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                                                                  EXECUTION COPY
                                                                    EXHIBIT 10.1

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                            LEXINGTON/LION VENTURE LP

                           DATED AS OF OCTOBER 1, 2003

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                                TABLE OF CONTENTS

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ARTICLE I             DEFINITIONS...........................................................................      1

         Section 1.1           Definitions..................................................................      1

ARTICLE II            FORMATION, DURATION AND PURPOSES......................................................     14

         Section 2.1           Formation....................................................................     14

         Section 2.2           Name; Registered Agent and Registered Office.................................     15

         Section 2.3           Principal Office.............................................................     15

         Section 2.4           Purposes and Business........................................................     15

         Section 2.5           Term.........................................................................     15

         Section 2.6           Other Qualifications.........................................................     15

         Section 2.7           Limitation on the Rights of Partners.........................................     15

ARTICLE III           MANAGEMENT RIGHTS, DUTIES, AND POWERS  OF THE MANAGING GENERAL PARTNER;
                      TRANSACTIONS INVOLVING PARTNERS.......................................................     16

         Section 3.1           Management...................................................................     16

         Section 3.2           Meetings of the General Partners.............................................     18

         Section 3.3           Authority of the Managing General Partner....................................     20

         Section 3.4           Major Decisions..............................................................     21

         Section 3.5           Preliminary and Annual Plans.................................................     24

         Section 3.6           Qualified Property Acquisitions..............................................     26

         Section 3.7           Sale of Qualified Properties; Right of First Refusal.........................     30

         Section 3.8           Limitation On Partnership Indebtedness.......................................     32

         Section 3.9           Business Opportunity.........................................................     32

         Section 3.10          Payments to LXP GP or the Asset Manager......................................     33

         Section 3.11          Other Duties and Obligations of the Managing General Partner.................     35

         Section 3.12          Exculpation..................................................................     37

         Section 3.13          Indemnification..............................................................     38

         Section 3.14          Fiduciary Responsibility.....................................................     39

ARTICLE IV            BOOKS AND RECORDS; REPORTS TO PARTNERS................................................     39

         Section 4.1           Books........................................................................     39

         Section 4.2           Monthly and Quarterly Reports................................................     39
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         Section 4.3           Annual Reports...............................................................     40

         Section 4.4           Appraisals; Additional Reports...............................................     41

         Section 4.5           Accountants; Tax Returns.....................................................     41

         Section 4.6           Accounting and Fiscal Year...................................................     42

         Section 4.7           Partnership Funds............................................................     42

         Section 4.8           Insurance....................................................................     42

         Section 4.9           Attorneys and Accountants....................................................     42

ARTICLE V             CONTRIBUTIONS.........................................................................     43

         Section 5.1           Capital Contributions........................................................     43

         Section 5.2           Return of Capital Contribution...............................................     47

         Section 5.3           Liability of the Limited Partners............................................     47

         Section 5.4           No Third Party Beneficiaries.................................................     48

ARTICLE VI            MAINTENANCE OF CAPITAL ACCOUNTS; ALLOCATION OF PROFITS AND LOSSES FOR BOOK AND
                      TAX PURPOSES..........................................................................     48

         Section 6.1           Capital Accounts.............................................................     48

         Section 6.2           Profits and Losses...........................................................     49

         Section 6.3           Regulatory Allocations.......................................................     51

         Section 6.4           Allocation of Tax Items for Tax Purposes.....................................     53

         Section 6.5           Tax Matters Partner..........................................................     54

         Section 6.6           Adjustments..................................................................     55

ARTICLE VII           DISTRIBUTIONS.........................................................................     55

         Section 7.1           Cash Available for Distributions.............................................     55

ARTICLE VIII          TRANSFER; REMOVAL OF MANAGING GENERAL PARTNER.........................................     56

         Section 8.1           Prohibition on Transfers and Withdrawals by Partners.........................     56

         Section 8.2           Prohibition on Transfers by and Resignation of Managing General Partner......     57

         Section 8.3           Removal of the Managing General Partner......................................     57

ARTICLE IX            TERMINATION...........................................................................     60

         Section 9.1           Dissolution..................................................................     60
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         Section 9.2           Termination..................................................................     61

         Section 9.3           Certificate of Cancellation..................................................     62

         Section 9.4           Acts in Furtherance of Liquidation...........................................     62

ARTICLE X             REPRESENTATIONS OF THE PARTNERS.......................................................     63

         Section 10.1          Representations of the Fund Partners.........................................     63

         Section 10.2          Representations of the LXP Partners..........................................     64

ARTICLE XI            SPECIAL PARTNER RIGHTS AND OBLIGATIONS................................................     66

         Section 11.1          Buy/Sell.....................................................................     66

         Section 11.2          Convertibility...............................................................     68

         Section 11.3          Remuneration To Partners.....................................................     70

         Section 11.4          Equality of Shares...........................................................     70

ARTICLE XII           GENERAL PROVISIONS....................................................................     71

         Section 12.1          Notices......................................................................     71

         Section 12.2          Governing Laws...............................................................     73

         Section 12.3          Entire Agreement.............................................................     73

         Section 12.4          Waiver.......................................................................     73

         Section 12.5          Validity.....................................................................     73

         Section 12.6          Terminology; Captions........................................................     73

         Section 12.7          Remedies Not Exclusive.......................................................     74

         Section 12.8          Action by the Partners.......................................................     74

         Section 12.9          Further Assurances...........................................................     74

         Section 12.10         Liability of the Limited Partners............................................     74

         Section 12.11         Binding Effect...............................................................     74

         Section 12.12         Amendments...................................................................     74

         Section 12.13         Counterparts.................................................................     75

         Section 12.14         Waiver of Partition..........................................................     75

         Section 12.15         No Third Party Beneficiaries.................................................     75
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Schedules and Exhibits
Schedule 1:                Names and Capital Commitments of Partners

Schedule 2:                Acquisition Parameters

Schedule 3:                Form of Acquisition Memorandum

Schedule 3.5:              Model of an Annual Plan

Schedule 4.8:              Insurance Standards

Schedule 5:                Redemption Rights

Schedule 7:                Registration Rights Agreement

Schedule 10.2(ii):         LXP Non-qualified Jurisdictions

Schedule 10.2(ix):         Exceptions to No Material Adverse Change

Exhibit A:        Form of Annual Budget

Exhibit B:        Form of Agreement between Partnership and Asset Manager

Exhibit C:        Form of Contribution Agreement
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<PAGE>

                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                            LEXINGTON/LION VENTURE LP

                  THIS LIMITED PARTNERSHIP AGREEMENT (as it may be amended,
modified, supplemented or restated from time to time, this "AGREEMENT") of
LEXINGTON/ LION VENTURE LP (the "PARTNERSHIP"), made and entered into as of the
1st day of October, 2003 by and among LEXINGTON CORPORATE PROPERTIES TRUST, a
Maryland real estate investment trust ("LXP"), as a limited partner of the
Partnership, LXP GP, LLC, a Delaware limited liability company ("LXP GP"), as a
general partner of the Partnership, CLPF-LXP/LV, L.P., a Delaware limited
partnership (the "FUND"), as a limited partner of the Partnership, and
CLPF-LXP/LION VENTURE GP, LLC, a Delaware limited liability company (the "FUND
GP"), as a general partner of the Partnership.

                  LXP and the Fund are sometimes individually referred to herein
as a "LIMITED PARTNER" and collectively referred to herein as the "LIMITED
PARTNERS". LXP GP and Fund GP are sometimes individually referred to herein as a
"GENERAL PARTNER" and collectively referred to herein as the "GENERAL PARTNERS".
The Limited Partners and the General Partners are sometimes individually
referred to herein as a "PARTNER" and collectively referred to herein as the
"PARTNERS". LXP and LXP GP are sometimes individually referred to herein as a
"LXP PARTNER" and collectively referred to herein as the "LXP PARTNERS". The
Fund and the Fund GP are sometimes individually referred to herein as a "FUND
PARTNER" and collectively referred to herein as the "FUND PARTNERS".

                  In consideration of the covenants and agreements set forth
herein, the Partners hereby agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

                  SECTION 1.1 DEFINITIONS. For the purposes of this Agreement,
initially capitalized terms used herein shall have the following meanings:

                  "ACQUIPORT ENTITIES" shall mean individually or collectively,
(a) Lexington Acquiport Company, LLC and (b) Lexington Acquiport Company II,
LLC.

                  "ACQUIPORT OPERATING AGREEMENTS" shall mean individually or
collectively, (a) the Operating Agreement of Lexington Acquiport Company, LLC
dated as of July 14, 1999, as amended, and (b) the Operating Agreement of
Lexington Acquiport Company II, LLC dated as of December 5, 2001, as amended.

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                  "ACQUIPORT PROPERTY" shall mean a property or loan which is
required to be presented by LXP to the Acquiport Entities for consideration for
acquisition or investment pursuant to the Acquiport Operating Agreements.

                  "ACQUISITION ACTIVITIES" is defined in Section 3.6(f) hereof.

                  "ACQUISITION FEE" is defined in Section 3.6(g) hereof.

                  "ACQUISITION MEMORANDUM" shall mean a memorandum in the form
attached as Schedule 3 hereto with respect to any Proposed Qualified Property as
provided in Section 3.6(b) hereof.

                  "ACQUISITION PARAMETERS" shall mean the guidelines and
requirements for any Proposed Qualified Property that are set forth on Schedule
2 hereto.

                  "ACT" is defined in Section 2.1 hereof.

                  "ADDITIONAL CAPITAL CONTRIBUTION" is defined in Section 5.1(b)
hereof.

                  "ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean the deficit
balance, if any, in a Partner's Capital Account at the end of any fiscal year,
with the following adjustments: (i) credit to such Capital Account any amount
that such Partner is obligated or deemed obligated to restore under Regulations
Section 1.704-1(b)(2)(ii)(c), as well as any additions thereto pursuant to the
next to last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
after taking into account thereunder any changes during such year in Partnership
Minimum Gain and in the minimum gain attributable to any Partner Nonrecourse
Debt; and (ii) debit to such Capital Account the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of
Adjusted Capital Account Deficit is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner
consistent with such intent.

                  "ADVISOR" shall mean Clarion Partners LLC or any successor
thereto designated by the Fund Partners as provided in Section 12.1(c) hereof
that serves as the manager of the Lion Fund.

                  "AFFILIATE" when used with respect to any particular Person,
shall mean (a) any Person or group of Persons acting in concert that directly or
indirectly through one or more intermediaries controls or is controlled by or is
under common control with such particular Person, (b) any Person that is an
officer, partner, member or trustee of, or serves in a similar capacity with
respect to, such particular Person or of which such particular Person is an
officer, partner, member or trustee or with respect to which such particular
Person serves in a similar capacity, (c) any Person that, directly or
indirectly, is the beneficial owner of 10% or more of any class of voting
securities of, or otherwise has an equivalent beneficial interest in, such
particular Person or of which such particular Person

                                       2

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is directly or indirectly the owner of 10% or more of any class of voting
securities or in which such particular Person has an equivalent beneficial
interest or (d) any relative or spouse of such particular Person.
Notwithstanding the foregoing, neither LXP nor the Fund shall be deemed to be an
Affiliate of the other party. The definition of "Affiliate" as used in this
Agreement shall not be affected by the Regulations under Code Section 752
describing certain "related" parties.

                  "AGREEMENT" is defined in the Preamble hereto. This Agreement
shall be the "partnership agreement" for the Partnership within the meaning of
Section 17-101(12) of the Act.

                  "AMENDING PARTNER" is defined in the Section 3.5(c) hereof.

                  "ANNUAL BUDGET" shall mean the annual budget for the
Partnership and each Qualified Property for any fiscal year, including without
limitation a reasonable description of the amount, source and character of each
item of gross income, expense and services to be rendered in the form attached
hereto as Exhibit A, approved by the General Partners as provided in Section 3.5
hereof.

                  "ANNUAL PLAN" is defined in Section 3.5(a) hereof.

                  "APPROVED QUALIFIED PROPERTY" is defined in Section 3.6(d)
hereof.

                  "ASSET MANAGER" shall mean Lexington Realty Advisors, Inc. or
another Affiliate of LXP.

                  "BANKRUPTCY" of the Partnership or a Partner shall be deemed
to have occurred upon the happening of any of the following: (i) the filing of
an application by the Partnership or such Partner for, or a consent to, the
appointment of a trustee, receiver or liquidator of its assets; (ii) the filing
by the Partnership or such Partner of a voluntary petition or answer in
bankruptcy or the filing of a pleading in any court of record admitting in
writing its inability to pay its debts as such debts come due or seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation; (iii) the making by the
Partnership or such Partner of a general assignment for the benefit of
creditors; (iv) the filing by the Partnership or such Partner of an answer
admitting the material allegations of, or its consenting to or defaulting in
answering, a bankruptcy or insolvency petition filed against it in any
bankruptcy or similar proceeding; or (v) the expiration of sixty (60) days
following the entry by any court of competent jurisdiction of an order for
relief in any bankruptcy or insolvency proceeding involving the Partnership or
such Partner or of an order, judgment or decree adjudicating the Partnership or
such Partner a bankrupt or insolvent or appointing a trustee, receiver or
liquidator of its assets.

                  "BONA FIDE OFFER" is defined in Section 3.7(b) hereof.

                                       3

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                  "BOOK DEPRECIATION" shall mean all deductions attributable to
the depreciation, amortization or other cost recovery, including additions, of
any Qualified Property or other asset (whether tangible or intangible) acquired
by the Partnership that has a useful life in excess of one year, as such
deductions are computed for federal income tax purposes; provided, that with
respect to any Partnership asset the tax basis of which differs from the Book
Value of such asset, Book Depreciation for any period shall equal (x) the sum
total of all deductions taken during such period attributable to depreciation,
amortization or other cost recovery deduction for federal income tax purposes
with respect to such asset, multiplied by (y) the Book Value of such asset
divided by the tax basis thereof; provided further, that if the depreciation,
amortization or other cost recovery deduction for federal income tax purposes
with respect to any Partnership asset for any period is zero ($0.00), Book
Depreciation shall be determined by the Tax Matters Partner using any reasonable
method selected by the Tax Matters Partner that is based on the Book Value of
such asset.

                  "BOOK VALUE" shall mean, with respect to any Partnership asset
at any time, the adjusted basis of such asset for federal income tax purposes,
except that (i) the initial Book Value of any asset contributed by a Partner to
the Partnership shall be the Fair Market Value of such asset, and (ii) the Book
Value of all Partnership assets shall be adjusted to equal their Fair Market
Values, as determined in good faith by the Managing General Partner, upon the
occurrence of certain events as described below. In either case, the Book Value
of Partnership assets shall thereafter be adjusted for Book Depreciation taken
into account with respect to such asset. Provided the Tax Matters Partner makes
an election to do so as provided under Section 1.704-1(b)(2)(iv)(f) of the
Regulations, the Book Value of Partnership assets shall be adjusted to equal
their Fair Market Value, as determined in good faith by the Managing General
Partner, as of the following times to which the election relates: (1) the
admission of a new Partner to the Partnership or acquisition by an existing
Partner of an additional interest in the Partnership, provided that the
consideration contributed to the Partnership upon such admission or acquisition
is more than a de minimis amount of money or property; (2) the distribution by
the Partnership to a Partner of more than a de minimis amount of money or other
property; and (3) the termination of the Partnership for federal income tax
purposes pursuant to Code Section 708(b)(1)(B).

                  The Book Value of all Partnership assets shall also be
increased (or decreased) to the extent that adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b) have been
taken into account for purposes of determining Capital Accounts in accordance
with Regulation Section 1.704-1(b)(2)(iv)(m), unless such adjustments have
already been accounted for pursuant to the preceding paragraph. If the Book
Value of an asset has been determined or adjusted pursuant hereto, such value
shall thereafter be the basis for, and be adjusted by, the depreciation taken
into account with respect to, such asset for purposes of computing Profits and
Losses. Moreover, notwithstanding the foregoing, the Book Value of any

                                       4

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Partnership asset distributed to any Partner shall be the gross Fair Market
Value of such asset on the date of distribution.

                  "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any day on which national banks in New York, New York are not open for
business.

                  "BUY/SELL PROPERTY" is defined in Section 11.1(a) hereof.

                  "CAPITAL ACCOUNT" shall mean, with respect to any Partner, the
separate "book" account which the Partnership shall establish and maintain for
such Partner as provided in Section 6.1 hereof and in accordance with Section
704(b) of the Code and Regulations Section 1.704-1(b)(2)(iv) and such other
provisions of Section 1.704-1(b) of the Regulations as must be complied with in
order for the Capital Accounts to be determined in accordance with the
provisions of said Regulations. In furtherance of the foregoing, the Capital
Accounts shall be maintained in compliance with Section 1.704-1(b)(2)(iv) of the
Regulations, and the provisions hereof shall be interpreted and applied in a
manner consistent therewith.

                  "CAPITAL CALL" is defined in Section 5.1(b) hereof.

                  "CAPITAL COMMITMENT" shall mean, with respect to each Partner,
the amount set forth opposite its name on Schedule 1 hereto, as such Schedule
may be amended or modified from time to time upon the General Partners'
unanimous consent. Any payment of the Acquisition Fees or Financing Fees shall
neither increase nor decrease a Partner's Capital Commitment.

                  "CAPITAL CONTRIBUTION" shall mean, at any particular time and
with respect to any Partner, an amount equal to the sum of (x) the total amount
of cash and (y) the Fair Market Value of any property (determined as of the date
such property is contributed by such Partner and net of any liabilities secured
by such property that the Partnership is considered to assume or take subject to
under Section 752 of the Code), that has in each case been contributed to the
Partnership by such Partner pursuant to Section 5.1 hereof.

                  "CASH PURCHASE PRICE" is defined in Section 11.2(c) hereof.

                  "CAUSE" is defined in Section 8.3(a) hereof.

                  "CHALLENGING GENERAL PARTNER" is defined in Section 11.1(d)
hereof.

                  "CLAIM AMOUNT" is defined in Section 5.1(f) hereof.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
amended, or corresponding provisions of future laws.

                  "CONTRIBUTING PARTNER" is defined in Section 5.1(f) hereof.

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                  "CONTRIBUTION AGREEMENT" shall mean the agreement pursuant to
which a Partner contributes an Approved Qualified Property to the Partnership
pursuant to Section 5.1 hereof and shall be in the form to be agreed to by the
General Partners, at which time it will be attached as Exhibit C to this
Agreement.

                  "CORRESPONDING LIMITED PARTNER" in respect of LXP GP shall
mean LXP and in respect of the Fund GP shall mean the Fund.

                  "CPI" shall mean the Revised Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, U.S. City Average, All Items, based on 2002 as 100. If the
CPI hereafter ceases to use the 2002 Base as 100, then the CPI with the new base
shall be used. If the Bureau of Labor Statistics ceases to publish the CPI, then
the successor or most nearly comparable index shall be used. In the event that
the U.S. Department of Labor, Bureau of Labor Statistics, changes the
publication frequency of the CPI so that it is not available when required under
the Agreement, then the CPI for the closest preceding month for which a CPI is
available shall be used in place of the CPI no longer available.

                  "DEFAULT AMOUNT" is defined in Section 5.1(e) hereof.

                  "DEFAULTING CONTRIBUTING PARTNER" is defined in Section 5.1(f)
hereof.

                  "DEFAULTING PARTNER" is defined in Section 5.1(e) hereof.

                  "DISTRIBUTABLE CASH" shall mean the amounts distributed
pursuant to Section 7.1(a)(i) hereof.

                  "ECONOMIC INTEREST" shall mean, with respect to any Percentage
Interest, (a) all income, profits, cash flow, proceeds of sales and/or
refinancing of the Qualified Properties, fees or payments of whatever nature and
all distributions to which any Partner would be entitled, now or at any time
hereafter, of whatsoever description or character; (b) all of any Partner's
present and future rights to and in its Capital Account, whether by way of
liquidating distributions or otherwise, and all of such Partner's right to
receive or share in any surplus of the Partnership in the event of the
dissolution of the Partnership; and (c) all damages, awards, money and
considerations of any kind or character to which any Partner would be entitled,
now or at any time hereafter, arising out of or derived from any proceeding by
or against such Partner in any federal or state court, under any bankruptcy or
insolvency law or under any law relating to assignments for the benefit of
creditors, compositions, extensions or adjustments of indebtedness, or to any
other relief of debtors, or otherwise in connection with its interest in the
Partnership.

                  "ECONOMIC RISK OF LOSS" shall have the meaning specified in
Regulations Section 1.752-2.

                  "ELECTION NOTICE" is defined in Schedule 5 hereto.

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<PAGE>

                  "ENVIRONMENTAL ASSESSMENT" shall mean with respect to any
Proposed Qualified Property, a phase one environmental site assessment performed
by a qualified environmental consultant selected by the Managing General Partner
in accordance with the then current ASTM Standard Practice for Environmental
Site Assessments, E1527 and, if required by the Managing General Partner, any
additional Phase II sampling, investigation, monitoring or other activities
performed by a qualified environmental consultant.

                  "ENVIRONMENTAL LAW" shall mean every federal, state, county or
other governmental law, statute, ordinance, rule, regulation, requirement, order
(including any consent order), or other binding obligation, injunction, writ or
decision relating to or addressing the environment or hazardous materials,
including, but not limited to, those federal statutes commonly referred to as
the Clean Air Act, Clean Water Act, Resource Conservation Recovery Act, Toxic
Substances Control Act, Comprehensive Environmental Response, Compensation and
Liability Act and the Endangered Species Act as well as all regulations
promulgated thereunder and all state laws and regulations equivalent thereto, as
each such statute, regulation or state law or regulation equivalent may be
amended from time to time.

                  "EXERCISE NOTICE" is defined in Schedule 5 hereof.

                  "EXTRAORDINARY CALL" is defined in Section 5.1(c) hereof.

                  "EXTRAORDINARY CAPITAL CONTRIBUTION" is defined in Section
5.1(c) hereof.

                  "EXTRAORDINARY FUNDING" is defined in Section 5.1(c) hereof.

                  "EXTRAORDINARY LOAN" is defined in Section 5.1(c) hereof.

                  "FAIR MARKET VALUE" shall mean an amount (in cash) that a bona
fide, willing buyer under no compulsion to buy and a bona fide, willing and
unrelated seller under no compulsion to sell would pay and accept, respectively,
for the purchase and sale of a Qualified Property, taking into account any
liens, restrictions and agreements then in effect and binding upon the Qualified
Property or any successor owner thereof and any options, rights of first refusal
or offer or other rights or options that either burden the Qualified Property or
run to the benefit of the owner of the Qualified Property; provided, however,
that in determining the Fair Market Value of any Qualified Property, none of the
options, rights of first refusal or offer or other rights of the Partners
hereunder shall be taken into consideration.

                  "FEE DISCLOSURE" is defined in Section 3.11(h) hereof.

                  "FFO" shall mean net income or loss (computed in accordance
with generally accepted accounting principles), excluding gains (or losses) from
debt

                                       7

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restructuring and sales of property, plus real estate depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis.

                  "FINANCING FEE" is defined in Section 3.6(g) hereof.

                  "FUND" is defined in the Preamble hereto.

                  "FUND GP" is defined in the Preamble hereto.

                  "FUND PARTNER" is defined in the Preamble hereto.

                  "GENERAL PARTNER" is defined in the Preamble hereto.

                  "INDEMNIFIED PARTY" is defined in Section 3.13(a) hereof.

                  "INITIAL CAPITAL CONTRIBUTION" shall mean, with respect to
each Partner, an amount equal to the sum of (x) the amount of cash and (y) the
Fair Market Value of any property (determined as of the date such property is
contributed by such Partner and net of any liabilities secured by such property
that the Partnership is considered to assume or take subject to under Section
752 of the Code), that has in each case been contributed to the Partnership by
such Partner at such time as the General Partners have agreed.

                  "INTEREST PRICE" is defined in Section 11.1(a) hereof.

                  "LIMITED PARTNER" is defined in the Preamble hereto.

                  "LION FUND" shall mean Clarion Lion Properties Fund, LLC, a
Delaware limited liability company.

                  "LIQUIDATING EVENTS" is defined in Section 9.1 hereof.

                  "LIQUIDATION" shall mean (a) when used with respect to the
Partnership, the earlier of (i) the date upon which the Partnership is
terminated under Section 708(b)(1) of the Code and (ii) the date upon which the
Partnership ceases to be a going concern, and (b) when used with respect to any
Partner, the earlier of (i) the date upon which there is a Liquidation of the
Partner and (ii) the date upon which such Partner's entire interest in the
Partnership is terminated other than by transfer, assignment or other
disposition to a Person other than the Partnership.

                  "LIQUIDATOR" shall mean the Managing General Partner, unless
the Managing General Partner's Bankruptcy, insolvency, removal, withdrawal or
liquidation or default hereunder shall have preceded the Liquidation of the
Partnership, in which case the Liquidator shall be any Person designated as such
by the Fund GP.

                                       8

<PAGE>

                  "LOSSES" AND "PROFITS" are defined in Section 6.2(b) hereof.

                  "LXP" is defined in the Preamble hereto.

                  "LXP AFFILIATED PARTY" shall mean any LXP Partner, the Asset
Manager and/or any of their respective Affiliates.

                  "LXP BOARD" shall mean the Board of Trustees of LXP.

                  "LXP GP" is defined in the Preamble hereto.

                  "LXP PARTNER" is defined in the Preamble hereto.

                  "MAJOR DECISION" is defined in Section 3.4 hereof.

                  "MANAGEMENT AGREEMENT" shall mean the agreement between the
Asset Manager and the Partnership which shall be substantially in the form
attached hereto as Exhibit B.

                  "MANAGEMENT FEE" is defined in Section 3.10(c) hereof.

                  "MANAGING GENERAL PARTNER" shall mean the Person in whom the
management of the Partnership is vested pursuant to the terms of this Agreement.
LXP GP shall be the Managing General Partner until LXP GP (x) transfers its
partnership interest in the Partnership or withdraws as a Partner from the
Partnership, (y) transfers or assigns its rights and obligations as the Managing
General Partner or resigns as the Managing General Partner, or (z) is removed as
Managing General Partner, each as provided in Article VIII hereof.

                  "MATERIAL MODIFICATION" shall mean a modification relating to
the treatment of Capital Accounts, distributions and/or allocations hereunder
which, when considered on a cumulative basis with the effect of all other such
modifications previously made, is likely to adversely affect the amount
ultimately distributable or paid to any Partner hereunder as determined by the
independent accountants of the Partnership.

                  "NET CASH FLOW FROM OPERATIONS" shall mean the gross proceeds
from Partnership operations (excluding sales or other dispositions or
refinancings of Qualified Properties) less the sum of any portion thereof used
to (x) pay Operating Expenses, capital improvements, replacements or debt
payments, any management fees payable to the Managing General Partner or Asset
Manager pursuant to Section 3.10(c) hereof, any credits reserved pursuant to
Section 3.10(c) hereof, indemnities and other extraordinary payments made
pursuant to this Agreement or to (y) establish reasonable reserves for Operating
Expenses, capital improvements, replacements, debt payments and contingencies as
provided in the Annual Plan, as such reserves are calculated, established and
maintained by the Managing General Partner pursuant to Section 3.11(d). "Net
Cash

                                       9

<PAGE>

Flow from Operations" shall not be reduced by real estate depreciation or by
cost amortization, cost recovery deductions or similar allowances, but shall be
increased by any reduction of reserves previously described in an Annual Plan.

                  "NET CASH FROM SALES OR REFINANCINGS" shall mean the gross
cash proceeds from the sale or other disposition or refinancing of Qualified
Properties less (a) any closing, transaction and other costs incurred by the
Partnership in connection with such sale or other disposition or refinancing or
repayment or exercise, as the case may be; (b) the amount required to retire any
debt outstanding against such Qualified Properties; and (c) any amounts required
to fund any related reserves up to the levels required by the Annual Plan, as
calculated by the Managing General Partner. Net Cash from Sales or Refinancings
shall be increased by reductions of reserves originally funded from Net Cash
from Sales or Refinancings. "Net Cash from Sales or Refinancings" shall include
all principal and interest payments made with respect to any note or other
obligation received by the Partnership in connection with the sale or other
disposition of any Qualified Property.

                  "NET RENTS" for any period shall mean the rents actually
received by the Partnership from all of the tenants of the Qualified Properties
during such period less any Operating Expenses for the Qualified Properties not
paid by the tenants thereof.

                  "NONRECOURSE LIABILITY" shall mean any Partnership liability
(or portion thereof) the Economic Risk of Loss of which is not borne by any
Partner or any party related to any Partner, as such related party is described
in the applicable Regulations under Code Section 752.

                  "NON-INVESTMENT GRADE TENANT" shall mean a tenant of a
property that either (a) has a current credit rating by Standard & Poor's of
less than BBB or a comparable credit rating by Moody's Investors Services, Inc.,
Duff & Phelps Credit Rating Co. or Fitch IBCA or (b) does not have a credit
rating.

                  "NON-SALE GENERAL PARTNER" is defined in Section 3.7(b)
hereof.

                  "OFFER NOTICE" is defined in Section 11.1(a) hereof.

                  "OFFER PRICE" is defined in Section 11.1(a) hereof.

                  "OFFERED AGREEMENT" is defined in Section 11.1(a) hereof.

                  "OFFERING GENERAL PARTNER" is defined in Section 11.1(a)
hereof.

                  "OPERATING EXPENSES" shall mean (x) all reasonable and
customary costs and expenses of Third Parties retained in connection with the
ownership, leasing, operation, repair and maintenance of the Qualified
Properties and (y) real estate taxes, insurance premiums, utility charges, rent
collection and lease enforcement costs,

                                       10
<PAGE>
brokerage commissions to the extent applicable to the period in question (but
excluding any Acquisition Fees payable to the Managing General Partner or the
Asset Manager under Section 3.6(g) hereof), maintenance expenses, costs of
repairs and replacements (which, under generally accepted accounting principles
consistently applied, may be expensed during the period when made) and
management fees (but excluding any management fees or the Oversight Fee payable
to the Managing General Partner or Asset Manager pursuant to Section 3.10(c)
hereof) in connection with the ownership, leasing, operation, repair and
maintenance of the Qualified Properties. Operating Expenses shall not include
general and administrative costs and overhead of the Partnership and debt
payments.

                  "O.P. UNIT" shall mean a partnership interest in a partnership
in which LXP is a partner.

                  "OTHER PARTNERS" in respect of either or both of the LXP
Partners shall mean the Fund Partners and in respect of either or both of the
Fund Partners shall mean the LXP Partners.

                  "OVERSIGHT FEE" is defined in Section 3.10(c) hereof.

                  "PARTNER" is defined in the Preamble hereto.

                  "PARTNER NONRECOURSE DEBT" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).

                  "PARTNER NONRECOURSE DEBT MINIMUM GAIN" shall have the meaning
set forth in Regulations Section 1.704-2(i)(2).

                  "PARTNER NONRECOURSE DEDUCTIONS" is defined in Section 6.3(d)
hereof.

                  "PARTNERSHIP" is defined in the Preamble hereto.

                  "PARTNERSHIP MINIMUM GAIN" shall have the meaning set forth in
Section 1.704-2(b)(2) and (d) of the Regulations.

                  "PERCENTAGE INTEREST" shall mean the entire undivided
ownership interest in the Partnership of any Partner at any particular time, (x)
expressed as a percentage rounded to the nearest one one-hundredth (0.01%), (y)
determined at such time by dividing the total Capital Contributions made by such
Partner by the total Capital Contributions made in the Partnership by all
Partners and (z) as may be adjusted from time to time in accordance with the
terms hereof. The Percentage Interest of each Partner as of the date hereof
shall be as described on Schedule 1 hereto.

                  "PERMITTED EXPENSES" shall mean, for each annual period
covered by an Annual Plan, Operating Expenses, capital improvements,
replacements and debt payments

                                       11

<PAGE>

as set forth therein plus, with respect to each budget line item in the Annual
Budget portion of such Annual Plan, the greater of (w) five percent (5%) of each
such budget line item or (x) Twenty Thousand Dollars ($20,000.00); provided,
however, that Permitted Expenses shall not include any Operating Expenses,
capital improvements, replacements and debt payments which, when added to all
other obligations incurred or reserve amounts accrued in excess of the
applicable budget line items in such Annual Budget portion of the Annual Plan,
exceed (x) One Hundred Thousand Dollars ($100,000) in any fiscal year for a
particular Qualified Property or (y) an average (taking into account all
Qualified Properties then owned by the Partnership) of Fifty Thousand Dollars
($50,000) per Qualified Property. Permitted Expenses shall also mean (i) all
reasonable and customary costs and expenses of Third Parties retained in
connection with the Acquisition Activities as provided in Section 3.6(f) hereof,
(ii) any reasonable costs or expenses incurred in implementing a Major Decision
agreed to by the General Partners as provided in Section 3.4 hereof and not
otherwise already included in an Annual Plan, (iii) costs and expenses incurred
by the Partners in connection with the formation of the Partnership, including
legal fees, and (iv) the management fees payable pursuant to Section 3.10(c)
hereof.

                  "PERSON" shall mean any individual, trust (including a
business trust), unincorporated association, corporation, limited liability
company, joint stock company, general partnership, limited partnership, joint
venture, governmental authority or other entity.

                  "PHYSICAL INSPECTION REPORT" shall mean a report prepared by a
qualified independent third party engineer, architect or other real estate
inspector selected by the Managing General Partner and reasonably acceptable to
the Fund GP concerning the physical condition of any Proposed Qualified
Property.

                  "PLAN AMENDMENT" is defined in Section 3.5(c).

                  "PROFITS" and "LOSSES" are defined in Section 6.2(b) hereof.

                  "PROPOSED PLAN" is defined in Section 3.5(a) hereof.

                  "PROPOSED TENDERED QUALIFIED PROPERTIES" is defined in Section
11.2(b) hereof.

                  "PROPOSED QUALIFIED PROPERTY" is defined in Section 3.6(a)
hereof.

                  "QUALIFIED PROPERTY" or "QUALIFIED PROPERTIES" shall mean the
interest of the Partnership in each parcel of real property acquired as provided
in Section 3.6 hereof, together with all buildings, structures and improvements
located thereon, fixtures contained therein, appurtenances thereto and all
personal property owned in connection therewith.

                                       12

<PAGE>

                  "REDEMPTION RIGHT" is defined in Section 11.2(a) hereof.

                  "REDEMPTION RIGHT SHARES" is defined in Section 11.4 hereof.

                  "REGULATIONS" shall mean the income tax regulations
promulgated under the Code, whether temporary, proposed or finalized, as such
regulations may be amended from time to time (including corresponding provisions
of future regulations).

                  "REGULATORY ALLOCATIONS" is defined in Section 6.3(f) hereof.

                  "REMOVAL AMOUNT" is defined in Section 8.3(b) hereof.

                  "REMOVAL NOTICE" is defined in Section 8.3(a) hereof.

                  "RESPONDING GENERAL PARTNER" is defined in Section 11.1(a)
hereof.

                  "RESPONDING INTEREST PRICE" is defined in Section 11.1(c)
hereof.

                  "RESPONSE NOTICE" is defined in Section 11.1(a) hereof.

                  "RETAINED QUALIFIED PROPERTIES" is defined in
Section 11.2(b)(ii).

                  "RIGHT OF FIRST REFUSAL" is defined in Section 3.7(b) hereof.

                  "RIGHTS TRIGGER DATE" shall mean the date of January 2, 2006.

                  "SALE GENERAL PARTNER" is defined in Section 3.7(b) hereof.

                  "SALE NOTICE" is defined in Section 3.7(b) hereof.

                  "SECTION 704(c) PROPERTY" shall mean (x) each item of property
to which Section 704(c) of the Code or Section 1.704-3(a)(3) of the Regulations
applies that is contributed to the Partnership, and (y) any property owned by
the Partnership which is governed by the principles of Section 704(c) of the
Code, as contemplated by Section 1.704-1(b)(4)(i) and other analogous provisions
of the Regulations.

                  "SHARE PURCHASE PRICE" is defined in Schedule 5 hereof.

                  "SHARES" shall mean the common shares of beneficial interest,
par value $.0001 per share, of LXP.

                  "SP SUBSIDIARY" shall mean an entity selected by the Managing
General Partner and approved by the Fund GP which shall be wholly-owned
(directly or indirectly) by the Partnership, the purpose of which is limited to
acquiring, financing, holding for investment, preserving, managing, operating,
improving, leasing, selling, exchanging,

                                       13

<PAGE>

transferring and otherwise using or disposing of a Qualified Property or
Qualified Properties.

                  "TAX DEPRECIATION" shall mean with respect to any property
owned by the Partnership depreciation, accelerated cost recovery, or modified
cost recovery, and any other amortization or deduction allowed or allowable for
federal, state or local income tax purposes.

                  "TAX MATTERS PARTNER" is defined in Section 6.5 hereof.

                  "TENDERED QUALIFIED PROPERTIES" shall mean all of the
Partnership's Qualified Properties owned by the Partnership at the time the Fund
GP exercises the Redemption Right pursuant to Section 11.2 hereof or, if the
Fund GP or LXP GP, or both, exercise their rights to exclude Qualified
Properties under Section 11.2(b) hereof, the Qualified Properties remaining
after the Fund GP has excluded Qualified Properties pursuant to Clause (ii) of
Section 11.2(b) hereof and after LXP GP has excluded certain Qualified
Properties pursuant to Clause (iii) of Section 11.2(b) hereof.

                  "THIRD PARTIES" shall mean consultants, engineers,
environmental consultants, accountants, attorneys, contractors and
subcontractors, brokers or managers, but excluding any LXP Affiliated Party.

                  "12% IRR" shall mean an annual interest rate of 12% which,
when applied to the Capital Contributions (including credited amounts under
Section 3.10(c) hereof) made, and the Acquisition Fees and Financing Fees (if
any) paid, by each Partner and the Distributable Cash distributed to each
Partner, renders the net present value of such negative (i.e. Capital
Contributions, Acquisition Fees and Financing Fees) and positive (i.e.
Distributable Cash) cash flows equal to zero.

                  Capitalized terms used herein but not defined herein shall
have the meanings assigned to such terms in Schedule 5 hereto, unless the
context requires otherwise.

                                   ARTICLE II
                        FORMATION, DURATION AND PURPOSES

                  SECTION 2.1 FORMATION. Pursuant to the Delaware Revised
Uniform Limited Partnership Act, codified in the Delaware Code Annotated, Title
6, Sections 17-101 to 17-1111, as the same may be amended from time to time (the
"ACT"), the Partners agree to form and hereby form the Partnership by entering
into this Agreement. The Partners hereby acknowledge that a certificate of
limited partnership has been executed and filed in the office of the Delaware
Secretary of State on the date hereof. The execution and filing of such
certificate of limited partnership with the Delaware Secretary of State is
hereby authorized, ratified and approved by the Partners. The rights,
liabilities and obligations of any Partner with respect to the Partnership shall
be determined in

                                       14

<PAGE>

accordance with the Act and this Agreement. To the extent anything contained in
this Agreement modifies, supplements or otherwise affects any such right,
liability, or obligation arising under the Act, this Agreement shall supercede
the Act to the extent not restricted thereby.

                  SECTION 2.2 NAME; REGISTERED AGENT AND REGISTERED OFFICE. The
name of the Partnership and the name under which the business of the Partnership
shall be conducted shall be "LEXINGTON/LION VENTURE LP". The registered agent of
the Partnership shall be National Registered Agents, and the registered office
of the Partnership shall be at National Registered Agents, 9 East Loockerman
Street, Suite 1B, in the City of Dover, County of Kent, Delaware 19901. The
Managing General Partner may select another such registered agent or registered
office from time to time upon ten (10) Business Days prior written notice
thereof to, and the consent of, the Fund GP.

                  SECTION 2.3 PRINCIPAL OFFICE. The principal place of business
and office of the Partnership shall be located at 355 Lexington Avenue, New
York, New York 10017-6603, or at such other place as the Managing General
Partner may determine from time to time. The business of the Partnership may
also be conducted at such additional place or places as the General Partners may
determine.

                  SECTION 2.4 PURPOSES AND BUSINESS. The business of the
Partnership is to acquire, finance, refinance, hold for investment, preserve,
manage, operate, improve, lease, sell, exchange, transfer and otherwise use or
dispose of the Qualified Properties as may be acquired by the Partnership from
time to time pursuant to the terms hereof, which Qualified Properties may be
located anywhere in the United States and shall not be used primarily for
agricultural, horticultural, ranch, mining, recreational, amusement or club
purposes. In connection therewith and without limiting the foregoing, the
Partnership shall have the power to dispose of the Qualified Properties in
accordance with the terms of this Agreement and to engage in any and all
activities related or incidental thereto, all for the benefit of the Partners.

                  SECTION 2.5 TERM. The term of the Partnership shall commence
on the date of this Agreement and shall continue in full force and effect until
ten (10) years from the date hereof, unless sooner terminated pursuant to the
terms hereof. No Partner may withdraw from the Partnership without the prior
consent of the General Partners, other than as expressly provided in this
Agreement.

                  SECTION 2.6 OTHER QUALIFICATIONS. The Partnership shall file
or record such documents and take such other actions under the laws of any
jurisdiction in which the Partnership does business as are necessary or
desirable to permit the Partnership to do business in any such jurisdiction and
to promote the limitation of liability for the Partners in any such
jurisdiction.

                  SECTION 2.7 LIMITATION ON THE RIGHTS OF PARTNERS. Except as
otherwise specifically provided in this Agreement, (a) no Partner shall have the
right to

                                       15

<PAGE>

withdraw or retire from, or reduce its contribution to the capital of, the
Partnership; (b) no Partner shall have the right to demand or receive property
other than cash in return for its Capital Contribution; and (c) no Partner shall
have priority over any other Partner either as to the return of its Capital
Contribution or as to profits or distributions.

                                   ARTICLE III
                      MANAGEMENT RIGHTS, DUTIES, AND POWERS
            OF THE MANAGING GENERAL PARTNER; TRANSACTIONS INVOLVING
                                    PARTNERS

                  SECTION 3.1 MANAGEMENT.

                  (a)      Management by the Managing General Partner. LXP GP
         shall be the Managing General Partner until LXP GP (x) transfers its
         partnership interest in the Partnership or withdraws as a Partner from
         the Partnership, (y) transfers or assigns its rights and obligations as
         the Managing General Partner or resigns as the Managing General
         Partner, or (z) is removed as the Managing General Partner, each as
         provided in Article VIII hereof. The Managing General Partner shall
         manage the investments, business and day-to-day affairs of the
         Partnership and shall be responsible for acquisitions and dispositions
         of Qualified Properties, subject, however, to the provisions of Section
         3.4 hereof with respect to Major Decisions, of Section 3.6 and Section
         3.7 hereof with respect to the acquisition or sale of Qualified
         Properties and any other provisions of this Agreement concerning the
         investments, business and day-to-day affairs of the Partnership. The
         Managing General Partner shall use reasonable efforts to manage the
         investments, business and day-to-day affairs of the Partnership in
         accordance with the Annual Plan approved in accordance with Section 3.5
         hereof. Any action taken by the Managing General Partner in accordance
         with the terms of this Agreement shall constitute the act of and serve
         to bind the Partnership. The Managing General Partner may delegate
         certain of the tasks that are to be performed in connection with the
         acquisition of properties, the management of the Qualified Properties
         or the business and day-to-day affairs of the Partnership. Any such
         delegation to third parties provided in the previous sentence shall be
         supervised by the Managing General Partner and such delegation shall
         not relieve the Managing General Partner of any of its obligations
         hereunder. Any right of any Partner to consent to any action requiring
         its consent hereunder shall not be diminished or otherwise affected by
         such delegation.

                  (b)      Delegation to the Asset Manager. LXP GP in its
         capacity as Managing General Partner shall have the right to retain the
         Asset Manager and delegate (pursuant to Section 3.1(a) above) to the
         Asset Manager any of the following duties and responsibilities: the
         management of the Qualified Properties and the performance of the tasks
         necessary for the evaluation of Proposed Qualified Properties and the
         acquisition of Approved Qualified Properties as

                                       16

<PAGE>

         contemplated in Section 3.6 hereof. The Asset Manager shall be
         qualified to do business in all jurisdictions in which the Partnership
         does business or owns properties. If LXP GP in its capacity as Managing
         General Partner elects to retain the Asset Manager, the Partnership and
         the Asset Manager shall enter into a Management Agreement substantially
         in the form attached hereto as Exhibit B and made a part hereof. The
         Managing General Partner may replace the Asset Manager at any time and
         from time to time, provided that as a condition to such replacement of
         the Asset Manager, (x) the Fund GP and the Advisor shall have received
         written notice of such replacement and (y) the replacement Asset
         Manager shall have entered into an agreement substantially in the form
         attached hereto as Exhibit B. Any other property management or
         operating agreement between the Partnership and any Asset Manager shall
         be acceptable to the General Partners and shall by its terms terminate
         without penalty at the election of the Fund GP upon five (5) Business
         Days' written notice to such Asset Manager if LXP GP is removed as
         Managing General Partner. The Asset Manager shall have no interest in
         or rights under this Agreement, shall not be admitted as a substitute
         for LXP GP or LXP and shall not have any of the rights of a Partner
         under the Act or this Agreement. The Asset Manager may be authorized to
         perform such tasks of the Managing General Partner specified in
         Section 3.3 hereof that LXP GP in its capacity as Managing General
         Partner reasonably deems necessary or appropriate in connection with
         the management of the Qualified Properties, the evaluation of Proposed
         Qualified Properties or the acquisition of Approved Qualified
         Properties, but in all cases in accordance with the Annual Plan and the
         requirements of Section 3.4, Section 3.6 and Section 3.7 hereof and any
         other provisions of this Agreement concerning the investments, business
         and affairs of the Partnership. The Asset Manager shall not have the
         authority to execute or deliver documents on behalf of the Partnership
         or to bind the Partnership, except as expressly set forth in the
         Management Agreement between the Partnership and the Asset Manager.
         Notwithstanding anything to the contrary contained in Section 3.3
         hereof, the Asset Manager shall not have any authority to borrow or
         draw down funds or finance or refinance any part of any purchase price
         or incur indebtedness secured by any Qualified Property or any
         unsecured indebtedness. Any delegation to the Asset Manager provided in
         this Section 3.1(b) shall be supervised by LXP GP in its capacity as
         Managing General Partner and such delegation shall not relieve LXP GP
         of any of its obligations hereunder as Managing General Partner.

                  (c)      Right to Rely on Authority of the Managing General
         Partner. Any action taken by LXP GP in its capacity as Managing General
         Partner, acting on behalf of the Partnership pursuant to the authority
         conferred thereon in this Agreement, shall be binding on the
         Partnership. In no event shall any Person dealing with LXP GP with
         respect to the conduct of the affairs of the Partnership while LXP GP
         is the Managing General Partner be obligated to ascertain whether

                                       17

<PAGE>

         the terms of this Agreement have been complied with, or be obligated to
         inquire into the necessity or expediency of any action of LXP GP.

                  (d)      No Management by the Fund GP or the Fund. The Fund GP
         shall have the authority to approve the Annual Plan (and amendments
         thereof) and to approve Major Decisions. The Fund GP shall also have
         the authority to consent to certain acts of the Managing General
         Partner, the Asset Manager and the Partnership, in each case as and to
         the extent provided in this Agreement. Neither Fund Partner shall
         participate in the control of the business of the Partnership or
         transact any business for the Partnership or have the power to sign
         documents for or otherwise bind the Partnership and neither shall
         perform or have the authority to perform any act, thing or deed in the
         name of or on behalf of the Managing General Partner, the Asset Manager
         or the Partnership (provided, however, that Fund GP shall have the
         right to appoint a replacement Managing General Partner pursuant to
         Section 8.3(a) and to exercise certain rights on behalf of the
         Partnership pursuant to Section 3.1(e)). The Fund Partners may give any
         consents, approvals or other authorizations described in this Agreement
         without being deemed to have participated in the control of the
         Partnership.

                  (e)      Fund GP's Right to Enforce Partnership Rights Against
         LXP Affiliated Parties. Notwithstanding anything herein to the
         contrary, if the Managing General Partner has failed to enforce any of
         the Partnership's rights against any LXP Affiliated Party that has
         defaulted on any obligation owed to the Partnership under this
         Agreement or under any agreement between the Partnership and any LXP
         Affiliated Party, the Fund GP shall be entitled to exercise, on behalf
         of the Partnership and at the expense of the Partnership (either in the
         Partnership's own capacity or as general partner of the Partnership),
         the Partnership's rights and obligations arising under such agreements
         all without the consent or approval of the Managing General Partner;
         provided, that the Fund GP shall not have the right to terminate such
         agreements or any rights of the LXP Affiliated Party under such
         agreements without Cause without the consent of the Managing General
         Partner.

                  SECTION 3.2 MEETINGS OF THE GENERAL PARTNERS

                  (a)      Meetings of the General Partners. The General
         Partners of the Partnership may hold meetings, both regular and
         special, within or outside the State of Delaware. Regular meetings of
         the General Partners shall be held at least annually with written
         notice to the General Partners at such time and at such place as shall
         from time to time be reasonably determined by the Managing General
         Partner subject to consent by the Fund GP. Regular or special meetings
         of the General Partners may be called by either General Partner on not
         less than ten (10) Business Day's written notice to the other General
         Partner. The Advisor may attend meetings of the General Partners but
         shall not vote on behalf of the Fund

                                       18

<PAGE>

         GP. Except as otherwise provided by the Act, the Limited Partners shall
         not be entitled to vote on any Partnership matter.

                  (b)      Acts of the General Partners. Both General Partners
         must be present at any meeting of the Partners, and all acts of the
         General Partners must be approved by the unanimous vote of the General
         Partners. Each General Partner present at a meeting and entitled to
         participate in such meeting shall be entitled to one vote with respect
         to any action. If either General Partner shall not be present at any
         meeting of the General Partners, the other General Partner present at
         such meeting shall adjourn the meeting from time to time, without
         notice other than announcement of the date and location of the
         adjourned meeting, until both General Partners shall be present. Any
         action required or permitted to be taken at any meeting of the General
         Partners may be taken without a meeting if both General Partners
         consent thereto in writing, and the writing or writings are filed with
         the minutes of such proceedings of the General Partners.

                  (c)      Electronic Communication. General Partners may
         participate in meetings of the General Partners by means of telephone
         conference or similar communications equipment that allows all persons
         participating in the meeting to hear each other, and such participation
         in a meeting shall constitute presence in person at the meeting. If all
         the participants are participating by telephone conference or similar
         communications equipment, the meeting shall be deemed to be held at the
         principal place of business of the Partnership.

                  (d)      Authorized Representatives. Prior to the first annual
         meeting of the General Partners and prior to the time the Fund GP casts
         a vote: (i) the Fund GP shall deliver to the LXP GP a list of
         individuals who are authorized to attend meetings of the General
         Partners and cast votes on its behalf and shall update such list to
         reflect any changes in authorized individuals; and (ii) LXP GP shall
         deliver to the Fund GP an incumbency certificate naming all of LXP GP's
         executive officers and shall replace such certificate whenever there is
         a change in LXP GP's executive officers. LXP GP's executive officers
         are authorized to attend meetings of the General Partners and to cast
         votes on behalf of LXP GP.

                  (e)      Informational Meetings. The Managing General Partner
         shall hold informational meetings with the Fund GP and the Advisor to
         review and discuss the Partnership's activities and business upon ten
         (10) Business Days' prior written notice by the Fund GP. The Fund GP
         may, but shall not be obligated to, attend informational meetings that
         are attended by the Advisor. Such meetings shall be held at a mutually
         convenient time at the New York City offices of LXP or the Fund unless
         the General Partners otherwise agree. LXP GP, the Fund GP and the
         Advisor may each designate any number of representatives to attend such
         meetings.

                                       19

<PAGE>

                  SECTION 3.3 AUTHORITY OF THE MANAGING GENERAL PARTNER. Except
as otherwise provided in this Article III, the Managing General Partner is
hereby authorized to do the following, for and in the name and on behalf of the
Partnership, as may be necessary, convenient or incidental to the implementation
of the Annual Plan or to the accomplishment of the purposes of the Partnership
(provided, that if any of the following constitutes a Major Decision that is not
specifically set forth in the Annual Plan, the Managing General Partner shall
first obtain the consent of the Fund GP pursuant to Section 3.4 hereof):

                      (i) acquire by purchase, exchange or otherwise, any
         Proposed Qualified Property consistent with the purposes of the
         Partnership, but only in accordance with Section 3.6 hereof;

                      (ii) operate, manage and maintain each of the Qualified
         Properties;

                      (iii) take such action as is necessary to form, create or
         set up any SP Subsidiary that has been approved by the General Partners
         in accordance with Section 3.6 hereof;

                      (iv) dissolve, terminate or wind-up any SP Subsidiary,
         provided that any Qualified Property held by such SP Subsidiary has
         been disposed of in accordance with Section 3.7 or Section 11.1 hereof
         or transferred to the Partnership or any other SP Subsidiary;

                      (v) enter into, amend, extend or renew any lease of any
         Qualified Property or any part thereof or interest therein approved by
         the General Partners as part of the Annual Plan;

                      (vi) initiate legal proceedings or arbitration with
         respect to any lease of any Qualified Property or part thereof or
         interest therein; provided that the initiation of such legal
         proceedings or arbitration shall have arisen (x) in connection with any
         matter of an emergency nature, (y) for the collection of rent or (z)
         involving an uninsured claim of less than $100,000;

                      (vii) dispose of any or all of the Qualified Properties by
         sale, lease, exchange or otherwise, and grant an option for the sale,
         lease, exchange or otherwise of any or all the Qualified Properties,
         but only in accordance with Section 3.7 hereof;

                      (viii) employ and dismiss from employment any and all
         employees, agents, independent contractors and, subject to Section 4.9
         hereof, attorneys and accountants for the Partnership;

                      (ix) pay all Permitted Expenses (and maintain in reserve
         the amount of any credits pursuant to Section 3.10(c) hereof);

                                       20
<PAGE>

                  (x)      execute and deliver any and all agreements,
         contracts, documents, certifications and instruments necessary or
         convenient in connection with the management, maintenance and ownership
         of the Qualified Properties and in connection with any other matters
         with respect to which the Managing General Partner has authority to act
         pursuant to the Annual Plan or as set forth in this Section 3.3;

                  (xi)     draw down funds as needed under any approved lines of
         credit or other financing previously approved under Section 3.4 hereof;

                  (xii)    finance or refinance a portion of the purchase price
         of any Qualified Property and incur (and refinance) indebtedness
         secured by any Qualified Property, or any portion thereof or any
         interest or estate therein and incur any other secured or unsecured
         borrowings or other indebtedness;

                  (xiii)   implement those Major Decisions that are specifically
         set forth in the Annual Plan or that have been approved by the Fund GP
         pursuant to Section 3.4 below; and

                  (xiv)    subject to any conditions expressly provided in this
         Agreement, engage in any kind of activity and perform and carry out
         contracts of any kind necessary or incidental to or in connection with
         the accomplishment of the purposes of the Partnership as may be
         lawfully carried out or performed by a limited partnership under the
         laws of each state in which the Partnership is then formed or
         registered or qualified to do business.

                  SECTION 3.4 MAJOR DECISIONS. Notwithstanding anything to the
contrary contained in this Agreement, the Managing General Partner shall not
take, on behalf of the Partnership, and shall not permit the Partnership or the
Asset Manager to take, any action, make any decision, expend any sum or
undertake or suffer any obligation which comes within the scope of any Major
Decision unless such Major Decision is approved by the Fund GP in advance in
writing (including any written approval delivered at a meeting in accordance
with Section 3.2 hereof) or is specifically set forth in the Annual Plan. As
used herein, "MAJOR DECISION" shall mean a decision to take any of the following
actions:

                  (i)      the acquisition by purchase, exchange or otherwise of
         any Qualified Property or other real property except in accordance with
         Section 3.6 hereof;

                  (ii)     the disposition by sale, lease, exchange or
         otherwise, and the granting of an option for the sale, lease, exchange
         or other disposition of any or all of the Qualified Properties except
         in accordance with Section 3.7(b) and Section 11.1 hereof;

                                       21
<PAGE>

                  (iii)    the financing or refinancing of, or the increasing of
         any mortgage indebtedness encumbering, any Qualified Property, or any
         portion thereof or any interest or estate therein, whether recourse or
         non-recourse to the Partnership, or the incurrence of indebtedness
         secured by any Qualified Property, or any portion thereof or any
         interest or estate therein, or the incurrence of any other secured or
         unsecured borrowings or other indebtedness by the Partnership,
         including determination of the terms and conditions thereof, and any
         amendments to such terms and conditions except as contemplated in an
         Annual Plan or in accordance with Section 3.4 hereof;

                  (iv)     the formation, creation or setting up of any SP
         Subsidiary except in accordance with Section 3.6 hereof;

                  (v)      the making of any loan;

                  (vi)     the entering into of any transaction or agreement
         with or for the benefit of, or the employment or engagement of, any LXP
         Affiliated Party, except as expressly contemplated in Sections 3.1(b)
         and 3.10 hereof;

                  (vii)    the causing or permitting of an encumbrance of any
         Percentage Interest or any portion thereof;

                  (viii)   making an Extraordinary Call to the Partners to fund
         an operating deficit of the Partnership, which Extraordinary Call shall
         be made only in accordance with Section 5.1(c) hereof;

                  (ix)     the construction, alteration, improvement, repair,
         rehabilitation, razing, rebuilding or replacement of any building or
         other improvements or the making of any capital improvements,
         replacements, repairs, alterations or changes in, to or on any
         Qualified Property, or any part thereof, except to the extent provided
         for in the Annual Plan; provided that repairs of emergency nature may
         be undertaken without prior approval of the Fund GP provided the
         Managing General Partner notifies the Advisor in writing thereof within
         two (2) Business Days following the commencement of such emergency
         repairs;

                  (x)      the incurring of any cost or expense for any fiscal
         year which, (x) when added to all other costs and expenses for such
         fiscal year, exceeds the applicable budget line in the Annual Budget
         portion of the Annual Plan by the greater of Twenty Thousand Dollars
         ($20,000) or five percent (5%) thereof or, (y) when added to all other
         costs and expenses in excess of their applicable budget line items in
         the Annual Budget portion of the Annual Plan, exceeds (i) One Hundred
         Thousand Dollars ($100,000) in any fiscal year for any Qualified
         Property or (ii) an average (taking into account all Qualified
         Properties then owned by the Partnership) of Fifty Thousand Dollars
         ($50,000) per Qualified Property; provided that, notwithstanding the
         foregoing, repairs of emergency

                                       22
<PAGE>

         nature may be undertaken without prior approval of the Fund GP provided
         the Managing General Partner notifies the Advisor in writing thereof
         within two (2) Business Days following the commencement thereof;

                  (xi)     the incurring of any expense other than a Permitted
         Expense; provided that, notwithstanding the foregoing, repairs of an
         emergency nature may be undertaken without prior approval of the Fund
         GP provided the Managing General Partner notifies the Advisor in
         writing thereof within two (2) Business Days following the commencement
         thereof;

                  (xii)    the reinvestment for restoration purposes of (i)
         insurance proceeds in excess of $500,000 received by the Partnership in
         connection with the damage or destruction of any Qualified Property or
         (ii) condemnation proceeds in excess of $500,000 received by the
         Partnership in connection with the taking or settlement in lieu of a
         threatened taking of all or any portion of any Qualified Property;
         provided that (x) if the determination is made not to reinvest any such
         insurance or condemnation proceeds, then so much thereof as may be
         necessary shall be applied to the razing or other disposition of the
         remaining improvements as may be required by law or by a reasonably
         prudent property manager and the balance of such insurance or
         condemnation proceeds shall be distributed in accordance with this
         Agreement and (y) any reinvestment of insurance or condemnation
         proceeds that is contractually required under any lease or the terms of
         any financing or refinancing of a Qualified Property approved in each
         case by the General Partners shall not be a Major Decision subject to
         this Section 3.4;

                  (xiii)   the approval of the Annual Plan;

                  (xiv)    the initiation of legal proceedings or arbitration
         with respect to any lease of any Qualified Property or part thereof or
         interest therein; provided that the initiation of such legal
         proceedings or arbitration (x) in connection with any matter of an
         emergency nature, or (y) for the collection of rent, shall not be a
         Major Decision subject to this Section 3.4;

                  (xv)     the commencement of any litigation by the Partnership
         or the settlement of any litigation against the Partnership involving
         an uninsured claim of $100,000 or more;

                  (xvi)    the commencement of any case, proceeding or other
         action seeking protection for the Partnership as debtor under any
         existing or future law of any jurisdiction relating to Bankruptcy,
         insolvency, reorganization or relief of debtors; any consent to the
         entry of an order for relief in or institution of any case, proceeding
         or other action brought by any third party against the Partnership as a
         debtor under any existing or future law of any jurisdiction relating to
         Bankruptcy, insolvency, reorganization or relief of debtors; the filing
         of an answer in any involuntary case or proceeding described in the
         previous clause admitting the

                                       23
<PAGE>

         material allegations of the petition therefor or otherwise failing to
         contest any such involuntary case or proceeding; the seeking of or
         consent to the appointment of a receiver, liquidator, assignee,
         trustee, sequestrator, custodian or any similar official for the
         Partnership or for a substantial portion of its Qualified Properties;
         any assignment for the benefit of the creditors of the Partnership; or
         the admission in writing that the Partnership is unable to pay its
         debts as they mature or that the Partnership is not paying its debts as
         they become due;

                  (xvii)   with respect to any lease of any Qualified Property,
         or part thereof or interest therein, the entering into, amending,
         extending or renewing thereof, in each case not already approved by the
         General Partners as part of the Annual Plan;

                  (xviii)  the execution of any agreement, contract,
         understanding or other arrangement to effectuate a Major Decision;
         provided that the execution of a non-binding letter of intent in
         accordance with Section 3.6(a) hereof shall not be a Major Decision
         subject to this Section 3.4;

                  (xix)    the extension of the statute of limitations for
         assessing or computing any tax liability against the Partnership or the
         amount of any Partnership tax item or to settle any dispute with
         respect to any income, or any other material, tax;

                  (xx)     the taking of any of the foregoing actions through a
         SP Subsidiary or any other subsidiary of the Partnership; and

                  (xxi)    any other action which requires the consent or
         approval of the Fund GP under this Agreement.

                  SECTION 3.5 PRELIMINARY AND ANNUAL PLANS.

                  (a)      Preparation and Approval of Plans. The Managing
         General Partner shall prepare and deliver to the Fund GP and the
         Advisor for the General Partners' approval or disapproval a proposed
         annual plan for the next fiscal year of the Partnership (as further
         described below, a "PROPOSED PLAN"). The Proposed Plan shall cover the
         Partnership, each Qualified Property and shall include: a proposed
         Annual Budget covering the Partnership, each Qualified Property and a
         brief narrative description of the material portions thereof; a plan of
         operations for each Qualified Property, including anticipated repairs
         and improvements; estimated financing needs and estimated financing
         costs; estimated cash flow projections; a description of tenants then
         in occupancy in each Qualified Property; a schedule of Qualified
         Properties, any leases which are expiring during such fiscal year and
         the plans for the re-leasing of such Qualified Properties and any lease
         restructures (such as subleasing or expansion by a tenant) of which the
         Managing General Partner is aware; projected capital improvements and
         capital repairs; a description

                                       24
<PAGE>

         of any Proposed Qualified Properties to the extent identified,
         including the terms of acquisition, provided that nothing in the
         Proposed Plan shall affect or limit the provisions of Section 3.6
         hereof; and any other information relative to the management of the
         Qualified Properties or the Partnership reasonably requested by the
         Fund General Partner. The Managing General Partner shall prepare and
         submit a Proposed Plan to the Fund GP and the Advisor on or before
         September 15th of the year prior to such fiscal year. The Fund GP shall
         provide the Managing General Partner with any comments or requested
         changes the Fund GP may have to such Proposed Plan within fifteen (15)
         days after its receipt thereof. The Managing General Partner shall
         submit a revised Proposed Plan to the Fund GP and the Advisor
         incorporating or otherwise addressing the Fund GP's requested changes
         no later than October 15th of the year prior to the fiscal year covered
         by such revised Proposed Plan; provided that if the Fund GP provides
         comments on a Proposed Plan to the Managing General Partner on any date
         after October 1st, then the Managing General Partner's deadline for
         submitting a revised Proposed Plan as described in this sentence shall
         be extended one day for each day after October 1st that the Fund GP
         shall have delayed providing comments to the Managing General Partner.
         The Fund GP shall approve or disapprove such revised Proposed Plan
         within fifteen (15) days after its receipt thereof. Any Proposed Plan
         approved by the General Partners in accordance with this Section 3.5(a)
         shall become the annual plan for the next fiscal year of the
         Partnership (any Proposed Plan approved by the General Partners for any
         fiscal year of the Partnership, and as may be amended from time to time
         by a Plan Amendment in accordance with Section 3.5(c) hereof, an
         "ANNUAL PLAN"). A model of an Annual Plan is attached as Schedule 3.5
         and made a part hereof.

                  (b)      Dispute Concerning an Annual Budget. If, prior to the
         commencement of any fiscal year, the General Partners have not reached
         an agreement as to the amount to be allocated to any budget line item
         set forth in the Annual Budget portion of the Proposed Plan for such
         fiscal year, then (i) as to any such disputed budget line item, the
         Annual Budget portion of the Annual Plan for the immediately preceding
         fiscal year (exclusive of any non-recurring capital expenditures) shall
         be controlling but only with respect to such disputed budget line item
         (in each case adjusted to reflect the increases in the CPI for
         September of such fiscal year over the CPI for September of such
         immediately preceding fiscal year) and only until such time as the
         General Partners reach an agreement on the amount to be allocated to
         such budget line item, and (ii) as to any budget line item or items
         that are not in dispute, the Annual Budget portion of the Proposed Plan
         shall control.

                  (c)      Amendments to Annual Plans. If in any General
         Partner's judgment an Annual Plan requires amendment, such General
         Partner (the "AMENDING GENERAL PARTNER") shall deliver to the other
         General Partner (the "NON-AMENDING GENERAL PARTNER") (and, if the
         Amending General Partner is

                                       25
<PAGE>

         LXP GP, to the Advisor) a written notice setting forth the proposed
         amendment to the Annual Plan and the basis therefor. The Non-Amending
         General Partner shall approve or disapprove such proposed amendment
         within ten (10) Business Days after receipt thereof, and, upon approval
         by the Non-Amending General Partner (any such amendment, a "PLAN
         AMENDMENT"), the Annual Plan (including, without limitation any
         amendments to the Annual Budget portion thereof) shall be amended by
         the Plan Amendment as set forth in the written notice described in the
         preceding sentence.

                  SECTION 3.6 QUALIFIED PROPERTY ACQUISITIONS.

                  (a)      Generally; Approval by the Fund. The Managing General
         Partner shall originate net-leased properties as candidates for
         acquisition by the Partnership (any such property, a "PROPOSED
         QUALIFIED PROPERTY") and shall consult regularly with the Advisor
         regarding each Proposed Qualified Property. The Managing General
         Partner or Asset Manager may, with the consent of the Advisor, enter
         into a good faith non-binding letter of intent concerning the
         acquisition of a Proposed Qualified Property. After entering into a
         good faith non-binding letter of intent with respect to a Proposed
         Qualified Property and performing such underwriting and other property
         analysis as the Managing General Partner deems appropriate with respect
         thereto, the Managing General Partner or Asset Manager shall submit to
         the Advisor and the LXP Board any Proposed Qualified Property that the
         Managing General Partner recommends for acquisition by the Partnership.
         Upon approval of the Proposed Qualified Property by the LXP Board, the
         Managing General Partner shall provide or cause the Asset Manager to
         provide to the Advisor and the Fund GP notice of such approval, the
         Acquisition Memorandum described in Section 3.6(b) hereof; provided
         however that the Managing General Partner shall not recommend to the
         Fund GP the acquisition of any Proposed Qualified Property that does
         not satisfy or comply with the Acquisition Parameters (although the
         Managing General Partner, at its election, may submit such property to
         the Partnership for its consideration pursuant to Section 3.6(c)). The
         Fund GP shall have fifteen (15) Business Days after its receipt of the
         documents described in the preceding sentence to approve or disapprove,
         in its sole and absolute discretion, a Proposed Qualified Property. If
         the Fund GP fails to respond to the Managing General Partner's
         recommendation within such fifteen (15) Business Days, the Managing
         General Partner may send to the Fund GP and the Advisor a second notice
         requesting a response within ten (10) Business Days after actual
         receipt by the Fund GP and the Advisor. Any failure by the Fund GP to
         approve a Proposed Qualified Property within such ten (10) Business Day
         period shall be deemed to be a disapproval of such Proposed Qualified
         Property.

                  (b)      Acquisition Memorandum. For each Proposed Qualified
         Property, the Managing General Partner or Asset Manager shall deliver
         to the Fund GP and

                                       26
<PAGE>

         the Advisor an Acquisition Memorandum stating that such Proposed
         Qualified Property is a net-leased facility and describing such
         Proposed Qualified Property in reasonable detail, including without
         limitation: the size and location thereof, the improvements thereon,
         the operating history and financial status thereof and the material
         findings of all due diligence undertaken to date with respect thereto,
         including the material findings to date of any Environmental Assessment
         and/or Physical Inspection Report; the structure of the contemplated
         transaction, including whether an SP Subsidiary will take title to the
         Proposed Qualified Property, the cost to the Partnership, including the
         purchase price, the amount and material terms of any mortgage
         indebtedness to be assumed, incurred or taken subject to; and the
         material provisions of the net lease or leases thereon and copies of
         such leases (or in the case of proposed leases, drafts or reasonably
         detailed abstracts of proposed leases), the identification of each
         tenant thereon and financial information relating to each such tenant
         and setting forth such other information as the Advisor may reasonably
         request. The Acquisition Memorandum shall include a credit analysis of
         any tenant net-leasing such property, including the credit rating of
         any such tenant by Standard & Poor's, Moody's Investors Services, Inc.,
         Duff & Phelps Credit Rating Co. or Fitch IBCA, or, if a credit rating
         of any such tenant is not available from the foregoing credit-rating
         companies, a credit analysis thereof by KDP or any other credit rating
         entity agreed to by the General Partners.

                  (c)      Properties Which Do Not Comply With Acquisition
         Parameters. With respect to any Proposed Qualified Property that does
         not comply in all respects with the Acquisition Parameters and that the
         Managing General Partner elects to submit to the Fund GP for approval
         pursuant to Section 3.6(a) hereof, the Managing General Partner or
         Asset Manager shall deliver to the Fund GP and the Advisor a reasonably
         detailed description of the ways in which such Proposed Qualified
         Property does not comply with the Acquisition Parameters.

                  (d)      Acquisition of Approved Qualified Properties. Upon
         receipt of the written approval of the Fund GP as provided in Section
         3.6(a) above of the acquisition by the Partnership of a Proposed
         Qualified Property (any Proposed Qualified Property so approved, an
         "APPROVED QUALIFIED PROPERTY"), the Managing General Partner or Asset
         Manager shall take all commercially reasonable efforts on behalf of the
         Partnership to negotiate and execute all documents necessary to acquire
         the Approved Qualified Property pursuant to and in accordance with the
         terms approved by the Partners (including formation of an SP
         Subsidiary, if applicable) and to complete due diligence that the
         Managing General Partner deems reasonably necessary, including (to the
         extent not already completed) obtaining an Environmental Assessment and
         a Physical Inspection Report. The Managing General Partner or Asset
         Manager shall keep the Advisor reasonably informed of the progress of
         the Partnership's acquisition of any Approved Qualified Property,
         including the material findings of all due diligence

                                       27
<PAGE>

         and of any material matters that arise during the course thereof. Upon
         completion of all due diligence undertaken as specified above with
         respect to an Approved Qualified Property and as a condition to
         completing the acquisition of the Approved Qualified Property, the
         Managing General Partner or Asset Manager shall deliver the Advisor a
         memorandum summarizing the material findings of the completed due
         diligence and any changes in the status of such Approved Qualified
         Property since the date of the Acquisition Memorandum described in
         Section 3.6(b) above and the Fund GP shall confirm its continuing
         approval of the acquisition before the Managing General Partner commits
         (on a nonrefundable basis) the Partnership's funds as provided below.
         Upon request, the Managing General Partner or Asset Manager will
         provide to the Fund GP or the Advisor copies of the Environmental
         Assessment, the Physical Inspection Report and the survey after
         completion thereof. Notwithstanding such deliveries, the Managing
         General Partner and Asset Manager shall remain solely responsible for
         such due diligence and any liability arising in connection therewith,
         and neither the Fund GP nor the Advisor shall be obligated to read or
         review such memorandum, Environmental Assessment, Physical Inspection
         Report or survey.

                  It is understood and agreed that (x) the Managing General
         Partner may deposit its own funds, or cause the Partnership to deposit
         Partnership funds, as refundable earnest money, and (y) the
         Partnership's funds shall be substituted (and such funds reimbursed to
         the Managing General Partner) or committed, as the case may be, on a
         nonrefundable basis only after due diligence is completed and the Fund
         GP has confirmed its continuing approval of the acquisition. After the
         Partnership has committed its funds on a nonrefundable basis in
         accordance with the prior sentence, if the terms of the acquisition
         change in any material respect from the terms described in the
         Acquisition Memorandum, such change shall require the consent of the
         Fund GP.

                  Within five (5) Business Days after the closing of an Approved
         Qualified Property, the Managing General Partner shall deliver to the
         Advisor (x) a closing statement acknowledging the receipt of and
         setting forth the application of the Partners' Capital Contributions
         and any other funds of the Partnership used to acquire such Approved
         Qualified Property or to pay closing costs (including an estimate of
         costs not finalized at closing, including legal fees and costs)
         associated therewith and (y) copies of all certificates of insurance
         delivered in connection with such closing as requested by the Fund GP
         or the Advisor.

                  (e)      Disapproved Qualified Properties. If the Fund GP (x)
         disapproves (or is deemed to have disapproved as provided in Section
         3.6(a) hereof) any Proposed Qualified Property, (y) fails after the
         completion of due diligence to confirm its continuing approval of the
         acquisition as provided in Section 3.6(d) above, or (z) otherwise
         withdraws its approval of an Approved Qualified Property as provided in
         Section 3.6(d) above, the Managing General Partner shall not cause

                                       28
<PAGE>

         or permit the Partnership to acquire such Proposed Qualified Property
         or Approved Qualified Property and the LXP Partners or their designee
         shall have the right to acquire such Proposed Qualified Property or
         Approved Qualified Property for its own account or with or in
         connection with any other Person.

                  (f)      Acquisition Costs. Except as provided in the
         following sentence and in Section 3.6(g) hereof, LXP or the Asset
         Manager (as the case may be) shall be liable for all costs and expenses
         arising in connection with the identification or evaluation of, the
         bidding on and the structuring and negotiation of and contracting for
         the acquisition or attempted acquisition of, and the due diligence
         undertaken in connection with, any Proposed Qualified Property or
         Approved Qualified Property (such activities, the "ACQUISITION
         ACTIVITIES"). The Partnership shall be liable for all reasonable and
         customary costs and expenses of Third Parties retained in connection
         with the Acquisition Activities; provided that if for any reason other
         than pursuant to Section 3.7(b) or Section 11.1 hereof any LXP
         Affiliated Party (instead of the Partnership or an SP Subsidiary)
         acquires title to any Proposed Qualified Property or Approved Qualified
         Property, LXP shall pay all of the costs and expenses (and reimburse
         the Partnership for any refundable or nonrefundable deposits funded by
         the Partnership in connection with the acquisition of such property)
         incurred or to be incurred in connection with the Acquisition
         Activities relating to such Proposed Qualified Property or Approved
         Qualified Property (it being understood that the proviso in this
         sentence applies only in those circumstances in which any LXP
         Affiliated Party (rather than the Partnership or an SP Subsidiary)
         acquires a Proposed Qualified Property or an Approved Qualified
         Property and therefore LXP would not pay such costs and expenses in the
         case of LXP's exercise of the Right of First Refusal or a buy/sell
         under this Agreement).

                  (g)      Acquisition Fee; Financing Fee. Upon the acquisition
         of any Approved Qualified Property by the Partnership or by an SP
         Subsidiary (including any Approved Qualified Property contributed in
         whole or in part by LXP to the Partnership), pursuant to this Section
         3.6, each Fund Partner shall pay the Managing General Partner or the
         Asset Manager an acquisition fee (the "ACQUISITION FEE") equal to the
         amount of such Fund Partner's Percentage Interest multiplied by the
         following sum:

                           (m) (1) the amount up to $10 million of the purchase
                           price of such acquired Approved Qualified Property
                           multiplied by (2) 0.90% plus

                           (n) (1) the amount from $10 million to $20 million of
                           the purchase price of such acquired Approved
                           Qualified Property multiplied by (2) 0.75% plus

                                       29
<PAGE>

                           (o) the amount over $20 million of the purchase price
                           of such acquired Approved Qualified Property
                           multiplied by (2) 0.65%.

                           For example, if the purchase price of such acquired
                           Approved Qualified Property were $25 million, the
                           Fund's Acquisition Fee would equal 69.65% of $197,500
                           (or $137,558.75) and the Fund GP's Acquisition Fee
                           would equal 0.35% of $197,500 (or $691.25).

         In addition, if the Asset Manager arranges financing for the purchase
         of an Approved Qualified Property without the use of a third-party
         broker then each Fund Partner shall pay the Asset Manager a fee (the
         "FINANCING FEE") equal to the amount of such Fund Partner's Percentage
         Interest multiplied by the following sum:

                           (x) (1) the amount up to $10 million of the financing
                           arranged for such acquired Approved Qualified
                           Property multiplied by (2) 0.75% plus

                           (y) (1) the amount from $10 million to $20 million of
                           the financing arranged of such acquired Approved
                           Qualified Property multiplied by (2) 0.50% plus

                           (z) the amount over $20 million of the financing
                           arranged of such acquired Approved Qualified Property
                           multiplied by (2) 0.25%.

                           For example, if the amount financed for such Approved
                           Qualified Property were $25 million, the Fund
                           Partner's Financing Fee would equal 69.65% of
                           $137,500 ($95,768.75) and the Fund GP's Financing Fee
                           would equal 0.35% of $137,500 ($481.25).

                  (h)      Further Restrictions on Acquisitions. Under no
         circumstances whatsoever shall the Partnership acquire any property (i)
         that either Fund Partner would be prohibited by applicable law or
         public policy from acquiring if either Fund Partner were to make such
         acquisition directly in its own name or (ii) that would give rise to
         nonqualifying income for purposes of the real estate investment trust
         tests set forth in Section 856 of the Code or (iv) that is or will be
         subject to any leases that would not be treated at "true leases" for
         federal income tax purposes.

                  SECTION 3.7 SALE OF QUALIFIED PROPERTIES; RIGHT OF FIRST
                              REFUSAL.

                  (a)      Authority to Sell. The Managing General Partner shall
         have no authority to and shall not initiate the sale of any Qualified
         Property without approval by the Fund GP (except as provided in Section
         3.7(b) and Section 11.1

                                       30
<PAGE>

         hereof). From and after the earlier of (i) the Rights Trigger Date and
         (ii) the date on which the Partnership shall have invested all of the
         Partners' Capital Commitment, the Fund GP or LXP GP may each require
         the sale of any or all of the Qualified Properties as provided in
         Section 3.7(b) below.

                  (b)      Required Sales; the Right of First Refusal. The Fund
         GP or LXP GP shall each have the right, at any time after the earlier
         of (i) the Rights Trigger Date and (ii) the date on which the
         Partnership shall have invested all of the Partners' Capital
         Commitment, and from time to time thereafter, to require the
         Partnership to sell any or all of the Qualified Properties to a third
         party or parties, in each instance by written notice (a "SALE NOTICE")
         to the other General Partner; provided, however, that a General
         Partner's right to require a sale under this Section 3.7(b) is subject
         to and limited by a General Partner's ability to exercise its Right of
         First Refusal set forth below or its rights under Section 11.1. Upon
         receipt of any Sale Notice, the Managing General Partner shall commence
         promptly to market and sell to third parties on behalf of the
         Partnership such Qualified Property or Qualified Properties specified
         in the Sale Notice. If the Partnership receives a Bona Fide Offer, as
         defined below, the Managing General Partner shall inform the Fund GP in
         writing of the terms and conditions thereof and the General Partner
         that delivered the Sale Notice (the "SALE GENERAL PARTNER") shall
         respond in writing as to whether it will accept or reject such Bona
         Fide Offer within fifteen (15) days of receipt of such notification
         from the Managing General Partner. If the Sale General Partner fails to
         respond in writing within the above-referenced fifteen day period, the
         Sale General Partner shall be deemed to have accepted such Bona Fide
         Offer. If the Sale General Partner has accepted or has been deemed to
         have accepted such Bona Fide Offer, the other General Partner (the
         "NON-SALE GENERAL PARTNER") or an Affiliate of the Non-Sale General
         Partner shall have the absolute right to purchase such Qualified
         Property or Qualified Properties upon the same terms and conditions as
         set forth in such Bona Fide Offer for cash or its equivalent (such
         right, the "RIGHT OF FIRST REFUSAL"). The Non-Sale General Partner
         shall, within fifteen (15) days after the Sale General Partner's
         decision to accept such Bona Fide Offer, indicate in writing to the
         Sale General Partner whether or not the Non-Sale General Partner has
         elected to exercise its Right of First Refusal. Failure to send such
         notification within fifteen (15) days shall constitute an election by
         the Non-Sale General Partner to waive its Right of First Refusal with
         respect to such Qualified Property and the Partnership may sell the
         Qualified Property to the third party making the Bona Fide Offer, but
         only (x) upon substantially the same terms and conditions contained in
         such Bona Fide Offer and (y) within one hundred fifty (150) days after
         the Non-Sale General Partner waived its Right of First Refusal. If the
         Non-Sale General Partner exercises its Right of First Refusal, the Sale
         General Partner shall consent to the sale of the Qualified Property or
         Qualified Properties to the Non-Sale General Partner, or its Affiliate,
         on substantially the same terms and conditions contained in the Bona
         Fide Offer. A "BONA FIDE OFFER" shall mean,

                                       31
<PAGE>

         with respect to the Qualified Property or Qualified Properties
         described in the Sale Notice, an offer (in the form of a non-binding
         letter of intent or other written offer) made in good faith by a
         financially responsible, stable party that is not Affiliated with any
         Partner having adequate financial worth, not having a reputation in the
         community for criminal, immoral or unconscionable behavior, and having
         substantial experience in the ownership or operation of real property.

                  (c)      Properties in Foreclosure. In the event a lender to
         the Partnership or a SP Subsidiary has initiated or threatens to
         initiate a foreclosure proceeding with respect to any Qualified
         Property securing such lender's loan to the Partnership or such SP
         Subsidiary (it being understood that any such loan shall be
         non-recourse to the Partnership, such SP Subsidiary and the Partners),
         and the General Partners disagree as to whether such Qualified Property
         shall be transferred to the lender in satisfaction of such loan, the
         General Partner not in favor of such transfer shall have the right to
         purchase such Qualified Property from the Partnership for One Dollar
         ($1.00) provided such Partner assumes such loan in full and such lender
         releases the Partnership therefrom. No adjustments to the Capital
         Contributions, Capital Commitments, or Capital Account shall be made on
         account of a transfer made in accordance with this Section 3.7(c).

                  (d)      Time of the Essence. The Partners agree that time is
         of the essence with respect to the rights and obligations described in
         this Section 3.7.

                  SECTION 3.8 LIMITATION ON PARTNERSHIP INDEBTEDNESS.

                  (a)      Maximum Debt. The total debt of the Partnership at
         any time shall not exceed sixty percent (60%) of the Partnership's
         capitalization which, when all Capital Commitments have been fully
         contributed, shall be $150,000,000 of maximum debt.

                  (b)      Non-Recourse to the Partners. Notwithstanding
         anything to the contrary contained in this Agreement, the Partnership
         shall not incur debt that is recourse to the Partners, and the Partners
         shall not be liable for any debts or other obligations or liabilities
         incurred by the Partnership.

                  SECTION 3.9 BUSINESS OPPORTUNITY.

                  (a)      LXP. Each LXP Affiliated Party may each engage in or
         possess any interest in other business ventures of any kind,
         independently or with others, including but not limited to the
         ownership, operation and management of net-leased real property, except
         as provided in this Section 3.9(a).

                  LXP shall make available for purchase by the Partnership, and
         the Partnership shall have the right to purchase pursuant to Section
         3.6 hereof, all

                                       32
<PAGE>

         properties which satisfy or comply with all of the "Required
         Parameters" comprising the Acquisition Parameters.

                  Any LXP Affiliated Party may acquire (v) the properties it is
         required to offer to the Partnership in accordance with this Section
         3.9(a) only (1) if the seller will accept only O.P. Units in exchange
         therefor or (2) after the Fund GP or the Advisor has disapproved such
         acquisitions as provided in Section 3.6 hereof and (w) properties that
         it is not required to offer to the Partnership under this Section
         3.9(a).

                  Notwithstanding anything to the contrary contained in this
         Section 3.9(a), the Partnership shall have no right to purchase
         pursuant to Section 3.6 hereof or this Section 3.9(a), any Acquiport
         Property (even if it otherwise meets the Acquisition Parameters) unless
         the Acquiport Entities determine not to acquire such property in
         accordance with the Acquiport Operating Agreements.

                  (b)      The Fund. The Fund and any of its Affiliates may
         engage in or possess any interest in other business ventures of any
         kind, independently or with others, including but not limited to the
         ownership, operation and management of net-leased real property.

                  (c)      Duties and Conflicts. Subject to the Managing General
         Partner's obligation to present net-leased properties to the
         Partnership pursuant to Section 3.6 and Section 3.9(a) hereof, each
         Partner recognizes that the other Partners and their Affiliates have or
         may have other business interests, activities and investments, some of
         which may be in conflict or competition with the business of the
         Partnership, and that such Persons are entitled to carry on such other
         business interests, activities and investments. The Partners and their
         Affiliates may engage in or possess an interest in any other business
         or venture of any kind, independently or with others, on their own
         behalf or on behalf of other entities with which they are affiliated or
         associated, and such Persons may engage in any activities, whether or
         not competitive with the Partnership, without any obligation (except as
         expressed in Sections 3.6 and 3.9(a)) to offer any interest in such
         activities to the Partnership or to any Partner. Neither the
         Partnership nor any Partner shall have any right, by virtue of this
         Agreement, in such activities, or the income or profits derived
         therefrom, and the pursuit of such activities, even if competitive with
         the business of the Partnership, shall not be deemed wrongful or
         improper.

                  SECTION 3.10 PAYMENTS TO LXP GP OR THE ASSET MANAGER.

                  (a)      Managing General Partner Expenses. The Managing
         General Partner shall pay (i) the salaries of all of its officers and
         regular employees and all employment expenses related thereto, (ii)
         general overhead expenses, (iii) record-keeping expenses, (iv) the
         costs of the office space and facilities which it requires,

                                       33
<PAGE>

         (v) the costs of such office space and facilities as the Partnership
         reasonably requires, (vi) all out of pocket costs and expenses incurred
         in connection with the management of the Qualified Properties and the
         Partnership (other than Operating Expenses) and (vii) costs and
         expenses relating to Acquisition Activities as set forth in and limited
         by Section 3.6(f).

                  (b)      Partnership Expenses. The Partnership shall pay all
         Permitted Expenses. The Managing General Partner is authorized, in the
         name and on behalf of the Partnership, to reimburse itself for
         Permitted Expenses paid by the Managing General Partner or to reimburse
         the Asset Manager for Permitted Expenses paid by the Asset Manager;
         provided, that if for any reason any LXP Affiliated Party (instead of
         the Partnership or an SP Subsidiary, which (for the purpose of this
         sentence) shall not be deemed to be an LXP Affiliated Party) acquires
         title to any Proposed Qualified Property or Approved Qualified
         Property, LXP shall pay all of the costs and expenses incurred or to be
         incurred in connection with the Acquisition Activities relating to such
         Proposed Qualified Property or Approved Qualified Property (it being
         understood that the proviso in this sentence applies only in those
         circumstances in which an LXP Affiliated Party (rather than the
         Partnership or an SP Subsidiary) acquires a Proposed Qualified Property
         or an Approved Qualified Property and therefore LXP would not pay such
         costs and expenses in the case of LXP's exercise of the Right of First
         Refusal or a buy/sell under this Agreement).

                  (c)      Management Fee; Oversight Fee. The Managing General
         Partner shall cause the Partnership to pay to the Asset Manager
         pursuant to the Management Agreement (or to the Managing General
         Partner in the event the Management Agreement is terminated) an annual
         Management Fee ("MANAGEMENT FEE") equal to the Fund Partners' aggregate
         Percentage Interest multiplied by two and one-half percent (2.5%) of
         Net Rents, payable monthly. Such fee shall be calculated monthly, based
         on Net Rents received by the Partnership for such month, and adjusted
         as provided herein. Within thirty (30) days of the Partnership's
         receipt of the annual reports described in Section 4.3 hereof for a
         fiscal year, the Asset Manager shall provide to the Advisor and the
         Fund GP a written statement of reconciliation setting forth (a) the Net
         Rents for such fiscal year and the Management Fee payable to the Asset
         Manager in connection therewith, pursuant to this Agreement, (b) the
         Management Fee already paid by the Partnership to the Asset Manager
         during such fiscal year, and (c) either the amount owed to the Asset
         Manager by the Partnership (which shall be the excess, if any, of the
         Management Fee payable to the Asset Manager for such fiscal year
         pursuant to this Agreement over the Management Fee actually paid by the
         Partnership to the Asset Manager for such fiscal year) or the amount
         owed to the Partnership by the Asset Manager (which shall be the
         excess, if any, of the Management Fee actually paid by the Partnership
         to the Asset Manager for such fiscal year over the Management Fee
         payable to the Asset Manager for such

                                       34
<PAGE>

         fiscal year pursuant to this Agreement). The Asset Manager or the
         Partnership, as the case may be, shall pay to the other the amount owed
         pursuant to clause (c) above within five (5) Business Days of the
         receipt by the Advisor and the Fund GP of the written statement of
         reconciliation described in this Section 3.10(c).

                           In addition, a credit in an amount equal to two and
         one-half percent (2.5%) of Net Rents for the fiscal year (or applicable
         portion thereof), less the Management Fee, as adjusted above (or the
         applicable portion thereof), shall be reserved on the Partnership books
         until a Capital Call is made by the Managing General Partner in
         accordance with Section 5.1(b) hereof, whereupon the amount of the
         credit shall be applied, in whole or in part, to the extent necessary
         to fund the LXP Partners' pro rata shares of such Capital Call and will
         be treated for purposes of this Agreement as if each pro rata share of
         such amount were an actual Capital Contribution made by the respective
         LXP Partner which (1) reduces the respective aggregate Capital
         Commitment of each LXP Partner and (2) gives rise to an entitlement to
         allocations (but only out of subsequent Profits), and related
         distributions, in amounts that reflect the amounts that would have been
         allocated and distributed if such notional capital contributions had
         constituted actual Capital Contributions, including a return of such
         notional capital contributions to the LXP Partners pursuant to Section
         7.1 hereof.

                           In those cases in which a tenant of any Qualified
         Property requests that the Partnership provide property management
         services at such tenant's expense, Asset Manager shall be entitled to
         an oversight fee for such property management services for the tenant
         of such Qualified Property equal to one half of one percent (0.50%) of
         the Net Rent from such Qualified Property ("OVERSIGHT FEE"), which
         Oversight Fee shall be payable by the tenant of such Qualified
         Property, in accordance with the terms as such tenant and Asset Manager
         may agree. Concurrently with the reconciliation statement required
         above, the Asset Manager shall provide to the Advisor and the Fund GP a
         written statement setting forth all Oversight Fees paid to the Asset
         Manager during such fiscal year and the Net Rents relating to such
         Qualified Properties for such fiscal year.

                  (d)      Acquisition Fees; Financing Fees. The Fund Partners
         shall pay the Acquisition Fees and Financing Fees in accordance with
         the provisions of Section 3.6(g).

                  SECTION 3.11 OTHER DUTIES AND OBLIGATIONS OF THE MANAGING
GENERAL PARTNER.

                  (a)      Partnership's Continued Existence. The Managing
         General Partner shall take all reasonable actions which may be
         necessary or appropriate for the continuation of the Partnership's
         valid existence as a limited partnership under the laws of the State of
         Delaware and of each other jurisdiction in which such

                                       35
<PAGE>

         existence is necessary to protect the limited liability of the Partners
         or to enable the Partnership to conduct the business in which it is
         engaged.

                  (b)      Personal Liability. The Managing General Partner
         shall at all times use its best efforts to conduct its affairs and the
         affairs of the Partnership in such a manner that the Limited Partners
         shall not have any personal liability with respect to any Partnership
         liability or obligation in excess of that portion of their respective
         Capital Commitments actually called by the Managing General Partner
         pursuant to Section 5.1(a) and Section 5.1(b) hereof.

                  (c)      Partnership for Tax Purposes. The Managing General
         Partner shall take all actions necessary to assure that the Partnership
         will be treated as a partnership for federal and state income tax
         purposes and be governed by the applicable provisions of Subchapter K
         of Chapter 1 of the Code.

                  (d)      Reasonable Reserves. The Managing General Partner
         shall establish and maintain out of Partnership funds reasonable
         reserves for working capital, capital expenditures and to pay other
         costs and expenses incident to ownership of the Qualified Properties
         and for such other Partnership purposes as the Managing General Partner
         deems appropriate, all as provided for and in accordance with the
         Annual Plan.

                  (e)      Deviations from the Annual Budget. The Managing
         General Partner shall verbally inform the Advisor as soon as
         practicable of any actual or potential variance from any budget line
         item of the Annual Budget portion of the Annual Plan for any fiscal
         year of the Partnership which (x) exceeds the greater of Twenty
         Thousand Dollars ($20,000) or five percent (5%) of the amount allocated
         to such budget line item or, (y) when added to all other costs and
         expenses already exceeding their applicable budget line items for such
         fiscal year, exceeds One Hundred Thousand Dollars ($100,000) for a
         particular Qualified Property or an average (taking into account all
         Qualified Properties then owned by the Partnership) of Fifty Thousand
         Dollars ($50,000) per Qualified Property.

                  (f)      Time Devoted to the Partnership. The Managing General
         Partner and its officers and key employees shall devote such time and
         attention to the Partnership business as shall be necessary to
         supervise the Partnership's business and affairs in accordance with the
         provisions of this Agreement.

                  (g)      Fee Disclosure. Within 10 days after the date of this
         Agreement, the Managing General Partner shall disclose in writing to
         the Fund GP (the "FEE DISCLOSURE") all fees, bonuses and other
         compensation paid by or on behalf of the Managing General Partner to
         any placement agent, finder or other individual or entity (other than
         the officers and employees of the Managing General Partner) in
         connection with the purchase by the Fund Partners of their interest in
         the Partnership. The Managing General Partner may omit from the Fee
         Disclosure

                                       36
<PAGE>

         fees and expenses paid to its counsel (Paul, Hastings, Janofsky &
         Walker LLP) in connection with the organization of the Partnership,
         provided that such counsel has not also represented the Fund Partners
         in connection with the formation of the Partnership and has not been
         involved in any form of solicitation relating to the Partnership.

                  Notwithstanding anything to the contrary contained in this
         Agreement or any subscription or other agreement relating hereto, the
         Managing General Partner hereby agrees that the Fund GP or its
         Affiliates may disclose the information contained in the Fee Disclosure
         to the public.

                  The Managing General Partner represents and warrants that all
         information contained in the Fee Disclosure will be true, correct and
         complete. In the event that the Fund GP does not receive the Fee
         Disclosure within the time period provided above, or the Fund GP
         determines that the Fee Disclosure contains a material inaccuracy or
         omission, the Fund Partners shall have the option, in their sole
         discretion and without liability to the Managing General Partner or any
         third party, to cease making their respective Capital Contributions to
         the Partnership (without being deemed to be Defaulting Partners under
         this Agreement) and to pursue all remedies that may be available to
         them.

                  SECTION 3.12 EXCULPATION.

                  (a)      LXP. No LXP Affiliated Party nor any officer,
         director, trustee or employee of any LXP Affiliated Party shall be
         liable, responsible or accountable in damages or otherwise to the
         Partnership or any other Partner for any act or omission on behalf of
         the Partnership, in good faith and within the scope of the authority
         conferred on LXP GP as Managing General Partner under this Agreement or
         otherwise under this Agreement or the Asset Manager, as the case may
         be, or by law unless such act or failure to act (i) is or results in a
         breach of any representation, warranty or covenant of any LXP Partner
         contained in this Agreement, which breach had or has a material adverse
         effect on the Partnership or the Fund Partners and, if capable of cure,
         is not cured within fifteen (15) days after notice thereof is delivered
         to LXP GP by the Fund, (ii) was fraudulent or committed in bad faith or
         (iii) constituted gross negligence or willful misconduct.

                  (b)      Securities Exception. Notwithstanding the exculpation
         contained in Section 3.12(a) above, each LXP Affiliated Party shall be
         liable, responsible and accountable in damages or otherwise to the
         Partnership and the Fund Partners for any act or omission on behalf of
         the Partnership and within the scope of authority conferred on LXP GP
         as Managing General Partner or the Asset Manager (i) which act or
         omission was negligent (including any negligent misrepresentation) and
         violated any law, statute, regulation or rule relating to Shares or any
         other security of LXP or (ii) to the extent the Partnership or any Fund
         Partner is charged with liability for, or suffers or incurs loss,
         liability, cost

                                       37
<PAGE>

         or expense (including reasonable attorneys' fees) as a result of, such
         act or omission and such act or omission was negligent and related to
         Shares or such other security of LXP.

                  (c)      The Fund. None of the Fund, the Advisor, the Fund GP,
         any officer, director or employee of the Fund, the Advisor or the Fund
         GP, or any Affiliate of the Fund, the Advisor or the Fund GP shall be
         liable, responsible or accountable in damages or otherwise to the
         Partnership or to any other Partner for any act or omission on behalf
         of the Partnership, in good faith and within the scope of authority
         conferred on the Fund under this Agreement or by law unless such act or
         failure to act (i) is or results in a breach of any representation,
         warranty or covenant of any Fund Partner contained in this Agreement,
         which breach had or has a material adverse effect on the Partnership or
         any LXP Partner and, if capable of cure, is not cured within fifteen
         (15) days after notice thereof is delivered to the Fund GP by LXP GP,
         (ii) was fraudulent or committed in bad faith or (iii) constituted
         gross negligence or willful misconduct.

                  (d)      Survival. The provisions of this Section 3.12 shall
         survive any termination of the Partnership or this Agreement.

                  SECTION 3.13 INDEMNIFICATION.

                  (a)      By the Partnership. The Partnership shall indemnify,
         defend and hold harmless any Person (an "INDEMNIFIED PARTY") who was or
         is a party or is threatened to be made a party to any threatened,
         pending or completed action, suit or proceeding, whether civil,
         criminal, administrative or investigative, by reason of any act or
         omission or alleged act or omission arising out of such Indemnified
         Party's activities as (i) a Partner or an officer, director, employee,
         Affiliate or agent of the Partner or (ii) the Managing General Partner,
         the Fund GP, the Advisor or the Asset Manager or an officer, director,
         employee, Affiliate or agent of any of them on behalf of the
         Partnership or in furtherance of the interest of the Partnership,
         against personal liability, claims, losses, damages and expenses for
         which such Indemnified Party has not been reimbursed by insurance
         proceeds or otherwise (including attorneys' fees, judgments, fines and
         amounts paid in settlement) actually and reasonably incurred by such
         Indemnified Party in connection with such action, suit or proceeding
         and any appeal therefrom, unless such Indemnified Party (A) acted
         fraudulently, in bad faith or with gross negligence or willful
         misconduct or (B) by such act or failure to act breached any
         representation, warranty or covenant contained in this Agreement, which
         breach had or has a material adverse effect on the Partnership or any
         Partner and, if capable of cure, is not cured within fifteen (15) days
         after notice thereof by the aggrieved Partner(s). Any indemnity by the
         Partnership under this Agreement shall be provided out of, and to the
         extent of, Partnership revenues and assets only, and no Partner shall
         have any personal liability on account thereof. The

                                       38
<PAGE>

         indemnification provided under this Section 3.13 shall (x) be in
         addition to, and shall not limit or diminish, the coverage of the
         Partners or any Affiliates under any insurance maintained by the
         Partnership and (y) apply to any legal action, suit or proceeding
         commenced by a Partner or in the right of a Partner or the Partnership.
         The indemnification provided under this Section 3.13 shall be a
         contract right and shall include the right to be reimbursed for
         reasonable expenses incurred by any such Indemnified Party within
         thirty (30) days after such expenses are incurred.

                  (b)      By LXP. LXP shall indemnify and hold harmless the
         Fund Partners and the Advisor from and against any liabilities, claims,
         losses, damages and expenses incurred by the Fund Partners (including
         attorneys' fees, judgments, fines and amounts paid in settlement) as a
         result of any act or omission by any LXP Affiliated Party which (i)
         constitutes or results in a breach of any representation, warranty or
         covenant of any LXP Partner contained in this Agreement, which breach
         had or has a material adverse effect on the Partnership, any Fund
         Partner, or the Advisor and, if capable of cure, is not cured within
         fifteen (15) days after notice thereof from the aggrieved Fund Partner,
         (ii) was performed or omitted fraudulently or in bad faith or (iii)
         constituted gross negligence or willful misconduct.

                  SECTION 3.14 FIDUCIARY RESPONSIBILITY. Subject to the
provisions set forth in Section 3.9 and Section 3.12(a) hereof, the Managing
General Partner acknowledges that it is under a common law fiduciary duty to
conduct the affairs of the Partnership in the best interests of the Partnership
and the Partners and consequently must exercise good faith and integrity in
handling Partnership affairs.

                                   ARTICLE IV
                     BOOKS AND RECORDS; REPORTS TO PARTNERS

                  SECTION 4.1 BOOKS. The Managing General Partner shall maintain
or cause to be maintained separate, full and accurate books and records of the
Partnership, and any Partner or any authorized representative of any Partner,
including the Advisor, shall have the right to inspect, examine and copy the
same and to meet with employees of the Managing General Partner responsible for
preparing the same at reasonable times during business hours and upon reasonable
notice. All policies of the Partnership with respect to the maintenance of such
books and records shall be subject to approval by all of the Partners.

                  SECTION 4.2 MONTHLY AND QUARTERLY REPORTS.

                  (a)      Monthly Reports. The Managing General Partner shall
         prepare and distribute to the Advisor within fifteen (15) days after
         the last day of each month a report with respect to the Partnership and
         each Qualified Property, including without limitation (i) an operating
         statement for the monthly period and

                                       39
<PAGE>

         year-to-date showing variances from the Annual Budget portion of the
         Annual Plan, (ii) a schedule of aged accounts receivable and accounts
         payable, (iii) an occupancy and leasing status report, (iv) a rent roll
         and (v) a bank statement reconciliation report.

                  (b)      Quarterly Reports. The Managing General Partner
         shall, no later than the twentieth (20th) day of the third (3rd) month
         of each fiscal quarter,

                           (i)      prepare and distribute to the Advisor a
         year-to-date consolidated report with respect to the Partnership (with
         the last month of each such report comprised of forecasted, rather than
         actual, results), prepared in accordance with generally accepted
         accounting principles, consistently applied, including (a) a balance
         sheet, (b) a profit and loss statement, (c) a statement of changes in
         the Partners' Capital Accounts, (d) a cash flow and distribution
         statement, (e) a report briefly describing each variance from the
         applicable budget line item in the consolidated Annual Budget portion
         of the Annual Plan exceeding the greater of Twenty Thousand Dollars
         ($20,000) and five percent (5%) of the amount allocated to such budget
         line item, (f) a statement as to whether the total of all actual
         variances from all budget line items in the consolidated Annual Budget
         portion of the Annual Plan exceeds One Hundred Thousand Dollars
         ($100,000) for any particular Qualified Property or an average (taking
         into account all Qualified Properties then owned by the Partnership) of
         Fifty Thousand Dollars ($50,000) per Qualified Property, (g)
         calculations in sufficient detail to verify the accuracy of all fees
         and other amounts paid or payable to the Asset Manager under the
         Management Agreement and (h) such other reports as any Partner may
         reasonably request; and

                           (ii)     prepare and distribute to the Advisor
         simultaneously with each quarterly report a report with respect to each
         Qualified Property, including an operating statement for the quarter
         and year-to-date showing each variance from the budget line items in
         the Annual Budget portion of the Annual Plan, and a narrative
         describing material market changes (as determined in good faith by the
         Managing General Partner or Asset Manager), and material changes in
         property operations, physical condition, capital expenditures and
         leasing and occupancy.

                  SECTION 4.3 ANNUAL REPORTS. The Managing General Partner shall
prepare and distribute to the Advisor within thirty-one (31) days after the end
of each fiscal year financial statements with respect to the Partnership, which
include the items set forth in clauses (i) and (ii) of Section 4.2(b) above with
respect to such fiscal year. The thirty-one (31) day period referred to in the
immediately preceding sentence shall be extended by one (1) day for each day
after January 2nd that the Advisor fails to deliver to the Managing General
Partner fair market value information necessary for the preparation of such
financial statements for the previous fiscal year with respect to each Qualified
Property. Such financial statements shall be prepared in accordance with
generally

                                       40
<PAGE>

accepted accounting principles, consistently applied, and shall be audited at
the Partnership's expense by such nationally recognized firm of independent
certified public accountants selected by the Managing General Partner with the
consent of the Partners as provided in Section 4.9 hereof. All reports delivered
pursuant to this Section 4.3 shall also include unaudited calculations in
sufficient detail to verify the accuracy of all fees and other amounts paid or
payable to the Asset Manager pursuant to the terms of this Agreement and such
other reports as any Partner may reasonably request.

                  SECTION 4.4 APPRAISALS; ADDITIONAL REPORTS.

                  (a)      Appraisals. The Advisor expects to cause each
         Qualified Property to be appraised, at the Fund Partners' or Advisor's
         expense, each calendar quarter by a third-party appraiser selected by
         the appraisal management firm for the Lion Fund. The Managing General
         Partner and the Asset Manager shall fully cooperate with such appraiser
         in connection with any such appraisal, shall provide such information
         to the appraiser as is reasonably requested by the appraiser and shall
         cause its employees to be reasonably available to meet with and answer
         questions of the appraiser so as to enable the appraiser to compete its
         appraisals in a timely manner. None of the Managing General Partner,
         the Asset Manager, the Fund Partners nor the Advisor shall have any
         liability with respect to any acts or actions taken by an appraiser,
         including but not limited to appraisals.

                  (b)      Additional Reports. The Managing General Partner
         shall prepare and distribute to the Partners such additional financial,
         property, investment and other reports regarding the Partnership, the
         Qualified Properties or any related matter as any Partner may
         reasonably request, including without limitation information necessary
         to enable the Advisor to provide to the Fund Partners with a valuation
         of their respective Percentage Interests. To the extent any Partner
         deems it appropriate or necessary, the Managing General Partner agrees
         to reasonably cooperate in any audit or examination conducted by such
         Partner or its consultants of any of the information contained in any
         report delivered pursuant to this Article IV.

                  SECTION 4.5 ACCOUNTANTS; TAX RETURNS. The Managing General
Partner shall also engage such nationally recognized firm of independent
certified public accountants approved by the General Partners as provided in
Section 4.9 hereof to review, or to sign as preparer, all federal, state and
local tax returns which the Partnership is required to file. The Managing
General Partner will furnish to each Partner within one hundred (100) days after
the end of each calendar year, or as soon thereafter as is practicable, a
Schedule K-1 or such other statement as is required by the Internal Revenue
Service which sets forth such Partner's share of the profits or losses and other
relevant fiscal items of the Partnership for such fiscal year. The Managing
General Partner shall deliver to the Partners copies of all federal, state and
local income tax returns and information returns, if any, which the Partnership
is required to file.

                                       41

<PAGE>

                  SECTION 4.6 ACCOUNTING AND FISCAL YEAR. The Managing General
Partner shall keep the Partnership books and records on the accrual basis. The
fiscal year of the Partnership shall end on December 31.

                  SECTION 4.7 PARTNERSHIP FUNDS.

                  (a)      Generally. The funds of the Partnership shall be
         deposited into such account or accounts as are designated by the
         Managing General Partner and reasonably approved by the Fund GP. All
         withdrawals from or charges against such accounts shall be made by the
         Managing General Partner or by those Persons designated from time to
         time by the Managing General Partner.

                  (b)      Restrictions on Deposits. Pending distribution or
         expenditure in accordance with the terms of this Agreement, funds of
         the Partnership may be invested, in the reasonable discretion of the
         Managing General Partner, in United States government obligations,
         insured obligations which are rated not lower than AA by Standard &
         Poor's or have a comparable rating from a nationally recognized rating
         agency, collateralized bank time deposits, repurchase agreements, money
         market funds, commercial paper which is rated not lower than P-1,
         certificates of deposit which are rated not lower than AA by Standard &
         Poor's or have a comparable rating from a nationally recognized rating
         agency, banker's acceptances eligible for purchase by the Federal
         Reserve and bonds and other evidences of indebtedness and preferred
         stock which are rated not lower than AA by Standard & Poor's or are of
         a comparable credit quality.

                  SECTION 4.8 INSURANCE. The Managing General Partner shall
cause the tenant or tenants of each Qualified Property to maintain insurance
thereon of such types and in such amounts that at a minimum are consistent with
the standards approved by the Partners, a copy of which standards is attached
hereto as Schedule 4.8. The Fund GP may amend such standards from time to time
upon written notice to the Managing General Partner, and the Managing General
Partner shall have sixty (60) days after receipt of such written notice to cause
the tenants of the Qualified Properties to obtain, if necessary, insurance that
conforms with such revised standards, provided that such revised standards are
reasonable and based on industry standards. The Managing General Partner shall
cause the Partnership to obtain, at the Partnership's expense, such types and
amounts of insurance that the tenant or tenants of any Qualified Property have
failed to maintain and that are included within the insurance standards listed
on Schedule 4.8 hereto, as may be revised from time to time pursuant hereto.

                  SECTION 4.9 ATTORNEYS AND ACCOUNTANTS. The attorneys and
accountants for the Partnership shall be selected by the Managing General
Partner and approved by the Fund GP, provided that (a) the Managing General
Partner may engage local counsel as necessary in connection with the business of
the Partnership without the approval of the Fund GP provided such counsel's fees
and the other terms and conditions of its engagement are comparable to those of
other law firms providing similar services in

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<PAGE>

such local area and the Fund GP has not previously notified the Managing General
Partner that such law firm is unacceptable and (b) the accounting firm shall be
among the four (4) largest accounting firms in the United States when chosen and
shall provide accounting services at market cost.

                                    ARTICLE V
                                  CONTRIBUTIONS

                  SECTION 5.1 CAPITAL CONTRIBUTIONS.

                  (a)      Generally; Percentage Interests. Each Partner shall
         make an Initial Capital Contribution to the Partnership in an amount
         and at such time as the Partners have agreed. Except as provided in
         this Section 5.1, (i) no Partner shall be obligated to make any
         Additional Capital Contribution or Extraordinary Funding to the
         Partnership and (ii) any Additional Capital Contribution or
         Extraordinary Funding shall be made by the Partners in proportion to
         their respective Percentage Interests as determined at the time of the
         Capital Call or Extraordinary Call. The Partners shall have the
         Percentage Interests in the Partnership set forth opposite each
         Partner's name on Schedule 1 hereto, as may be adjusted from time to
         time pursuant to Section 5.1(e) hereof.

                  (b)      Additional Capital Contributions. In the event the
         Partnership requires capital to acquire an Approved Qualified Property,
         the Managing General Partner shall be entitled to require an additional
         Capital Contribution (an "ADDITIONAL CAPITAL CONTRIBUTION") from the
         Partners in an amount not in excess of the amount necessary to acquire
         such Approved Qualified Property plus all reasonable and customary
         costs and expenses incurred by the Partnership for Third Parties
         retained in connection with the Acquisition Activities; provided that
         (x) each Partner shall be required to contribute the amount determined
         by multiplying such Partner's Percentage Interest by such Additional
         Capital Contribution and (y) no Partner shall be required to contribute
         the amount described in clause (x) above if such amount, when added to
         the total of all of such Partner's prior Capital Contributions, exceeds
         such Partner's Capital Commitment. If the Managing General Partner
         shall provide to the Partners a written notice calling for an
         Additional Capital Contribution (any such notice, a "CAPITAL CALL")
         setting forth the total amount of such Additional Capital Contribution,
         the amount of each Partner's share of such Additional Capital
         Contribution as determined pursuant to clause (x) above, and the due
         date on which the Managing General Partner is requiring that such
         Additional Capital Contribution be contributed to the Partnership,
         which due date shall be at least ten (10) Business Days after the date
         on which the Partners actually received the Capital Call and not more
         than one (1) Business Day prior to the scheduled closing of the
         acquisition of such Approved Qualified Property; each Partner shall
         contribute its share of such Additional Capital Contribution in
         immediately

                                       43

<PAGE>

         available funds on or before such due date. If the acquisition of an
         Approved Qualified Property fails to close and the Managing General
         Partner determines there will not be a closing with fifteen (15) days
         of the date of the originally scheduled closing, the Managing General
         Partner (x) shall inform the Partners of such failure and return each
         Partner's share of the Additional Capital Contribution made with
         respect thereto and (y) each Partner's Capital Contribution shall be
         restored to the level thereof immediately prior to such Additional
         Capital Contribution. If, at any time after the Partners have each
         contributed their entire Capital Commitment, the Partners elect to
         contribute additional capital, the Partners shall contribute such
         additional capital in accordance with their respective Percentage
         Interests. A Partner may contribute to the Partnership an Approved
         Qualified Property, or an equity interest therein, pursuant to the
         Contribution Agreement.

                  (c)      Extraordinary Fundings. In the event the Partnership
         requires additional funds to cover any costs and expenses for which the
         Partnership has insufficient funds, the Managing General Partner may
         make a written request therefor (any such request, an "EXTRAORDINARY
         CALL") setting forth the amount requested and the due date therefor,
         which due date shall be at least ten (10) Business Days after the date
         on which the Partners actually received the Extraordinary Call. The
         Fund GP shall have the right to approve or disapprove any Extraordinary
         Call. If the Fund GP elects to approve an Extraordinary Call, then each
         Partner shall be required to fund an amount equal to the amount
         determined by multiplying such Partner's Percentage Interest by the
         amount set forth in such approved Extraordinary Call (each such
         Extraordinary Call required to be funded hereunder, an "EXTRAORDINARY
         FUNDING"). If the Fund GP elects not to approve an Extraordinary Call,
         then no Partner shall have any obligation to fund such disapproved
         Extraordinary Call, and the Managing General Partner shall cover such
         shortfall in funds by Partnership borrowings. An Extraordinary Funding
         may be made by agreement of the General Partners either as a loan by
         the Partners to the Partnership (any such loan, an "EXTRAORDINARY
         LOAN") or a supplementary capital contribution by the Partners to the
         Partnership (any such contribution, an "EXTRAORDINARY CAPITAL
         CONTRIBUTION"). Each Partner shall contribute its share of such
         Extraordinary Capital Contribution or Extraordinary Loan, as the case
         may be, in immediately available funds on or before the due date to
         which the Partners agreed in the Extraordinary Call. If the General
         Partners agree to make an Extraordinary Loan, (x) each Partner shall
         loan to the Partnership the amount of such Partner's share as
         determined above with interest equal to either a rate agreed to by the
         General Partners or, if there is no such agreement, then the 10-year
         treasury rate plus two percent (2%) per annum as of the date the
         Extraordinary Loan is made, (y) the Annual Budget portion of the Annual
         Plan shall be amended to reflect such loan, and (z) such loan
         (including interest accrued thereon) shall be repaid from Net Cash Flow
         from Operations or Net Cash from Sales or Refinancings. Any Net Cash
         Flow from Operations or

                                       44

<PAGE>

         any Net Cash from Sales or Refinancings shall be applied to each
         Partner's unpaid Extraordinary Loan in proportion to each Partner's
         Percentage Interest.

                  (d)      [Intentionally deleted].

                  (e)      Failure to Fund an Additional Capital Contribution or
         Extraordinary Funding. If any Partner (a "DEFAULTING PARTNER") fails to
         make any Additional Capital Contribution or Extraordinary Funding which
         it is required to make under this Section 5.1 by the due date therefor,
         then any non-defaulting Partner may, at its election, make an
         Additional Capital Contribution or Extraordinary Funding to the
         Partnership in an amount equal to the amount that the Defaulting
         Partner failed to contribute ("DEFAULT AMOUNT"). The Defaulting Partner
         shall be liable for interest equal to the 10-year treasury rate plus
         two percent (2%) per annum accruing from the due date of such
         Additional Capital Contribution or Extraordinary Funding, payable on
         the first Business Day of each month, on such Default Amount to the
         Partnership, provided that the non-defaulting Partner makes an
         Additional Capital Contribution or Extraordinary Funding equal to the
         Default Amount, or any portion thereof, in which case the applicable
         amount of interest shall be paid to the non-defaulting Partner. If for
         ninety (90) days a Defaulting Partner shall fail to make an Additional
         Capital Contribution or Extraordinary Funding or to pay to the
         Partnership or the non-defaulting Partner (as applicable) any interest
         that has accrued on such Default Amount, the Percentage Interest of the
         Defaulting Partner shall be adjusted, effective the day after the
         conclusion of such ninety (90) day period, to equal: the Percentage
         Interest of such Defaulting Partner (prior to adjustment hereunder)
         multiplied by a fraction, the numerator of which is the Defaulting
         Partner's total Capital Contribution, and the denominator of which is
         the product of 120% multiplied by the sum of the Defaulting Partner's
         total Capital Contribution, plus the amount of the Default Amount and
         any accrued and unpaid interest on the Default Amount during such
         ninety (90) day period. The adjustment of the Defaulting Partner's
         Percentage Interest hereunder may also be expressed by the following
         formula:

                  a         =        b        x             c
                                                      --------------
                                                      (c+d+e) x 120%

                  Where     a = new Percentage Interest of Defaulting Partner
                            after adjustment hereunder

                            b = old Percentage Interest of Defaulting Partner
                            prior to adjustment hereunder

                            c = Defaulting Partner's total Capital Contribution

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<PAGE>

                            d = amount of Default Amount

                            e = accrued interest on Default Amount during ninety
                            (90) day period

         The adjustment of the Percentage Interest of the Defaulting Partner
         hereunder shall constitute satisfaction of the Default Amount including
         interest thereon and shall cure the Defaulting Partner's default
         hereunder and the Default Amount, excluding accrued interest, shall
         constitute a Capital Contribution made by the non-defaulting Partner
         and shall be credited to the Capital Account of the non-defaulting
         Partner. In addition, the Percentage Interest of the non-defaulting
         Partner shall be increased by the amount by which the Percentage
         Interest of the Defaulting Partner is decreased. Notwithstanding the
         foregoing, the provisions of this Section 5.1(e) shall not be applied
         against any Fund Partner, as the Defaulting Partner, during the
         occurrence and continuance of any material default by LXP GP, in its
         capacity as Managing General Partner, of its obligations under this
         Agreement, or by the Asset Manager, of its obligations under the
         Management Agreement, and neither Fund Partner shall be obligated to
         make an Additional Capital Contribution or Extraordinary Funding to the
         Partnership pursuant hereto unless and until any such material default
         by LXP GP, in its capacity as Managing General Partner, or the Asset
         Manager, has been cured to the reasonable satisfaction of the Fund GP.
         In addition, if LXP or LXP GP fails to make an Additional Capital
         Contribution or Extraordinary Funding for a period exceeding ninety
         (90) days, LXP GP shall lose its right to be the Managing General
         Partner and the Fund GP shall have the right in its sole and absolute
         discretion to replace LXP GP as Managing General Partner in accordance
         with the provisions of Section 8.3 hereof.

                  (f)      Failure to Satisfy Claims Under a Contribution
         Agreement. If a Partner has contributed an Approved Qualified Property
         pursuant to a Contribution Agreement (a "CONTRIBUTING PARTNER") and the
         Partnership has a claim under such Contribution Agreement against such
         Contributing Partner which has either been (w) acknowledged and agreed
         to by such Contributing Partner or (x) adjudicated in favor of the
         Partnership (after all appeals have been taken) (the acknowledged or
         adjudicated amount of such claim being the "CLAIM AMOUNT"), such
         Contributing Partner shall either, as applicable, (y) satisfy such
         Claim Amount at its expense or (z) contribute the Claim Amount to the
         Partnership (for which it shall not receive any additional credit to
         its Capital Account as a Capital Contribution). If for ninety (90) days
         such Contributing Partner (a "DEFAULTING CONTRIBUTING PARTNER") shall
         fail to satisfy such Claim Amount or contribute such Claim Amount to
         the Partnership, the Percentage Interest of the Defaulting Contributing
         Partner shall be adjusted, effective the day

                                       46

<PAGE>

         after the conclusion of such ninety (90) day period, to equal: the
         Percentage Interest of such Defaulting Contributing Partner (prior to
         adjustment hereunder) multiplied by a fraction, the numerator of which
         is the Defaulting Contributing Partner's total Capital Contribution,
         and the denominator of which is the product of 120% multiplied by the
         sum of the Defaulting Contributing Partner's total Capital
         Contribution, plus the amount of the Claim Amount. The adjustment of
         the Defaulting Contributing Partner's Percentage Interest hereunder may
         also be expressed by the following formula:

                  a         =        b        x             c
                                                      ------------
                                                      (c+d) x 120%

                  Where     a = new Percentage Interest of Defaulting
                            Contributing Partner after adjustment hereunder

                            b = old Percentage Interest of Defaulting
                            Contributing Partner prior to adjustment hereunder

                            c = Defaulting Contributing Partner's total Capital
                            Contribution

                            d = amount of Claim Amount

         The adjustment of the Percentage Interest of the Defaulting
         Contributing Partner hereunder shall constitute satisfaction of the
         Claim Amount and shall cure the Defaulting Contributing Partner's
         default hereunder and the Claim Amount shall constitute a Capital
         Contribution made by the non-defaulting Partner and shall be credited
         to the Capital Account of the non-defaulting Partner. In addition, the
         Percentage Interest of the non-defaulting Partner shall be increased by
         the amount by which the Percentage Interest of the Defaulting Partner
         is decreased.

                  SECTION 5.2 RETURN OF CAPITAL CONTRIBUTION. Except as
otherwise expressly provided in this Agreement, (a) the Capital Contribution of
a Partner will be returned to that Partner only in the manner and to the extent
provided in Article VII and Article IX hereof and (b) no Partner shall have any
right to demand or receive the return of its Capital Contribution. In the event
the Partnership is required or compelled to return any Capital Contribution, no
Partner shall have the right to receive property other than cash. No Partner
shall be entitled to interest on its Capital Contribution or Capital Account
notwithstanding any disproportion therein as between the Partners.

                  SECTION 5.3 LIABILITY OF THE LIMITED PARTNERS. No Limited
Partner shall have any personal liability to the Partnership, to any Partner, to
the creditors of the Partnership or to any other Person for any debt, liability
or obligation of the Partnership.

                                       47

<PAGE>

No Limited Partner shall be required to contribute funds or capital to the
Partnership in excess of its Capital Commitment although Limited Partners may at
their option contribute funds in excess of their respective Capital Commitments
pursuant to Section 5.1(c) and Section 5.1(d) hereof.

                  SECTION 5.4 NO THIRD PARTY BENEFICIARIES. The foregoing
provisions of this Article V are not intended to be for the benefit of any
creditor of the Partnership or any other Person, and no creditor of the
Partnership or any other Person may rely on the commitment of any Partner to
make any Capital Contribution. Additional Capital Contributions and
Extraordinary Fundings are not payable unless and until the conditions set forth
in Section 5.1 hereof have been satisfied, and no creditor of the Partnership or
any other Person shall have, or be given, any right to cause a Capital Call or
Extraordinary Call to be given by the Managing General Partner.

                                   ARTICLE VI
                        MAINTENANCE OF CAPITAL ACCOUNTS;
                        ALLOCATION OF PROFITS AND LOSSES
                            FOR BOOK AND TAX PURPOSES

                  SECTION 6.1 CAPITAL ACCOUNTS.

                  (a)      Generally: Credits to Capital Accounts. A Capital
         Account shall be established and maintained for each Partner.
         Initially, the Capital Account of each Partner shall be credited with
         each Partner's respective Initial Capital Contribution. Thereafter,
         each Partner's Capital Account shall be credited with any Additional
         Capital Contributions or Extraordinary Capital Contributions made or
         contributed by such Partner and such Partner's allocable share of
         Profits, any individual items of income and gain allocated to such
         Partner pursuant to the provisions of this Article VI, and the amount
         of additional cash, or the Fair Market Value of any Partnership asset
         (net of any liabilities assumed by the Partnership and liabilities to
         which the asset is subject), contributed to the Partnership by such
         Partner or deemed contributed to the Partnership by such Partner in
         accordance with Regulations Section 1.704-1(b)(2)(iv)(c).

                  (b)      Debits to Capital Account. The Capital Account of
         each Partner shall be debited with the Partner's allocable share of
         Losses, any individual items of expenses and loss allocated to such
         Partner pursuant to the provisions of this Article VI, the amount of
         any cash distributed to such Partner and the Fair Market Value of any
         Partnership asset (net of any liabilities assumed by the Partner and
         liabilities to which the asset is subject) distributed to such Partner
         or deemed distributed to such Partner in accordance with Regulations
         Section 1.704-1(b)(2)(iv)(c).

                  (c)      Capital Account of Transferee. In the event that any
         Percentage Interest of a Partner is transferred in accordance with the
         terms of this Agreement,

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<PAGE>

         the transferee shall succeed to the Capital Account of the transferor
         to the extent it relates to the transferred Percentage Interest in such
         Partner.

                  (d)      Adjustments of Book Value. In the event that the Book
         Value of any Partnership asset is adjusted as described in the
         definition of "Book Value", the Capital Accounts of all Partners shall
         be adjusted in accordance with Regulation Section 1.704-1(b)(2)(iv)(f)
         or Regulation Section 1.704-1(b)(2)(iv)(m), as applicable, to reflect
         such adjustment.

                  (e)      Compliance with Regulations. The foregoing provisions
         and the other provisions of this Agreement relating to the maintenance
         of Capital Accounts are intended to comply with Regulation Section
         1.704-1(b) and shall be interpreted and applied in a manner consistent
         with such Regulation. In the event that the Managing General Partner
         shall determine that it is prudent to modify the manner in which the
         Capital Accounts, or any debits or credits thereto, are computed in
         order to comply with such Regulation, the Managing General Partner may
         make such modification; provided, however, that if such modification
         constitutes a Material Modification, it shall become effective only
         upon the consent of any Partner to whom such modification would
         constitute a Material Modification.

                  SECTION 6.2 PROFITS AND LOSSES.

                  (a)      Allocation. Except as otherwise provided in Section
         6.3 hereof, for each fiscal year of the Partnership, Profits and Losses
         shall be allocated as set forth below.

                           (i)      Profits (calculated without regard to the
         Management Fee) shall be allocated:

                                             (A)      first, to the Partners in
                  an amount sufficient to reverse the cumulative amount of any
                  Losses allocated to the Partners in the current and all prior
                  fiscal years pursuant to Section 6.2(a)(ii)(C) hereof, in
                  proportion to the allocation of such Losses to such Partners;

                                             (B)      second, to the Partners
                  pro rata in accordance with their respective Percentage
                  Interests until the Partners have received a cumulative amount
                  allocated pursuant to this Section 6.2(a)(i)(B) for the
                  current and all prior fiscal years equal to the sum of (1) an
                  aggregate amount sufficient to provide such Partners with
                  their 12% IRR (not including amounts representing a return of
                  Capital Contributions with respect to any Qualified Property)
                  and (2) the aggregate amount of Losses allocated to such
                  Partners pursuant to Section 6.2(a)(ii)(B) hereof; and

                                       49

<PAGE>

                                             (C)      the balance, if any, (x)
                  85% to the Partners pro rata in proportion to their Percentage
                  Interests and (y) 15% to LXP GP.

                           (ii)     Losses (calculated without regard to the
         Management Fee) shall be allocated:

                                             (A)      first, to the Partners in
                  an amount sufficient to reverse the cumulative amount of any
                  Profits allocated to the Partners in the current and all prior
                  fiscal years pursuant to Section 6.2(a)(i)(C) hereof, in
                  proportion to the allocation of such Profits to such Partners;

                                             (B)      second, to the Partners in
                  an amount sufficient to reverse the cumulative amount of any
                  Profits allocated to the Partners in the current and all prior
                  fiscal years pursuant to Section 6.2(a)(i)(B) hereof, in
                  proportion to the allocation of such Profits to such Partners;
                  and

                                             (C)      the balance, if any, to
                  the Partners pro rata in accordance with their Percentage
                  Interests.

                           (iii)    Any deduction with respect to the Management
         Fee payable pursuant to Section 3.10(c) hereof shall be specially
         allocated to the Fund Partners in proportion to their Percentage
         Interests.

                  (b)      Adjustments to "Profits" and "Losses". When used in
         this Agreement, "PROFITS" and "LOSSES" shall mean, for each fiscal year
         or other period, an amount equal to the Partnership's taxable income or
         loss for such year or period, determined in accordance with Code
         Section 703(a) (for this purpose, all items of income, gain, loss or
         deduction required to be stated separately pursuant to Code Section
         703(a)(1) shall be included in taxable income or loss), and otherwise
         in accordance with the methods of accounting followed by the
         Partnership for federal income tax purposes, with the following
         adjustments:

                           (i)      any income of the Partnership that is exempt
         from federal income tax and not otherwise taken into account in
         computing Profits or Losses shall be added to such taxable income or
         loss;

                           (ii)     any items that are specially allocated
         pursuant to this Agreement shall not be taken into account in computing
         Profits or Losses;

                           (iii)    any expenditure of the Partnership described
         in Section 705(a)(2)(B) of the Code (or treated as such under
         Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into
         account in computing Profits or Losses pursuant to this Definition
         shall be deducted from such taxable income or loss;

                                       50

<PAGE>

                           (iv) any depreciation, amortization and/or cost
         recovery deductions with respect to any asset shall be deemed to be
         equal to the Book Depreciation available with respect to such asset;

                           (v) the computation of all items of income, gain,
         loss and deduction shall be made without regard to any basis adjustment
         under Section 743 of the Code;

                           (vi) in the event the Book Value of any Partnership
         asset is adjusted pursuant to the definition of Book Value, the amount
         of such adjustment shall be taken into account as gain or loss from the
         disposition of such asset for purposes of computing Profits or Losses;
         and

                           (vii) gain or loss resulting from any disposition of
         property with respect to which gain or loss is recognized for federal
         income tax purposes shall be computed by reference to the Book Value of
         the property disposed of, notwithstanding that the adjusted tax basis
         of such property differs from its Book Value.

                  (c)      Changes in Percentage Interests. If any Partner's
         Percentage Interest changes during any taxable year of the Partnership
         in accordance with Section 5.1(e) hereof, then for that taxable year
         the Partnership will effect a deemed closing of the books as of the
         date of such change, and the Profits and Losses of the Partnership (and
         all items of income, gain, loss, deduction or credit for federal income
         tax purposes) for the period in such year ending on and including such
         date (the "pre-change period") shall be allocated among the Partners in
         proportion to their respective Percentage Interest (as may be required
         by Section 6.2 hereof) as of the first day of such pre-change period,
         and each Partner's share of Profits and Losses (and all items of
         income, gain, loss, deduction or credit for federal income tax
         purposes) for the period following such date of change (the
         "post-change period") shall be allocated among the Partners in
         proportion to their respective Percentage Interest (as may be required
         by Section 6.2 hereof) as of the first date of such post-change period.

                  SECTION 6.3 REGULATORY ALLOCATIONS.

                  (a)      Minimum Gain Chargeback. If there is a net decrease
         in Partnership Minimum Gain during any fiscal year, each Partner shall
         be specially allocated items of Partnership income and gain for such
         fiscal year (and, if necessary, subsequent fiscal years) in an amount
         equal to such Partner's share of the net decrease in Partnership
         Minimum Gain, as determined under Regulations Section 1.704-2(g).
         Allocations pursuant to the previous sentence shall be made in
         proportion to the respective amounts required to be allocated to each
         Partner pursuant thereto. The items to be so allocated shall be
         determined in accordance with Regulations Sections 1.704-2(f)(6) and
         1.704-2(j)(2). This Section 6.3(a) is

                                       51

<PAGE>

         intended to comply with the "minimum gain chargeback" requirements of
         Regulations Section 1.704-2(f) and shall be interpreted consistently
         therewith.

                  (b)      Chargeback Attributable to Partner Nonrecourse Debt.
         If there is a net decrease in Partner Nonrecourse Debt Minimum Gain
         during any fiscal year attributable to a Partner Nonrecourse Debt, each
         Partner with a share of Partner Nonrecourse Debt Minimum Gain
         attributable to such Partner Nonrecourse Debt at the beginning of such
         year shall be specially allocated items of income and gain for such
         fiscal year (and, if necessary, for subsequent fiscal years) in an
         amount equal to such Partner's share of the net decrease in Partner
         Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
         Debt, determined in accordance with Regulations Section 1.704-2(i)(4)
         and (5). Allocations pursuant to the previous sentence shall be made in
         proportion to the respective amounts required to be allocated to each
         Partner pursuant thereto. The items to be so allocated shall be
         determined in accordance with Regulations Sections 1.704-2(i)(4) and
         1.704-2(j)(2). This Section 6.3(b) is intended to comply with the
         "minimum gain chargeback" requirements of Regulations Section
         1.704-2(i)(4) and shall be interpreted consistently therewith.

                  (c)      Qualified Income Offset. If any Partner unexpectedly
         receives any adjustment, allocation or distribution described in
         Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results
         in or increases an Adjusted Capital Account Deficit for the Partner,
         such Partner shall be allocated items of income and book gain in an
         amount and manner sufficient to eliminate such Adjusted Capital Account
         Deficit or increase therein as quickly as possible; provided, that an
         allocation pursuant to this Section 6.3(c) shall be made if and only to
         the extent that such Partner would have an Adjusted Capital Account
         Deficit after all other allocations provided in this Article VI have
         been tentatively made as if this Section 6.3(c) were not in the
         Agreement. This Section 6.3(c) is intended to constitute a "qualified
         income offset" as provided by Regulations Section 1.704-1(b)(2)(ii)(d)
         and shall be interpreted consistently therewith.

                  (d)      Partner Nonrecourse Deductions. Items of Partnership
         loss, deduction or Section 705(a)(2)(B) expenditures that are
         attributable to a Partner Nonrecourse Debt ("PARTNER NONRECOURSE
         DEDUCTIONS") shall be allocated among the Partners who bear the
         Economic Risk of Loss for such Partner Nonrecourse Debt in the ratio in
         which they share Economic Risk of Loss for such Partner Nonrecourse
         Debt. This provision is to be interpreted in a manner consistent with
         the requirements of Regulations Section 1.704-2(b)(4) and (i)(1).

                  (e)      Limitation on Allocation of Net Loss. To the extent
         any allocation of Losses or other items of loss or deduction would
         cause or increase an Adjusted Capital Account Deficit as to any
         Partner, such allocation shall be reallocated

                                       52

<PAGE>

         among the other Partners in accordance with their respective Percentage
         Interests, subject to the limitations hereof.

                  (f)      Curative Allocation. The allocations set forth in
         this Section 6.3 (the "REGULATORY ALLOCATIONS") are intended to comply
         with certain requirements of the applicable Regulations promulgated
         under Code Section 704(b). Notwithstanding any other provision of this
         Article VI, the Regulatory Allocations shall be taken into account in
         allocating other operating Profits, Losses and other items of income,
         gain, loss and deduction to the Partners for Capital Account purposes
         so that, to the extent possible, the net amount of such allocations of
         Profits, Losses and other items shall be equal to the amount that would
         have been allocated to each Partner if the Regulatory Allocations had
         not occurred.

                  SECTION 6.4 ALLOCATION OF TAX ITEMS FOR TAX PURPOSES.

                  (a)      Generally. Subject to Sections 1.704-1(b)(4)(i) and
         1.704-1(b)(2)(iv)(m) of the Regulations and Section 6.4(b), Section
         6.4(c) and Section 6.4(e) hereof, allocations of income, gain, loss,
         deduction and credit for federal, state and local tax purposes shall be
         allocated to the Partners in the same manner and amounts as the book
         items corresponding to such tax items are allocated for Capital Account
         purposes.

                  (b)      Recapture Income. Notwithstanding Section 6.4(a)
         hereof, if there is a gain on any sale, exchange or other disposition
         of Partnership property and all or a portion of such gain is
         characterized as ordinary income by virtue of the recapture rules of
         Code Section 1245 or 1250, or under the corresponding recapture rules
         of state or local income tax law, as the case may be, then, to the
         extent possible, such recapture income for United States and state and
         local tax purposes shall be allocated to the Partners in the ratio that
         they were allocated Tax Depreciation previously taken and allowed with
         respect to the Partnership property being sold or otherwise disposed
         of.

                  (c)      Section 754 Adjustments. Notwithstanding Section
         6.4(a) hereof, any increase or decrease in the amount of any items of
         income, gain, loss, deduction or credit for tax purposes attributable
         to an adjustment to the basis of Partnership assets made pursuant to a
         valid election or deemed election under Sections 732(d), 734, 743, and
         754 of the Code, and any increase or decrease in the amount of any item
         of credit or tax preference attributable to any such adjustment, shall
         be allocated to those Partners entitled thereto under such law. Such
         items shall be excluded in determining the Capital Accounts of the
         Partners, except as otherwise provided by Section 1.704-1(b)(2)(iv)(m)
         of the Regulations.

                  (d)      Nonrecourse Deductions. Any "Nonrecourse Deductions"
         as defined in Treasury Regulations Section 1.704-2(c) for any fiscal
         year or other

                                       53

<PAGE>

         period shall be specially allocated as items of loss in the manner
         provided in Treasury Regulations Section 1.704-2(j)(1)(ii).

                  (e)      Sharing of Excess Nonrecourse Liabilities. For
         purposes of determination of the Partners' shares of the excess
         Nonrecourse Liabilities of the Partnership for purposes of Section
         1.752-3(a)(3) of the Regulations, the Partners' interests in profits as
         determined pursuant to Section 1.752-3(a)(3) of the Regulations shall
         be in accordance with their Percentage Interests as adjusted from time
         to time.

                  (f)      Section 704(c). Notwithstanding Section 6.4 hereof,
         if the Partnership owns or acquires Section 704(c) Property, or if the
         Tax Matters Partner makes an election referred to in the definition of
         "Book Value" herein, then, solely for tax purposes and not for Capital
         Account purposes, Tax Depreciation, and any gain or loss, attributable
         to such Section 704(c) Property shall be allocated between or among the
         Partners in a manner that takes into account the variation between such
         Book Value and such adjusted tax basis, in accordance with the
         principles of Code Section 704(c) and the Regulations promulgated
         thereunder and such method set forth in Regulations Section 1.704-3(b).
         Any elections or other decisions relating to such allocations
         (including under Section 1.704-3 of the Regulations, whether to use the
         traditional method, the traditional method with curative allocations or
         the remedial method) shall be made by the Tax Matters Partner (as
         defined below) in any manner that reasonably reflects the purpose and
         intention of this Agreement.

                  SECTION 6.5 Tax Matters Partner. LXP GP is hereby designated
as the "tax matters partner" for the Partnership as such term is defined in
Section 6231(a)(7) of the Code (the "TAX MATTERS PARTNER"), and all federal,
state and local tax audits and litigation shall be conducted under the direction
of LXP GP. All expenses incurred with respect to any tax matter which does or
may affect the Partnership, including but not limited to expenses incurred by
LXP GP acting in its capacity as Tax Matters Partner in connection with
Partnership level administrative or judicial tax proceedings, shall be paid out
of Partnership assets, whether or not included in an Annual Plan. If the Fund GP
is permitted under the Code to participate in Partnership level administrative
or judicial tax proceedings and the Fund GP chooses, in its sole discretion, to
so participate, the Partnership shall be responsible for all expenses incurred
by the Fund GP in connection with such participation, whether or not included in
an Annual Plan. Without the consent of the Fund GP, the Tax Matters Partner
shall have no right to extend the statute of limitations for assessing or
computing any tax liability against the Partnership or the amount of any
Partnership tax item or to settle any dispute with respect to any income, or any
other material, tax. The Tax Matters Partner shall, promptly upon receipt
thereof, forward to each Partner a copy of any correspondence relating to the
Partnership received from the Internal Revenue Service or any other tax
authority which relates to matters that are of material importance to the
Partnership and/or the Partners. The Tax Matters

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Partner shall promptly advise each Partner in writing of the substance of any
material conversation held with any representative of the Internal Revenue
Service which relates to an audit or administrative proceeding relating to a tax
return of the Partnership.

                  SECTION 6.6 ADJUSTMENTS.

                  (a)      Generally. Except as otherwise provided in this
         Agreement, all items of Partnership income, gain, loss and deduction
         and any other allocations not otherwise provided for shall be divided
         among the Partners in the same proportions as they share Profits and
         Losses, as the case may be, for the year.

                  (b)      Upon Transfer or Change in Percentage Interest.
         Except as otherwise provided in Section 6.2(c) hereof, if any
         Percentage Interest is transferred in any fiscal year in accordance
         with this Agreement, or if a Partner's Percentage Interest changes
         during any fiscal year, all Profits and Losses attributable to such
         Percentage Interest for such fiscal year shall be divided and allocated
         in accordance with an interim closing of the books as of the date of a
         transfer or change.

                  (c)      Amendments to this Article VI. The Managing General
         Partner is specifically authorized, with the consent of the Fund GP and
         upon the advice of the accountants or legal counsel for the
         Partnership, to amend this Article VI to comply with any Regulations
         with respect to the distributions and allocations of the Partnership
         and any such amendment shall become effective; provided, however, that
         if such amendment constitutes a Material Modification for any Partner,
         then such amendment shall become effective only upon the express
         written consent of such Partner.

                                   ARTICLE VII
                                  DISTRIBUTIONS

                  SECTION 7.1 CASH AVAILABLE FOR DISTRIBUTIONS.

                  (a)      Generally.

                           (i) The Managing General Partner shall cause the
         Partnership to distribute (A) all Net Cash Flow from Operations not
         less frequently than quarterly; and (B) except upon Liquidation, Net
         Cash from Sales or Refinancings at such times as the General Partners
         may determine as soon as practicable after the receipt of such Net Cash
         from Sales or Refinancings, as follows: (x) first, to the Partners pro
         rata in accordance with their Percentage Interests, until such time as
         the Partners have each received cumulative distributions in an amount
         sufficient to achieve a 12% IRR and (y) thereafter, (1) 85% to the
         Partners pro rata in accordance with their Percentage Interests and (2)
         15% to LXP GP.

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                           (ii) Distributable Cash shall not be used to acquire
         Qualified Properties or make capital improvements on Qualified
         Properties unless consented to in writing in advance by the General
         Partners.

                  (b)      Withholdings. The Managing General Partner is
         authorized to withhold from distributions or allocations to any Partner
         (or, in the event there are insufficient funds, require such Partner to
         contribute to the Partnership) and to pay over to any federal, state or
         local government any amounts required to be withheld pursuant to the
         Code or any provisions of any other federal, state or local law with
         respect to any payment, distribution or allocation to the Partnership
         or such Partner and shall allocate any such amounts to such Partner
         with respect to which such amount was withheld. All amounts so withheld
         (including such amounts contributed by the Partner) shall be treated as
         amounts distributed to such Partner, and will reduce the amount
         otherwise distributable to such Partner, pursuant to this Article VII
         for all purposes under this Agreement.

                  (c)      Restrictions on Distributions. Notwithstanding
         anything to the contrary contained in this Section 7.1, the Partnership
         shall not make a distribution to the extent that, at the time of such
         distribution and after giving effect to such distribution, all
         liabilities of the Partnership (other than liabilities to the Partners
         on account of their Capital Contributions or liabilities for which the
         recourse of creditors is limited to specific property of the
         Partnership) shall exceed the Fair Market Value of the Partnership
         assets, except that the Fair Market Value of Qualified Property that is
         subject to a liability for which the recourse of the creditors is
         limited shall be included in the Partnership assets only to the extent
         that the Fair Market Value of such Qualified Property exceeds that
         liability.

                  (d)      Clawback. Upon the tenth anniversary of the date
         hereof and upon the dissolution of the Partnership pursuant to Section
         9.1 hereof, if and to the extent any Partner has not received an amount
         of distributions (during the life of the Partnership and in
         liquidation) at least sufficient to achieve a 12% IRR calculated on an
         aggregate basis, then LXP GP or LXP shall promptly restore capital to
         the Partnership for payment to each such Partner in such amounts until
         each such Partner has received such aggregate amount of distributions,
         provided however, that LXP GP and/or LXP shall not be obligated to
         contribute pursuant to this Section 7.1(d) an amount greater than the
         total amount of distributions previously made to LXP GP pursuant to
         Section 7.1(a)(i)(y)(2) hereof (net of taxes on income attributable to
         such distributions).

                                  ARTICLE VIII
                  TRANSFER; REMOVAL OF MANAGING GENERAL PARTNER

                  SECTION 8.1 PROHIBITION ON TRANSFERS AND WITHDRAWALS BY
PARTNERS. The Partners shall be prohibited from transferring or assigning their
respective interests

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(or any part of such interests) in the Partnership and any attempted transfer
shall be void ab initio. Except as provided in Section 11.1 and Section 11.2
hereof, the Partners shall be prohibited from withdrawing from the Partnership.
If any Partner withdraws from the Partnership, it shall be and remain liable for
all obligations and liabilities incurred by it as a Partner, and shall be liable
to the Partnership and the other Partners for all indemnifications set forth
herein and for any liabilities, losses, claims, damages, costs and expenses
(including reasonable attorneys' fees) incurred by the Partnership as a result
of any withdrawal in breach of this Agreement.

                  SECTION 8.2 PROHIBITION ON TRANSFERS BY AND RESIGNATION OF
MANAGING GENERAL PARTNER.

                  (a)      LXP GP may not transfer or assign its rights and
         obligations (or any portion thereof) as the Managing General Partner
         and may not resign as Managing General Partner, except with the prior
         written consent of all the Partners, which consent may be given or
         withheld in their sole discretion. If LXP GP resigns as Managing
         General Partner without consent by the Fund GP, LXP GP shall be and
         remain liable for all obligations and liabilities incurred by it as
         Managing General Partner, and shall be liable to the Partnership and
         the Fund Partners for all indemnifications set forth herein and for any
         liabilities, losses, claims, damages, costs and expenses (including
         reasonable attorneys' fees) incurred by the Partnership as a result of
         any resignation in breach of this Agreement. If the Partners approve a
         transfer or assignment by LXP GP of its rights and obligations as
         Managing General Partner, any transferee or assignee thereof shall
         execute a counterpart to this Agreement agreeing to be bound by all the
         provisions of this Agreement as if originally a party to this
         Agreement.

                  (b)      Any assignment, transfer or other disposition
         (voluntary, involuntary or by operation of law) of any membership
         interest in LXP GP to a Person other than a directly or indirectly
         wholly-owned Affiliate of LXP shall require the prior written consent
         of the Fund GP.

                  SECTION 8.3 REMOVAL OF THE MANAGING GENERAL PARTNER.

                  (a)      Generally. In the event of (i) a default by the
         Managing General Partner of any of its obligations hereunder, or a
         default by the Asset Manager of any of its obligations under the
         Management Agreement, which default materially and adversely affects
         the Partnership or any Fund Partner and which, if capable of cure,
         remains uncured for thirty (30) days after written notice thereof, (ii)
         gross negligence, willful misconduct or fraud in the performance by the
         Managing General Partner of its obligations hereunder or by the Asset
         Manager of its obligations under the Management Agreement, (iii) the
         commission of a felony or misdemeanor involving embezzlement, theft or
         acts of moral turpitude by the Managing General Partner or the Asset
         Manager, (iv) failure by the Managing General Partner to make an
         Additional Capital Contribution or Extraordinary

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         Funding for a period exceeding ninety (90) days or (v) failure by an
         LXP Partner to pay a Claim Amount for a period exceeding ninety (90)
         days (any of the foregoing, "CAUSE"), the Fund GP shall have the right
         in its sole and absolute discretion to remove the Managing General
         Partner (and, except in the case of a failure to make an Additional
         Capital Contribution or Extraordinary Funding, to remove the LXP
         Partners as Partners if LXP GP or any LXP Affiliated Party is the
         Managing General Partner) by written notice to the Managing General
         Partner (the "REMOVAL NOTICE") and to appoint a new Managing General
         Partner. The Removal Notice shall specifically set forth the act or
         failure to act of the Managing General Partner or the Asset Manager
         upon which the Cause is based. Such removal of the Managing General
         Partner shall be effective ten (10) Business Days after receipt of the
         Removal Notice by the Managing General Partner (unless such removal is
         enjoined as provided below). If LXP GP is the Managing General Partner,
         LXP GP shall have the right, in its discretion, to sue the Fund GP to
         enjoin such removal. In order to enable LXP GP to seek prompt
         injunctive relief in the event of a removal pursuant hereto, the
         parties agree to seek expedited resolution of any lawsuit brought with
         respect to such removal, and the Fund GP acknowledges that, for
         purposes hereof only, in the event the Fund GP violated Section 8.3
         hereof by wrongfully removing LXP GP, the injury to LXP GP would be
         irreparable and one for which there is no adequate remedy at law. In
         the event that the Fund GP elects to remove the Managing General
         Partner (or LXP GP), any agreements between the Partnership and the
         Managing General Partner (or any LXP Affiliated Party) shall be
         terminated without cost or penalty as of the effective date of the
         Managing General Partner's removal.

                  (b)      Removal Amount Due LXP Partners. Upon removal of the
         LXP Partners as Partners as provided in Section 8.3(a) above, each LXP
         Partner shall be entitled to be paid an amount (the "REMOVAL AMOUNT")
         equal to the difference between (i) the amount such LXP Partner would
         receive if the Partnership were dissolved, the Qualified Properties
         sold for their Fair Market Values (determined pursuant to Section
         8.3(c) hereof) and the assets of the Partnership were distributed in
         liquidation in accordance with Section 9.2 hereof, minus (ii) any
         liabilities, claims, losses, damages, costs or expenses incurred by the
         Partnership or the Fund Partners as a result of the Cause which led to
         the LXP Partners' removal hereunder. The Partnership shall cause the
         Removal Amounts payable to the LXP Partners to be paid out of proceeds
         from liquidation or sales of Qualified Properties and other assets
         resulting from a liquidation performed in accordance with the standards
         described in the first two sentences of Section 9.2(ii) hereof in cash
         no later than two (2) years after effectiveness of the removal;
         provided, that the Partnership may, but shall not be obligated to, pay
         such Removal Amounts without liquidating some or all of the Qualified
         Properties and other assets not later than two (2) years after the
         effectiveness of the removal. Interest on the Removal Amounts payable
         to the LXP Partners shall accrue at a rate equal to the 10-year
         treasury rate plus two percent (2%) per annum following the
         effectiveness

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<PAGE>

         of the removal, as provided in Section 8.3(a) hereof, and shall be
         payable in arrears out of proceeds from liquidation of Qualified
         Properties and other assets. The proceeds from the liquidation or sale
         of a Qualified Property shall be distributed to the Partners pro rata
         in accordance with Section 9.2 hereof. If, due to market conditions or
         the adverse effect of liquidation on the Fair Market Value of the
         Qualified Properties, liquidation cannot be completed within two (2)
         years, the date for paying the Removal Amounts payable to the LXP
         Partners in full shall be extended for the length of time needed to
         accomplish liquidation in accordance with Section 9.2.

                  (c)      Determination of Fair Market Value. For purposes of
         calculating the Removal Amounts described above in Section 8.3(b), the
         Fair Market Value of each Qualified Property shall be (i) the net
         amount obtained by liquidating such Qualified Property in accordance
         with Section 9.2 and applying the proceeds of sale to the payment of
         the debts and obligations of the Partnership secured by or relating to
         such Qualified Property (including a pro rata portion of the
         Partnership's debts and obligations that are not secured by or do not
         relate to any particular Qualified Property) and to the expenses of
         liquidating such Qualified Property and to the setting up to any
         reserves in accordance with Section 9.2(iv)(B) hereof (but only with
         respect to such Qualified Property), or (ii) if the Partnership elects
         not to liquidate each such Qualified Property, determined by agreement
         between the General Partners, or if agreement cannot be reached within
         thirty (30) days after determination that the Qualified Property will
         not be liquidated, by an independent, reputable and qualified real
         estate appraiser with at least ten (10) years experience selected by
         the General Partners. If the General Partners cannot agree on an
         appraiser, then each shall select an independent, qualified and
         reputable real estate appraiser with at least ten (10) years experience
         to determine the Fair Market Values of the Qualified Properties. If the
         appraisers agree on the Fair Market Values, then the Fair Market Values
         of the Qualified Properties shall be as determined by the appraisers.
         If the appraisers do not agree, then each appraiser shall set forth its
         determination of the Fair Market Value of each Qualified Property and,
         with respect to each Qualified Property, if the higher amount set forth
         in either appraisal is not more than 10% of the lower amount, then the
         Fair Market Value of such Qualified Property shall be the average of
         the amount set forth in the two appraisals. If the higher amount
         exceeds the lower amount of the appraisal of any Qualified Property by
         more than 10%, then the two appraisers shall designate a third
         appraiser to determine the Fair Market Value of such Qualified
         Property. If the two appraisers cannot agree upon the designation of
         the third appraiser, then the third appraiser shall be appointed by the
         American Arbitration Association in the City of New York. The third
         appraiser shall conduct such investigations as it shall deem
         appropriate and within 30 days after its date of designation shall
         choose, with respect to each Qualified Property as to which a Fair
         Market Value has not been determined pursuant to the second preceding
         sentence, the appraisal of the Fund GP's

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<PAGE>

         appraiser or the appraisal of LXP GP's appraiser and no other amount as
         the Fair Market Value of each Qualified Property. The decision of the
         third appraiser shall be in writing and shall be binding on the
         Partners. If LXP GP and the Fund GP agree on an appraiser, then the
         Partnership shall pay the fees and expenses of such appraiser. If LXP
         GP and the Fund GP each select an appraiser, then LXP GP and the Fund
         GP shall each pay the fees and expenses of the appraiser selected by
         it, and the Partnership shall pay the fees and expenses of any third
         appraiser designated by such appraisers or by the American Arbitration
         Association.

                  (d)      Removal not Wrongful. In addition to the foregoing,
         after removal of the LXP Partners as Partners and, if LXP GP sues to
         enjoin the removal, a final determination by a court of competent
         jurisdiction that such removal was not wrongful, the Fund GP shall have
         the right to cause the dissolution and liquidation of the Partnership
         in accordance with Article IX hereof.

                                   ARTICLE IX
                                   TERMINATION

                  SECTION 9.1 DISSOLUTION. The Partnership shall dissolve and
commence winding up and liquidating upon the first to occur of any of the
following (collectively, the "LIQUIDATING EVENTS"):

                           (i) the reduction to cash or cash equivalents (other
         than purchase money notes obtained by the Partnership from the sale of
         Qualified Property) of the last remaining Qualified Property;

                           (ii) the agreement in writing by the General Partners
         to dissolve the Partnership;

                           (iii) the termination of the term of the Partnership
         pursuant to Section 2.5 hereof;

                           (iv) the entry of a decree of judicial dissolution of
         the Partnership pursuant to Section 17-802 of the Act;

                           (v) the election of the Fund GP to dissolve the
         Partnership pursuant to Section 8.3(d) hereof;

                           (vi) all of the Qualified Properties have been sold
         to the LXP Partners, or their designees, or to the Fund Partners, or
         their designees, pursuant to the exercise of the Buy/Sell as provided
         in Section 11.1 hereof;

                           (vii) the Bankruptcy, insolvency, dissolution or
         withdrawal from the Partnership of any LXP Partner or any Fund Partner,
         provided that the bankruptcy

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<PAGE>

         of any LXP Partner shall not constitute a Liquidating Event if the
         Partnership is continued pursuant to this Section 9.1; or

                           (viii)   the election of any General Partner to
         dissolve the Partnership after the breach by any Fund Partner (in the
         case of the LXP GP) or any LXP Partner (in the case of the Fund GP) of
         any representation, warranty or covenant contained in this Agreement,
         which breach had or has a material adverse effect on the Partnership or
         such General Partner, and, if capable of cure, is not cured within
         fifteen (15) days after notice thereof from such General Partner.

The Partners hereby agree that, notwithstanding any provision of the Act, the
Partnership shall not dissolve prior to the occurrence of a Liquidating Event.
Upon the occurrence of the events described in Section 9.1(v) or Section
9.1(vii) above (relating to the status of the LXP Partners), the Partnership
shall not be dissolved or required to be wound up if within ninety (90) days
after such event the Fund GP elects, in its sole and absolute discretion, to
continue the business of the Partnership and to appoint, effective as of the
date of such event, a successor Managing General Partner.

                  SECTION 9.2 TERMINATION. In all cases of dissolution of the
Partnership, the business of the Partnership shall be wound up and the
Partnership terminated as promptly as practicable thereafter, and each of the
following shall be accomplished:

                           (i)      The Liquidator shall cause to be prepared a
         statement setting forth the assets and liabilities of the Partnership
         as of the date of dissolution, a copy of which statement shall be
         furnished to both of the General Partners;

                           (ii)     The Qualified Properties and assets of the
         Partnership shall be liquidated by the Liquidator as promptly as
         possible, but in an orderly and businesslike and commercially
         reasonable manner, consistent with maximizing the price to be received.
         The Liquidator in its reasonable discretion and with the consent of the
         Fund shall determine whether to sell any Qualified Property at a public
         or private sale, for what price and on what terms. The Liquidator may,
         in the exercise of its good faith business judgment and if commercially
         reasonable and if acceptable to the Fund GP, determine not to sell a
         portion of the Qualified Properties and assets of the Partnership, in
         which event such Qualified Properties and assets shall be distributed
         in kind pursuant to clause (iv) below;

                           (iii)    Any Profit or Loss realized by the
         Partnership upon the sale or other disposition of its property pursuant
         to Section 9.2(ii) above shall be allocated to the Partners as required
         by Article VI hereof; and

                           (iv)     The proceeds of sale and all other assets of
         the Partnership shall be applied and distributed as follows and in the
         following order of priority; (provided, that if the LXP Partners have
         been removed as Partners and have received payment in full of the
         Removal Amounts pursuant to Section 8.3 hereof,

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<PAGE>

         then the LXP Partners shall not be paid any portion of such proceeds of
         sale and other assets of the Partnership):

                                    (A)      To the payment of the debts and
                  liabilities of the Partnership and the expenses of
                  liquidation;

                                    (B)      To the setting up of any reserves
                  which the Liquidator shall reasonably determine to be
                  necessary for contingent, unliquidated or unforeseen
                  liabilities or obligations of the Partnership or the Partners
                  arising out of or in connection with the Partnership. Such
                  reserves may, in the discretion of the Liquidator, be paid
                  over to a national bank or national title company selected by
                  it and authorized to conduct business as an escrowee to be
                  held by such bank or title company as escrowee for the
                  purposes of disbursing such reserves to satisfy the
                  liabilities and obligations described above, and at the
                  expiration of such period as the Liquidator may reasonably
                  deem advisable, distribute any remaining balance in the manner
                  set forth below; and

                                    (C)      The balance, if any, to the
                  Partners in accordance with Section 7.1 hereof.

         No payment or distribution in any of the foregoing categories shall be
         made until all payments in each prior category shall have been made in
         full. If the payments due to be made in any of the foregoing categories
         exceed the remaining assets available for such purpose, such payment
         shall be made to the Persons entitled to receive the same pro rata in
         accordance with the respective amount due them.

                  Payments described in clause (iv) above must be made in cash.
         The Partners shall continue to share profits, losses and other tax
         items during the period of liquidation in the same proportions as
         before dissolution.

                  SECTION 9.3 CERTIFICATE OF CANCELLATION. Upon completion of
the distribution of the Partnership's assets as provided in this Article IX and
the completion of the winding-up of the affairs of the Partnership, the
Partnership shall be terminated, and the Liquidator shall cause the filing of a
certificate of cancellation of the certificate of limited partnership in the
office of the Secretary of State of the State of Delaware in accordance with the
Act and shall take all such other actions as may be necessary to terminate the
Partnership in accordance with the Act and shall take such other actions as may
be necessary to terminate the Partnership's registration in any other
jurisdictions where the Partnership is registered or qualified to do business.

                  SECTION 9.4 ACTS IN FURTHERANCE OF LIQUIDATION. Each Partner
or former Partner, upon the request of the Liquidator, shall promptly execute,
acknowledge and deliver all documents and other instruments as the Liquidator
shall reasonably

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request to effectuate the proper dissolution and termination of the Partnership,
including the winding up of the business of the Partnership.

                                   ARTICLE X
                         REPRESENTATIONS OF THE PARTNERS

                  SECTION 10.1 REPRESENTATIONS OF THE FUND PARTNERS. Each Fund
Partner hereby represents and warrants to the LXP Partners and the Partnership
as follows:

                           (i)      This Agreement constitutes the valid and
         binding agreement of such Fund Partner, enforceable against such Fund
         Partner in accordance with its terms, subject as to enforcement of
         bankruptcy, insolvency and other similar laws affecting the rights of
         creditors and to general principles of equity;

                           (ii)     Such Fund Partner has all requisite power
         and authority to enter into this Agreement, to carry out the provisions
         and conditions hereof and to perform all acts necessary or appropriate
         to consummate all of the transactions contemplated hereby and no
         further action by such Fund Partner is necessary to authorize the
         execution or delivery of this Agreement;

                           (iii)    This Agreement has been duly and validly
         executed and delivered by such Fund Partner and the execution, delivery
         and performance hereof by such Fund Partner does not and will not (i)
         require the approval of any other Person, or (ii) contravene or result
         in any breach of or constitute any default under, or result in the
         creation of any lien upon such Fund Partner's assets under, any
         indenture, mortgage, loan agreement, lease or other agreement or
         instrument to which such Fund Partner is a party or by which such Fund
         Partner or any of its properties is bound;

                           (iv)     To such Fund Partner's knowledge, there has
         been no material adverse change in the economic condition of such Fund
         Partner since the last public report thereof;

                           (v)      No finder's, broker's or similar fee or
         commission has been paid or shall be paid by such Fund Partner to any
         individual or organization in connection with the formation of the
         Partnership except for fees payable to the Advisor;

                           (vi)     There is no action, suit or proceeding
         pending or, to its knowledge, threatened against such Fund Partner that
         questions the validity or enforceability of this Agreement or, if
         determined adversely to it, would materially adversely affect the
         ability of such Fund Partner to perform its obligations hereunder;

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<PAGE>

                           (vii)    Such Fund Partner is not the subject of any
         bankruptcy, insolvency or reorganization proceeding;

                           (viii)   To such Fund Partner's knowledge, such Fund
         Partner has not received from any governmental agency any notice of
         violation of any law, statute or regulation which would have a material
         adverse effect on the Partnership; and

                           (ix)     To such Fund Partner's knowledge, such Fund
         Partner is not in default in the performance or observation of any
         obligation under any agreement or instrument to which it is a party or
         by which it or any of its properties is bound, which default would
         individually or in the aggregate with other defaults materially
         adversely affect the business or financial condition of the
         Partnership.

                  SECTION 10.2 REPRESENTATIONS OF THE LXP PARTNERS. Each LXP
Partner represents and warrants to the Fund Partners and the Partnership as
follows:

                           (i)      This Agreement constitutes the valid and
         binding agreement of such LXP Partner enforceable against such LXP
         Partner in accordance with its terms, subject as to enforcement to
         bankruptcy, insolvency and other similar laws affecting the rights of
         creditors and to general principles of equity;

                           (ii)     LXP has been duly formed and is validly
         existing as a real estate investment trust in good standing under the
         laws of the State of Maryland, with all requisite power and authority
         to enter into this Agreement, to carry out the provisions and
         conditions hereof and to perform all acts necessary or appropriate to
         consummate all of the transactions contemplated hereby. Except as set
         out on Schedule 10.2(ii) attached hereto, LXP is duly qualified as a
         foreign corporation in each jurisdiction in which the ownership of its
         assets or the conduct of its business requires such qualification,
         except where the failure to so qualify would not have a material
         adverse effect on the business or financial condition of the
         Partnership or LXP;

                           (iii)    LXP GP has been duly formed and is validly
         existing as a limited liability company in good standing under the laws
         of the State of Delaware, with all requisite power and authority to
         enter into this Agreement, to carry out the provisions and conditions
         hereof and to perform all acts necessary or appropriate to consummate
         all of the transactions contemplated hereby. LXP GP is duly qualified
         to transact business as a foreign limited liability company in each
         jurisdiction in which the ownership of its assets or the conduct of its
         business requires such qualification, except where the failure to so
         qualify would not have a material adverse effect on the business or
         financial condition of the Partnership or LXP GP;

                           (iv)     This Agreement has been duly and validly
         executed and delivered by such LXP Partner and the execution, delivery
         and performance

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<PAGE>

         hereof by such LXP Partner does not and will not (x) require the
         approval of any other Person or (y) contravene or result in any breach
         of or constitute any default under, or result in the creation of any
         lien upon such LXP Partner's assets under, any indenture, mortgage,
         loan agreement, lease or other agreement or instrument to which such
         LXP Partner or any LXP Affiliated Party is a party or by which such LXP
         Partner or any of its properties is bound;

                           (v)      To such LXP Partner's knowledge, such LXP
         Partner is not in default in the performance or observation of any
         obligation under any agreement or instrument to which it is a party or
         by which it or any of its properties is bound, which default would
         individually or in the aggregate with other defaults materially
         adversely affect the business or financial condition of such LXP
         Partner;

                           (vi)     The formation of the Partnership did not and
         the consummation of the transactions contemplated herein does not and
         will not result in any violation of the organizational documents of
         such LXP Partner;

                           (vii)    No finder's, broker's or similar fee or
         commission has been paid or shall be paid to any individual or
         organization in connection with the formation of the Partnership except
         for fees, if any, payable to the Advisor;

                           (viii)   There is no action, suit or proceeding
         pending or, to its knowledge, threatened against such LXP Partner that
         questions the validity or enforceability of this Agreement or, if
         determined adversely to it, would materially adversely affect the
         ability of such LXP Partner to perform its obligations hereunder;

                           (ix)     Except as set forth in Schedule 10.2(ix)
         attached hereto and made a part hereof, there has been no material
         adverse change in the circumstances or condition, financial or
         otherwise, of such LXP Partner since the date of the last filing by LXP
         with the United States Securities and Exchange Commission;

                           (x)      such LXP Partner is not the subject of any
         bankruptcy, insolvency or reorganization proceeding;

                           (xi)     LXP is a "real estate investment trust" (a
         "REIT") within the meaning of Section 856 of the Code (and any
         Regulations promulgated thereunder);

                           (xii)    To such LXP Partner's knowledge, such LXP
         Partner has not received from any governmental agency any notice of
         violation of any law, statute or regulation which would have a material
         adverse effect on the financial condition of such LXP Partner or of the
         Partnership;

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                           (xiii)   The informational materials that have been
         publicly disseminated to the shareholders of the LXP are true, complete
         and correct in all material respects as of the date of such
         informational materials, provided that with respect to any forecasts or
         financial projections contained in such publicly-disseminated
         informational materials, such LXP Partner represents and warrants only
         that such forecasts and financial projections represent LXP's best
         estimates of future performance;

                           (xiv)    Financial statements for LXP previously
         delivered to the Advisor or the Fund Partners present fairly the
         financial position of LXP as of the date of such financial statements;
         and

                           (xv)     All information contained in the Fee
         Disclosure will be true, correct and complete, as of the date of such
         disclosure.

                                   ARTICLE XI
                     SPECIAL PARTNER RIGHTS AND OBLIGATIONS

                  SECTION 11.1 BUY/SELL.

                  (a)      Generally. After the Rights Trigger Date, any General
         Partner, and, as provided in Section 11.1(e) and Section 11.1(f) below,
         the General Partner specified therein (the "OFFERING GENERAL PARTNER")
         may provide the other General Partner (the "RESPONDING GENERAL
         PARTNER") with notice (the "OFFER NOTICE") of a price (the "OFFER
         PRICE") that the Offering General Partner, or its designee(s), is
         willing to pay to purchase (A) those Qualified Properties which the
         Offering General Partner, or its designee(s), desires to purchase if
         the Offering General Partner, or its designee(s), desires to purchase
         less than all of the Qualified Properties from the Partnership, or (B)
         all of the Qualified Properties if the Offering General Partner, or its
         designee(s), desires to purchase all of the Qualified Properties
         (provided that an offer to purchase all of the Qualified Properties
         shall be implemented as a purchase by the Offering General Partner, or
         its designee(s), of the Percentage Interests of the Other Partners)
         (such Qualified Properties or such Percentage Interests, as the case
         may be, the "BUY/SELL PROPERTY"), such Offer Notice to include, as an
         attachment thereto, a bona fide proposed purchase and sale agreement on
         terms reasonably customary for the sale of real property or for the
         sale of limited partnership interests in a limited partnership that
         owns primarily real property (the "OFFERED AGREEMENT"). Upon receipt of
         the Offer Notice, the Responding General Partner shall have thirty (30)
         days to provide to the Offering General Partner a notice (the "RESPONSE
         NOTICE") specifying the Responding General Partner's election either,
         (i) if the Buy/Sell Property comprises less than all of the Qualified
         Properties, (x) to cause the Partnership to sell the Buy/Sell Property
         to the Offering General Partner, or its designee(s), at the Offer Price
         pursuant to the Offered Agreement or (y) to purchase (or have a
         designee purchase), the Buy/Sell Property from the

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         Partnership for a purchase price equal to the Offer Price and on
         substantially the same terms and conditions as provided in the Offered
         Agreement, or, (ii) if the Buy/Sell Property comprises all of the
         Qualified Properties, purchase the Percentage Interests of the Other
         Partners or, together with its Corresponding Limited Partner, sell its
         Percentage Interest to the Offering General Partner, or its
         designee(s), for cash in an amount equal to the amount of cash the
         Offering General Partner would receive under Section 9.2 hereof if the
         Partnership assets were sold for cash at the Offer Price and the
         Partnership liquidated and dissolved (the "INTEREST PRICE"). In
         determining the amount of the Interest Price, it will be assumed that
         no reserves will be required under Section 9.2 hereof. Any Offer Notice
         made with respect to all of the Qualified Properties in connection with
         a dispute between the General Partners concerning more than fifty
         percent (50%) of the Qualified Properties or concerning the governance
         or management of the Partnership shall supersede and render of no
         further effect any Offer Notice (x) made with respect to less than all
         of the Qualified Properties and (y) to which no Response Notice has
         been provided to the Offering General Partner.

                  (b)      Responding General Partner's Election to Purchase. If
         the Responding General Partner timely delivers a Response Notice that
         specifies the Responding General Partner's election to purchase the
         Buy/Sell Property, as described in Section 11.1(a) above, then the
         Responding General Partner shall have up to one hundred and twenty
         (120) days to close the purchase of the Buy/Sell Property on
         substantially the same terms and conditions as contained in the Offered
         Agreement.

                  (c)      Responding General Partner's Election not to
         Purchase. If the Responding General Partner delivers a timely Response
         Notice that specifies the Responding General Partner's election not to
         purchase the Buy/Sell Property, as described in Section 11.1(a) above,
         then the Managing General Partner shall cause the Partnership to sell
         the Buy/Sell Property to the Offering General Partner, or if the
         Responding General Partner fails to deliver a timely Response Notice,
         then the Offering General Partner must elect either, (i) if the
         Buy/Sell Property comprises less than all of the Qualified Properties,
         proceed to close the acquisition of the Buy/Sell Property at the Offer
         Price in accordance with the terms and conditions of the Offered
         Agreement, provided, however, that such closing must take place within
         the ninety (90) day period beginning on the earlier of (x) the date of
         delivery of the Response Notice, or (y) the expiration of the thirty
         (30) day period during which the Responding General Partner is required
         to deliver a Response Notice, or, (ii) if the Buy/Sell Property
         comprises all of the Qualified Properties, to purchase the Percentage
         Interests of the Other Partners within the ninety (90) day period
         described in clause (i) above, for cash in an amount equal to the
         amount the Other Partners would receive under Section 9.2 hereof if the
         Partnership assets were sold at the Offer Price and the Partnership
         were liquidated and dissolved (the "RESPONDING INTEREST PRICE"). In
         determining

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         the amount of the Responding Interest Price, it will be assumed that no
         reserves will be required pursuant to Section 9.2 hereof.

                  (d)      Challenge to Buy/Sell. If any General Partner (the
         "CHALLENGING GENERAL PARTNER") initiates a legal action with respect to
         any exercise of the other General Partner's rights under this Section
         11.1 and such legal action is not resolved in the Challenging General
         Partner's favor by a court of competent jurisdiction, the Challenging
         General Partner shall pay all attorneys' fees and court costs arising
         in connection with the Challenging General Partner's legal action.

                  (e)      Buy/Sell Upon Default or Dispute. Prior to the Rights
         Trigger Date, any General Partner may exercise as the Offering General
         Partner its buy/sell right as provided in Section 11.1(a) above in the
         event of a material default of this Agreement by either of the Other
         Partners, or a material dispute between the General Partners.

                  (f)      Buy/Sell Upon Change of Control in LXP. In the event
         there is any change in the control or management of LXP without the
         consent of the Fund GP while LXP GP is the Managing General Partner,
         the Fund GP may exercise the buy-sell provided in this Section 11.1.
         For the purposes hereof, (x) a change in control shall be deemed to
         occur upon any Person (and its Affiliates) becoming the beneficial
         owner, directly or indirectly, of thirty-three percent (33%) or more of
         the outstanding Shares on a fully diluted basis (including any
         outstanding interests in Leperq Corporate Income Fund, L.P., Leperq
         Corporate Income Fund II, L.P. and Net 3 Acquisition L.P. and any other
         entity, that can be converted into Shares) and (y) a change in
         management shall be deemed to occur either upon the resignation or
         removal of both E. Robert Roskind and T. Wilson Eglin from the
         management of LXP or the replacement of a majority of the members of
         the Board of Trustees of LXP over a one-year period.

                  (g)      Due Diligence and Other Costs. Each General Partner
         shall bear its own costs, such as due diligence expenses and
         consultants' and attorneys' fees, incurred in connection with its
         exercise of, or response to, buy/sell rights.

                  SECTION 11.2 CONVERTIBILITY.

                  (a)      Grant of Redemption Rights. The Fund Partners, acting
         together, will have the right (the "REDEMPTION RIGHT") to require LXP,
         or its designee(s), to acquire all or a portion of their Percentage
         Interests in the Partnership for either, at LXP's sole option, (i) a
         number of Shares equal to the Share Purchase Price or (ii) a cash
         amount equal to the Cash Purchase Price, both in accordance with the
         Redemption Rights Schedule attached hereto as Schedule 5 and made a
         part hereof. Any Shares issued pursuant to this Section 11.2 will not
         be registered under any federal or state securities laws but shall be
         subject to the terms of the

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\
         registration rights agreement attached hereto as Schedule 7 and made a
         part hereof to be entered into by LXP and the Fund Partners at the time
         of issuance of such Shares. Notwithstanding anything in this Agreement
         to the contrary, in the event the shareholders of LXP are required by
         law, regulation or otherwise to approve the issuance of Shares to the
         Fund Partners and do not approve the issuance of Shares to the Fund
         Partners as provided in this Agreement, which failure to approve
         prevents the Fund Partners from being able to receive the Share
         Purchase Price upon exercise of the Redemption Right, LXP shall satisfy
         the Fund Partners' Redemption Right by paying the Cash Purchase Price
         to the Fund Partners pursuant to Section 11.2(c) below.

                  (b)      Conditions to Exercise of Redemption Right. The
         Redemption Right shall be subject to the following conditions:

                           (i)      The Fund Partners, acting together, may
         exercise the Redemption Right at any time on and after the earlier to
         occur of (x) the Rights Trigger Date or (y) the date on which the
         Partnership has invested at least One Hundred Million Dollars
         ($100,000,000) of its equity capital through the purchase or
         contribution of Qualified Properties;

                           (ii)     The Fund Partners may exercise the
         Redemption Right only if all of the Qualified Properties have a
         remaining lease maturity of at least an average of five (5) years. If
         all of the Qualified Properties do not have a remaining lease maturity
         of at least an average of five (5) years, then the Fund GP, on behalf
         of both Fund Partners, shall have the right to exclude Qualified
         Properties (the "RETAINED QUALIFIED PROPERTIES") that the Fund GP shall
         designate from the calculation of lease maturity so as to make the
         remaining Qualified Properties (the "PROPOSED TENDERED QUALIFIED
         PROPERTIES") satisfy the minimum lease maturity standard; and

                           (iii)    (x) LXP may exclude any Proposed Tendered
         Qualified Property that has experienced a material adverse change in
         its financial condition.

                                        (y) In addition, LXP may exclude any
         Proposed Tendered Qualified Property leased in whole or in part to any
         Non-Investment Grade Tenant that has experienced a material adverse
         change in its financial condition (including a downgrading of its
         credit rating since such Proposed Tendered Qualified Property was
         acquired by the Partnership) (it being understood that, notwithstanding
         the Acquisition Parameters, if the Partnership has acquired a Proposed
         Tendered Qualified Property leased in whole or in part to any tenant
         that has an investment grade credit rating that has experienced a
         downgrade of its credit rating since such Proposed Tendered Qualified
         Property was acquired by the Partnership, such property may also be
         excluded) if (1) the aggregate Fair Market Values of the Proposed
         Tendered Qualified Properties which LXP seeks to exclude as described
         above in clause (x) and this clause (y) is greater than an

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         amount equal to seven and one-half percent (7 1/2%) of the Fair Market
         Values of all of the Proposed Tendered Qualified Properties and (2) the
         aggregate Fair Market Values of all of the Proposed Tendered Qualified
         Properties equals or exceeds Twenty Million Dollars ($20,000,000).

                                    (z)      The Proposed Tendered Qualified
         Properties excluded by LXP as provided in this Section 11.2(b)(iii)
         shall be added to and become a part of the Retained Qualified
         Properties, and the Redemption Right shall apply only to the remaining
         Proposed Tendered Qualified Properties (the remaining Proposed Tendered
         Qualified Properties are collectively referred to as the "TENDERED
         QUALIFIED PROPERTIES").

                  (c)      Cash Purchase Price. LXP shall have a right in its
         sole and absolute discretion to satisfy the Fund Partners' Redemption
         Right by paying the Cash Purchase Price to the Fund Partners. The Cash
         Purchase Price (the "CASH PURCHASE PRICE") shall be a cash price equal
         to the Fund Partners' aggregate Percentage Interest multiplied by the
         Fair Market Values of all of the Tendered Qualified Properties.

                  (d)      The Fund Partners' Retained Qualified Properties. If
         the Fund GP, on behalf of both Fund Partners, elects to exclude the
         Retained Qualified Properties in accordance with Section 11.2(b) above,
         the Fund GP shall identify the Retained Qualified Properties in its
         Exercise Notice, and the Retained Qualified Properties shall be dealt
         with as set forth in Paragraph 13 of Schedule 5.

                  (e)      LXP's Retained Qualified Properties. If LXP elects to
         exclude any of the Retained Qualified Properties in accordance with
         Section 11.2(b) above, LXP shall identify the Retained Qualified
         Properties in its Election Notice, and the Retained Qualified
         Properties shall be dealt with as set forth in Paragraph 13 of Schedule
         5.

                  SECTION 11.3 REMUNERATION TO PARTNERS. No Partner is entitled
to remuneration for acting on behalf of the Partnership. Except as otherwise
authorized in this Agreement, including but not limited to Sections 3.6 and
3.10, no Partner is entitled to remuneration for acting in the Partnership
business.

                  SECTION 11.4 EQUALITY OF SHARES. LXP covenants that: (x) the
Shares issuable upon the Fund Partners' exercise of the Redemption Right (the
"REDEMPTION RIGHT SHARES") shall have rights, privileges, powers and immunities
identical to the Shares then outstanding, including without limitation full
voting rights and any rights (whether or not then exercisable) to purchase or
subscribe for other securities; (y) LXP shall not issue securities of any class
entitled to vote in the election of trustees of LXP unless fair consideration is
transferred to LXP in exchange therefor and the proportionate voting power of
such class does not exceed the proportion of the total capital of LXP
represented by such consideration; and (z) LXP shall not amend its organic
documents,

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<PAGE>

adopt or amend any plan, or issue or suffer to remain outstanding any
securities, the terms or effect of which is (or upon the occurrence of any event
would become) inconsistent with the foregoing clauses (x) and (y) or would
subject the Redemption Right Shares to any disability or deny the Redemption
Right Shares any benefit not shared equally with all other Shares then
outstanding. If LXP shall breach the covenants contained in this Section 11.4,
then the Fund Partners shall have all remedies hereunder or under applicable
law, including, without limitation, if the Fund Partners exercise the Redemption
Right as provided Section 11.2 hereof, the Fund Partners shall have the option
of requiring LXP either (x) to pay the Cash Purchase Price or (y) to pay the
Share Purchase Price plus, in either case, damages in an amount equal to the
total of (i) one hundred and ten percent (110%) of the difference, if any,
between the value that the Shares received by the Fund Partners would have had
had such dilution not occurred and the value of such Shares as diluted and (ii)
any other damages suffered by the Fund Partners as the result of such breach.

                                  ARTICLE XII
                               GENERAL PROVISIONS

         SECTION 12.1 NOTICES.

         (a)      Generally. All notices, demands, approvals, consents or
     requests provided for or permitted to be given pursuant to this Agreement
     must be in writing.

         (b)      Manner of Notice. All notices, demands, approvals, consents
     and requests to be sent to the Partnership or any Partner pursuant to the
     terms hereof shall be deemed to have been properly given or served, if
     personally delivered, sent by recognized messenger or next day courier
     service, or sent by United States mail, telex or facsimile transmission to
     the addresses or facsimile numbers listed below, and will be deemed
     received, unless earlier received: (a) if sent by express, certified or
     registered mail, return receipt requested, when actually received or
     delivery refused; (b) if sent by messenger or courier, when actually
     received; (c) if sent by telex or facsimile transmission, on the date sent,
     so long as a confirming notice is sent by messenger or courier or by
     express, certified, registered, or first-class mail; (d) if delivered by
     hand, on the date of delivery; and (e) if sent by first-class mail, seven
     days after it was mailed. Rejection or other refusal to accept or the
     inability to deliver because of changed address of which no notice was
     given shall be deemed to be receipt of the notice, demand or request sent.

If to the Partnership:                Lexington/Lion Venture LP
                                      c/o Lexington Corporate Properties Trust
                                      355 Lexington Avenue
                                      New York, New York 10017-6603
                                      Attention: Chief Executive Officer

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                                      Telephone No.: (212) 692-7200
                                      Fax No. (212) 986-6972

with a copy to:                       Clarion Partners LLC
                                      230 Park Avenue
                                      12th Floor
                                      New York, New York 10017
                                      Attention: Stephen B. Hansen
                                      Telephone No.: (212) 883-2545
                                      Fax No.: (212) 883-2845

If to either LXP Partner:             c/o Lexington Corporate Properties Trust
                                      355 Lexington Avenue
                                      New York, New York 10017-6603
                                      Attention: Chief Executive Officer
                                      Telephone No.: (212) 692-7200
                                      Fax No.: (212) 986-6972

with a copy of any notice specified   Paul, Hastings, Janofsky & Walker LLP
in Section 12.1(d) below to:          399 Park Avenue, 31st floor
                                      New York, New York 10022-4697
                                      Attention: Mark Schonberger, Esq.
                                      Telephone No.: (212) 318-6859
                                      Fax No.: (212) 230-7747

If to either Fund Partner:            Clarion Partners LLC
                                      230 Park Avenue
                                      12th Floor
                                      New York, New York 10017
                                      Attention: Stephen B. Hansen
                                      Telephone No.: (212) 883-2545
                                      Fax No.: (212) 883-2845

and a copy of any                     Mayer Brown Rowe & Maw LLP
notices of default to:                190 South LaSalle Street
                                      Chicago, Illinois 60602
                                      Attention: Jeffrey Usow, Esq.
                                      Telephone No.: (312) 701-8612
                                      Fax No.: (312) 706-8725

         (c)      Right to Change Addresses. A Partner shall have the right from
     time to time and at any time during the term of this Agreement to change
     its notice address or addresses by giving to the Other Partners at least
     ten (10) Business Days' prior written notice thereof in the manner provided
     by this Section 12.1. The Fund Partners shall have the right from time to
     time and at any time during the term of this Agreement to designate a
     successor to Clarion

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     Partners as Advisor by giving to the Other Partner at least ten (10)
     Business Days' prior written notice thereof in the manner provided by this
     Section 12.1.

         (d)      Notices to Paul, Hastings, Janofsky & Walker LLP. Copies of
     the following notices shall be provided to Paul, Hastings, Janofsky and
     Walker LLP at the address listed in Section 12.1(b) above: notices made in
     connection with Section 11.1 and Section 11.2 hereof, notices of default
     and any notice made in connection with the exercise by a Partner of any
     right hereunder not in the ordinary course of the Partnership's business.

         SECTION 12.2 GOVERNING LAWS. This Agreement and the obligations of the
Partners hereunder shall be interpreted, construed and enforced in accordance
with the laws of the State of Delaware without regard to its choice of law
provisions. Except as otherwise provided herein, the rights and obligations of
the Partners and the administration and termination of the Partnership shall be
governed by the Act.

         SECTION 12.3 ENTIRE AGREEMENT. This Agreement (including the exhibits
and schedules hereto) contains the entire agreement between the parties,
supercedes any prior agreements or understandings between them and may not be
modified or amended in any manner other than pursuant to Section 12.12 hereof.

         SECTION 12.4 WAIVER. No consent or waiver, express or implied, by any
Partner to or of any breach or default by any other Partner in the performance
by the other Partner of its obligations hereunder shall be deemed or construed
to be a consent or waiver to or of any other breach or default in the
performance by such other Partner of the same or any other obligations of such
other Partner hereunder. Failure on the part of any Partner to complain of any
act or failure to act of any of the other Partners or to declare any of the
other Partners in default, irrespective of how long such failure continues,
shall not constitute a waiver by such Partner of its rights hereunder. No
custom, practice or course of dealings arising among the Partners in the
administration hereof shall be construed as a waiver or diminution of the right
of any Partner to insist upon the strict performance by any other Partner of the
terms, covenants, agreements and conditions herein contained.

         SECTION 12.5 VALIDITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

         SECTION 12.6 TERMINOLOGY; CAPTIONS. All personal pronouns used in this
Agreement, whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice versa
and shall refer solely to the parties signatory hereto except where otherwise
specifically provided. Titles of Articles, Sections, Subsections, Schedules and
Exhibits are for convenience only, and

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<PAGE>

neither limit nor amplify the provisions of the Agreement itself, and all
references herein to Articles, Sections, Subsections, Schedules and Exhibits
shall refer to the corresponding Articles, Sections, Subsections, Schedules and
Exhibits of this Agreement unless specific reference is made to such Articles,
Sections, Subsections, Schedules and Exhibits of another document or instrument.
Any use of the word "including" herein shall, unless the context otherwise
requires, be deemed to mean "including without limitation".

         SECTION 12.7 REMEDIES NOT EXCLUSIVE. Except as otherwise provided
herein, the rights and remedies of the Partnership and of the Partners hereunder
shall not be mutually exclusive, i.e., the exercise of one or more of the
provisions hereof shall not preclude the exercise of any other provisions
hereof. Each of the Partners confirms that damages at law may be an inadequate
remedy for a breach or threatened breach of this Agreement and agrees that in
the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy but nothing herein contained
is intended to, nor shall it, limit or affect any rights or rights at law or by
statute or otherwise of any party aggrieved as against the other for breach or
threatened breach of any provision hereof, it being the intention by this
section to make clear the agreement of the Partners that the respective rights
and obligations of the Partners hereunder shall be enforceable in equity as well
as at law or otherwise.

         SECTION 12.8 ACTION BY THE PARTNERS. No approval, consent, designation
or other action by a Partner shall be binding upon such Partner unless the same
is in writing and executed on behalf of such Partner by a duly authorized
representative of such Partner.

         SECTION 12.9 FURTHER ASSURANCES. Each of the Partners shall hereafter
execute and deliver such further instruments and do such further acts and things
as may be required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.

         SECTION 12.10 LIABILITY OF THE LIMITED PARTNERS. Each Limited Partner's
exposure to liabilities hereunder is limited to its interest in the Partnership.
No Limited Partner shall be personally liable for the expenses, liabilities,
debts, or obligations of the Partnership.

         SECTION 12.11 BINDING EFFECT. Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Partners and their respective
successors, transferees, and assigns.

         SECTION 12.12 AMENDMENTS. Except as otherwise provided in this
Agreement, this Agreement may not be amended without the written consent of all
the Partners.

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<PAGE>

         SECTION 12.13 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original, but all such counterparts together shall constitute but one and the
same instrument; signature and acknowledgment pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature and acknowledgement pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and delivery to each of the
Partners of a fully executed original counterpart of this Agreement.

         SECTION 12.14 WAIVER OF PARTITION. Each of the Partners hereby
irrevocably waives any and all rights (if any) that it may have to maintain any
action for partition of any of the Qualified Properties to be acquired.

         SECTION 12.15 NO THIRD PARTY BENEFICIARIES. Supplementing Section 5.4
hereof, nothing in this Agreement, expressed or implied, is intended to confer
any rights or remedies upon any Person, other than the Partners and, subject to
the restrictions on assignment contained herein, their respective successors and
assigns.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

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<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed effective as of
the date first set forth above.

                              LXP GP

                              LXP GP, LLC

                              By: ______________________________
                                  Name:
                                  Title:

                              LXP

                              LEXINGTON CORPORATE PROPERTIES TRUST

                              By: ______________________________
                                  Name:
                                  Title:

                              THE FUND GP

                              CLPF-LXP/LION VENTURE GP, LLC

                              By: CLPF-LXP/LV, L.P., a Delaware limited
                              partnership, its sole member

                              By: CLPF-LXP/LV GP, LLC, a Delaware limited
                              partnership, its general partner

                              By: Clarion Lion Properties Fund Holdings, L.P., a
                              Delaware limited partnership, its sole member

                              By: CLPF-Holdings, LLC, a Delaware limited
                              liability company, its general partner

                              By: Clarion Lion Properties Fund Holdings REIT,
                              LLC, a Delaware limited liability company, its
                              sole member

                              By: Clarion Lion Properties Fund, LLC, a Delaware
                              limited liability company, its managing member

                              By: Clarion Partners LLC, a New York limited
                              liability company, its manager

                              By: ______________________________
                                  Name: Stephen B. Hansen
                                  Title: Authorized Signatory

                                      s-1

<PAGE>

                              THE FUND

                              CLPF-LXP/LV, L.P.

                              By: CLPF-LXP/LV GP, LLC, a Delaware limited
                              partnership, its general partner

                              By: Clarion Lion Properties Fund Holdings, L.P., a
                              Delaware limited partnership, its sole member

                              By: CLPF-Holdings, LLC, a Delaware limited
                              liability company, its general partner

                              By: Clarion Lion Properties Fund Holdings REIT,
                              LLC, a Delaware limited liability company, its
                              sole member

                              By: Clarion Lion Properties Fund, LLC, a Delaware
                              limited liability company, its managing member

                              By: Clarion Partners LLC, a New York limited
                              liability company, its manager

                              By: ______________________________
                                  Name: Stephen B. Hansen
                                  Title: Authorized Signatory

                                       2

<PAGE>

                                   SCHEDULE 1

                    NAMES AND CAPITAL COMMITMENTS OF PARTNERS

<TABLE>
<CAPTION>
                                                                   Percentage
            Partner Name                    Capital Commitment      Interest
            ------------                    ------------------      --------
<S>                                         <C>                    <C>
Lexington Corporate Properties Trust          $ 29,850,000.00        29.85%

LXP GP, LLC                                   $    150,000.00          .15%

CLPF-LXP/LV, L.P.                             $ 69,650,000.00        69.65%

CLPF-LXP/Lion Venture GP, LLC                 $    350,000.00          .35%
</TABLE>

                                  Schedule 1-1

<PAGE>

                                   SCHEDULE 2

                             ACQUISITION PARAMETERS

PROPERTY TYPE

         REQUIRED PARAMETERS

     -   Single tenant, net leased, commercial properties in the office, retail
         and industrial sectors.

     -   Properties located in major metropolitan areas with a population of one
         million or greater and within well-established commercial districts.

     -   Not a property that is high risk/high return in need of significant
         renovation, redevelopment or repositioning.

     -   Purchase price of between $15 to $40 million.

         NOTES

         An emphasis will be placed on properties that are less than 10 years
old. The Partnership will generally invest in well-designed buildings that
present an attractive appearance, have been and are properly maintained and
require minimal capital improvements in the near-term.

TENANT

         REQUIRED PARAMETERS

     -   Non-Investment Grade Tenants

     -   Lease term of 5 years or greater.

         NOTES

         Given the credit profile of the tenant and in some cases shorter lease
terms, each acquisition will be subject to an in-depth credit analysis of the
tenant and the probability of renewal. The tenant's industry will be considered
insofar as the Partnership seeks broad economic diversification across
properties held in the Partnership. Leases will typically be structured to
reduce cash flow volatility and to provide for all operating expenses and
expense increases to be paid by the tenant.

OWNERSHIP

         REQUIRED PARAMETERS

     -   Fee simple title (subject to leases and typical easements and
         encumbrances)

     -   No leased fee or leasehold interests.

                            Schedule 2 (1 of 2 pages)

<PAGE>

                                   SCHEDULE 3

                         FORM OF ACQUISITION MEMORANDUM

                           ACQUISITION MEMORANDUM FOR
                            LEXINGTON/LION VENTURE LP

                 _______________________________________________
                            [QUALIFIED PROPERTY NAME]

         ______________________________________________________________
                          [QUALIFIED PROPERTY ADDRESS]

                            ________________________
                                     [DATE]

                                   Sched. 3-1

<PAGE>

                             I. INVESTMENT SUMMARY

[General description of property, location, tenancy, metropolitan market and
competitive submarket]

                                   Sched. 3-2
<PAGE>

                       II. INVESTMENT STRUCTURE & RETURNS

[Description of deal structure, purchase price, closing costs, financing
considerations, relationship of acquisition cost/sf to replacement cost, etc.]

RETURNS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
INVESTMENT YIELDS                                     UNLEVERAGED                             LEVERAGED
-----------------------------------------------------------------------------------------------------------
<S>                                                   <C>                                     <C>
Investment Amount

Per Square Foot

Initial Return

5-Year Average Return

10-Year Average Return

IRR (X-year hold) - Nominal

IRR (X-year hold) - Real
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                   Sched. 3-3

<PAGE>

                              III. PROPERTY PROFILE

Location & Access

Project History and Ownership

Site and Land Area

Building Description and Size

Parking

Foundations/Flooring

Exterior Walls

Vertical Transportation Systems

HVAC Systems

Electrical

Life Safety

Roofs

Compliance with Americans with Disabilities Act (ADA)

Environmental Inspection

Physical Conditions Report

Five-year Capital Improvements and Major Repairs Budget

                                   Sched. 3-4

<PAGE>

         IV.      TENANCY

Corporate Overview

Tenant Improvement Allowance

Financial Highlights

Description of Divisions

                                   Sched. 3-5

<PAGE>

                               V. MARKET ANALYSIS

MARKET OVERVIEW

[Analysis, supported by statistical data (see tables) of metropolitan, county
and city historical population, projections for future absorption, employment
growth, construction and occupancy]

                                     TABLE 1
              METROPOLITAN CITY OFFICE MARKET TRENDS, 1980-MID 2000
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                               TOTAL                                         VACANCY                  NET
     YEAR-END                INVENTORY            OCCUPIED AREA               RATE %               ABSORPTION
------------------------------------------------------------------------------------------------------------------
<S>                          <C>                  <C>                        <C>                   <C>
------------------------------------------------------------------------------------------------------------------

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

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

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

------------------------------------------------------------------------------------------------------------------
   1986-1990

AVG. ABSORPTION
------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

------------------------------------------------------------------------------------------------------------------
   1991-2000

AVG. ABSORPTION
------------------------------------------------------------------------------------------------------------------
   1980-2000

AVG. ABSORPTION
------------------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                   Sched. 3-6

<PAGE>

                                     TABLE 5
      METROPOLITAN CITY EMPLOYMENT TRENDS AND PROJECTIONS, 1980-2005 (000)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                             COMPOUNDED ANNUAL
                                                                                                  GROWTH
                                                                                        --------------------------------
                                 BUSINESS &                                                                  FIRE &
                               PROFESSIONAL                       ALL                     TOTAL             BUSINESS
YEAR          FIRE               SERVICES         SUBTOTAL       OTHER     TOTAL        EMPLOYMENT          SERVICES
------------------------------------------------------------------------------------------------------------------------
<S>           <C>              <C>                <C>            <C>       <C>          <C>                 <C>
1980
------------------------------------------------------------------------------------------------------------------------
1985
------------------------------------------------------------------------------------------------------------------------
1990
------------------------------------------------------------------------------------------------------------------------
1995
------------------------------------------------------------------------------------------------------------------------
2000
------------------------------------------------------------------------------------------------------------------------
2005
------------------------------------------------------------------------------------------------------------------------
</TABLE>

Source: DRI/McGraw-Hill

                                    TABLE 6
                  MAJOR PRIVATE EMPLOYERS IN METROPOLITAN CITY

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                                NUMBER OF EMPLOYEES IN
COMPANY                                                           METROPOLITAN CITY
-----------------------------------------------------------------------------------------
<S>                                                             <C>
-----------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

-----------------------------------------------------------------------------------------
</TABLE>

                                   Sched. 3-7

<PAGE>


                                     TABLE 7
       HISTORICAL AND PROJECTED METROPOLITAN CITY OFFICE DEMAND, 1980-2000
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                   FIRE AND                                 OCCUPIED SQUARE
                                                   BUSINESS         SQUARE FOOTAGE            FOOTAGE PER
              OCCUPIED SQUARE                      SERVICES          PER EMPLOYEE             INCREMENTAL
YEAR-END          FOOTAGE                         EMPLOYMENT          (AVERAGE)                EMPLOYEE
------------------------------------------------------------------------------------------------------------------
<S>           <C>                                 <C>               <C>                     <C>
1980
------------------------------------------------------------------------------------------------------------------
1985
------------------------------------------------------------------------------------------------------------------
1990
------------------------------------------------------------------------------------------------------------------
1995
------------------------------------------------------------------------------------------------------------------
2000
------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL ABSORPTION 1980-1998
------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL ABSORPTION 1999-2000
------------------------------------------------------------------------------------------------------------------
1999-2000 / 1980-1998
AVERAGE ANNUAL ABSORPTION
------------------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                     TABLE 8
    ESTIMATED AND PROJECTED METROPOLITAN CITY OFFICE MARKET TRENDS, 2000-2002
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                        OCCUPANCY            PROJECTED            PROJECTED
YEAR-END          TOTAL SF           OCCUPIED SF          RATE              ABSORPTION           CONSTRUCTION
------------------------------------------------------------------------------------------------------------------
<S>               <C>                <C>                <C>                 <C>                  <C>
------------------------------------------------------------------------------------------------------------------

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

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

------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL 2000-2002
------------------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                     TABLE 9
 NEW AND PLANNED MULTI-TENANT OFFICE BUILDINGS FOR METROPOLITAN CITY, 2001-2003

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PROJECT            ADDRESS            SUBMARKET            OWNER/DEVELOPER             SF                YEAR
------------------------------------------------------------------------------------------------------------------
<S>                <C>                <C>                  <C>                         <C>               <C>
------------------------------------------------------------------------------------------------------------------

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

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

------------------------------------------------------------------------------------------------------------------
TOTAL:
------------------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                   Sched. 3-8

<PAGE>

                                    TABLE 10
    EXPECTED MULTI-TENANT OFFICE BUILDING CONSTRUCTION FOR METROPOLITAN CITY,
                             BY SUBMARKET, 2001-2004
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
SUBMARKET             2001         2002       2003        2004            TOTAL
--------------------------------------------------------------------------------------
<S>                   <C>          <C>        <C>         <C>             <C>
CBD
--------------------------------------------------------------------------------------
Submarket:
--------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

--------------------------------------------------------------------------------------
TOTAL METROPOLITAN CITY
--------------------------------------------------------------------------------------
</TABLE>

Source:

                                    TABLE 11
                   HISTORICAL COUNTY MARKET TRENDS, 1980-2000
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                    TOTAL SQUARE        OCCUPIED SQUARE               OCCUPANCY           AVERAGE ANNUAL
YEAR-END                FEET                 FEET                        RATE               ABSORPTION
----------------------------------------------------------------------------------------------------------
<S>                 <C>                 <C>                           <C>                 <C>
1980
----------------------------------------------------------------------------------------------------------
1990
----------------------------------------------------------------------------------------------------------
2000
----------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL ABSORPTION 1980-2000
----------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                    TABLE 12
             COUNTY SHARE OF METROPOLITAN CITY ABSORPTION, 1980-2000
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                                    COUNTY SHARE
                                                      --------------------------------------
                           METROPOLITAN CITY AVG.     AVERAGE ANNUAL NET
TIME PERIOD                  ANNUAL ABSORPTION            ABSORPTION              PERCENT
--------------------------------------------------------------------------------------------
<S>                        <C>                        <C>                         <C>
1980-1990
--------------------------------------------------------------------------------------------
1990-2000
--------------------------------------------------------------------------------------------
1980-2000
--------------------------------------------------------------------------------------------
</TABLE>

Source:

                                   Sched. 3-9
<PAGE>

                                    TABLE 13
                     COUNTY OFFICE SPACE BY CLASS, JUNE 2000
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                       CLASS A                                     CLASS B & C
------------------------------------------------    -----------------------------------------
TOTAL SQUARE        OCCUPIED SQUARE    OCCUPANCY    TOTAL SQUARE   OCCUPIED     OCCUPANCY
    FEET                  FEET            RATE          FEET      SQUARE FEET     RATE
---------------------------------------------------------------------------------------------
<S>                 <C>                <C>          <C>           <C>           <C>
---------------------------------------------------------------------------------------------
</TABLE>

Source:

                                    TABLE 14
      HISTORICAL AND PROJECTED OFFICE USING EMPLOYMENT IN COUNTY, 1980-2005
                                 (000 EMPLOYEES)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                           COMPOUNDED ANNUAL GROWTH
                                                                       ---------------------------------------
                      BUSINESS &                                                       FIRE & BUSINESS
                     PROFESSIONAL                   ALL                   TOTAL         & PROFESSIONAL
YEAR      FIRE         SERVICES       SUBTOTAL     OTHER    TOTAL       EMPLOYMENT         SERVICES
--------------------------------------------------------------------------------------------------------------
<S>       <C>        <C>              <C>          <C>      <C>         <C>            <C>
--------------------------------------------------------------------------------------------------------------

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

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

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

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

--------------------------------------------------------------------------------------------------------------
</TABLE>

Source: DRI/McGraw-Hill

                                    TABLE 15
       HISTORICAL AND PROJECTED COUNTY OFFICE EMPLOYMENT TRENDS 1980-2002
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                      FIRE AND BUSINESS &                               OCCUPIED SQUARE
              OCCUPIED SQUARE             PROFESSIONAL          SQUARE FOOTAGE PER        FOOTAGE PER
YEAR-END          FOOTAGE              SERVICES EMPLOYMENT       EMPLOYEE AVERAGE     INCREMENTAL EMPLOYEE
--------------------------------------------------------------------------------------------------------------------
<S>           <C>                     <C>                       <C>                   <C>
--------------------------------------------------------------------------------------------------------------------

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

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

--------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL ABSORPTION 1980-1998
--------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL ABSORPTION 1998-2002
--------------------------------------------------------------------------------------------------------------------
1980-1998/1998-2002
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                  Sched. 3-10
<PAGE>

                                    TABLE 16
         ESTIMATED AND PROJECTED COUNTY OFFICE MARKET TRENDS, 2000-2002
                                (000 SQUARE FEET)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                   TOTAL           OCCUPIED         OCCUPANCY      PROJECTED          PROJECTED
  YEAR-END      SQUARE FEET      SQUARE FEET          RATE         ABSORPTION        CONSTRUCTION
-----------------------------------------------------------------------------------------------------
<S>             <C>              <C>                <C>            <C>               <C>
-----------------------------------------------------------------------------------------------------

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

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

-----------------------------------------------------------------------------------------------------
AVERAGE ANNUAL 2000-2002
-----------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                   Sched. 3-11

<PAGE>

                                 VI. COMPETITION

MARKET SYNOPSIS

NEW CONSTRUCTION

INVESTMENT SALES

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                         PURCHASE        SQUARE        PRICE ($ IN
        NAME               DATE          FOOTAGE           MM)           PRICE/SF        BUYER
-----------------------------------------------------------------------------------------------------
<S>                      <C>             <C>           <C>               <C>             <C>
-----------------------------------------------------------------------------------------------------
</TABLE>

COMPETITIVE POSITION

COMPETITIVE PROJECT ANALYSIS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
                                                 CURRENT     NUMBER
                              TOTAL SQUARE      OCCUPANCY      OF        YEAR        CURRENT ASKING
    BUILDING       CLASS          FEET            RATE       FLOORS      BUILT        RENTS - 2001
-------------------------------------------------------------------------------------------------------
<S>                <C>        <C>               <C>          <C>         <C>         <C>
-------------------------------------------------------------------------------------------------------
</TABLE>

Source:

                                   Sched. 3-12

<PAGE>

                            VII. FINANCIAL ANALYSIS

[RETURN SUMMARY]

                                   Sched. 3-13
<PAGE>

ASSUMPTIONS TO FINANCIAL PROJECTIONS

Projection Period:

Residual Cap rate:

Residual Calculation:

Sales Cost:

Market Rents:

Tenant Option:

Expense Recoveries:

Expense Growth:

Operating Expenses:

Real Estate Taxes:

Management Fee:

Vacancy Allowance:

Renewal Probability:

Downtime:

Tenant Improvements:

Leasing Commissions:

<TABLE>
<CAPTION>
Capital Improvements:           Year:          Item                 Estimated Amount
                                ----           ----                 ----------------
<S>                             <C>            <C>                  <C>
                                2002
                                2003
                                2004
                                2005
                                2006
                                Total
</TABLE>

Capital Reserve:

                                  Sched. 3-14
<PAGE>

REPLACEMENT COST ANALYSIS:

<TABLE>
<CAPTION>
-----------------------------------------------
                                          $/SF
-----------------------------------------------
<S>                                       <C>
Land Acquisition Cost

Building Shell & Core

Site Improvements/Parking

Tenant Improvements

Contingencies (5%)

Total Hard Costs

Architectural & Engineering

Legal/Permits

Real Estate Taxes

Marketing/Advertising

Leasing Commissions

Constr. Period Taxes & Insurance

Financing Fees (1%)

Developer's Fee & Overhead (6%)

Interest Carry

Total Soft Costs
----------------------------------------------
TOTAL DEVELOPMENT COST

Operating Profit/Loss

NET DEVELOPMENT COST
----------------------------------------------
</TABLE>

                                   Sched. 3-15

<PAGE>

ESTIMATED REQUIRED GROSS EFFECTIVE RENT

<TABLE>
<CAPTION>
---------------------------------------------------------
                                  Assumption        $/SF
---------------------------------------------------------
<S>                               <C>               <C>
Required Return/Net Rent

Operating Expenses/Taxes

Less Parking Income

Gross Effective Rent

Vacancy Factor

---------------------------------------------------------
Required Gross Effective Rent
---------------------------------------------------------
</TABLE>


                                  Sched. 3-16

<PAGE>

                                 VIII. EXHIBITS

         A. LOCATION MAPS

         B. FLOOR PLANS

         C. LEASE ABSTRACT

         D. ACQUISITION PARAMETERS CHECKLIST

                                  Sched. 3-17

<PAGE>

                                  SCHEDULE 3.5

                             MODEL OF AN ANNUAL PLAN

                    [SCHEDULE BEGINS ON THE FOLLOWING PAGE.]

                                  Sched. 3.5-1

<PAGE>

                                  SCHEDULE 4.8

                               INSURANCE STANDARDS

GENERAL

-        Minimum A.M. Best's rating for all insurance carriers: A- 14.

-        Insurance carriers must be authorized to do business in the state which
         the property is located.

-        The Partnership and the Partners are to be named as additional named
         insureds (or additional insureds and loss payees, if applicable) on all
         policies.

-        All policies are to provide the Partnership and the General Partners
         with 30 days written notice of cancellation or any material change in
         coverage.

GENERAL LIABILITY INSURANCE

<TABLE>
<CAPTION>
                                                                                        Combined
                                                                                      Single Limit
Coverage                                                                              Per Property
<S>                                                                                   <C>
- General aggregate other than Products/Completed Operations                           $2,000,000

- Products/Completed Operations aggregate                                               1,000,000

- Personal and advertising injury (any one person)                                      1,000,000

- Each occurrence                                                                       1,000,000

- Fire/explosion damage legal liability (any one fire/explosion)                          100,000

- Medical expense (any one person)                                                         10,000
</TABLE>

Extensions

         -        Aggregate must be on a per location basis

         -        Notice of occurrence

         -        Knowledge of occurrence

         -        Unintentional errors and omissions

                                  Sched. 4.8-1

<PAGE>

         -        Pollution from hostile fire

         -        Cross liability

         -        Amend contractual exclusion on personal injury coverage part
                  to include coverage for insured contract

REQUIREMENTS FOR EXCESS LIABILITY

Coverage

-        Coverage must be written on an umbrella form for the lead carrier. All
         excess layers (if any) should be written on a follow form basis.

Limits

-        Minimum acceptable limit is $25 million.

PROPERTY/CASUALTY INSURANCE

Coverage

-        "All Risk" on real property, personal property, loss of income (rents)
         and extra expense, signs (if applicable), fences (if applicable).

Extensions

         -        Flood, including back up of sewers and drains and surface
                  water

         -        Earthquake

         -        Increased cost of construction

         -        Building ordinance or law

         -        Demolition

         -        Pollution clean up

         -        Extended period of indemnity, 90 days

         -        Joint loss clause (if boiler written separately)

Valuation Clauses

         -        Replacement cost of real and personal property

         -        Actual loss sustained on loss of rents, extra expense

Limits

                                  Sched. 4.8-2

<PAGE>


         -        Must reflect valuation clauses; if written on a blanket basis,
                  blanket limit must reflect total values at risk.

Deductibles

Maximum deductibles

<TABLE>
<S>                             <C>                 <C>
"All Risk"                      $25,000
Flood                           $50,000             (in a flood zone higher deductibles are acceptable, up to the
                                                    maximum that can be bought back in Federal Flood Program.)
Earthquake                      $50,000             (no greater than 5% of total insurable value for properties located
                                                    in California, Washington state and the "New Madrid Fault")
Windstorm                       5% in Florida, Texas and Virginia; $400,000 minimum
</TABLE>

BOILER AND MACHINERY INSURANCE

Coverage

   -        Coverage must be provided for direct damage and loss of income due
            to any accident to boiler and/or air conditioning equipment.

Extensions

         -        Water damage

         -        Expediting expenses

         -        Ammonia contamination

         -        Building ordinance

         -        Joint loss clause

         -        Hazardous substance clean up

Valuation

         -        Replacement cost of property

         -        Actual loss sustained on business income

Deductibles

Maximum deductibles

                                  Sched. 4.8-3

<PAGE>

         -        Direct damage - $10,000

         -        Loss of income - 24 hours

                                  Sched. 4.8-4

<PAGE>

                                   SCHEDULE 5

                                REDEMPTION RIGHTS

                  The Redemption Right granted to the Fund Partners pursuant to
Section 11.2 of the Agreement shall be implemented pursuant to, and subject to,
the following terms and conditions:

                  1.       Definitions. The following terms and phrases shall,
for purposes of this Schedule and the Agreement, have the meanings set forth
below:

                  "CASH PURCHASE PRICE" is defined in Section 11.2(c) of the
Agreement.

                  "COMMON STOCK" shall mean the common shares of beneficial
interest, par value $.0001 per share, of LXP.

                  "COMPUTATION DATE" shall mean the date on which the Exercise
Notice from the Fund GP is received by LXP or, if such date is not a Business
Day, the first Business Day thereafter.

                  "CONVERSION FACTOR" shall mean 100%, provided that such factor
shall be adjusted in accordance with Paragraph 8 of this Schedule 5.

                  "ELECTION NOTICE" shall mean the written notice to be given by
LXP to the Fund GP in response to the receipt by LXP of an Exercise Notice from
the Fund GP, by which LXP elects to pay either the Cash Purchase Price or the
Share Purchase Price, and identifies any Proposed Tendered Qualified Properties
excluded by LXP pursuant to Section 11.2(b) of the Agreement.

                  "EQUITY EQUIVALENT" shall mean the rights to acquire one share
of Common Stock by purchase or exchange, by conversion or exchange of preferred
stock, by conversion or exchange of partnership or other interests in Leperq
Corporate Income Fund, L.P., Leperq Corporate Income Fund II, L.P., Net 3
Acquisition L.P. or in any other entity, by exchange of redeemable secured notes
or other instruments, pursuant to a stock purchase agreement, by exercise of a
warrant or option, or otherwise.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any successor statute.

                  "EXERCISE NOTICE" shall mean a written notice delivered by the
Fund GP to LXP pursuant to Paragraph 2 of this Schedule 5, by which the Fund GP
exercises the Redemption Right, and identifies any Retained Qualified Properties
excluded by the Fund GP pursuant to Section 11.2(b) of the Agreement.

                  "LXP REORGANIZATION" is defined in Paragraph 11 of this
Schedule 5.

                                   Sched. 5-1

<PAGE>

                  "OFFERED INTEREST" shall mean, collectively, the Percentage
Interests of the Fund Partners in the Partnership offered by the Fund Partners
for redemption. The Offered Interest shall be that portion of the Fund Partners'
entire aggregate Percentage Interest in the Partnership attributable to the
Tendered Qualified Properties.

                  "PURCHASE PRICE" shall mean the Cash Purchase Price or the
Share Purchase Price.

                  "REGISTRATION RIGHTS AGREEMENT" shall mean an agreement to be
executed and delivered by LXP and the Partnership as a part of the delivery of
the Share Purchase Price, which agreement shall be substantially in the form of
Schedule 7 attached to the Agreement.

                  "RETAINED QUALIFIED PROPERTIES" is defined in Section
11.2(b)(ii) of the Agreement.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any successor statute.

                  "SHARE" shall mean a share of Common Stock.

                  "SHARE PURCHASE PRICE" shall mean the number of Shares of LXP
determined pursuant to Paragraph 12(a) of this Schedule 5. In the event LXP
issues to all holders of Shares rights, options, warrants or convertible or
exchangeable securities entitling the shareholders to subscribe for or purchase
Shares, or any other securities or property (collectively, "RIGHTS") then the
Share Purchase Price shall also include such Rights that a holder of that number
of Shares as calculated pursuant to Paragraph 12(a) of this Schedule 5 would be
entitled to receive.

                  "SURVIVING LXP PARTNER" is defined in Paragraph 11 of this
Schedule 5.

                  2.       Due Diligence; Delivery of Exercise Notice.

                           (a)      The Fund GP shall have the right at any time
and from time to time to perform such due diligence as the Fund GP deems
necessary and appropriate to evaluate LXP in connection with the Conversion
Right. LXP shall cooperate with the Fund GP with respect to the Fund GP's
above-referenced due diligence efforts and shall make its books and records and
its employees available to the Advisor and the Fund GP and the agents,
representatives and employees of the Fund GP and of the Advisor upon ten (10)
Business Days notice by the Fund GP or the Advisor, as the case may be. In
connection with such due diligence, the Fund GP shall pay its own out-of-pocket
costs and expenses and the costs of expenses of consultants and experts retained
by the Fund GP.

                                   Sched. 5-2

<PAGE>

                           (b)      The Fund GP may, subject to the conditions
set forth in Section 11.2(b) of the Agreement, deliver to LXP written notice
pursuant to which the Fund GP elects to exercise the Redemption Right and to
exclude any Retained Qualified Properties (the "EXERCISE NOTICE"). If the Fund
GP elects not to deliver the Exercise Notice after completing the due diligence
efforts described in this Section 2, the Fund GP shall retain its right to
perform again such due diligence from time to time thereafter.

                  3.       Closing, Delivery of Election Notice. LXP shall,
within fifteen (15) Business Days after the receipt by LXP of an Exercise Notice
from the Fund GP, deliver to the Fund GP an Election Notice, which Election
Notice shall specify whether the Purchase Price will be paid in the form of the
Cash Purchase Price or the Share Purchase Price, shall set forth the computation
of the Purchase Price and shall specify the date, time and location for
completion of the purchase and sale of the Offered Interest, which date shall in
no event be more than (i) twenty (20) days after delivery by LXP of the Election
Notice for the Offered Interest if LXP has elected to pay the Share Purchase
Price or (ii) sixty (60) days after the date of receipt by LXP of the Exercise
Notice for the Offered Interest if LXP has elected to pay the Cash Purchase
Price. The Election Notice shall also identify any Retained Qualified Properties
that LXP elects to exclude pursuant to Section 11.2(b)(iii) of the Agreement. If
LXP fails to deliver the Election Notice within such fifteen (15) Business Day
period, it shall be deemed to have given an Election Notice on the last day of
such period specifying that LXP will redeem the Offered Interest, for the Share
Purchase Price, at the Partnership's principal office, at 10 a.m. local time on
the twenty (20th) day thereafter (or if such 20th day is not a Business Day, on
the first Business Day following such 10th day). Notwithstanding the foregoing,
LXP and the Fund Partners agree to use their best efforts to cause the closing
of the acquisition of the Offered Interest hereunder to occur as quickly as
reasonably possible.

                  4.       Closing Deliveries. At the closing of the redemption
of the Offered Interest, payment of the Purchase Price (and if LXP elects to pay
the Share Purchase Price, the execution and delivery of the Registration Rights
Agreement attached as Schedule 7 to the Agreement) shall be accompanied by
proper instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the Fund Partners that (x) the Offered
Interest is free and clear of all liens, and (y) the Fund Partners are
"accredited investors", as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act, and (B) LXP that the acquisition of the
Offered Interest and the execution, delivery and performance of the Registration
Rights Agreement have been duly authorized, and (ii) to the extent that any
Shares and Rights are issued to the Fund Partners, (A) an opinion of counsel for
LXP, reasonably satisfactory to the Fund Partners, to the effect that LXP is a
real estate investment trust duly organized and validly existing under the laws
of the State of Maryland and is taxed as a REIT under Section 856 of the Code,
that such Shares and Rights have been duly authorized, are validly issued,
fully-paid and nonassessable, and that the Registration Rights Agreement is a
valid and legally binding obligation of LXP, and (B) a certificate or
certificates evidencing the Shares and Rights to be issued and registered in the
name of

                                   Sched. 5-3

<PAGE>

the Fund Partners or their designee(s). If LXP has elected to pay the
Cash Purchase Price, the Cash Purchase Price shall be paid by wire transfer of
immediately available funds, as LXP is directed in writing by the Fund Partners.

                  5.       Term of Redemption Right. The Redemption Right shall
continue in full force and effect for the term of the Partnership.

                  6.       Representations and Covenants of LXP. LXP represents,
covenants and agrees as follows:

                           (a)      Available Shares. LXP shall at all times
reserve for issuance and keep available, free from preemptive rights, out of its
authorized but unissued Shares, such number of Shares as may be necessary to
enable LXP to issue Shares in full satisfaction of the Fund Partners' Redemption
Right (assuming that LXP elected to pay the Share Purchase Price with respect to
the Redemption Right).

                           (b)      Filings. As long as LXP shall be obligated
to file periodic reports under the Exchange Act, LXP will timely file such
reports in such manner as shall enable any recipient of Shares issued to the
Fund Partners hereunder in reliance upon an exemption from registration provided
by Rule 144 under the Securities Act to continue to be eligible to utilize such
exemption, or any successor rule or regulation or statute thereunder, for the
resale thereof.

                           (c)      SEC Reports. LXP shall furnish to the Fund
GP in a timely manner all reports filed by LXP with the SEC and all other
communications transmitted from time to time by LXP to its shareholders
generally.

                           (d)      Fully Paid Shares. LXP shall ensure that all
Shares which are issued in respect of the Purchase Price for the Offered
Interest will upon issue be fully paid and non-assessable and LXP will pay all
taxes (including all state or local transfer taxes but excluding all foreign,
federal or state income, franchise, property, estate, inheritance, gift or
similar taxes), charges and liens with respect to the issue thereof. LXP shall
not, however, be required to pay any tax that may be payable by the transferee
or transferor in respect of any subsequent transfer of the Shares.

                           (e)      Excess Shares Provisions. The organizational
documents of LXP contain an excess share provision limiting the percentage of
Shares that any Person may directly or indirectly hold or own to nine and
eight-tenths percent (9.8%) on a non-diluted basis. Prior to the acquisition of
the first Qualified Property by the Partnership, LXP shall obtain LXP Board
approval for the Fund Partners to acquire, in the aggregate, the percentage
represented by the number of Shares that will be the Share Purchase Price if LXP
elects to pay the Share Purchase Price.

                                   Sched. 5-4

<PAGE>

                  7.       The Fund Partners' Covenants. The Fund Partners
covenant and agree with LXP that the Offered Interest tendered to LXP in
accordance with the exercise of the Redemption Right shall be delivered to LXP
free and clear of all liens.

                  8.       Anti-dilution Provisions.

                           (a)      No-Dilution without Adjustment. LXP shall
not (x) issue or sell any Shares or other equity securities or any instrument
convertible into any equity security (and shall not permit or suffer Leperq
Corporate Income Fund L.P., Leperq Corporate Income Fund II L.P., Net 3
Acquisition L.P. or any other entity to issue or sell partnership or other
interests convertible into Shares or other equity securities), for a
consideration less than the fair value of such Shares or other equity security,
as determined in each case by the LXP Board, (y) under any circumstance declare
any stock dividend, stock split, stock distribution or the like or distribute to
holders of its Shares evidences of its indebtedness, shares of any class, or
non-cash assets (including securities) or undertake any reclassification of the
Shares into securities other than the Shares (except for reclassification upon a
consolidation or merger to which Paragraph 11 of this Schedule 5 applies) unless
(i) an adjustment is made pursuant to Paragraph 8(b) hereof or (ii) in case this
Paragraph 8 does not provide for an adjustment, other fair and equitable
arrangements are provided, to the extent necessary, to fully adjust, and to
avoid any dilution in, the rights of the Fund Partners with respect to the Share
Purchase Price under the Redemption Right. If any dilutive action described in
this Paragraph 8 is taken any time after the Share Purchase Price has been
determined, the Conversion Factor shall be adjusted in accordance therewith. If
any such dilutive action is taken prior to the closing of the purchase and sale
of the Offered Interest, an appropriate adjustment shall be made in the number
of Shares and Rights to be issued (if the Share Purchase Price is to be paid) to
the Fund Partners based on the adjustment to the Conversion Factor called for by
this Paragraph 8. Notwithstanding anything to the contrary contained in this
Paragraph 8, LXP may declare (x) dividends or distributions that are paid
exclusively in cash and (y) such other dividends or distributions that are made
in accordance with the provisions of any preferred stock existing on the date
hereof.

                           (b)      Adjustment for Dilution. The Conversion
Factor shall be subject to adjustment from time to time as hereinafter provided
and shall be expressed as a percentage, calculated to the nearest one-thousandth
of one percent (.001%):

                                    (i)      Dividends and Distributions in
         Shares; Subdivisions and Combinations. If, after determination of the
         Share Purchase Price, LXP (i) declares or pays a dividend on its
         outstanding Shares in Shares, or makes a distribution to all holders of
         its outstanding Shares in Shares, (ii) subdivides its outstanding
         Shares, or (iii) combines its outstanding Shares into a smaller number
         of Shares, then the Conversion Factor shall be adjusted by multiplying
         the Conversion Factor by a fraction, the numerator of which shall be
         the number of Shares issued and outstanding on the record date for such
         dividend, distribution,

                                   Sched. 5-5

<PAGE>

         subdivision or combination (assuming for the purposes of such
         calculation that such dividend, distribution, subdivision or
         combination has occurred as of such time), and the denominator of which
         shall be the actual number of Shares (assuming for the purposes of such
         calculation that such dividend, distribution, subdivision or
         combination has not yet occurred as of such time) issued and
         outstanding on the record date for such dividend, distribution,
         subdivision or combination. Any such adjustment to the Conversion
         Factor shall become effective immediately upon the effective date of
         such event retroactive to the record date, if any, for such event. For
         the purposes of the calculations to be made under this Paragraph 8, the
         number of Shares at any time outstanding shall not include Shares held
         in the treasury of LXP, but shall include Shares issuable in respect of
         scrip certificates issued in lieu of fractions of Shares. LXP shall not
         pay any dividend or make any distribution on Shares held in the
         treasury of LXP.

                                    (ii)     Minimum Adjustments. No adjustment
         in the Conversion Factor shall be required unless such adjustment would
         require an increase or decrease of at least one-thousandth of one
         percent (.001%) in such Conversion Factor; provided, however, that any
         adjustment which by reason of this subparagraph (b)(ii) is not required
         to be made shall be carried forward and taken into account in any
         subsequent adjustment.

                                    (iii)    Certain Discretionary Adjustments.
         In addition to the adjustments in Conversion Factor required above in
         this Paragraph 8, LXP may from time to time in its good faith,
         reasonable discretion make such increases in the Conversion Factor as
         it considers to be advisable in order to avoid or diminish any Federal
         income tax to any holders of the Shares resulting from any dividend or
         distribution of Shares or issuance of Rights or Equity Equivalents to
         purchase or subscribe for Shares or from any event treated as such for
         Federal income tax purposes.

                  9.       Fractions of Shares. No fractional Shares shall be
issued in respect of the Share Purchase Price. Instead, LXP shall pay, on the
closing date of the acquisition of the Offered Interest, a cash adjustment in
respect of any fraction of a Share that would otherwise be issuable in respect
of such Share Purchase Price. Such cash adjustment shall be in an amount equal
to the same fraction multiplied by the adjusted Share Price determined in
accordance with Paragraph 12 below, computed as of the Computation Date.

                  10.      Requests for Computation of Purchase Price. The Fund
GP shall be entitled to request, from time to time, that LXP compute the
Purchase Price then in effect by delivering written notice to LXP requesting
such computation, provided, however, that the Fund GP may not request such
computation more than thrice during any calendar year. Upon its receipt of any
such request, LXP shall compute the Purchase Price, and shall prepare and
promptly deliver to the Advisor a certificate signed by the

                                   Sched. 5-6

<PAGE>

chief financial officer or treasurer of LXP stating, to the best of such
person's knowledge, the Purchase Price and the date as of which the same was
calculated. LXP shall cooperate with the Advisor during the Advisor's review of
any such computation of the Purchase Price.

                  11.      Provisions in Case of Consolidation, Merger or Sale
of Assets. In the event of any consolidation of LXP with, or merger of LXP into,
any other Person, any merger or consolidation of another Person into LXP (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding Shares of LXP), or the transfer of LXP's
Percentage Interest, which transfer does not constitute a violation of the
Agreement or is otherwise consented to in writing by the Fund GP (collectively,
a "LXP REORGANIZATION"), the Person formed by such consolidation or resulting
from such merger or which acquires such Percentage Interest and other assets of
LXP, as the case may be (the "SURVIVING LXP PARTNER"), shall have the right and
the duty to amend this Agreement as set forth below in this Paragraph 11. The
Surviving LXP Partner and the Fund GP shall in good faith negotiate to arrive at
a new method for the calculation of the Share Purchase Price for the Offered
Interest after any such LXP Reorganization so as to approximate the existing
method for such calculation as closely as reasonably possible. Such calculation
shall take into account, among other things, the kind and amount of securities,
cash and other property that was receivable upon such LXP Reorganization by a
holder of the number of Shares and Rights in exchange for which a Percentage
Interest in the Partnership could have been acquired by LXP immediately prior to
the consummation of such LXP Reorganization. Such amendment to this Agreement
shall provide for adjustments to such method of calculation which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Schedule with respect to the Conversion Factor. If the Surviving LXP Partner and
the Fund GP cannot arrive at a new method for the calculation of the Share
Purchase Price, an accounting firm that is among the five (5) largest accounting
firms in the United States when chosen shall be selected by the Fund GP and
shall be reasonably acceptable to the Surviving LXP Partner. Such accounting
firm shall arrive at a method for the calculation of the Share Purchase Price
that satisfies the requirements of this Paragraph 11 and such method shall
replace the calculation method set forth in Paragraph 12 hereof. The Surviving
LXP Partner and the Fund GP shall have the right to present to such accounting
firm such information and argument as each shall desire, and such accounting
firm shall receive and consider such information and argument in good faith and
shall use its good faith, best efforts to comply with this Paragraph. The
Surviving LXP Partner and the Fund GP shall each be bound by the calculation
method at which such accounting firm arrived. The above provisions of this
Paragraph 11 shall similarly apply to successive LXP Reorganizations permitted
or consented to hereunder.

                  12.      Calculation of Purchase Price.

                           (a)      Calculation of Share Purchase Price.

                                   Sched. 5-7

<PAGE>

                                    (i)      The Share Purchase Price shall be
calculated as follows: multiply the Partnership's adjusted proforma funds from
operations ("AVFFO") by LXP's FFO multiple ("LFM"), both as calculated for the
preceding 12-month period, and then divide the product by the adjusted LXP share
price as defined in subparagraph 12(a)(ii) below ("ASP"). The result will then
be multiplied by the Fund Partners' aggregate Percentage Interest in the
Partnership ("FUND%") to determine the number of shares of Common Stock that
will be issued to the Fund Partners. This calculation can be represented by the
following formula, subject to subparagraphs 12(a)(ii) through subparagraph
12(a)(vii):

                                       AVFFO x LFM      x [Fund%]
                                    -------------------
                                            ASP

                                    (ii)     For the purpose of the preceding
calculation, LXP's adjusted share price ("ASP") will equal the greater of (x)
the closing price per share of Common Stock on the date of such calculation, as
quoted on the securities exchange on which Common Stock is then traded, (y)
LXP's FFO for the preceding 12-month period multiplied by 9.5, or (z) $19.00.

                                    (iii)    The calculation of the adjusted pro
forma FFO for the Partnership ("AVFFO") is intended to reflect the fact that the
Partnership may have a level of leverage that varies from that of LXP. As a
result, it is agreed that the Partnership's actual FFO for the preceding
12-month period will be adjusted to reflect (x) the interest expense that would
have been payable on the Partnership's debt if such debt were adjusted to LXP's
leverage level, and (y) the increased or decreased revenues that would have been
earned if either the Partnership could not have invested its excess debt in
properties or if the Partnership could have invested increased debt in
additional properties. Therefore, AVFFO will equal adjusted Partnership revenue
("AVR") less Partnership expenses ("VE") less adjusted Partnership interest
expense ("AVI"), all as calculated for the preceding 12-month period. This
calculation can be represented by the following formula:

                                          AVFFO = [AVR-VE-AVI]

                                    (iv)     The calculation of adjusted
Partnership interest expense ("AVI") shall be made by first calculating adjusted
Partnership leverage. This calculation can be represented by the following
formula ("AVL"), and then multiplying by the Partnership's average interest rate
over the previous 12-month period ("VLIR"). AVL will equal actual Partnership
leverage ("VL") multiplied by the ratio of LXP leverage percentage ("LL%") to
Partnership leverage percentage ("VL%"). This calculation can be represented by
the following formula:

                                         AVL = VL x [LL%/VL%]

                                   Sched. 5-8

<PAGE>

To calculate the leverage percentage of both LXP and the Partnership, each
entity's actual leverage will be divided by its capitalization, which will be
deemed to equal its EBITDA for the preceding 12 months times 10.0.

                                    (v)      The calculation of AVR will be made
by adding to or subtracting from its actual revenue ("VR"), the adjustment in
debt level ("VLA") multiplied by the Partnership's average revenue percentage it
earns on its assets ("VR%). The VLA (adjustment in debt level) is simply actual
venture leverage minus adjusted venture leverage from above (VLA = VL-AVL),
while VR% equals VR divided by the original purchase price ("VPP") for the
assets contributing to VR. These calculations can be represented by the
following formulas:

                    AVR = VR-[VLA x VR%]  where  VR%=VR/VPP

                                    (vi)     For the purposes of these
calculations, values related to the Partnership's assets and performance will be
fairly adjusted to accommodate the exclusion of Retained Qualified Properties,
as defined in Section 11.2(b)(ii) of the Agreement.

                                    (vii)    For the purposes of these
calculations, (x) LXP's properties shall be deemed to include properties owned
directly by LXP or indirectly through partnerships and entities other than the
Partnership, (y) LXP's properties shall be deemed to exclude LXP's interest in
the Partnership and (z) Shares shall be deemed to be fully diluted.

                           (b)      Cash Purchase Price. The Cash Purchase Price
shall be (i) the Fair Market Values of all of the Tendered Qualified Properties;
multiplied by (ii) the Fund Partners' aggregate Percentage Interest.

                  13.      Disposition of Retained Qualified Properties. If any
of the Partnership's Qualified Properties are excluded pursuant to Sections
11.2(b)(ii) and (iii) of the Agreement, then as soon as is commercially
reasonable, either (i) the Managing General Partner shall sell the Retained
Qualified Properties and the proceeds of sale shall be distributed pursuant to
Section 9.2(iv) of the Agreement provided that references in Section 9.2(iv) to
Percentage Interests shall mean Percentage Interests as they existed prior to
LXP's purchase of the Offered Interest), or (ii) the Partnership shall form a
Delaware limited partnership on the same terms that apply to the Partnership
(except there shall be no Redemption Right), and in which the Fund Partners and
LXP Partners shall have the same Percentage Interests as they each have in the
Partnership prior to LXP's purchase of the Offered Interest, the Retained
Qualified Properties shall be contributed to the newly formed limited
partnership, and the Partners shall continue to own indirectly the Retained
Qualified Properties through their Percentage Interests in the newly formed
limited partnership. The buy/sell provisions of Section 11.1 shall apply to

                                   Sched. 5-9

<PAGE>

the Retained Qualified Properties, whether or not the Rights Trigger Date has
occurred, and any Partner may be the Offering General Partner.

                                   Sched. 5-10

<PAGE>

                                   APPENDIX 1

                                       TO

                                   SCHEDULE 5

                               (REDEMPTION RIGHTS)

                  This Appendix 1 contains an illustrative calculation of the
Share Purchase Price using numbers rather than variables. The calculation
beginning on the next page is provided for illustration purposes only. Nothing
in this Appendix 1 is intended by the Fund Partners or LXP to be an estimate or
approximation of the value of the Share Purchase Price upon the Fund GP's
exercise of the Redemption Right.

            [ILLUSTRATIVE CALCULATION BEGINS ON THE FOLLOWING PAGE.]

                                   Sched. 5-11

<PAGE>

                                   SCHEDULE 7

                          REGISTRATION RIGHTS AGREEMENT

                    [SCHEDULE BEGINS ON THE FOLLOWING PAGE.]

                                   Sched. 7-1

<PAGE>

                                SCHEDULE 10.2(ii)

                         LXP NON-QUALIFIED JURISDICTIONS

Representatives of each of the following states have informed LXP that their
respective states do not recognize trusts as legal entities and therefore only
LXP's predecessor, Lexington Corporate Properties, Inc. is qualified to do
business in such states:

                  Alabama
                  Georgia
                  Illinois
                  North Carolina
                  Tennessee and
                  Virginia.

                                 Sched. 10.2(ii)

<PAGE>

                                SCHEDULE 10.2(ix)

                    EXCEPTIONS TO NO MATERIAL ADVERSE CHANGE

None.

                              Sched. 10.2(viii)-1
<PAGE>

                                    EXHIBIT A

                              FORM OF ANNUAL BUDGET

                     [EXHIBIT BEGINS ON THE FOLLOWING PAGE]

                                    Exh. A-1

<PAGE>

                                    EXHIBIT B

                          FORM OF MANAGEMENT AGREEMENT

                  THIS MANAGEMENT AGREEMENT (this "MANAGEMENT AGREEMENT") is
dated as of October 1, 2003 and entered into by and between Lexington/Lion
Venture LP, a Delaware limited partnership (the "PARTNERSHIP"), and Lexington
Realty Advisors, Inc., a Delaware corporation (the "ASSET MANAGER").

                  WHEREAS, the Partnership owns or will own net-leased real
estate properties in the United States of America (collectively, the "QUALIFIED
PROPERTIES"); and

                  WHEREAS, the Partnership desires to have the Asset Manager
undertake the duties and responsibilities hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Partnership and the
Asset Manager agree as follows:

                  1.       Definitions. Unless otherwise defined herein,
capitalized terms used in this Management Agreement shall have the meanings
ascribed to such terms in that certain Limited Partnership Agreement of
Lexington/Lion Venture LP (the "PARTNERSHIP") dated as of even date herewith
among Lexington Corporate Properties Trust, a Maryland real estate investment
trust ("LXP"), as a limited partner of the Partnership, LXP GP, LLC, a Delaware
limited liability company ("LXP GP", and together with LXP, collectively, the
"LXP PARTNERS"), as a general partner of the Partnership, CLPF-LXP/LV, L.P.
Delaware limited partnership (the "FUND"), as a limited partner of the
Partnership, and CLPF-LXP/Lion Venture GP, LLC, a Delaware limited liability
company (the "FUND GP", and together with the Fund, collectively, the "FUND
PARTNERS"), as a general partner of the Partnership (as such limited partnership
agreement may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof, the "PARTNERSHIP AGREEMENT").

                  2.       Obligations of the Asset Manager. The Asset Manager
shall perform on behalf of the Partnership those duties and responsibilities of
the Managing General Partner in respect of the evaluation of Proposed Qualified
Properties and the acquisition of Approved Qualified Properties as contemplated
by Section 3.6 of the Partnership Agreement, and in respect of the management of
the Qualified Properties that may be delegated to the Asset Manager pursuant to
Section 3.1(b) of the Partnership Agreement. With respect to the management of
the Qualified Properties, the Asset Manager shall perform the duties and
responsibilities described in Appendix 1 attached hereto and made a part hereof.
Additionally, the Asset Manager shall prepare or cause to be prepared reports
and statements as is, and in the manner, required by the Partnership Agreement.
The Asset Manager shall maintain appropriate books of account and records
relating to services performed pursuant hereto, which books of account and
records shall

                                    Exh. B-1

<PAGE>


be available for inspection by representatives of the Partnership upon
reasonable notice during normal business hours, and from time to time or at any
time requested by the Partnership, make reports to the Partnership of the Asset
Manager's performance of the foregoing services. In performing the foregoing
services, the Asset Manager shall not, and shall have no power or authority to,
(i) bind the Partnership, or to enter into any contract or other agreement in
the name of or on behalf of the Partnership, unless specifically authorized in
writing to do so by the Partnership, (ii) amend, cancel or alter any of the
organizational documents of the Partnership, or (iii) do any act not authorized
pursuant to this Management Agreement, unless specifically authorized to do so
in writing by the Partnership or specifically authorized to do so by the
Partnership Agreement. Any and all approvals required from the Partnership
pursuant to this Management Agreement may be given or withheld by the
Partnership in its absolute and sole discretion.

                  3.       No Partnership or Joint Venture. The Partnership and
the Asset Manager are not partners or joint venturers with each other and the
terms of this Management Agreement shall not be construed so as to make them
such partners or joint venturers or impose any liability as such on either of
them.

                  4.       Employees of Asset Manager. All persons engaged in
the performance of the services to be performed by the Asset Manager hereunder
shall be employees of LXP or LXP GP; provided, however, that, employees and
officers of LXP and LXP GP may also be employees and officers of the
Partnership. All of the Asset Manager's employees shall be covered by workers'
compensation insurance in the manner required by law.

                  5.       Limitation on the Asset Manager's Liability.

                           (a)      Except as provided in Section 5(b) below,
the Asset Manager and its directors, officers and employees shall not be liable,
responsible or accountable in damages or otherwise to the Partnership or either
Partner for (a) any loss or liability arising out of any act or omission by the
Asset Manager so long as any such act or omission did not constitute (i) a
breach of this Management Agreement or of the Partnership Agreement which breach
had or has a material adverse effect on the Partnership and, if capable of cure,
is not cured within fifteen (15) days after notice thereof is delivered to the
Asset Manager by the Partnership, (ii) gross negligence or willful misconduct or
(iii) fraud or bad faith on the part of the Asset Manager or (b) any acts or
omissions by third parties selected by the Asset Manager in good faith and with
reasonable care to perform services for the Partnership.

                           (b)      Notwithstanding the limitation contained in
Section 5(a) above, the Asset Manager shall be liable, responsible and
accountable in damages or otherwise to the Partnership and the Fund Partners for
any act or omission on behalf of the Partnership and within the scope of
authority conferred on the Asset Manager (i) which act or omission was negligent
(including any negligent misrepresentation) and

                                    Exh. B-2

<PAGE>

violated any law, statute, regulation or rule relating to Shares or any other
security of LXP or (ii) to the extent the Partnership or any Fund Partner is
charged with liability for, or suffers or incurs loss, liability, cost or
expense (including reasonable attorneys' fees) as a result of, such act or
omission and such act or omission was negligent and related to Shares or such
other security of LXP.

                  6.       Partnership's Professional Services. The Partnership
may independently retain legal counsel and accountants to provide such legal and
accounting advice and services as the Partnership shall deem necessary or
appropriate.

                  7.       Expenses of the Asset Manager and the Partnership.

                           (a)      The Asset Manager shall pay, without
reimbursement by the Partnership (i) the salaries of all of its officers and
regular employees and all employment expenses related thereto, (ii) general
overhead expenses, (iii) record-keeping expenses, (iv) the costs of the office
space and facilities which it requires, (v) the costs of such office space and
facilities as the Partnership reasonably requires, (vi) all out of pocket costs
and expenses incurred in connection with the management of the Qualified
Properties and the Partnership (other than reasonable and customary costs and
expenses of Third Parties retained in connection with the management of the
Qualified Properties and the Partnership) and (vii) costs and expenses relating
to Acquisition Activities as set forth in and limited by Section 3.6(f) of the
Agreement.

                           (b)      The Asset Manager shall either pay directly
from a Partnership account or pay from its own account and be reimbursed by the
Partnership for the following Partnership costs and expenses that are incurred
by the Partnership or by the Asset Manager in the performance of its duties
under this Management Agreement or the Partnership Agreement:

                                    (i)      Permitted Expenses;

                                    (ii)     all reasonable and customary costs
         and expenses relating to Third Parties retained in connection with a
         Proposed Qualified Property or an Approved Qualified Property as
         provided in Section 3.6(f) of the Partnership Agreement provided, that
         if for any reason the Asset Manager, or any LXP Affiliated Party
         (instead of the Partnership or an SP Subsidiary) acquires title to any
         Proposed Qualified Property or Approved Qualified Property, the Asset
         Manager shall pay all of the costs and expenses incurred or to be
         incurred in connection with such Proposed Qualified Property or
         Approved Qualified Property.

The Asset Manager shall not pay or be reimbursed by the Partnership for any
other cost or expense.

                           (c)      Except as expressly otherwise provided in
this Management Agreement or the Partnership Agreement, the Partnership shall
directly pay

                                    Exh. B-3

<PAGE>


all of its own expenses, and without limiting the generality of the foregoing,
it is specifically agreed that the following expenses shall be borne directly by
the Partnership and not be paid by the Asset Manager:

                                    (i)      interest, principal or any other
         cost of money borrowed by the Partnership;

                                    (ii)     fees and expenses paid to
         independent contractors, appraisers, consultants and other agents
         retained by or on behalf of the Partnership and expenses directly
         connected with the financing, refinancing and disposition of real
         estate interests or other property (including insurance premiums, legal
         services, brokerage and sales commissions, maintenance, repair and
         improvement costs and expenses related to the Qualified Properties);
         and

                                    (iii)    insurance as required by the
         Partnership.

                  8.       Indemnification by the Partnership. The Partnership
shall indemnify, defend and hold harmless the Asset Manager by reason of any act
or omission or alleged act or omission arising out of the Asset Manager's
activities as the Asset Manager on behalf of the Partnership, against personal
liability, claims, losses, damages and expenses for which the Asset Manager has
not otherwise been reimbursed by insurance proceeds or otherwise (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred by the Asset Manager in connection with such action, suit or
proceeding and any appeal therefrom, unless the Asset Manager (A) acted
fraudulently, in bad faith or with gross negligence or willful misconduct or (B)
by such act or failure to act breached any covenant contained in this Management
Agreement, which breach had or has a material adverse effect on the Partnership
or either Partner and, if capable of cure, is not cured within fifteen (15) days
after notice thereof from the Partnership. Any indemnity by the Partnership
under this Management Agreement shall be provided out of, and to the extent of,
Partnership revenues and assets only, and no Partner shall have any personal
liability on account thereof. The indemnification provided under this Section 8
shall (x) be in addition to, and shall not limit or diminish, the coverage of
the Asset Manager under any insurance maintained by the Partnership and (y)
apply to any legal action, suit or proceeding commenced by a Partner or in the
right of a Partner or the Partnership. The indemnification provided under this
Section 8 shall be a contract right and shall include the right to be reimbursed
for reasonable expenses incurred by the Asset Manager within thirty (30) days
after such expenses are incurred.

                  9.       Terms and Termination. This Management Agreement
shall remain in force until terminated in accordance herewith. At the sole
option of the Partnership, exercisable in the Partnership's sole and arbitrary
discretion with or without Cause, this Management Agreement may be terminated at
any time and for any reason immediately upon notice of termination from the
Partnership to the Asset Manager. This Management Agreement shall automatically
expire upon the completion of dissolution or

                                    Exh. B-4

<PAGE>

winding up of the Partnership pursuant to Section 9.2 of the Partnership
Agreement or the removal or resignation of LXP GP as Managing General Partner.
This Management Agreement shall also terminate upon any of the following:

                           (a)      The Asset Manager shall be adjudged bankrupt
or insolvent by a court of competent jurisdiction or an order shall be made by a
court of competent jurisdiction for the appointment of a receiver, liquidator or
trustee of the Asset Manager or of all or substantially all of its property by
reason of the foregoing, or approving any petition filed against the Asset
Manager for reorganization, and such adjudication or order shall remain in force
and unstayed for a period of 30 days.

                           (b)      The Asset Manager shall institute
proceedings for voluntary bankruptcy or shall file a petition seeking
reorganization under the Federal Bankruptcy Code, for relief under any law for
relief of debtors, or shall consent to the appointment of a receiver for itself
or for all or substantially all of its property, or shall make a general
assignment for the benefit of its creditors, or shall admit in writing its
inability to pay its debts generally as they become due.

                  10.      Action Upon Termination. After the expiration or
termination of this Management Agreement, the Asset Manager shall:

                           (a)      Promptly pay to the Partnership or any
person legally entitled thereto all monies collected and held for the account of
the Partnership pursuant to this Management Agreement, after deducting any
compensation and reimbursement for its expenses which it is then entitled to
receive pursuant to the terms of this Management Agreement.

                           (b)      Within 90 days deliver to the Partnership a
full account, including a statement showing all amounts collected by the Asset
Manager and a statement of all monies disbursed by it, covering the period
following the date of the last accounting furnished to the Partnership.

                           (c)      Within ten (10) days deliver to the
Partnership all property and documents of the Partnership then in the custody of
the Asset Manager.

Upon termination of this Management Agreement, the Asset Manager shall be
entitled to receive payment for any expenses and fees (including without
limitation the Management Fee which shall be prorated on a daily basis) as to
which at the time of termination it has not yet received payment or
reimbursement, as applicable, pursuant to Section 7 and Section 11 hereof, less
any damages to the Partnership caused by the Asset Manager.

                  11.      Management Fee. The Partnership shall pay to the
Asset Manager an annual Management Fee equal to the Fund Partners' aggregate
Percentage Interest multiplied by two and one-half percent (2.5%) of Net Rents,
payable monthly. Such fee shall be calculated monthly, based on Net Rents
received by the Partnership for such

                                    Exh. B-5

<PAGE>

month, and adjusted as provided in this Section 11. Within thirty (30) days of
the Partnership's receipt of the annual reports described in Section 4.3 of the
Partnership Agreement for a fiscal year, the Asset Manager shall provide to the
Partnership a written statement of reconciliation setting forth (a) the Net
Rents for such fiscal year and the Management Fee payable to the Asset Manager
in connection therewith, pursuant to this Management Agreement, (b) the
Management Fee already paid by the Partnership to the Asset Manager during such
fiscal year, and (c) either the amount owed to the Asset Manager by the
Partnership (which shall be the excess, if any, of the Management Fee payable to
the Asset Manager for such fiscal year pursuant to this Agreement over the
Management Fee actually paid by the Partnership to the Asset Manager for such
fiscal year) or the amount owed to the Partnership by the Asset Manager (which
shall be the excess, if any, of the Management Fee actually paid by the
Partnership to the Asset Manager for such fiscal year over the Management Fee
payable to the Asset Manager for such fiscal year pursuant to this Agreement).
The Asset Manager or the Partnership, as the case may be, shall pay to the other
the amount owed pursuant to clause (c) above within five (5) Business Days of
the receipt by the Advisor and the Fund GP of the written statement of
reconciliation described in this Section 11. In addition, in those cases in
which a tenant of any Qualified Property requests that the Partnership provide
property management services at such tenant's expense, Managing General Partner
shall be entitled to an oversight fee for such property management services for
the tenant of such Qualified Property equal to one half of one percent (0.50%)
of the net rent from such Qualified Property, payable by the tenant of such
Qualified Property.

                  12.      Assignment. The Asset Manager may not assign or
delegate any of its rights or obligations hereunder.

                  13.      Notices. Unless otherwise specifically provided
herein, any notice or other communication required herein shall be given in
accordance with the Partnership Agreement.

                  14.      Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Management Agreement shall in any
event be effective without the written concurrence of the Partnership. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.

                  15.      Governing Law. THIS MANAGEMENT AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

                                    Exh. B-6

<PAGE>

                  16.      Entire Agreement. This Management Agreement embodies
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior agreements, written and oral, relating to the subject
matter hereof.

                  17.      Severability. In case any provision in or obligation
under this Management Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

                  18.      No Waiver, etc. No waiver by the Partnership of any
default hereunder shall be effective unless such waiver is in writing and
executed by the Partnership nor shall any such written waiver operate as a
waiver of any other default or of the same default on a subsequent occasion.
Furthermore, the Partnership shall not, by any act, delay, omission or
otherwise, be deemed to have waived any of its rights, privileges and/or
remedies hereunder, and the failure or forbearance of the Partnership on one
occasion shall not prejudice or be deemed or considered to have prejudiced its
right to demand such compliance on any other occasion.

                  19.      No Third Party Beneficiary. The Asset Manager is not
a third party beneficiary of the Partnership Agreement and shall have no rights
or remedies thereunder, and the parties to the Partnership Agreement can amend,
modify or terminate the Partnership Agreement at any time without the Asset
Manager's consent and without any liability to the Asset Manager.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

                                    Exh. B-7

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Management Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.

PARTNERSHIP                        LEXINGTON/LION VENTURE LP a Delaware
                                   limited partnership

                                   By: LXP GP, LLC, a Delaware limited liability
                                       company, the managing member

                                       By: _____________________________________
                                           Name:
                                           Its:

ASSET MANAGER                      LEXINGTON REALTY ADVISORS, INC.

                                   By: _________________________________________
                                       Name:
                                       Its:

                                    Exh. B-8

<PAGE>

                                   APPENDIX 1
                                       TO
                                    EXHIBIT B
                         (FORM OF MANAGEMENT AGREEMENT)

                      PROPERTY MANAGEMENT RESPONSIBILITIES

         The Asset Manager shall perform its duties and obligations under
Section 2 of the Management Agreement with respect to the management of the
Qualified Properties in accordance with the following standards:

                  1.       Management of the Qualified Properties. Asset Manager
shall devote its commercially reasonable efforts, consistent with first class
professional management, to manage the Qualified Properties, and shall perform
its duties with respect thereto under the Management Agreement in accordance
with the Partnership Agreement and Annual Plan and in a reasonable, diligent and
careful manner so as to manage and supervise the operation, maintenance, leasing
and servicing of each Qualified Property in a manner that is comparable to
similar properties in the market area in which such Qualified Property is
located. The services of Asset Manager hereunder are to be of a scope and
quality not less than those generally performed by professional managers of
other similarly situated properties in the market area in which each Qualified
Property is located. Asset Manager shall make available to the Partnership the
full benefit of the judgment, experience and advice of the members of Asset
Manager's organization and staff with respect to the policies to be pursued by
the Partnership and will perform such services as may be requested by the
Partnership within the scope of the Management Agreement in operating,
maintaining, leasing, and servicing each Qualified Property.

                  2.       Specific Duties of Asset Manager. Without limiting
the duties and obligations of Asset Manager under any other provisions of the
Management Agreement, Asset Manager shall have the following duties and perform
the following services with respect to management of the Qualified Properties:

                           2.1      Repairs and Maintenance. In accordance with
and subject to the Partnership Agreement and the Annual Plan, Asset Manager
shall cause to be made, or ensure that the tenant makes, all repairs and shall
cause to be performed, or ensure that the tenant performs, all maintenance on
the buildings, appurtenances and grounds of each Qualified Property as are
required to maintain each Qualified Property in such condition and repair (and
in compliance with applicable codes) that is comparable to similarly situated
properties in the market area in which such Qualified Property is located, and
such other repairs as may be required to be made under the leases governing each
Qualified Property. Asset Manager shall to the extent it deems necessary arrange
for periodic inspections of the Qualified Properties by independent contractors.

                                    Exh. B-9

<PAGE>

                           2.2      Leasing Supervision Activities.

                           (a)      Leasing Supervision. Asset Manager shall
supervise all leasing activities, for the purpose of leasing the available space
in the Qualified Properties to tenants upon such terms and conditions as shall
be consistent with the Partnership Agreement and the Annual Plan.

                           (b)      Generally. In the performance of Asset
Manager's duties under this Section 2.2, Asset Manager shall (i) develop and
coordinate advertising, marketing and leasing plans for space at each Qualified
Property that is vacant or anticipated to become vacant; (ii) cooperate and
communicate with leasing specialists, consultants and third-party brokers in the
market, and solicit their assistance with respect to new tenant procurement; and
(iii) notify the Partnership in writing of all offers for tenancy at each
Qualified Property which Asset Manager believes are made in good faith,
including the identification and fee schedules of procuring brokers, if any.

                           (c)      Negotiation of Leases. Asset Manager shall
negotiate all tenant leases, extensions, expansions and other amendments and
related documentation on the Partnership's behalf in accordance with the
Partnership Agreement and the Annual Plan. All such documentation shall be
prepared at the Partnership's expense by counsel acceptable to or designated by
the Partnership, and shall be executed by the Partnership. The terms of all such
documentation are to be approved by the Partnership pursuant to such reasonable
procedures as may be requested by the Partnership from time to time.
Notwithstanding the foregoing, (x) Asset Manager shall not, for any reason, have
the power or authority to execute any such documentation on behalf of the
Partnership or otherwise bind the Partnership without the Partnership's prior
written consent, and (y) the Partnership reserves the right to deal with any
prospective tenant to procure any such lease, extension, expansion or other
amendment or related documentation.

                           (d)      Third Party Brokers. Asset Manager shall
encourage third-party real estate brokers to secure tenants for the Qualified
Properties, and periodically notify such brokers of the spaces within the
Qualified Properties that are available for lease.

                           (e)      Compensation for Third-Party Brokers. Asset
Manager shall negotiate and enter into on behalf of the Partnership a commission
agreement with third party brokers providing for a leasing commission to be paid
at prevailing market rates, subject to prevailing market terms and conditions.
Such leasing commission shall be paid by the Partnership.

                           2.3      Rents, Billings and Collections. Asset
Manager shall be responsible for the monthly billing of rents and all other
charges due from tenants to the Partnership with respect to each Qualified
Property. Asset Manager shall use its commercially reasonable efforts to collect
all such rents and other charges when due. Asset Manager shall notify the
Partnership and the Advisor of all tenant defaults as soon

                                    Exh. B-10

<PAGE>

as reasonably practicable after occurrence, and shall provide the Partnership
and the Advisor with Asset Manager's best judgment of the appropriate course of
action in remedying such tenant defaults.

                           2.4      Obligations Under Leases. Asset Manager
shall supervise and use its commercially reasonable efforts to cause the
Partnership to perform and comply, duly and punctually, with all of the
obligations required to be performed or complied with by the Partnership under
all leases and all laws, statutes, ordinances, rules, permits and certificates
of occupancy relating to the operation, leasing, maintenance and servicing of
the Qualified Properties, including, without limitation, the timely payment by
the Partnership of all sums required to be paid thereunder.

                           2.5      The Partnership's Insurance. If requested by
the Partnership, the Asset Manager shall cause to be placed and kept in force
all forms of insurance required by the Partnership Agreement and the Annual Plan
or required by any mortgage, deed of trust or other security agreement covering
all or any part of any Qualified Property. The Asset Manager is to be named as
an additional insured on the general liability policies in its capacity as
managing agent. All such insurance coverage shall be placed through insurance
companies and brokers selected or approved by the Partnership, with limits,
values and deductibles established by the Partnership and with such beneficial
interests appearing therein as shall be acceptable to the Partnership and
otherwise be in conformity with the requirements of the Partnership Agreement
and the Annual Plan. Should the Partnership elect to place such insurance
coverage directly, the Asset Manager shall be named as an additional insured on
the general liability policies in its capacity as managing agent and the
Partnership will provide the Asset Manager with a certificate of insurance
evidencing such coverage. If requested to do so by the Partnership, the Asset
Manager shall duly and punctually pay on behalf of the Partnership with funds
provided by the Partnership all premiums with respect thereto, prior to the time
the policy would lapse due to nonpayment. If any lease requires that a tenant
maintain any insurance coverage, the Asset Manager shall use its commercially
reasonable efforts to obtain insurance certificates annually, or more
frequently, as required pursuant to the applicable leases, from each such tenant
and review the certificates for compliance with the lease terms. If any lease
requires the Partnership to provide insurance certificates to tenants
thereunder, the Asset Manager shall obtain such insurance certificates from the
Partnership, review the certificates for compliance with the lease terms, and
provide a copy thereof to tenants in accordance with their respective leases.
The Asset Manager shall promptly investigate and make a full and timely written
report to the insurance broker, with a copy to the Partnership, as to all
accidents, claims or damage of which the Asset Manager has knowledge relating to
the operation and maintenance of each Qualified Property, any damage or
destruction to each Qualified Property, and the estimated cost of repair
thereof, and shall prepare any and all reports required by any insurance company
in connection therewith. All such reports shall be filed timely with the
insurance broker as required under the terms of the insurance policy involved.
The Asset Manager shall have no right to settle, compromise or otherwise


                                    Exh. B-11

<PAGE>

dispose of any claims, demands or liabilities, whether or not covered by
insurance, without the prior written consent of the Partnership, which consent
may be withheld by the Partnership in its sole discretion.

                           2.6      Asset Manager's Insurance. The Asset Manager
or the Managing General Partner or LXP will obtain and maintain on the Asset
Manager's behalf, at the Asset Manager's or the Managing General Partner's or
LXP's expense, the following insurance:

                           (a)      Commercial general liability on an
occurrence form for bodily injury and property damage with limits of One Million
Dollars ($1,000,000) combined single limit each occurrence and Two Million
Dollars ($2,000,000) from the aggregate of all occurrences within each policy
year, including but not limited to Premises-Operation, Products/Completed
Operations, Hazard and Contractual Coverage (including coverage for the
indemnity clause provided under the Management Agreement) for claims arising out
of actions beyond the scope of Asset Manager's duties or authority under the
Management Agreement.

                           (b)      Comprehensive form automobile liability
covering hired and non-owned vehicles with limits of One Million Dollars
($1,000,000) combined single limit per occurrence.

                           (c)      Employer's liability insurance in an amount
not less than Five Hundred Thousand Dollars ($500,000).

                           (d)      Excess liability (umbrella) insurance on the
above with limits of Two Million Dollars ($2,000,000).

                           (e)      Workers' compensation insurance in
accordance with the laws of the state with jurisdiction.

                           (f)      Either (x) blanket crime coverage protecting
the Asset Manager against fraudulent or dishonest acts of its employees, whether
acting alone or with others, with limits of liability of not less than One
Million Dollars ($1,000,000) per occurrence (any loss within any deductible
shall be borne by the Asset Manager) or (y) a fidelity or financial institution
bond in an amount no less than One Million Dollars ($1,000,000.00) bonding the
employees of the Asset Manager who handle or who are responsible for funds
belonging to the Partnership.

                           (g)      Professional liability insurance covering
the activities of the Asset Manager written on a "claim made" basis with limits
of at least One Million Dollars ($1,000,000). Any loss within any deductible
shall be borne by the Asset Manager. Coverage shall be maintained in effect
during the period of the Management Agreement and for not less than two (2)
years after termination of the Management Agreement.

                                    Exh. B-12

<PAGE>

                  Each of the above policies will contain provisions giving the
Partnership and the Advisor at least thirty (30) days' prior written notice of
cancellation of coverage. The policies referred to in items (a) and (d) above
will name the Partnership and the Advisor as additional insureds, and the
policies referred to in item (f) above will name the Partnership as loss payee.
The Asset Manager will provide the Partnership and the Advisor with evidence of
all required coverages.

                  Such insurance shall be placed with reputable insurance
companies licensed or authorized to do business in the states in which the
Qualified Properties are located with a minimum Best's rating of AX.

                  The Partnership and the Asset Manager agree that the insurance
policies summarized on Appendix 2 to this Exhibit B (Form of Management
Agreement) are consistent with the standards listed above with respect to the
types and amounts of insurance the Asset Manager is required to obtain.

                           2.7      Compliance with Insurance Policies;
Compliance by Tenants with Tenant Leases. Asset Manager shall use its
commercially reasonable efforts to prevent the use of each Qualified Property
for any purpose that might void any policy of insurance held by the Partnership,
or any tenant at each Qualified Property, that might render any loss insured
thereunder uncollectible or that would be in violation of any governmental
restriction or the provisions of any lease. Asset Manager shall use its
commercially reasonable efforts to secure full compliance by the tenants with
the terms and conditions of their respective leases, including, but not limited
to, periodic maintenance of all building systems, including individual tenant's
heating, ventilation and air conditioning systems.

                           2.8      Intentionally Omitted.

                           2.9      Tenant Relations. Asset Manager will
maintain reasonable contact with the tenants of the Qualified Properties and
keep the Partnership and the Advisor informed of the tenants' concerns,
expansion or contraction plans, changes in occupancy or use, and other matters
that could have a material bearing upon the leasing, operation or ownership of
each Qualified Property.

                           2.10     Compliance with Laws. Asset Manager shall
use its commercially reasonable efforts to determine such action that may be
necessary, inform the Partnership of action as may be necessary and, when
authorized by the Partnership, take such action that may be necessary to cause
the Qualified Properties to comply with all current and future laws, rules,
regulations, or ordinances affecting the ownership, use or operation of each
Qualified Property; provided, however, that Asset Manager need not obtain the
prior authorization of the Partnership to take action in case of an emergency or
any threat to life, safety or property, so long as Asset Manager shall give the
Partnership prompt notice of any such action taken.

                                    Exh. B-13

<PAGE>

                           2.11     Cooperation. Should any claims, demands,
suits, or other legal proceedings be made or instituted by any third party
against the Partnership that arise out of any matters relating to a Qualified
Property or the Management Agreement or Asset Manager's performance hereunder,
Asset Manager shall promptly give the Partnership all pertinent information and
assistance in the defense or other disposition thereof; provided, however, in
the event the foregoing requires Asset Manager to incur any expenses beyond the
ordinary cost of performing its obligations under the Management Agreement, the
Partnership shall pay for any such out-of-pocket costs of which the Partnership
has been advised in writing.

                           2.12     Notice of Complaints, Violations and Fire
Damage. Asset Manager shall respond to complaints and requests from tenants
within thirty (30) days of Asset Manager's having received any material
complaint made by a tenant or any alleged landlord default under any lease.
Additionally, Asset Manager shall notify the Partnership and Advisor as soon as
is reasonably practical (such notice to be accompanied by copies of supporting
documentation) of each of the following: any notice of any governmental
requirements received by Asset Manager; upon becoming aware of any material
defect in a Qualified Property; and upon becoming aware of any fire or other
material damage to any Qualified Property. In the case of any fire or other
material damage to a Qualified Property, Asset Manager shall also notify the
Partnership's insurance broker telephonically, so that an insurance adjuster has
an opportunity to view the damage before repairs are started, and complete
customary loss reports in connection with fire or other damage to a Qualified
Property.

                           2.13     Notice of Damages and Suits; Settlement of
Claims. Asset Manager shall notify the Partnership's general liability insurance
broker and the Partnership as soon as is reasonably practical of the occurrence
of any bodily injury or property damage occurring to or claimed by any tenant or
third party on or with respect to a Qualified Property, and promptly forward to
the broker, with copies to the Partnership and the Advisor, any summons,
subpoena or other like legal documents served upon Asset Manager relating to
actual or alleged potential liability of the Partnership, Asset Manager or a
Qualified Property. Notwithstanding the foregoing, Asset Manager shall not be
authorized to accept service of process on behalf of the Partnership, unless
such authority is otherwise imputed by law. The Asset Manager shall have no
right to settle, compromise or otherwise dispose of any claims, demands, or
liabilities, whether or not covered by insurance, without the prior written
consent of the Partnership, which consent may be withheld by the Partnership in
its sole discretion.

                           2.14     Enforcement of Leases. The Asset Manager
shall enforce compliance by tenants with each and all of the terms and
provisions of the leases, provided, however, that Asset Manager shall not,
without the prior written consent of the Partnership in each instance, which
consent may be withheld by the Partnership in its sole discretion, institute
legal proceedings in the name of the Partnership to enforce leases, collect
income and rent or dispossess tenants or others occupying a Qualified Property
or

                                    Exh. B-14
<PAGE>

any portion thereof, or terminate any lease, lock out a tenant, or engage
counsel or institute any proceedings for recovery of possession of a Qualified
Property if any such action by the Asset Manager would constitute a Major
Decision.

                           2.15     Environmental.

                           (a)      Notice. The Asset Manager shall promptly
advise the Partnership and the Advisor in writing of any evidence of
non-compliance with any Environmental Laws, which Asset Manager is aware of,
together with a written report of the nature and of the non-compliance and the
potential threat, if any, to the health and safety of persons and/or damage to
each Qualified Property or the property adjacent to or surrounding each
Qualified Property. The Partnership acknowledges that (A) Asset Manager is not
an environmental engineer and does not have any special expertise in the
Environmental Laws, (B) Asset Manager's duties under this Section 2.15 are
limited to the quality of reasonable commercial care and diligence customarily
applied to property managers of triple net leased properties.

                           (b)      Rights; Limitations. Without limiting any
other provision contained herein and subject to Section 2.14, Asset Manager
shall use commercially reasonable efforts to enforce the Partnership's rights
under the leases insofar as any tenant's compliance with Environmental Laws are
concerned; provided, however, Asset Manager shall hold in confidence all
information bearing on Environmental Laws and hazardous materials, except to the
extent expressly instructed otherwise in writing by the Partnership, or except
to the extent necessary to protect against the imminent threat to the life and
safety of persons and/or damage to a Qualified Property or damage to the
property adjacent to or surrounding such Qualified Property, or except to the
extent such disclosure is required by Environmental Laws, other laws, or court
order.

                           2.16     Monitoring of Tenant Improvements. The Asset
Manager shall monitor the construction and installation of material tenant
improvements undertaken by the tenant under any lease and act as the
Partnership's liaison with such tenant's construction managers and contractors
(or other supervisors of a tenant's build-out).

                                    Exh. B-15

<PAGE>

                                APPENDIX 2 TO THE
                    EXHIBIT B (FORM OF MANAGEMENT AGREEMENT)

                        SUMMARY OF LXP INSURANCE POLICIES

                     [APPENDIX BEGINS ON THE FOLLOWING PAGE]

                                    Exh. B-16

<PAGE>

                                    EXHIBIT C

                         FORM OF CONTRIBUTION AGREEMENT

<PAGE>

                                    Exh. B-2