OLP Partnership Agreement if the Partnership Assets and the
assets of the Operating Partnership were sold for cash in an orderly liquidation
of the Partnership Assets commencing on the effective date of such General
Partner's departure, with such liquidation being effected through arm's-length
sales between informed and willing purchasers under no compulsion to buy and
informed and willing sellers under no compulsion to sell, with the proceeds from
such hypothetical sales to be discounted (at a rate equal to the interest rate
on U.S. Treasury obligations with a term of one (1) year issued on the date
nearest the effective date of such General Partner's departure) to the effective
date of such General Partner's departure to reflect the time period reasonably
anticipated to be necessary to consummate such sales, as such "fair market
value" is agreed upon by such General Partner and its successor within thirty
(30) days after the effective date of such General Partner's departure or, in
the absence of such an agreement, as determined by an independent investment
banking firm or other independent expert selected by such General Partner and
its successor, which, in turn, may rely on other experts and the determination
of which shall be conclusive as to such matter. If such parties cannot agree
upon one independent investment banking firm or other independent expert within
45 days after the effective date of such departure, then such firm shall be
designated by the independent investment banking firm or other independent
expert selected by each of such General Partner and its successor. In making its
determination, such independent investment banking firm or other independent
expert shall consider the Unit Price, the value of the Partnership Assets and
the assets of the Operating Partnership, the rights and obligations of such
General Partner and other factors it may deem relevant.

         (d)      At any time after the departure of a departing General
Partner, upon the request of such departing General Partner, the Partnership
shall file with the Commission as promptly as practicable after receiving such
request, and use its best efforts to cause to become effective, a registration
statement under the Securities Act registering the offering and sale of all or a
portion of the Units owned by the departing General Partner at the time of its
departure, including any Units that were received by the departing General
Partner pursuant to this Section 12.04 and pursuant to Section 10.04 of the OLP
Partnership Agreement and

                                       51

<PAGE>

included in such request, provided that the Partnership shall be required to
file no more than three such registration statements at the request of any one
departing General Partner. In connection with any such registration, the
Partnership shall promptly prepare and file such documents as may be necessary
to register or qualify the Units subject to such registration under the
securities laws of such states as the departing General Partner may reasonably
request and do any and all other acts and things which may be necessary or
advisable to enable the departing General Partner to consummate a public sale of
such Units in such states. The first of the three registrations permitted to be
effected under this Section 12.04(d) shall be effected at the expense of the
Partnership, except for underwriting discounts and commissions, and the second
and third such registrations, if any, shall be effected at the expense of the
departing General Partner. Any registration statement filed pursuant hereto
shall be continued in effect for a period of not more than six months following
its effective date. If offered in a firm commitment underwriting, the
Partnership may provide indemnification to the underwriters in form and
substance reasonably satisfactory to such underwriters and the General Partner.

         (e)      If a departing General Partner shall not exercise the option
provided for in Section 12.04(a), the successor General Partner shall, at the
effective date of its admission to the Partnership as a General Partner,
contribute to the capital of the Partnership cash in an amount equal to 1/99th
of the product of (i) the number of Units outstanding immediately prior to the
effective date of such successor General Partner's admission (but after giving
effect to the conversion described in Section 12.04(b)) and (ii) the average
closing Unit Price for the twenty (20) trading days immediately preceding the
effective date of such successor General Partner's admission. Thereafter, such
successor General Partner shall, notwithstanding any other provision of this
Agreement, be entitled to one percent (1%) of all Partnership allocations and
distributions.

         (f)      If, at the time of the General Partner's departure, the
Partnership is indebted to the General Partner under this Agreement or any other
instrument or agreement for funds advanced, properties sold, services rendered
or costs and expenses incurred by the General Partner, the Partnership shall, in
the case of the General Partner's withdrawal pursuant to Section 12.01, deliver
to the General Partner a three-year fully-amortizing promissory note in the
original principal amount of the full amount of such indebtedness and bearing
interest at an annual rate equal to the Prime Rate announced by Citibank, N.A.
from time to time plus one (1) percent, and in the case of the General Partner's
removal pursuant to Section 12.02, pay to the General Partner in cash or by
check, within sixty (60) days after the effective date of the

                                       52

<PAGE>

General Partner's removal, the full amount of such indebtedness. The successor
to the General Partner shall assume all obligations theretofore incurred by the
General Partner, as genera: partner of :he Partnership, and the Partnership and
such successor shall take all such actions as shall be necessary to terminate
any guarantees of the General Partner, and any of its Affiliates, of any
obligations of the Partnership. If, for whatever reason, the creditors of the
Partnership shall not consent to such termination of any such guarantees, the
successor to the General Partner and the Partnership shall be required to
indemnify the General Partner for any liabilities and expenses incurred by the
departing General Partner on account of such guarantees.

                                  ARTICLE XIII

                           Dissolution and Liquidation

         13.01.   No Dissolution. The Partnership shall not be dissolved by the
admission of Additional Limited Partners or Substituted Limited Partners or by
the admission of additional General Partners or successor General Partners in
accordance with the terms of this Agreement.

         13.02.   Events Causing Dissolution. The Partnership shall be dissolved
and its affairs wound up upon the occurrence of the earliest to occur of any of
the following events:

         (a)      the expiration of the term of the Partnership, as provided in
         Section 2.05;

         (b)      the withdrawal, bankruptcy or dissolution of the General
         Partner or the occurrence of any other event that results in the
         General Partner ceasing to be the General Partner (other than by reason
         of a transfer pursuant to Section 10.02 or withdrawal occurring upon or
         after, or a removal effective upon or after, selection of a successor
         pursuant to Sections 12.01 or 12.02, as the case may be);

         (c)      an election by a Majority Interest, with the approval of the
         General Partner, to terminate, liquidate and dissolve the Partnership;

         (d)      the sale or other disposition of all or substantially all of
         the Partnership Assets, upon the election of the General Partner and
         the vote of a Majority Interest;

         (e)      the Partnership's insolvency or bankruptcy; or

         (f)      the occurrence of any other event that, under the Delaware
         Act, would cause the dissolution of the Partnership

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<PAGE>

         or that would make it unlawful for the business of the Partnership to
         be continued.

         For purposes of this Section 13.02, bankruptcy of the Partnership or
the General Partner shall be deemed to have occurred when (i) such Person
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) a final and nonappealable order for relief is entered against it
under the Federal bankruptcy laws as now or hereafter in effect or (iii) it
executes and delivers a general assignment for the benefit of its creditors.

         13.03.   Right to Continue Business of Partnership. Upon an event
described in Section 13.02(b), the Partnership thereafter shall be dissolved and
liquidated unless, within ninety (.90) days after the event described in such
Section, an election to reconstitute and continue the business of the
Partnership shall be made writing by a Majority Interest and a successor General
Partner is selected by a Majority Interest. If such an election to continue the
Partnership is made and a successor General Partner selected, then:

         (i)      the Partnership shall continue until the Termination Date
         unless earlier dissolved in accordance with this Article XIII;

         (ii)     the Partnership Interest of the former General Partner shall
         be treated thenceforth as the interest of a Record Holder and either
         (A) purchased by the successor General Partner or (B) converted into
         Units in the manners provided in Section 12.04 as if the former General
         Partner were a departing General Partner under Section 12.04; and

         (iii)    all necessary steps shall be taken to amend this Agreement and
         the Certificate of Limited Partnership to reflect the reconstitution
         and continuation of the business of the Partnership.

         13.04.   Dissolution. Except as otherwise provided in Section 13.03,
upon the dissolution of the Partnership, the Certificate of Limited Partnership
shall be cancelled in accordance with the provisions of the Delaware Act, and
the General Partner (or, if the dissolution is caused by the withdrawal,
bankruptcy, dissolution or removal of the General Partner, then the Person
designated as Liquidating Trustee in Section 13.05 hereof) promptly shall notify
the Record Holders of such dissolution.

         13.05.   Liquidation. Upon dissolution of the Partnership, unless an
election to continue the business of the Partnership is

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<PAGE>

made pursuant to Section 13.03, the General Partner, or, in the event the
dissolution is caused by an event described in Section 13.02(b), a Person or
Persons selected by a Majority Interest, shall be the Liquidating Trustee. The
Liquidating Trustee shall proceed without any unnecessary delay to sell or
otherwise liquidate the Partnership Assets and shall apply and distribute the
proceeds of such sale or liquidation in the following order of priority, unless
otherwise required by mandatory provisions of applicable law:

         (a)      to pay (or to make provision for the payment of) all creditors
         of the Partnership, other than Partners, in the order of priority
         provided by law;

         (b)      to pay, on a pro rata basis, all creditors of the Partnership
         that are Partners; and

         (c)      after the payment (or the provision for payment) of all debts,
         liabilities, and obligations of the Partnership, to the General Partner
         and the Record Holders in accordance with Section 5.03.

         The Liquidating Trustee, if other than the General Partner, shall be
entitled to receive such compensation for its services as Liquidating Trustee as
may be approved by a Majority Interest. The Liquidating Trustee shall agree not
to resign at any time without sixty (60) days prior written notice and, if other
than the General Partner, may be removed at any time, with or without cause, by
written notice of removal approved by a Majority Interest. Upon dissolution,
removal or resignation of the Liquidating Trustee, a successor and substitute
Liquidating Trustee (who shall have and succeed to all rights, powers and duties
of the original Liquidating Trustee) shall be selected within ninety (90) days
thereafter by a Majority Interest. The right to appoint a successor or
substitute Liquidating Trustee in the manner provided herein shall be recurring
and continuing for so long as the functions and services of the Liquidating
Trustee are authorized to continue under the provisions hereof, and every
reference herein to the Liquidating Trustee will be deemed to refer also to any
such successor or substitute Liquidating Trustee appointed in the manner herein
provided. Except as expressly provided in this Article XIII, the Liquidating
Trustee appointed in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto, all of
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers) to the extent necessary or desirable in the
good faith judgment of the Liquidating Trustee to carry out the duties and
functions of the Liquidating Trustee hereunder (including the establishment of

                                       55

<PAGE>

reserves for liabilities that are contingent or uncertain in amount) for and
during such period of time as shall be reasonably required in the good faith
judgment of the Liquidating Trustee to complete the winding up and liquidation
of the Partnership as provided for herein. In the event that no Person is
selected to be the Liquidating Trustee as herein provided within one hundred
twenty (120) days following the event of dissolution, or in the event the Record
Holders fail to select a successor or substitute Liquidating Trustee within the
time periods set forth above, any Partner may make application to a Court of
Chancery of the State of Delaware to wind up the affairs of the Partnership and,
if deemed appropriate, to appoint a Liquidating Trustee.

         13.06.   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 13.05 in order
to minimize any losses otherwise attendant upon such a winding up.

         13.07.   Termination of Partnership. Except as otherwise provided in
this Agreement, the Partnership shall terminate when all of the assets of the
Partnership shall have been converted into cash, the net proceeds therefrom, as
well as any other liquid assets of the Partnership, after payment of or due
provision for all debts, liabilities and obligations of the Partnership, shall
have been distributed to the Partners as provided for in Section 5.03 and 13.05,
and the Certificate of Limited Partnership shall have been cancelled in the
manner required by the Delaware Act.

                                   ARTICLE XIV

                    Amendments; Meetings; Voting; Record Date

         14.01.   Amendments to be Adopted Solely by General Partner. The
General Partner (pursuant to the General Partner's powers of attorney from the
Record Holders described in Article XV), without the consent or approval at the
time of any Record Holder (each Record Holder, by acquiring a Unit, Depositary
Unit or other security of the Partnership and requesting admission to the
Partnership, being deemed to consent to any such amendment), may amend any
provision of this Agreement, and execute, swear to, acknowledge, deliver, file
and record all documents required or desirable in connection therewith, to
reflect:

         (a)      a change in the name of the Partnership or the location of the
         principal place of business of the Partnership;

         (b)      the admission, substitution, or withdrawal of Partners in
         accordance with this Agreement;

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<PAGE>

         (c)      an election to be bound by any successor statute to the
         Delaware Act governing limited partnerships pursuant to the power
         granted in Section 6.06;

         (d)      a change that is necessary to qualify the Partnership as a
         limited partnership or a partnership in which the Record Holders have
         limited liability under the laws of any state or that is necessary or
         advisable in the opinion of the General Partner to ensure that the
         Partnership will not be treated as an association taxable as a
         corporation for federal income tax purposes;

         (e)      a change that is necessary to reorganize the Partnership so as
         to qualify as a "real estate investment trust" within the meaning of
         Section 856 of the Code;

         (f)      a change that is (i) of an inconsequential nature and does not
         adversely affect the Record Holders in any material respect; (ii)
         necessary or desirable to cure any ambiguity, to correct or supplement
         any provision herein that would be inconsistent with law or any other
         provision herein or to make any other provision with respect to matters
         or questions arising under this Agreement that will not be inconsistent
         with law or any provisions of this Agreement; (iii) necessary or
         desirable to satisfy any federal or state agency or contained in any
         federal or state statute; (iv) necessary or desirable to facilitate the
         trading of the Depositary Units or comply with any rule, regulation,
         guideline or requirement of any National Securities Exchange on which
         the Depositary units are or will be listed for trading, compliance with
         any of which the General Partner deems to be in the interests of the
         Partnership, the Limited Partners, Record Holders, Non-Consenting
         Investors or Subsequent Transferees; (v) necessary or desirable in
         connection with any action permitted to be taken by the General Partner
         under Section 8.13 hereof; or (vi) required or contemplated by this
         Agreement;

         (g)      a change in any provision of this Agreement which requires any
         action to be taken by or on behalf of the General Partner or the
         Partnership pursuant to the requirements of applicable Delaware law if
         the provisions of applicable Delaware law are amended, modified or
         revoked so that the taking of such action is no longer required; or

         (h)      any other amendments similar to the foregoing.

The authority set forth in Section 14.01(f) shall specifically include the
authority to make such amendments to this Agreement and to the Certificate of
Limited Partnership as the General

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<PAGE>

Partner deems necessary or desirable in the event the Delaware Act amended to
eliminate or change any provision now in effect.

         14.02.   Amendment Procedures. Except as specifically provided in
Sections 14.01 and 14.03, all amendments to this Agreement shall be made solely
in accordance with the following procedures:

         (a)      Any amendments of this Agreement must be proposed either:

                           (i)      by the General Partner, by submitting the
                  text of the proposed amendment to all Record Holders in
                  writing; or

                           (ii)     by Record Holders owning at least ten
                  percent (10%) of the total number of Units and Depositary
                  Units then owned by all Record Holders, by submitting their
                  proposed amendment in writing to the General Partner. The
                  General Partner shall, within thirty (30) days after the
                  receipt of any such proposed amendment, or as soon thereafter
                  as is practicable, submit the text of the proposed amendment
                  to all Record Holders. The General Partner may include in such
                  submission its recommendation as to the proposed amendment.

         (b)      If an amendment is proposed pursuant to this Section 14.02,
         the General Partner shall seek the written consent of the Record
         Holders to such amendment or shall call a meeting of the Record Holders
         to consider and vote on the proposed amendment, unless, in the opinion
         of counsel for the Partnership, such proposed amendment would be
         illegal under Delaware law if adopted, in which case the General
         Partner shall not be required to take any further action with respect
         thereto. A proposed amendment shall be effective only if approved by
         the General Partner in writing and by a Majority Interest, unless a
         greater percentage vote of the Record Holders is required by law or
         this Agreement. The General Partner shall keep all Record Holders
         advised of the status of any proposed amendment and shall notify all
         Record Holders upon final adoption or rejection of any proposed
         amendment.

         14.03.   Amendment Restrictions. Notwithstanding the provisions of
Sections 14.01 and 14.02, (a) no amendment to this Agreement shall be permitted
without a unanimous vote of the Record Holders if such amendment, in the opinion
of counsel for the Partnership, (i) would cause the loss of limited liability of
the Record Holders under this Agreement or of the Partnership as the sole
limited partner of the Operating Partnership, or (ii) would cause the
Partnership or the Operating Partnership to be

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<PAGE>

treated as an association taxable as a corporation for federal income tax
purposes and (b) no amendment to this Agreement shall be permitted which would
(i) enlarge the obligations of the General Partner or any Record Holder or
convert the interest of any Record Holder into the interest of a general
partner; (ii) modify the expense reimbursement payable to the General Partner
pursuant to Article VII of this Agreement without the consent of the General
Partner; (iii) modify the order and method for allocations of income and loss or
distributions pursuant to Article V of this Agreement without the consent of the
General Partner or the Record Holders adversely affected; or (iv) amend Sections
14.01, 14.02 or 14.03 of this Agreement without the consent of the General
Partner and Record Holders who are Record Holders with respect to at least
ninety-five percent (95%) of the total number of all outstanding Units held by
all Record Holders.

         14.04.   Meetings. Meetings of the Record Holders may be called by the
General Partner or by Record Holders owning at least ten percent (10%) of the
total number of Units and Depositary Units then owned by all Record Holders. Any
Record Holder calling a meeting shall specify the number of Units and Depositary
Units as to which such Record Holder is exercising the right to call a meeting
and only those specified Units and Depositary Units shall be counted for the
purpose of determining whether the required ten percent (10%) standard of the
preceding sentence has been met. Record Holders desiring to call a meeting shall
deliver to the General Partner one or more calls in writing stating that the
Record Holders signing such writing wish to call a meeting and indicating the
specific purposes for which the meeting is to be called. Action at the meeting
shall be limited to those specific matters specified in the call of the meeting.
Within sixty (60) days after receipt of such a call from Record Holders, or
within such greater time as may be reasonably necessary for the Partnership to
comply with any statutes, rules, regulations, listing agreements or similar
requirements governing the holding of a meeting or the solicitation of proxies
for use at such a meeting, the General Partner shall send a notice of the
meeting to the Record Holders either directly or indirectly though the
Depositary. A meeting shall be held at a reasonable time and convenient place
determined by the General Partner or the Liquidating Trustee, as the case may
be, on a date not more than sixty (60) days after the mailing of notice of the
meeting. Record Holders may vote either in person or by proxy at any meeting.
Each Record Holder shall have one vote for each Unit or Depositary Unit as to
which he has been admitted to the Partnership as a Record Holder. No action
shall be taken by the Record Holders without a meeting duly called and held or
without written consent in accordance with Section 14.13.

                                       59

<PAGE>

         14.05.   Notice of Meeting. Notice of a meeting called pursuant to
Section 14.04 shall be given either personally in writing or by mail or other
means of written communication addressed to each Record Holder at the address of
the Record Holder appearing on the books of the Depositary or the Partnership.
An affidavit or certificate of mailing of any notice or report in accordance
with the provisions of this Article XIV executed by the General Partner, the
Depositary, transfer agent, registrar of Depositary Units or mailing
organization shall constitute conclusive (but not exclusive) evidence of the
giving of notice. If any notice addressed to a Record Holder at the address of
such Record Holder appearing on the books of the Partnership or Depositary is
returned to the Partnership by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver such notice,
the notice and any subsequent notices or reports shall be deemed to have been
duly given without further mailing if they are available for the Record Holder
at the principal office of the Partnership for a period of one year from the
date of the giving of the notice to all other Record Holders.

         14.06.   Record Date. For purposes of determining the Record Holders
entitled to notice of or to vote at a meeting of the Record Holders or to give
consents without a meeting as provided in Section 14.13, the General Partner or
the Liquidating Trustee, as the case may be, may set a Record Date, which Record
Date shall not be less than ten (10) days nor more than sixty (60) days prior to
the date of such meeting or consent (unless such requirement conflicts with any
rule, regulation, guideline, or requirement of any securities exchange on which
the Depositary Units are listed for trading, in which case the rule, regulation,
guidelines, or requirement of such securities exchange shall govern).

         14.07.   Adjournment. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record Date
need not be fixed if the time and place of such adjourned meeting are announced
at the meeting at which such adjournment is taken, unless such adjournment shall
be for more than thirty (30) days. At the adjourned meeting, the Partnership may
transact any business that would have been permitted to be transacted at the
original meeting. If the adjournment is for more than thirty (30) days, or if a
new Record Date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given in accordance with this Article XIV.

         14.08.   Waiver of Notice; Consent to Meeting; Approval of Minutes. The
transactions of any meeting of Record Holders, however called and noticed, and
wherever held, are as valid as though they had been approved at a meeting duly
held after regular call and notice, if a quorum is present either in person or
by proxy, and if, either before or after the meeting, each of the Record

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<PAGE>

Holders entitled to vote, not present in person or by proxy, signs written
waiver of notice, or a consent to the holding of the meeting, or an approval of
the minutes thereof. All such waivers, consents, and approvals shall be filed
with the Partnership records or made a part of the minutes of such meeting.
Attendance of a Record Holder at a meeting shall constitute a waiver of notice
of the meeting, provided, however, that no such waiver shall occur when such a
Record Holder objects, at the beginning of the meeting, to the transaction of
any business at such meeting because the meeting is not lawfully called or
convened; and provided further, that attendance at a meeting is not a waiver of
any right to object to the consideration of any matters required to be included
in the notice of the meeting, but not so included, if the objection is expressly
made at the meeting.

         14.09.   Quorum. Record Holders who are Record Holders with respect to
more than fifty percent (50%) of the total number of all outstanding Units and
Depositary Units then held by all Record Holders, whether represented in person
or by proxy, shall constitute a quorum at a meeting of Record Holders. The
Record Holders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment of such meeting,
notwithstanding the withdrawal of enough Record Holders to leave less than a
quorum, if any action taken (other than adjournment) is approved by the
requisite number of Record Holders specified in this Agreement. In the absence
of a quorum, any meeting of Record Holders may be adjourned from time to time by
the affirmative vote of a majority of the Units and Depositary Units represented
either in person or by proxy at such meeting, but no such business may be
transacted, except as provided in Section 14.04.

         14.10.   Conduct of Meeting. The General Partner or the Liquidating
Trustee, as the case may be, shall be solely responsible for convening,
conducting, and adjourning any meeting of Record Holders, including, without
limitation, the determination of Persons entitled to vote at such meeting, the
existence of a quorum for such meeting, the satisfaction of the requirements of
Section 14.04 with respect to such meeting, the conduct of voting at such
meeting, the validity and effect of any proxies represented at such meeting, and
the determination of any controversies, votes, or challenges arising in
connection with or during such meeting or voting. The General Partner or the
Liquidating Trustee, as the case may be, shall designate a Person to serve as
chairman of any meeting and further shall designate a Person to take the minutes
of any meeting, which Person, in either case, may be, without limitation, a
Partner or any employee or agent of the General Partner. The General Partner or
the Liquidating Trustee, as the case may be, may make all such other
regulations, consistent with applicable law and this Agreement, as it may deem

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<PAGE>

advisable concerning the conduct of any meeting of the Record Holders, including
regulations in regard to the appointment of proxies, the appointment and duties
of inspectors of votes, and the submission and examination of proxies and other
evidence of the right to vote.

         14.11.   Voting Rights. (a) Subject to Section 14.12, the Record
Holders shall have the right to vote on all matters specified below and the
actions specified therein may be taken by the General Partner only with the
affirmative vote or written consent pursuant to Section 14.13 of a Majority
Interest (except for (i) removal of the General Partner pursuant to Section
12.02, which requires consent of at least 75% of the Record Holders, and (ii)
certain amendments to this Agreement pursuant to Section 14.03, which require
either unanimous or the consent of at least 95% of the Record Holders) and with
the separate concurrence of the General Partner:

         (i)      amendment of this Agreement, including an amendment extending
         the term of the Partnership, except as permitted pursuant to Section
         14.12;

         (ii)     dissolution of the Partnership pursuant to Section 13.02(c) or
         (d);

         (iii)    selection of a Liquidating Trustee pursuant to Section 13.05;

         (iv)     approval or disapproval of any merger, consolidation or
         combination of the business operations of the Partnership with those of
         any other Person; provided, however, that no vote or approval shall be
         required with respect to any such transaction which, in the sole and
         absolute discretion of the General Partner, (A) is primarily for the
         purpose of acquiring properties or assets, (B) combines the ongoing
         business operations of the entities with the Partnership as the
         surviving entity, or (C) is between the Partnership and the Operating
         Partnership;

         (v)      approval or disapproval of a sale or other disposition, except
         upon dissolution and liquidation pursuant to Article XIII, of all or
         substantially all of the Partnership Assets in a single sale or in a
         related series of multiple sales; provided, however, that this
         provision shall not be interpreted to preclude or limit the mortgage,
         pledge, hypothecation or grant of a security interest in all or
         substantially all of the Partnership Assets, and shall not apply to any
         forced sale of any or all of the Partnership Assets pursuant to the
         foreclosure of, or other realization upon, any such encumbrance; which
         require either unanimous or 95% consent of the Record Holders pursuant
         to Section 14.03.

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         (vi)     approval or disapproval of the transfer of the General
         Partner's Partnership Interest as a General Partner where permitted
         pursuant to Section 10.02;

         (vii)    approval or disapproval of the withdrawal of the General
         Partner as the general partner in the Partnership pursuant to Section
         12.01;

         (viii)   election of a successor General Partner pursuant to Section
         12.01;

         (ix)     removal of the General Partner pursuant to Section 12.02;

         (x)      when the Partnership would otherwise dissolve and its business
         would not otherwise be continued pursuant to Article XIII, election to
         reconstitute and continue the business of the Partnership pursuant to
         Section 13.03; and

         (b)      The Record Holders shall have the right to vote on any
proposal submitted for the approval of the limited partners of the Operating
Partnership, and the General Partner shall not cause the Partnership, in its
capacity as sole limited partner of the Operating Partnership, to consent to any
such proposal unless the Record Holders vote to approve such proposal in at
least the same percentage as is required by the OLP Partnership Agreement for
the approval of such proposal by the limited partners of the Operating
Partnership.

         (c)      Except as expressly provided in this Agreement, Record Holders
shall have no voting rights.

         14.12.   Voting Rights Conditional. The voting rights set forth in
Section 14.11 shall not be exercised unless the Partnership shall have received
an opinion of counsel for the Partnership to the effect that the exercise of
such right and the action proposed to be taken with respect to any particular
matter (a) shall not cause the Record Holders to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to subject the Record Holders or the Partnership as the sole limited partner of
the Operating Partnership to unlimited liability, (b) will not jeopardize the
status of the Partnership as a partnership under applicable tax laws and
regulations, and (c) is otherwise permissible under the state statutes then
governing the rights, duties and liabilities of the Partnership and the Record
Holders. If counsel for the Partnership has indicated that it is unable or
unwilling to deliver such an opinion, the General Partner may take any action
described in Section 14.11(a) without the need for a vote of the Record Holders,
except for effecting amendments to the Partnership Agreement

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which require either unanimous or 95% consent of the Record Holders pursuant to
Section 14.03.

         14.13.   Action Without a Meeting. Any action that may be taken at a
meeting of the Record Holders may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by Record Holders owning not
less than the number of Depositary Units or Units that would be necessary to
authorize or take such action at a meeting at which all of the Record Holders
were present and voted. Prompt notice of the taking of action without a meeting
shall be given to the Record Holders who have not consented thereto in writing.
The General Partner may specify that any written ballot submitted to Record
Holders for the purpose of taking any action without a meeting shall be returned
to the Partnership within the time, not less than twenty (20) days, specified by
the General Partner. If a ballot returned to the Partnership does not vote all
of the Units held by a Record Holder, the Partnership shall be deemed to have
failed to receive a ballot for the Units that were not voted. If consent to the
taking of any action by the Record Holders is solicited by any person other than
by or on behalf of the General Partner, the written consents shall have no force
and effect unless and until (i) they are deposited with the Partnership in care
of the General Partner, and (ii) consents sufficient to take the action proposed
are dated as of a date not more than ninety (90) days prior to the date
sufficient consents are deposited with the Partnership.

                                   ARTICLE XV

                                Power of Attorney

         Each Record Holder (including each Non-Consenting Investor who executes
and delivers a Transfer Application to the Depositary and each Subsequent
Transferee who accepts Depositary Units and executes and delivers a Transfer
Application to the Depositary) is deemed to irrevocably constitute, appoint and
empower the General Partner (and any successor by merger, transfer, election or
otherwise), and each of the General Partner's authorized officers and
attorneys-in-fact, with full power of substitution, as the true and lawful agent
and attorney-in-fact of such Record Holder, with full power and authority in
such Record Holder's name, place and stead and for such Record Holder's use or
benefit:

                  (a)      to make, execute, verify, consent to, swear to,
         acknowledge, make oath as to, publish, deliver, file and/or record in
         the appropriate public offices, (i) all certificates and other
         instruments, including, at the option of the General Partner, this
         Agreement and the Certificate of Limited Partnership and all amendments
         and restatements thereof, that the General Partner deems appropriate or
         necessary to

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         qualify, or continue the qualification of, the Partnership as a limited
         partnership (or a partnership in which the Record Holders have limited
         liability) in the State of Delaware and all jurisdictions in which the
         Partnership may or may intend to conduct business or own property; (ii)
         all other certificates, instruments and documents as may be requested
         by, or may be appropriate under the laws of any state or other
         jurisdiction in which the Partnership may or may intend to conduct
         business or own property; (iii) all instruments that the General
         Partner deems appropriate or necessary to reflect any amendment, change
         or modification of this Agreement in accordance with the terms hereof;
         (iv) all conveyances and other instruments or documents that the
         General Partner deems appropriate or necessary to effectuate or reflect
         the dissolution, termination and liquidation of the Partnership
         pursuant to the terms of this Agreement; (v) any and all financing
         statements, continuation statements, mortgages or other documents
         necessary to grant to or perfect for secured creditors of the
         Partnership, including the General Partner and Affiliates, a security
         interest, mortgage, pledge or lien on all or any of the Partnership
         Assets; (vi) all instruments or papers required to continue the
         business of the Partnership pursuant to Article XIII; (vii) all
         instruments (including this Agreement and the Certificate of Limited
         Partnership and amendments and restatements thereof) relating to the
         admission of any Partner pursuant to Article XI; and (viii) all other
         instruments as the attorneys-in-fact or any one of them may deem
         necessary or advisable to carry out fully the provisions of this
         Agreement in accordance with its terms; and

                  (b)      to enter into the Depositary Agreement and deposit
         all Units of the Record Holders in the Deposit Account established by
         the Depositary pursuant to the Depositary Agreement. The execution and
         delivery by any of said attorneys-in-fact of any such agreements,
         amendments, consents, certificates or other instruments shall be
         conclusive evidence that such execution and delivery was authorized
         hereby.

         Nothing herein contained shall be construed as authorizing any Person
acting as attorney-in-fact pursuant to this Article XV to take action as an
attorney-in-fact for any Record Holder to increase in any way the liability of
such Record Holder beyond the liability expressly set forth in this Agreement,
or to amend this Agreement except in accordance with Article XIV.

         The appointment by each Record Holder of the Persons designated in this
Article XV as attorneys-in-fact shall be deemed to be a power of attorney
coupled with an interest in recognition of the fact that each of the Record
Holders under this Agreement will

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be relying upon the power of such Persons to act pursuant to this power of
attorney for the orderly administration of the affairs of the Partnership. The
foregoing power of attorney is hereby declared to be irrevocable, and it shall
survive, and shall not be affected by, the subsequent death, incompetency,
dissolution, disability, incapacity, bankruptcy or termination of any Record
Holder and it shall extend to such Record Holder's heirs, successors and
assigns. Each Record Holder hereby agrees to be bound by any representations
made by any Person acting as attorney-in-fact pursuant to this power of attorney
in accordance with this Agreement. Each Record Holder hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of any
Person taken as attorney-in-fact under this power of attorney in accordance with
this Agreement. Each Record Holder shall execute and deliver to the General
Partner, within fifteen (15) days after receipt of the General Partner's request
therefor, all such further designations, powers of attorney and other
instruments as the General Partner deems necessary to effectuate this Agreement
and the purposes of the Partnership.

                                   ARTICLE XVI

                            Miscellaneous Provisions

         16.01.   Additional Actions and Documents. Each of the Record Holders
hereby agrees to take or cause to be taken such further actions, to execute,
acknowledge, deliver, and file or cause to be executed, acknowledged, delivered
and filed such further documents and instruments, and to use his best efforts to
obtain such consents, as may be necessary or as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this Agreement,
whether before, at, or after the closing of the transactions contemplated by
this Agreement.

         16.02.   Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by a
Record Holder or the Partnership pursuant to this Agreement shall be in writing
and shall be personally delivered, mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram or telex, addressed as follows:

                  (a)      If to the General Partner:

                           American Property Investors, Inc.
                           666 Third Avenue
                           New York, New York 10017
                           Attention: Richard H. Ader

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                  (b)      If to a Record Holder:

                           The Last Known Business, Residence or
                           Mailing Address of Such Record Holder
                           Reflected in the Records of the
                           Partnership or the Depositary

                  (c)      If to the Partnership:

                           American Real Estate Partners, L.P.
                           666 Third Avenue
                           New York, New York 10017

The General Partner and each Record Holder and the Partnership may designate by
notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand,
request, or communication which shall be delivered, mailed or transmitted in the
manner described above shall be deemed sufficiently given, served, sent or
received for all purposes at such time as it is delivered to the addressee (with
an affidavit of personal delivery, the return receipt, the delivery receipt, or
(with respect to a telex) the answerback being deemed conclusive (but not
exclusive) evidence of such delivery) or at such time as delivery is refused by
the addressee upon presentation.

         16.03.   Severability. The invalidity of any one or more provisions
hereof or of any other agreement or instrument given pursuant to or in
connection with this Agreement shall not affect the remaining portions of this
Agreement or any such other agreement or instrument or any part thereof, all of
which are inserted conditionally on their being held valid in law; and in the
event that one or more of the provisions contained herein or therein should be
invalid, or should operate to render this Agreement or any such other agreement
or instrument invalid, this Agreement and such other agreements and instruments
shall be construed as if such invalid provisions had not been inserted.

         16.04.   Survival. It is the express intention and agreement of the
Partners that all covenants, agreements, statements, representations, warranties
and indemnities made in this Agreement shall survive the execution and delivery
of this Agreement.

         16.05.   Waivers. Neither the waiver by a Partner of a breach or of a
default under any of the provisions of this Agreement, nor the failure of a
Partner, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, remedy, or privilege hereunder shall be
construed as a waiver of any subsequent breach or default of a similar nature,
or

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a waiver of any such provisions, rights, remedies, or privileges hereunder.

         16.06.   Exercise of Rights. No failure of delay on the part of a
Partner or the Partnership in exercising any right, power, or privilege
hereunder and no course of dealing between the Partners or between the Partners
and the Partnership shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power, or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any other rights or remedies which a Partner, or the
Partnership would otherwise have at law or in equity or otherwise.

         16.07.   Binding Effect. Subject to any provisions hereof restricting
assignment, this Agreement shall be binding upon and shall inure to the benefit
of the Partners and their respective heirs, executors, administrators, legal
representatives, successors, and assigns.

         16.08    Limitation on Benefits of this Agreement. It is the explicit
intention of the Partners that no person or entity other than the Partners and
the Partnership is or shall be entitled to bring any action to enforce any
provision of this Agreement against any Partners or the Partnership, and that
except as set forth in this Agreement, the covenants, undertakings, and
agreements set forth in this Agreement shall be solely for the benefit of, and
shall be enforceable only by, the Partners (or their respective successors and
assigns as permitted hereunder) and the Partnership.

         16.09.   Force Majeure. If the General Partner is rendered unable,
wholly or in part, by "force majeure" (as herein defined) to carry out any of
its obligations under this Agreement, other than the obligation hereunder to
make money payments, the obligations of the General Partner, insofar as they are
affected by such force majeure, shall be suspended during but no longer than the
continuance of such force majeure. The term "force majeure" as used herein shall
mean an act of God, strike, lockout or other industrial disturbance, act of
public enemy, war, blockade, public riot, lightning, fire, storm, flood,
explosion, governmental restraint, unavailability of equipment and any other
cause, whether of the kind specifically enumerated above or otherwise, which is
not reasonably within the control of the General Partner.

         16.10.   Consent of Record Holders. By acceptance of a Unit or
Depositary Unit, each Record Holder expressly consents and agrees that, whenever
in this Agreement it is specified that an action may be taken upon the
affirmative vote of less than all of

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the Record Holders, such action may be so taken upon the concurrence of less
than all of the Record Holders and each such Record Holders shall be bound by
the results of such action.

         16.11.   Entire Agreement. This Agreement contains the entire agreement
among the Partners with respect to the transactions contemplated herein, and
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein and therein.

         16.12.   Pronouns. All pronouns and any variation thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or entity may require.

         16.13.   Headings. Article, section and subsection headings contained
in this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.

         16.14.   Governing Law. This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the Delaware Act and all other laws
of Delaware (but not including the choice of law rules thereof).

         16.15.   Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required; and it
shall not be necessary that the signatures of, or on behalf of, each party, or
that the signatures of all persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of or on behalf of,
each party, or that the signatures of the person required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than a number of counterparts
containing

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the respective signatures of, or on behalf of, all of the parties hereto.

         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Agreement to be duly executed on their behalf, as of the day
and year first hereinabove set forth.

                                                    GENERAL PARTNER:

                                            AMERICAN PROPERTY INVESTORS, INC.

                                          By: _________________________________

                                          Title: ______________________________

                                            ORGANIZATIONAL LIMITED PARTNER:

                                                    JULIA DESANTIS



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                                                      EXHIBIT A
                                                      TO AMENDED AND RESTATED
                                                      AGREEMENT OF LIMITED
                                                      PARTNERSHIP OF AMERICAN
                                                      REAL ESTATE PARTNERS, L.P.

                                   CERTIFICATE
                                       FOR
                              LIMITED PARTNER UNITS
                                       OF
                       AMERICAN REAL ESTATE PARTNERS, L.P.

No.                                                      Units

         American Property Investors, Inc., as the General Partner of American
Real Estate Partners, L.P. (the "Partnership"), a Delaware limited partnership,
hereby certifies that _______________________ units of limited partner interest
in the Partnership ("Units") have been issued to _____________________________.
The rights, preferences and limitations of the Units are set forth in the
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") under which the Partnership was formed and is existing, and in the
Certificate of Limited Partnership filed for record in the Office of the
Secretary of State of Delaware, copies of which are on file at the General
Partner's principal office at 666 Third Avenue, New York, New York 10017.
Neither this Certificate nor the Units evidenced hereby is transferable, except
upon death, by operation of law or as otherwise provided in the Partnership
Agreement.

                                            American Property Investors, Inc.
                                            General Partner of
                                            American Real Estate Partners, L.P.

Dated:                                      By: ________________________________

                                            Title: _____________________________

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