<PAGE>
                                                                    EXHIBIT 10.1

                      THE TC OPERATING LIMITED PARTNERSHIP

           THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

      THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is
entered into effective as of the 4th day of August, 2003 (except as to the "LLC
Contributions" defined and described in the Recitals hereof and Section 3.3(c),
as to which the effective date shall be September 26, 2003), by and among THE
TOWN AND COUNTRY TRUST, a Maryland real estate investment trust ("TCT"); THE
TOWN AND COUNTRY ORIOLE CORPORATION ("TC-Oriole"), THE TOWN AND COUNTRY HOLDING
CORPORATION ("REIT Sub"), and THE TOWN AND COUNTRY HOLDING CORPORATION II ("REIT
Sub II"), each a Delaware corporation and each a wholly-owned subsidiary of TCT;
THE BAL-PENN COMPANY, an Ohio limited partnership ("Bal-Penn"); HARVEY SCHULWEIS
("Schulweis"); and PAUL E. TAYLOR, JR. ("Taylor"). TCT, TC-Oriole, REIT Sub and
REIT Sub II may be referred to individually as a "General Partner" and
collectively as the "General Partners". Bal-Penn, Schulweis, Taylor, and any
substitute or other Limited Partner admitted to the Partnership in accordance
with Article VIII may be referred to individually as a "Limited Partner" and
collectively as the "Limited Partners". The Limited Partners and the General
Partners may be referred to individually as a "Partner" and collectively as the
"Partners".

                                R E C I T A L S:

      TCT, TC-Oriole, Bal-Penn and Oriole formed a Maryland limited partnership
under the name and style of The TC Operating Limited Partnership (the
"Partnership") upon the filing of a certificate of limited partnership with the
Maryland Department of Assessments and Taxation on August 18, 1993 and the
execution of an Agreement of Limited Partnership of the Partnership dated as of
August 18, 1993 (the "1993 Agreement"). Oriole assigned its interest in the
Partnership to TC-Oriole, Schulweis and Taylor on August 23, 1993.

      The Partners amended the 1993 Agreement effective as of January 25, 1995
and entered into an Amended and Restated Agreement of Limited Partnership
effective as of such date, and further amended and restated the Amended and
Restated Agreement of Limited Partnership effective as of January 31, 2001 (the
1993 Agreement, as so amended and restated, the "Prior Agreement").

      The Partners desire to amend the provisions of the Prior Agreement to
provide for and reflect the contribution of additional capital to the
Partnership by TCT in exchange for Convertible Preferred Partnership Interests,
and to make certain corresponding changes to the allocation provisions of the
Prior Agreement, as further described in Section 3.5 of this Agreement. Pursuant
to Section 12.4 of the Prior Agreement, this Third Amended and Restated
Agreement of Limited Partnership has been approved by the General Partners and a
majority in interest of the Limited Partners.

      The Partners further wish to amend the provisions of the Prior Agreement
to provide for and reflect:

      (i) the formation by REIT Sub and REIT Sub II of wholly-owned subsidiaries
in the form of Delaware limited liability companies to be known as The Town and
Country Holding Company, LLC ("Holding") and The Town and Country Holding
Company II, LLC ("Holding II");

<PAGE>

      (ii) the contribution to Holding by REIT Sub of REIT Sub's 1% general
partnership interest in The TC Property Company, a Maryland general partnership
(the "Property Company"), and in each of the Original Companies, the New
Companies, The TC-Christina Mill Company, The TC-Stonegate Company, and The
TC-Carlyle Station Company (all such companies, collectively, the "First PC
Companies");

      (iii) the contribution to the Partnership by REIT Sub of REIT Sub's 100%
membership interest in Holding, and the issuance to REIT Sub in exchange
therefor of a general partnership interest in the Partnership;

      (iv) the contribution to Holding II by REIT Sub II of REIT Sub II's 1%
general partnership interest in The TC Property Company II, a Maryland general
partnership ("Property Company II"), and in each of the seven Maryland general
partnerships listed on Exhibit C hereto (all such companies, collectively, the
"PC II Companies"); and

      (v) the contribution to the Partnership by REIT Sub II of REIT Sub II's
100% membership interest in Holding II, and the issuance to REIT Sub II in
exchange therefor of a general partnership interest in the Partnership.

The foregoing series of transactions is referred to collectively herein as
the "LLC Contributions".

      Therefore, the undersigned, being the general partners and a majority in
interest of the limited partners of the Partnership, wish to amend and restate
the Prior Agreement and to supersede in its entirety the Prior Agreement.

                              A G R E E M E N T S:

      In consideration of the foregoing and the mutual promises herein
contained, the undersigned do hereby agree that the Prior Agreement is amended
and restated to read in its entirety as follows:

                                    ARTICLE I

                                   Definitions

      Certain capitalized terms used herein and in the Exhibits hereto are
defined in Exhibit A hereto. All other capitalized terms used herein or in any
Exhibit shall have the meanings ascribed to them in other parts hereof.

                                   ARTICLE II

                                  Organization

      Section 2.1 Formation. The Partnership was formed as a Maryland limited
partnership upon the filing of a certificate of limited partnership with the
office of the Maryland State Department of Assessments and Taxation on August
18, 1993 pursuant to the provisions of the Act. This Agreement amends, restates
and supersedes in its entirety the Prior Agreement, and the Partnership, in
accordance with the terms and conditions contained herein, shall continue
without interruption the business and operations previously conducted by the
Partnership. The


                                     - 2 -
<PAGE>

Partnership has been organized under, and has and shall continue to be operated
subject to, the Act.

      Section 2.2 Name. The name of the Partnership is "The TC Operating Limited
Partnership".

      Section 2.3 Purpose and Powers. The Partnership may carry out any business
permitted by the Act. Without limiting the foregoing, the Partnership has the
power and authority: (a) to receive ninety-nine percent (99%) of the general
partnership interests in the Original Companies (the "Interests") as capital
contributions from the Limited Partners; (b) to contribute the Interests to the
Property Company; (c) to act as a general partner in the Property Company; (d)
to participate as a partner in partnerships, or as the holder of an equity
interest in other entities, that acquire, hold or dispose, or otherwise to
acquire, hold or dispose, of real estate, buildings or any other property, real
or personal, in fee or under lease, or any right or interest therein; (e) to
merge with Town and Country Management, and be the surviving entity in such
merger; (f) to borrow money and issue evidences of indebtedness, and to secure
the same by mortgage, pledge or other lien on any Partnership Property; (g) to
accept the contribution by REIT Sub of its interest in Holding and to admit REIT
Sub as a General Partner of the Partnership; (h) to accept the contribution by
REIT Sub II of its interest in Holding II and to admit REIT Sub II as a General
Partner of the Partnership; and (i) to enter into any kind of activity, and to
execute, perform and carry out contracts of any kind, appropriate to business of
the Partnership.

      Section 2.4 Place of Business. The address of the principal office and
place of business of the Partnership shall be 100 South Charles Street,
Baltimore, Maryland 21201. The name and address of the Partnership's agent for
service of process in Maryland shall be The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21201.

      Section 2.5 Term. The Partnership shall continue until December 31, 2090
unless earlier terminated pursuant to Article VII hereof.

      Section 2.6 Names and Addresses of Partners. The names and addresses of
the Partners are set forth in Exhibit B hereto.

      Section 2.7 Filing of Certificates. Upon execution of this Agreement, any
amendment hereof, and every change of membership in the Partnership, the
Partners shall sign, acknowledge and cause to be filed such certificates of
limited partnership or of fictitious name as may be required by applicable law
in any jurisdiction in which the Partnership maintains an office or is engaged
in business and copies thereof will be maintained with the records of the
partnership at the Maryland office referred to in Section 2.4 for inspection
pursuant to Section 2.8. Subject to Section 2.8, the General Partners shall not
be obligated to furnish such certificates or information.

      Section 2.8 Records to be Kept. The General Partners shall keep or make
available at the principal office referred to in Section 2.4 all records
required pursuant to the Act or this Partnership Agreement. Upon written request
by any Partner, such Partner or its duly authorized representative shall have
the right to inspect for any purpose reasonably related to such Partner's
interest as a Partner of the Partnership, and, at such Partner's expense, to
copy, any Partnership books and records (including such books and records
required to be maintained pursuant to the Act) at all reasonable times during
business hours. The General Partners may require any Partner exercising its
rights under this Section 2.8 to establish to the General Partners' satisfaction
that such exercise is related to such Partner's interest as a Partner of the
Partnership.


                                     - 3 -
<PAGE>

The General Partners also may withhold from any Partner any information which is
subject to a confidentiality agreement or the release of which, in the judgment
of the General Partners, adversely could affect any Partner or the Partnership.
The General Partners from time to time may adopt such reasonable standards with
respect to the release of information pursuant to this Section 2.8 as they may
deem appropriate.

                                   ARTICLE III

                       Capital Contributions and Accounts

      Section 3.1 Initial Capital Contributions.

      (a) Upon the execution of the 1993 Agreement, the following amounts in
cash or property were contributed by the parties listed below:

<TABLE>
<S>                                                       <C>
              TCT - cash                                  $     1,000

              Bal-Penn - undivided 49.5% general
              partnership interests in the
              Original Companies, at Book Value           $47,350,586

              Oriole - undivided 49.5% general
              partnership interests in the
              Original Companies, at Book Value           $47,350,586
</TABLE>

      (b) Immediately following such contributions, (i) Oriole distributed its
Limited Partnership Interest among the Oriole Partners, pro rata, in proportion
to their interests in Oriole, (ii) TC-Oriole purchased eighty-five and 400/1000
percent (85.400%) of the Limited Partnership Interests held by the Oriole
Partners, (iii) the Limited Partnership Interests purchased by TC-Oriole
automatically were reconstituted as a general Partnership Interest and (iv) TCT
contributed the sum of $263,499,000 in cash to the Partnership.

      Section 3.2 Additional Funds.

      (a) If the Partnership requires funds ("Required Funds") for any purpose,
and except (i) as otherwise provided in Section 3.5 of this Agreement, (ii) as
reasonably necessary to maintain TCT's status as a real estate investment trust
("REIT") for federal income tax purposes, or (iii) as otherwise agreed by the
Partners in a future amendment to this Agreement:

            (i) Subject to Section 5.3(b), to the extent that TCT borrows all or
      any portion of the Required Funds by entering into a Funding Loan, TCT
      shall lend (the "General Partner Loan") to the Partnership the Funding
      Loan Proceeds on the same terms and conditions, including interest rate,
      repayment schedule and costs and expenses, as shall be applicable with
      respect to or incurred in connection with the Funding Loan. TCT shall use
      its reasonable efforts to cause Required Funds to be advanced to the
      Partnership as third party loans or as General Partner Loans (as opposed
      to Contributed Funds) to the maximum extent practicable under the
      circumstances existing at the time Required Funds are needed; or

            (ii) to the extent TCT does not borrow all of the Required Funds by
      entering into a Funding Loan or other borrowing, TCT may contribute to the
      Partnership as an


                                     - 4 -
<PAGE>

      additional Capital Contribution the amount of the Required Funds not
      loaned to the Partnership (such amount, as increased by any underwriting
      discount incurred by TCT in making such additional Capital Contribution,
      being referred to as the "Contributed Funds") (hereinafter, each date on
      which TCT so contributes Contributed Funds pursuant to this subparagraph
      (ii) is referred to as an "Adjustment Date").

Notwithstanding the foregoing, it is understood and agreed by the Partners that
the Nonrecourse Liabilities of the Partnership may be refinanced other than
through General Partner Loans.

      (b) Effective on each Adjustment Date, the Percentage Interest of each
Limited Partner shall be adjusted so that the Percentage Interest of such
Limited Partner shall be equal to a fraction, (i) the numerator of which is
equal to the number of Conversion Shares that such Limited Partner would receive
if it were to convert in full all of its unexercised Units (or Deemed Units) on
such Adjustment Date and (ii) the denominator of which is equal to the sum of

      (x) the product of (A) the total number of issued and outstanding Common
      Shares on the Adjustment Date (excluding any Conversion Shares issued by
      the TCT on or prior to such date) and (B) the Partnership Interest
      Fraction, plus

      (y) any Conversion Shares issued by TCT on or prior to such date, plus

      (z) the Conversion Shares which would be issued by TCT assuming that all
      Limited Partners converted in full all of their unexercised Units (or
      Deemed Units).

The General Partners promptly shall give each Limited Partner written notice of
its Percentage Interest, as adjusted. Percentage Interests shall be rounded to
the nearest one-thousandth of one percent.

      (c) Effective on each Adjustment Date, the Percentage Interest of TCT
shall be adjusted such that it shall be equal to 100% minus the sum of (i) the
Percentage Interest of TC-Oriole, REIT Sub and REIT Sub II and (ii) the
Percentage Interests of all Limited Partners immediately after being adjusted
pursuant to paragraph (b) of this Section 3.2 on such Adjustment Date.

      (d) All calculations pursuant to this Section 3.2 shall be made without
regard to any limit placed on the ownership of Common Shares, and any
outstanding Excess Shares shall be treated as Common Shares.

      (e) Except as provided in Section 7.6, the Limited Partners shall not be
required, nor have they agreed, to make any additional Capital Contributions to
the Partnership.

      (f) Any Partnership Interest acquired by TCT under this Agreement
automatically shall be converted into a general Partnership Interest.

      (g) Notwithstanding anything to the contrary in this Section 3.2, the
Percentage Interests of the Partners following the LLC Contributions (but before
the redemption of Partnership Interests pursuant to Section 3.5(c)) and the
Percentage Interests of the Partners following the redemption of Partnership
Interests pursuant to Section 3.5(c) shall be as indicated on Exhibit B.

      Section 3.3 Capital Accounts.


                                     - 5 -
<PAGE>

      (a) A separate Capital Account shall be maintained for each Partner and
shall be determined and adjusted as set forth on Exhibit D hereto. No interest
shall be paid on the Capital Contributions or Capital Account of any Partner.

      (b) Following the transactions contemplated by Section 3.1, the Capital
Accounts of the Partners were as set forth on Exhibit H hereto.

      (c) On or about the effective date of the LLC Contributions:

      (i) REIT Sub shall contribute to Holding REIT Sub's 1% general partnership
interest in the Property Company and in each of the First PC Companies;

      (ii) REIT Sub shall contribute to the Partnership REIT Sub's 100%
membership interest in Holding, and the Partnership shall issue to REIT Sub in
exchange therefor a general partnership interest in the Partnership;

      (iii) REIT Sub II shall contribute to Holding 2 REIT Sub II's 1% general
partnership interest in Property Company II and in each of the PC II Companies;
and

      (iv) REIT Sub II shall contribute to the Partnership REIT Sub II's 100%
membership interest in Holding 2, and the Partnership shall issue to REIT Sub II
in exchange therefor a general partnership interest in the Partnership.

      Section 3.4 Stock Incentive Plan.

      If at any time or from time to time Common Shares are granted in
accordance with the terms of the Stock Incentive Plan:

      (a) Each date on which TCT issues any Common Shares pursuant to the Stock
Incentive Plan shall be deemed to constitute an Adjustment Date and the
interests of the Partners shall be adjusted accordingly.

      (b) For purposes of this Section 3.4, Common Shares issued subject to
forfeiture or other similar restrictions shall be deemed issued if dividends
accrue thereon; otherwise, restricted Common Shares shall be deemed issued upon
the lapse of such restrictions. In addition, the grant of options to purchase
Common Shares pursuant to the Stock Incentive Plan shall not constitute the
grant or issuance of Common Shares for purposes of this Section 3.4.

      (c) TCT shall contribute to the Partnership any consideration received on
issuance of Common Shares pursuant to the Stock Incentive Plan.

      Section 3.5 Issuance of Convertible Preferred Partnership Interests to
TCT.

      (a) Effective as of August 4, 2003, TCT made an additional Capital
Contribution to the Partnership in an amount equal to the net proceeds received
by TCT upon the sale on August 4, 2003 of $74,750,000 aggregate principal amount
of TCT's 5.375% Convertible Senior Notes due 2023 (the "Notes") issued pursuant
to the Indenture, dated as of August 4, 2003 (the "Indenture"), between TCT and
The Bank of New York, as trustee. In exchange therefor, the Partnership issued
to TCT 74,750 convertible preferred interests in the Partnership having the
terms, conditions and restrictions set forth in Exhibit K hereto (the
"Convertible Preferred Partnership Interests").


                                     - 6 -
<PAGE>

      (b) In accordance with Exhibit D hereto, TCT's Capital Account has been
increased by $74,750,000 to reflect the additional Capital Contribution
described in Section 3.5(a).

      (c) Immediately following receipt of the additional Capital Contribution
described in Section 3.5(a), the Partnership distributed $14,999,292 of such
Capital Contribution to cause the redemption of the Partnership Interests held
by TCT.

      Section 3.6 Convertible Securities.

      (a) If TCT issues Convertible Debt Securities, such Convertible Debt
Securities shall be treated as a General Partner Loan. Upon any conversion or
exchange of the Convertible Debt Securities for Common Shares, the date on which
any Common Shares are issued shall be deemed an Adjustment Date, and the
interests of the Partners shall be adjusted accordingly.

      (b) If TCT issues Convertible Equity Securities, the date on which any
Common Shares are issued upon conversion or exchange of the Convertible Equity
Securities shall be deemed an Adjustment Date, and the interests of the Partners
shall be adjusted accordingly.

      Section 3.7 Conversion of Units. Upon any conversion of any Unit by any
Limited Partner or the acquisition by TCT or the Partnership of any Partnership
Interests (and related Units) or Conversion Shares pursuant to Exhibit J, such
conversion or acquisition shall be treated as an Adjustment Date and the
interests of the Limited Partners and TCT shall be adjusted accordingly.

      Section 3.8 Redemption of Units. If TCT redeems or purchases any of its
outstanding Common Shares, the Partnership shall redeem Units held by TCT on
substantially similar terms and in the same amount, and the redemption shall be
treated as an Adjustment Date and the Percentage Interests of the Partners shall
be adjusted pursuant to Section 3.2(b).

                                   ARTICLE IV

                    Accounting, Distributions and Allocations

      Section 4.1 Accounting. Partnership books shall be kept on the accrual
basis and in accordance with generally accepted accounting principles. The
taxable and fiscal year of the Partnership shall be the calendar year.

      Section 4.2 Cash Flow.

      (a) Subject to Section 7.2, Cash Flow of the Partnership shall be
determined by the General Partners and distributed at such times and in such
amounts as the General Partners from time to time may determine; provided,
however, that any such distribution shall be made pro rata, in proportion to
each Partner's Percentage Interest. No Partner shall receive any distribution
from the Partnership except as herein provided or upon termination of the
Partnership.

      (b) Notwithstanding the foregoing, but subject to Section 5.9, the General
Partners shall use their best efforts to cause the Partnership to distribute
sufficient Cash Flow for each year or other period so that the General Partners'
share of such Cash Flow will enable TCT to pay


                                     - 7 -
<PAGE>

shareholder dividends that will (i) satisfy the distribution requirements for
qualifying as a REIT under the Code and Regulations ("REIT Requirements"), and
(ii) avoid any federal income or excise tax liability of TCT.

      Section 4.3 Allocation of Profits and Losses.

      (a) After giving effect to the required special allocations, if any,
described in Exhibit E hereto, Net Profits for each fiscal year shall be
allocated to the Partners, pro rata, in proportion to their Percentage
Interests.

      (b) After giving effect to the required special allocations, if any, set
forth in Exhibit E, Net Losses for each fiscal year shall be allocated to the
Partners, pro rata, in proportion to their Percentage Interests.

      (c) After giving effect to the required special allocations, if any, set
forth in Exhibit E, Gain From Sale shall be allocated as follows:

      (i)   Gain From Sale in respect of an asset held by one of the Original
            Companies shall be allocated among the Partners as follows:

            (1)   First, to all Partners with deficit MG-Inclusive Capital
                  Account balances, in an amount equal to the aggregate of such
                  deficit MG-Inclusive Capital Account balances, in the
                  proportion to their respective deficit MG-Inclusive Capital
                  Account balances.

            (2)   Second, to the Partners such that the ratio of each Partner's
                  positive MG-Inclusive Capital Account balance to the aggregate
                  MG-Inclusive Capital Account balances of all the Partners is
                  equal to such Partner's Percentage Interest; and

            (3)   Third, the balance to the Partners, pro rata, in proportion to
                  their Percentage Interests.

      (ii)  Gain From Sale in respect of any other asset shall be allocated
            among the Partners as follows:

            (1)   First, to the Limited Partners, pro rata, in proportion to
                  their Percentage Interests, in an amount not to exceed the
                  aggregate amount of Depreciation in respect of such asset
                  which has been specially allocated to the Limited Partners
                  pursuant to Sections 1(a)(1) and (2) of Exhibit E;

            (2)   Second, the balance to the Partners, pro rata, in proportion
                  to their Percentage Interests.

      (d) After giving effect to the required special allocations, if any, set
forth in Exhibit E, Loss From Sale shall be allocated as follows:


                                     - 8 -
<PAGE>

            (i) First, to all Partners with positive MG-Inclusive Capital
      Account balances, such that the ratio of each Partner's positive
      MG-Inclusive Capital Account balance to the aggregate positive
      MG-Inclusive Capital Account balance of all Partners with positive
      MG-Inclusive Capital Account balances is equal to the ratio of such
      Partner's Percentage Interest to the aggregate Percentage Interest of all
      Partners with positive MG-Inclusive Capital Account balances;

            (ii) Second, to all Partners such that the ratio of each Partner's
      MG-Inclusive Capital Account balance to the aggregate MG-Inclusive Capital
      Account balance of all Partners is equal to such Partner's Percentage
      Interest; and

            (iii) Third, the balance to the Partners, pro rata, in proportion to
      their Percentage Interests.

      (e) Notwithstanding the foregoing provisions of this Section 4.3, if the
allocations pursuant to this Section 4.3 would not otherwise cause the Capital
Accounts of the Partners on liquidation to be in the amounts described in the
next sentence, then (i) items of income, gain, loss and deduction shall be
specially allocated among the Partners in the amounts and in the proportions
necessary to cause the Capital Accounts of the Partners to be as described in
the next sentence, and (ii) Net Profits, Net Losses, Gain From Sale and Loss
From Sale shall be deemed not to include the items specially allocated pursuant
to this sentence. The Capital Accounts of the Partners are anticipated to be (x)
first, for TCT, the amount referred to in Section 7.2(c), and then (y) next, to
the Partners (including TCT) in proportion to their Percentage Interests.

      (f) To the extent provided in Exhibit E, the General Partners shall have
the right, but not the obligation, to make, change or adjust certain special
allocations of depreciation at future times.

      Section 4.4 Tax Elections. The General Partners have caused the
Partnership to make an election under Code Section 754, and have caused the
Property Company and each Company to make such elections, on the 1993 federal
income tax returns of such entities.

                                    ARTICLE V

            Powers, Duties, Liabilities, and Compensation of Partners

      Section 5.1 Powers and Duties of Partners.

      (a) Subject to the provisions of Section 5.3 hereof, the General Partners
shall have sole and complete authority to manage, control and make all decisions
affecting the business and assets of the Partnership, and shall have (without
limiting the foregoing) the power to:

            (i)     authorize or approve all actions in furtherance of the
                    purposes of the Partnership;

            (ii)    open accounts with financial institutions in the
                    Partnership's name and deposit, maintain and with-draw funds
                    therein or therefrom;

            (iii)   admit Limited Partners in accordance with and subject to the
                    provisions of Article VIII;


                                     - 9 -
<PAGE>

            (iv)    cause the Partnership to employ from time to time persons or
                    entities for the operation and management of any and all
                    properties which may come under the ownership and/or control
                    of the Partnership, including (but not limited to)
                    accountants and attorneys, on such terms and for such
                    compensation as the General Partners shall determine;

            (v)     cause the Partnership to borrow funds (secured or unsecured)
                    as needed to meet its obligations, and to execute notes,
                    mortgages, deeds of trust, financing statements, assignment
                    of rents and leases, loan agreements and related documents
                    in connection with any such borrowing;

            (vi)    obtain replacements of any such mortgage, deed of trust or
                    other financing and, in furtherance thereof, to pledge any
                    Partnership Property existing on, or acquired after, the
                    date hereof;

            (vii)   cause the Partnership to prepay, in whole or in part, any
                    mortgage, deed of trust or other financing, or to refinance,
                    increase, modify or extend the same;

            (viii)  cause the Partnership to enter into, approve and enforce
                    leases and other agreements involving any property, real or
                    personal;

            (ix)    cause the Partnership to exercise any rights it may have as
                    a partner in the Property Company or any other partnership
                    and to contribute or lend funds or property to the Property
                    Company or any such other partnership;

            (x)     cause the Partnership to convey title to a nominee and
                    reacquire the same;

            (xi)    cause the Partnership to maintain, repair and improve any
                    property owned by the Partnership;

            (xii)   cause the Partnership to sell, exchange or convey title to,
                    or grant an option for the sale of, all or any part of any
                    Partnership Property;

            (xiii)  cause the Partnership to merge with Town and Country
                    Management and become the surviving entity of such merger;
                    and

            (xiv)   cause the Partnership to transfer the management company
                    assets, liabilities and operations to a subsidiary of TCT.

The General Partners shall have such additional rights, authority and powers
conferred by law as are consistent with the purposes of the Partnership. Any
power or right granted to the General Partners in this Agreement may be
exercised solely by TCT as the managing General Partner.

      (b) The General Partners shall devote such time to the affairs of the
Partnership as, in their sole discretion, they deem necessary to supervise the
business of the Partnership; to ensure compliance with all contracts, loans and
other documents to which the Partnership is a party or Partnership Property is
subject; to cause to be prepared all reports which are required to be furnished
by the Partnership to any person; and to do all other things and execute and
deliver any documents which may be necessary or advisable in order to supervise
and manage the affairs and business, and carry out the purposes, of the
Partnership in accordance with this Agreement.


                                     - 10 -
<PAGE>

Notwithstanding the foregoing but subject to paragraph (f), it is expressly
understood and agreed that the General Partners shall not be required to devote
their entire time or attention to the business of the Partnership.

      (c) No Limited Partner, in its capacity as a Limited Partner, shall take
part in the control and management of the business of the Partnership or have
any power to bind the Partnership to any obligation.

      (d) The General Partners shall provide the following to each Partner
within ninety (90) days after the end of each fiscal year:

            (i)   Annual operating statements regarding the financial situation
                  of the Partnership as of the end of each fiscal year,
                  including a balance sheet, profit and loss statement,
                  statement of partner's capital and statement of cash flows;
                  and

            (ii)  Annual tax reporting information.

      (e) The Limited Partners shall not have the right to remove any General
Partner.

      (f) So long as any Partnership Interests are held by an Original Limited
Partner, the General Partners agree that any acquisition, disposition or lease
of real estate properties shall be done exclusively through the Partnership or
through entities in which the Partnership directly or indirectly owns all of the
equity interests.

      Section 5.2 Compensation of General Partners.

      (a) Except for the distributions provided in Section 4.2, the General
Partners shall not be entitled to receive any other compensation from the funds
of the Partnership for services rendered or duties performed in connection with
the management of the operations of the Partnership or any services performed by
them pursuant to Section 7.2; provided that the General Partners shall be
reimbursed by the Partnership, to the extent permitted under Section 5.2(b), for
all of their out-of-pocket costs and expenses incurred by them or by their
trustees, directors, officers or employees in managing the business or affairs
of the Partnership, including any legal, accounting or other professional
services rendered to the Partnership.

      (b) Except as provided in Sections 5.5(a) and 5.7, the parties hereto
agree that a portion of the aggregate post-Formation expenses incurred by the
General Partners or the Partnership (excluding the expenses of any management
company subsidiary of TCT) equal to the Partnership Interest Fraction multiplied
by the aggregate amount of such expenses shall be deemed to be expenses of the
Partnership and shall be treated, for all purposes of this Agreement, as if
directly incurred by the Partnership; and the remainder of such aggregate
expenses shall be deemed to be non-reimbursable expenses of the General Partners
and shall be treated, for all purposes of this Agreement, as if directly
incurred by the General Partners. Notwithstanding the foregoing, any income or
excise taxes to which the General Partners or REIT Sub become subject by virtue
of a decision by the Board of Trustees of TCT to cease to comply with the REIT
Requirements shall be borne solely by the General Partners.

      Section 5.3 Limitation on General Partners' Authority.

      (a) The General Partners shall have no authority to:


                                     - 11 -
<PAGE>

            (i) take any action which is contravention of this Partnership
      Agreement or the Act; or

            (ii) require partition of Partnership Property or compel any sales
      or appraisements of Partnership assets or sale of a deceased Partner's
      interest therein, except as otherwise expressly permitted by this
      Partnership Agreement or with the Consent of the Limited Partners.

      (b) The General Partners shall not take any one or more of the following
actions without the Consent of the Limited Partners:

            (i) Amend, modify or terminate this Agreement;

            (ii) Sell, exchange, lease, mortgage, pledge or otherwise transfer
      all or substantially all of the Partnership Property;

            (iii) Cause, permit or allow the Property Company to sell, exchange,
      lease, mortgage, pledge or otherwise transfer all or any portion of its
      interest in all or substantially all of the Companies or any of the
      Properties;

            (iv) Cause, permit or allow any of the Companies, or either general
      partner of any of the Companies, to sell, exchange, lease, mortgage,
      pledge or otherwise transfer all or any portion of any of their respective
      interests in all or substantially all of the Properties;

            (v) Cause, permit or allow the Partnership to refinance any
      indebtedness secured by mortgages encumbering all or substantially all of
      the Properties, to increase or decrease the amount of such mortgage
      indebtedness other than by required amortization of principal, or
      otherwise to incur indebtedness other than in the ordinary course of the
      Partnership's business;

            (vi) Change the nature of the Partnership's business;

            (vii) Transfer their Partnership Interests to a person other than an
      existing General Partner;

            (viii) Admit one or more successor or additional general partners to
      the Partnership;

            (ix) Cause the Partnership to merge with or into any other entity;
      or

            (x) Take any action, or cause, permit or allow the Partnership, the
      Property Company or any of the Companies to take any action, in respect of
      the Properties (other than as provided in clause (v), above) which would
      result in any adverse tax effect to any of the Original Limited Partners.

      Section 5.4 Reliance on Act of General Partners. No person dealing with
the General Partners, or any of them, shall be required to ascertain whether a
General Partner is acting in accordance with this Agreement, and such person
shall be protected in relying solely upon the


                                     - 12 -
<PAGE>

deed, transfer, or assurance of, and the execution of any instrument or
instruments by, such General Partner.

      Section 5.5 Liabilities of Partners.

      (a) None of the General Partners nor any of their trustees, directors,
officers, employees or agents shall be liable to the Partnership or to any other
Partner for any actions or omissions to act taken in good faith and reasonably
believed to be in the best interests of the Partnership, but shall be liable for
bad faith, willful misconduct, fraud, or gross negligence, provided that, no
individual trustee, director, officer, employee or agent of a General Partner
shall be liable to the Partnership or any Partner except for his or her own
fraud.. A General Partner shall remain liable for the obligations of the
Partnership incurred or arising out of its operations while it was a General
Partner, but not for obligations arising thereafter.

      (b) Except as required or otherwise provided by Section 7.6 or the Act, no
Limited Partner shall be (i) required to make any further contributions to the
capital of the Partnership to restore a loss, to discharge any liability of the
Partnership or for any other purpose, or (ii) personally liable for any
liabilities of the Partnership or the General Partners.

      Section 5.6 General Partner Loans. Any loan to the Partnership from a
General Partner shall be treated (except for tax purposes) as Partnership
indebtedness to an unrelated third party and shall be approved by the trustees
of TCT with the Consent of the Limited Partners.

      Section 5.7 Indemnification of General Partners. The Partnership shall
indemnify the General Partners and each trustee, director, officer, employee and
agent of the General Partners (collectively, the "Indemnified Parties"), to the
fullest extent permitted by law, and save and hold such Indemnified Parties
harmless from, and in respect of, (a) all Losses incurred in connection with or
resulting from any claim, action, proceeding or demand against the Indemnified
Parties or the Partnership that arise out of or in any way relate to the
Partnership, its properties, business or affairs, and (b) any Losses resulting
from such claims, actions, proceedings and demands, including amounts paid in
settlement or compromise of any such claim, action, proceeding or demand;
provided, however, that no Indemnified Party shall be entitled to
indemnification hereunder if and to the extent any Losses arise as a result of
such Indemnified Party's bad faith, willful misconduct, fraud, or gross
negligence. The termination of any action, suit, or proceeding by judgment,
order, settlement or upon a plea of nolo contendere or its equivalent, shall not
of itself create a presumption that an Indemnified Party acted with bad faith,
willful misconduct, fraud or gross negligence.

      Section 5.8 Tax Matters Partner. TCT shall be the Tax Matters Partner in
accordance with and subject to the provisions set forth on Exhibit F.

      Section 5.9 Operation in Accordance with REIT Requirements. The Partners
acknowledge and agree that the Partnership shall be operated in a manner that
will enable TCT to (a) satisfy the REIT Requirements and (b) avoid any federal
income or excise tax liability. The Partnership shall avoid taking any action,
or permitting any entity owned or controlled by it to take any action, which
would result in TCT ceasing to satisfy the REIT Requirements or would result in
the imposition of any federal income or excise tax liability on TCT.
Notwithstanding the foregoing, a majority of the trustees of TCT may waive
compliance with this Section 5.9 if such trustees determine that such
noncompliance would be in the best interests of TCT.


                                     - 13 -
<PAGE>

      Section 5.10 Refinancing of Certain Nonrecourse Liabilities. In the event
of a refinancing of Nonrecourse Liabilities to which the Properties are subject,
and subject to Section 5.3(b), the General Partners may secure the resulting
Nonrecourse Liabilities with Supplemental Properties through the use of
guarantees or direct issuance of notes or bonds and the execution and delivery
of mortgages, deeds of trust and related security documents in respect thereof.

                                   ARTICLE VI

                           Bankruptcy and Liquidation

      Section 6.1 Dissolution or Continuation of Partnership. In the event of an
"event of withdrawal" (as defined in Section 10402 of the Act as in effect on
the date of this Agreement) of, or in respect of, the sole remaining General
Partner, this Partnership shall dissolve unless the remaining Partners shall
unanimously elect to continue the Partnership within ninety (90) days after
notice of such event (it being understood that in the case of an event of
withdrawal under Section 10-402(4) such 90 day period shall commence after the
lapse of the 120 day period specified therein). In the absence of such an
election, the Partnership shall be dissolved on such ninetieth day. If the
election to continue the Partnership is made, the remaining Partner or Partners
(a) shall designate a new general partner who consents to and accepts such
designation and (b) shall have the option to either substitute the successor or
personal representative of the withdrawing General Partner as a Limited Partner
or to purchase the withdrawing General Partner's interest on such terms and
conditions as may be agreed upon by the parties. The new general partner shall
be subject to the same obligations as the General Partners under this Agreement.

      Section 6.2 Actions of the Limited Partners.

      In the event a Limited Partner shall do any of the following:

      (a)   file a voluntary petition in bankruptcy;

      (b)   be adjudicated a bankrupt or insolvent;

      (c)   (i) file a petition or answer seeking for itself any reorganization,
            arrangement, composition, readjustment, liquidation, dissolution, or
            similar relief under any statute, law, or rule; or (ii) file an
            answer or other pleading admitting or failing to contest the
            material allegations of a petition filed against it in any such
            proceeding;

      (d)   die; or

      (e)   be dissolved;

then the legal representative or successor in interest automatically shall be
substituted as a Limited Partner upon compliance with the provisions of the Act;
provided that the estate of a deceased Partner shall be deemed an assignee of
such deceased Partner, and shall be admitted as a substitute Limited Partner
upon compliance with Section 8.4.

      Section 6.3 Withdrawal of Partners. No Partner shall be entitled to
withdraw from the Partnership other than in connection with (a) a transfer or
assignment of all of such Partner's Partnership Interest pursuant to the terms
and conditions of this Agreement or (b) dissolution and


                                     - 14 -
<PAGE>

termination of the Partnership. The Partnership shall not be obligated to
purchase the interest of any withdrawing Partner, nor shall such Partner be
entitled to receive any payment or distribution from the Partnership in
connection with its withdrawal.

                                   ARTICLE VII

                           Dissolution of Partnership

      Section 7.1 Termination. The Partnership shall be terminated and dissolved
upon the first to occur of the following ("Liquidating Events"): (a) completion
of its term of years, (b) an event of withdrawal of a sole remaining General
Partner under Section 6.1 and the failure of the Partners to elect to continue
the business of the Partnership without liquidation pursuant to Section 6.1, or
(c) the voluntary dissolution of the Partnership by the General Partners with
the Consent of the Limited Partners. Upon the dissolution and the commencement
of the winding up of the Partnership, a certificate of cancellation shall be
filed pursuant to Section 10-203 of the Act.

      Section 7.2 Winding Up. Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is inconsistent
with the winding up of the Partnership's business and affairs. The General
Partners (or, if there is no General Partner, any person elected by a majority
in interest of the Percentage Interests) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the
Partnership's liabilities and Partnership Property, and the Partnership Property
shall be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the assets of the Partnership or the proceeds therefrom, to the
extent sufficient therefor, shall be applied and distributed in the following
order:

      (a) First, to the payment and discharge of all the Partnership's debts and
liabilities to creditors other than the General Partners, including the
establishment of any necessary reserves;

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

      (c) Third, to the payment of the Liquidation Preference in respect of the
Convertible Preferred Partnership Interests; and

      (d) The balance, if any, to the Partners in accordance with their positive
Capital Accounts, after giving effect to all contributions, distributions, and
allocations for all periods.

      Section 7.3 Deemed Distribution and Recontribution. Notwithstanding any
other provisions of this Article VII, if the Partnership is liquidated within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)(3) but no Liquidating
Event has occurred, the Partnership Property shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the Partnership's
affairs shall not be wound up.

      Section 7.4 Accounting for Dissolution and Liquidation. Each Partner shall
be furnished with such statements concerning the dissolution and liquidation of
the Partnership as are prepared by the Partnership's accountants.


                                     - 15 -
<PAGE>

      Section 7.5 Waiver of Appraisement. The provisions of Articles VI and VII
shall be in lieu of any statutory mode of settlement of the interest of a
Partner. An inventory and appraisement of the Partnership's assets and a sale of
a deceased Partner's interest therein are hereby waived and dispensed with, and,
in lieu thereof, the interest in the Partnership of a deceased Partner shall be
subject solely to the provisions of this Agreement.

      Section 7.6 Deficit Restoration Obligation. If there is a deficit in a
Partner's Capital Account following the liquidation of such Partner's interest
in the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), as determined after taking into account all Capital
Account adjustments for the taxable year of the Partnership in which such
liquidation occurs (other than those made as a result of this section), such
Partner will be unconditionally obligated to restore the amount of such deficit
balance by the end of such taxable year (or, if later, within ninety (90) days
after the date of such liquidation), which amount shall, upon liquidation of the
Partnership, be applied and distributed in accordance with Section 7.2.

                                  ARTICLE VIII

           Sale of Partnership Interest; Admission of Limited Partners

      Section 8.1 General Partners. Without the Consent of the Limited Partners
and the approval of the remaining General Partner, the interests of a General
Partner shall not be transferable (other than to another General Partner);
provided, however, that the General Partners may reduce their Percentage
Interests in connection with the admission of additional Limited Partners
pursuant to Section 8.5.

      Section 8.2 Limited Partners' Right to Assign. (a) Subject to Sections
8.2(b), 8.3, 8.4 and 10.1, a Limited Partnership Interest shall be assignable,
in whole or in part, but the assignee shall not become a Limited Partner, except
pursuant to Section 8.4. An assignee who does not become a Limited Partner shall
have no rights hereunder except to receive any allocations or distributions
which (but for the assignment) would have been made to the assignor. Except as
provided in Section 6.2, no assignment of a Limited Partnership Interest shall
be effective as to the Partnership until a duplicate original copy of the
instrument of assignment, properly executed, shall have been received by the
Partnership.

      (b) Transfers of Limited Partnership Interests pursuant to the conversion
of Units shall not be subject to the restrictions and limitations of this
Article VIII.

      Section 8.3 Restrictions on Transfer of Limited Partnership Interest.
Except as provided in Sections 6.2 and 8.2(b), no transfer or assignment of a
Limited Partnership Interest shall be made unless the following conditions have
been met:

      (a) The General Partners may require as a condition of sale, exchange or
other transfer of any Limited Partnership Interest, that the transferor assume
any costs reasonably incurred by the Partnership in connection therewith.

      (b) No such assignment shall be made to a minor or incompetent.

      (c) No such assignment shall be made if, in the written opinion of counsel
to the Partnership, such assignment may not be effected without registration
under the Securities Act or would result in the violation of any applicable
state securities laws or would cause the


                                     - 16 -
<PAGE>

Partnership to become subject to the reporting requirements of the Securities
Exchange Act of 1934.

      (d) No Limited Partnership Interest or any portion thereof shall be
transferable or assignable to the extent that any such transfer or assignment
would result in the termination of the Partnership for Federal income tax
purposes or treatment of the Partnership as a publicly traded partnership under
Code Section 7704, except in the sole discretion of the General Partners, or to
the extent that such transfer would cause TCT to fail to satisfy the REIT
Requirements at any time at which such requirements are applicable to TCT.

Except as provided in Sections 6.2 and 8.2(b), any assignment, sale, exchange or
other transfer in contravention of the provisions hereof shall be void and shall
not bind the Partnership.

      Section 8.4 Substitute Limited Partners; Effect of Substitution and/or
Assignment.

      (a)   Except as provided in Sections 6.2 and 8.2(b), no Limited Partner
            shall have the right to substitute an assignee as a Limited Partner
            in his place unless the General Partners, in their sole discretion,
            shall consent to the admission of any such assignee as a substitute
            Limited Partner and have obtained the Consent of the Limited
            Partners to such admission, and the following conditions have been
            met:

      (i) a duly executed and acknowledged written instrument of assignment
shall have been filed with the Partnership, which instrument shall set forth the
intention of the assignor that the assignee succeed to his interest as a
substitute Limited Partner;

      (ii) the assignor and assignee shall have executed and acknowledged such
other instruments as the General Partners may deem necessary to effect such
substitution, including the written acceptance and adoption by the assignee of
the provisions of this Agreement and the written agreement of the assignee to be
personally liable for the assignor's deficit restoration obligations under
Section 7.6 and liable on a non-recourse basis for the representations and
warranties set forth in Exhibit C to the extent provided by Article XI; and

      (iii) the provisions of Section 8.3 of this Agreement are complied with.

No assignment of a Limited Partner's interest shall relieve the assignor (or his
legal successors) of the duties and obligations arising under this Partnership
Agreement until the assignee is admitted as a substitute Limited Partner.
Consent to substitution of a Limited Partner shall not be unreasonably delayed
or withheld by the General Partners, nor shall the General Partners refuse to
consent to an assignment and substitution for the purposes of preserving an
indemnification obligation or remedy pursuant to Article XI.

      (b) The General Partners shall amend the certificate of limited
partnership if required under applicable law to reflect any substitution of a
Limited Partner effected under this section. By executing or adopting this
Partnership Agreement, each Partner hereby consents to the admission of
substitute Limited Partners by the General Partners as provided in this Section,
and the amendment of the certificate of limited partnership to reflect any such
admission.

      (c) Each person who becomes a substitute Limited Partner shall duly
execute this Partnership Agreement and shall ratify and agree to be bound by all
prior permitted actions taken by the Partnership and the General Partners.


                                     - 17 -
<PAGE>

      Section 8.5 Additional Limited Partners. The General Partners may admit
additional Limited Partners to the Partnership with the Consent of the Limited
Partners.

      Section 8.6 Partnership Certificates. Limited Partnership Certificates
("Certificates") may be issued to evidence interests in Limited Partnership
Interests, to the extent the General Partners determine such Certificates to be
advisable. While such Certificates may serve as evidence of Limited Partnership
Interests, the presence or absence of a Certificate representing a Limited
Partnership Interest shall not adversely affect the right of any Limited
Partner. The records of the Partnership shall be conclusive as to the identity
and Percentage Interests of the Limited Partners. If issued, each certificate
shall be signed by authorized officers of the General Partners. Certificates
shall be in such form as the General Partners shall deem appropriate and not
inconsistent with law. In case any Certificate is lost, stolen, mutilated or
destroyed, the General Partners may authorize the issuance of a new Certificate
in place thereof upon such terms and conditions as the General Partners deem
advisable. In the event that a Limited Partnership Interest evidenced by a
Certificate is adjusted pursuant to Article III hereof, the Percentage Interest
of the Limited Partner shown on such Certificate shall be adjusted accordingly,
and upon surrender of such Certificate, a new Certificate evidencing the
adjusted Limited Partnership Interest may be issued to the extent the General
Partners determine a new Certificate to be advisable.

                                   ARTICLE IX

                       Grant of Units to Limited Partners

      Section 9.1 Grant of Units.

      (a) TCT hereby grants to each Limited Partner such number of Units as are
set forth in Exhibit I hereto, subject to adjustment as provided in Exhibit J
hereto. Units shall not be separable from a Limited Partnership Interest, and
the assignee of a Limited Partnership Interest automatically shall succeed to
the Units attributable to such Limited Partnership Interest. The Units
hereunder, along with the related portion of the corresponding Limited
Partnership Interest, may be converted into Common Shares, subject to the terms,
conditions and restrictions contained in Exhibit J hereto, upon delivery to TCT
of an Exercise Notice in the form of Schedule 1 attached hereto, which notice
shall specify the number of Units to be converted by such Limited Partner. Once
delivered, the Exercise Notice shall be irrevocable, subject to the delivery of
Common Shares by TCT in accordance with the terms hereof, and TCT agrees to
issue Common Shares upon delivery of said Exercise Notice in accordance with the
terms hereof.

      (b) Solely for the purpose of recalculating Percentage Interests of the
Partners pursuant to Section 3.2(b), TCT shall grant Deemed Units to a Limited
Partner who has not been granted any Units pursuant to Section 9.1(a) above.

      Section 9.2 Terms of Units. The terms and provisions applicable to the
Units shall be as set forth in Exhibit J hereto.

                                    ARTICLE X

                       Acknowledgment By Limited Partners

      Section 10.1 Acknowledgment.


                                     - 18 -
<PAGE>

      (a) Each Limited Partner acknowledges that:

            (i)   The General Partners may employ accountants, attorneys and
                  brokers, in which a General Partner and/or a Limited Partner
                  is interested; and

            (ii)  it is acquiring its Partnership Interest for investment only
                  and without a view to the resale or distribution thereof.

      (b) Notwithstanding any other provision of this Agreement, no interest in
the Partnership may be offered or sold other than in connection with the
original formation of the Partnership or pursuant to this Agreement and no
transfer of any such interest will be made either by the Partnership or the
Partners, other than pursuant to the provisions of Article IX hereof, unless:

            (i)   such Partnership interests are registered under the Securities
                  Act;

            (ii)  a reasonably satisfactory opinion of counsel satisfactory to
                  the Partnership (any nationally recognized counsel being
                  automatically deemed satisfactory) is obtained to the effect
                  that such registration is not necessary; or

            (iii) a "no action letter" from the Securities and Exchange
                  Commission is obtained.

      (c) Each Limited Partner, by signing this Agreement or a counterpart
hereof, acknowledges that:

            (i)   it has received and read this Agreement and the Exhibits
                  attached hereto;

            (ii)  it is an "accredited investor" as defined in Rule 501(a) of
                  the Securities Act;

            (iii) the Limited Partnership Interests have not been registered
                  under the Securities Act and may not be transferred or
                  assigned unless registered under applicable securities laws or
                  exempt from registration, and the assignee shall not become a
                  substituted Limited Partner without the consent of the General
                  Partners and the Consent of the Limited Partners;

            (iv)  it is aware that the ownership of the Companies involves
                  certain tax and economic variables and risks which could
                  affect adversely the value of its interest in the Partnership;

            (v)   its business, tax and/or legal advisors have reviewed the
                  documents and information relating to this transaction and
                  they have advised the Limited Partner as to the merits and
                  risks of acquiring an interest in the Partnership;

            (vi)  it and/or its advisors (a) have discussed the entire
                  transaction with the General Partners and (b) have had ready
                  access to and an opportunity to review any and all documents
                  which it and they deem relevant to this


                                     - 19 -
<PAGE>

                  transaction, and no information, oral or written, requested by
                  them has been withheld by the General Partners; and

            (vii) it has sufficient experience in investment and business
                  matters and recognizes the advantages and disadvantages of an
                  investment of this nature.

      (d) Each Limited Partner which is a partnership agrees to receive
acknowledgements substantially similar to those in paragraph (c) from each of
its partners.

                      ARTICLE XI - [INTENTIONALLY OMITTED]

                                   ARTICLE XII

                            Miscellaneous Provisions

      Section 12.1 Notice. Notice to Partners or to the Partnership shall be
deemed to have been given three (3) days after the same has been mailed, by
registered or certified mail, the day after being sent by a recognized national
overnight delivery service if delivery is confirmed by such service, or when
actual receipt has been confirmed if delivered by hand or sent by facsimile
transmission, in each case addressed or delivered to the address as set forth in
Exhibit B or in any notice of change of address previously given in writing by
the addressee to the addressor.

      Section 12.2 Applicable Law. The rights of the Partners and this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Maryland.

      Section 12.3 Further Action. The Partners shall execute and deliver all
documents, provide all information, and take or forebear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.

      Section 12.4 Entire Agreement; Amendments. Except as provided in the
Formation Agreement, this Agreement contains the entire understanding between
and among the parties hereto and supersedes any prior understandings and
agreements between or among them respecting the subject matter of this
Agreement. This Agreement may be amended from time to time by the General
Partners with the Consent of the Limited Partners. This Agreement and any
amendments hereto may be executed in several counterparts, and all so executed
shall constitute one agreement, binding on all parties hereto, notwithstanding
that all the parties are not signatory to the original or same counterpart.

      Section 12.5 Titles and Captions. All captions are for convenience only,
do not form a substantive part of this Agreement, and shall not restrict or
enlarge any substantive provisions of this Agreement.

      Section 12.6 Benefits. This Agreement shall inure to the benefit of and
shall bind the parties hereto, their successors and permitted assigns. None of
the provisions of this Agreement shall be for the benefit of or enforceable by
any creditors of the Partnership.

      Section 12.7 Severability. The invalidity or unenforceability of any
provision of this Agreement in a particular respect shall not affect the
validity and enforceability of any other provisions of this Agreement or of the
same provision in any other respect.


                                     - 20 -
<PAGE>

      Section 12.8 Power of Attorney.

      (a) Each Limited Partner hereby appoints the General Partners, and each of
them, its agent and attorney-in-fact, to execute on its behalf and on behalf of
the Partnership the following documents or papers, as reasonably determined to
be necessary or appropriate by the General Partners to carry out, on behalf of
the Partnership, any activities or obligations of the Partnership:

            (i) any and all agreements amending the Partnership Agreement, as
now or hereafter amended, that may be necessary to reflect (1) a change in the
name or location of the principal place of business of the Partnership; (2) the
disposition by a Limited Partner (including the undersigned) of its interest in
the Partnership or any part thereof; and (3) the addition of a person becoming a
Limited Partner of the Partnership (subject to the provisions of this
Agreement);

            (ii) any documents or instruments required under the laws of any
state or jurisdiction where the Partnership shall desire to conduct business for
the formation and/or operation of the Partnership as a limited partnership
therein;

            (iii) such certificates, instruments and documents as may be
required or appropriate in connection with the qualification of the Partnership
to do business in any state or jurisdiction and the use of the name of the
Partnership therein;

            (iv) such certificates, instruments and documents as may be required
or as may be appropriate under the laws of any state or jurisdiction to reflect
a change of name or address of a Limited Partner; and

            (v) all conveyances or other instruments and documents necessary to
effect the dissolution and termination of the Partnership, and all other filings
with agencies of the Federal government and of the states to carry out the
purposes of the Partnership.

      (b) No Limited Partner personally shall be liable in respect of any action
taken by the Partnership pursuant to the foregoing power of attorney. The
foregoing power of attorney shall not be used in any manner inconsistent with
the terms of this Agreement or the characterization and treatment of the
Partnership as a limited partnership.

      (c) It is expressly intended by the Limited Partners that the foregoing
power of attorney is coupled with an interest, is irrevocable, and shall survive
the death, incapacity, dissolution, bankruptcy or insolvency of any Limited
Partner.

      (d) This power of attorney granted herein shall be in addition to, and not
in limitation of, the powers and authority granted to the General Partners
pursuant to Section 10-204 of the Act.

      Section 12.9 Limitation of Liability. The First Amended and Restated
Declaration of Trust establishing TCT, dated June 24, 1993, a copy of which is
duly filed with the Department of Assessments and Taxation of the State of
Maryland, provides that no trustee, officer, shareholder, employee or agent of
TCT shall be held to any personal liability, jointly or severally, for any
obligation of, or claim against, TCT. All persons dealing with TCT, in any way,
shall look only to the assets of TCT for the payment of any sum or the
performance of any obligation.


                                     - 21 -
<PAGE>

      Section 12.10 Arbitration. Any controversy or claim arising out of or
relating to this Partnership Agreement, or any alleged breach thereof, shall be
settled by arbitration. The parties hereto agree that any such controversy shall
be submitted to three arbitrators. Each of (a) the General Partners and (b) the
group of Limited Partners involved in such controversy or claim shall select one
arbitrator. The two arbitrators selected shall then choose a third arbitrator.
The arbitration shall be governed by the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), as amended and in effect on the date a
demand for arbitration is filed with the AAA. Any demand for arbitration shall
specify a dollar amount of damages sought. The arbitrators shall be governed by
and shall apply the substantive law of the State of Maryland in making their
award, and their ruling shall be binding and conclusive upon the parties hereto.
Any arbitration shall occur in New York City or in Baltimore, Maryland and
judgment upon the award rendered may be entered (a) in the United States
District Court for the Southern District of New York if the arbitration occurs
in New York City, or (b) in the United States District Court for the District of
Maryland if the arbitration occurs in Baltimore, Maryland. The parties agree
that, prior to any arbitration hearing, each party will provide discovery to the
other party or parties hereto in the form of document production and, to the
fullest extent allowed by law, depositions lasting no more than one day per
witness. Notwithstanding the foregoing, the parties will obtain the agreement of
arbitrators to the following: (i) the arbitrators shall provide a written
ruling, stating in separate sections the findings of fact and conclusions of law
on which their ruling is based, (ii) their ruling shall be due no later than
ninety (90) days after their final hearing and within eighteen (18) months after
commencement of the arbitration, and (iii) in selecting the third arbitrator,
preference shall be given to a retired federal judge or a member of a nationally
recognized accounting firm. Each party shall pay its own fees and expenses, the
fee of its arbitrator and one-half of the fee of the third arbitrator.


                                     - 22 -
<PAGE>

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

                                            GENERAL PARTNERS:


                                            THE TOWN AND COUNTRY TRUST

                                            By: /s/ Harvey Schulweis
                                               ---------------------------------
                                                Harvey Schulweis, President


                                            THE TOWN AND COUNTRY ORIOLE
                                            CORPORATION

                                            By: /s/ Harvey Schulweis
                                               ---------------------------------
                                                Harvey Schulweis, President


                                            THE TOWN AND COUNTRY HOLDING
                                            CORPORATION

                                            By: /s/ Harvey Schulweis
                                               ---------------------------------
                                                Harvey Schulweis, President


                                            THE TOWN AND COUNTRY HOLDING
                                            CORPORATION II

                                            By: /s/ Harvey Schulweis
                                               ---------------------------------
                                                Harvey Schulweis, President


                                            LIMITED PARTNERS:

                                            THE BAL-PENN COMPANY

                                            By: The Estate of Alfred Lerner,
                                                its General Partner

                                            By: /s/ Nancy F. Beck
                                               ---------------------------------
                                                   Nancy F. Beck, Co-Executor

                                              /s/ Harvey Schulweis
                                            ------------------------------------
                                            HARVEY SCHULWEIS


                                     - 23 -
<PAGE>

                         LIST OF EXHIBITS AND SCHEDULES

Exhibit A    Certain Definitions

Exhibit B    Names and Addresses of the Partners

Exhibit C    Listing of the PC II Companies

Exhibit D    Maintenance of Capital Accounts

Exhibit E    Certain Allocations

Exhibit F    Tax Matters Partner

Exhibit G    Listing of the Original Companies

Exhibit H    Initial Capital Account Balances

Exhibit I    Units and Deemed Units Granted to Limited Partners

Exhibit J    Terms and Conditions of Units

Exhibit K    Terms and Conditions of Convertible Preferred Partnership Interests

Schedule 1   Form of Exercise Notice


                                     - 24 -
<PAGE>

                                    Exhibit A

                               Certain Definitions

      Capitalized terms used and not otherwise defined in the Agreement of
Limited Partnership of The TC Operating Limited Partnership and the Exhibits
thereto shall have the meanings set forth below:

      1.1 "Act" shall mean the Maryland Revised Uniform Limited Partnership Act
(presently Maryland Corporations and Associations Code Annotated, Title 10) or
any corresponding provisions of successor law.

      1.2 "Book Value" shall mean, with respect to any asset of the Partnership,
such asset's adjusted basis for federal income tax purposes, except as follows:

      (a) The initial Book Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value as determined by the General
Partners with the Consent of the Limited Partners (or by an independent
appraisal if not so approved by the Limited Partners).

      (b) The Book Value of all Partnership assets shall be adjusted to equal
their respective gross fair market values, as determined by the General Partners
with the Consent of the Limited Partners (or by an independent appraisal if not
so approved by the Limited Partners) subject to Code Section 7701(g), as of the
following times: (i) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (ii) the distribution by the Partnership to a
retiring or continuing Partner as consideration for an interest in the
Partnership of more than a de minimis amount of money or other Partnership
Property; and (iii) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that the
adjustments pursuant to clauses (i) and (ii) above shall be made only if the
General Partners reasonably determine that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership.

      (c) The Book Value of any Partnership asset distributed to any Partner
will be the gross fair market value of the asset, as determined by the General
Partners with the Consent of the Limited Partners (or by an independent
appraisal if not so approved by the Limited Partners), on the date of
distribution.

      (d) If the Book Value of an asset has been determined or adjusted pursuant
to paragraph (a) or (b) above of this Section, such Book Value shall thereafter
be adjusted for the Depreciation taken into account with respect to such asset
for purposes of computing Net Profits, Net Losses, Gain From Sale, and Loss From
Sale.

      1.3 "Capital Account" shall mean the capital account of each Partner which
is to be established and maintained as provided in Section 3.3 of the
Partnership Agreement.

      1.4 "Capital Contribution" shall mean, with respect to any Partner, the
amount of cash and the initial Book Value of property (other than money)
contributed by such Partner to the capital of the Partnership (excluding any
advances or loans).


                                      A-1
<PAGE>

      1.5 "Capital Transaction" shall mean any of the following events affecting
the Partnership: (a) a sale, exchange, transfer, assignment, or other
disposition of all or a portion of any partnership asset (but not including
occasional sales in the ordinary course of business of inventory, operating
equipment, or furniture, fixtures and equipment); (b) any condemnation or
deeding in lieu of condemnation of all or a material portion of the Partnership
Property; (c) collection in respect of property, hazard, or casualty insurance
(but not business interruption insurance) or any damage award except to the
extent proceeds are used to repair or replace the asset so damaged or destroyed;
(d) a refinancing; or (e) any other transaction the proceeds of which, in
accordance with generally accepted accounting principles, are considered to be
capital in nature.

      1.6 "Cash Flow" shall mean the cash funds derived by the Partnership from
the operation of the Partnership's business and from any other source whatsoever
before any deduction for depreciation or amortization and after deduction of:

      (a) all operating expenses including guaranteed payments and taxes;

      (b) all payments of principal, interest and other charges in respect of
any Partnership indebtedness;

      (c) all expenditures for capital improvements to the Partnership Property
(except to the extent that proceeds of property, hazard or casualty insurance
are used to fund such expenditures); and

      (d) all reserves, whether for working capital or otherwise, which are
required by the General Partners in the exercise of their sole discretion.

      1.7 "Closing Price" on any date shall mean the last sale price, regular
way, of Common Shares, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported on the New York Stock Exchange or, if the Common Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Common Shares
are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers National Market System or, if such system is no longer in use, the
principal other automated quotation system that may then be in use or, if the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares as such person is selected from time to time by
TCT.

      1.8 "Code" shall mean the Internal Revenue Code of 1986, as heretofore or
hereafter amended, and any successor statute thereto.

      1.9 "Common Shares" shall include any beneficial interests of any class of
TCT which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
TCT and which is not subject to redemption by TCT. However, subject to the
provisions of Exhibit J, shares issuable upon exercise of Units shall include
only shares of beneficial interest designated as Common Shares of TCT at the
date of the Completion of the Offering or shares of beneficial interest
resulting from any


                                      A-2
<PAGE>

reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of TCT and which are not
subject to redemption by TCT; provided, that, if at any time there shall be more
than one such resulting class of beneficial interests, the shares of each such
class of beneficial interests then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

      1.10 "Completion of the Offering" shall mean the date on which the last
sale of the Common Shares by TCT to the underwriters pursuant to the
Underwriting Agreement occurred.

      1.11 "Companies" shall mean the Original Companies and the New Companies.

      1.12 "Consent of the Limited Partners" shall mean the consent of a
majority in interest of the Limited Partners.

      1.13 "Conversion Shares" shall mean Common Shares issued by TCT to a
Limited Partner upon conversion of such Limited Partner's Units pursuant to
Article IX of the Partnership Agreement.

      1.14 "Convertible Debt Securities" shall mean any debt security,
promissory note, bond or similar instrument that is convertible into or
exchangeable for Common Shares.

      1.15 "Convertible Equity Security" shall mean any warrant, option, right,
preferred stock or other equity security convertible into or exchangeable for
Common Shares.

      1.16 "Convertible Preferred Partnership Interest" shall have the meaning
set forth in Section 3.5(a) of this Agreement.

      1.17 "Current Common Share Value" of a Partner on any date shall mean the
product of (a) the average of the Closing Price for the five consecutive Trading
Days ending on such date multiplied by (b) the sum of (x) the number of
Conversion Shares held by such Partner plus (y) the number of Conversion Shares
which such Partner would receive upon conversion of all unexercised Units held
by such Partner.

      1.18 [Intentionally omitted.]

      1.19 "Deemed Unit" shall mean a unit granted by TCT to a Limited Partner,
which unit is not convertible into Common Shares and which is issued solely for
the purpose of recalculating Percentage Interests pursuant to Section 3.2(b) of
the Partnership Agreement.

      1.20 "Depreciation" shall mean, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction,
as computed for federal income tax purposes, allowable with respect to an asset
of the Partnership for such year or other period, except that if the Book Value
of a Partnership asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Book Value as the federal
income tax depreciation, amortization or other cost recovery deduction for such
year or other period bears to such beginning adjusted tax basis.

      1.21 "Excess Shares" shall have the meaning set forth in the Registration
Statement.


                                      A-3
<PAGE>

      1.22 "First PC Companies" shall mean, collectively, the Original
Companies, the New Companies, The TC-Christina Mill Company, The TC-Stonegate
Company, and The TC-Carlyle Station Company.

      1.23 "Formation" shall have the meaning set forth in the Registration
Statement.

      1.24 "Formation Agreement" shall mean the agreement, dated as of August
13, 1993, among TCT, Bal-Penn, Oriole, Alfred Lerner, Patrick Gerschel, Harvey
Schulweis, Paul Taylor, Jr., TC-Oriole, Town and Country Management and the
Companies in respect of the transactions contemplated herein.

      1.25 "Funding Loan Proceeds" shall mean the net cash proceeds received by
the General Partners in connection with any Funding Loan, after deduction of all
costs and expenses incurred by the General Partners in connection with such
Funding Loan.

      1.26 "Funding Loan(s)" shall mean any borrowing or refinancing of
borrowings by or on behalf of the General Partners from any lender for the
purpose of advancing the Funding Loan Proceeds to the Partnership as a loan
pursuant to Section 3.2(a) (i) hereof.

      1.27 "Gain From Sale" shall mean any income or gain of the Partnership for
federal income tax purposes resulting from a Capital Transaction; provided that
if the Book Value of a Partnership asset differs from its adjusted tax basis,
the income or gain, if any, resulting from a Capital Transaction with respect to
such asset shall be computed with respect to its Book Value rather than its
adjusted tax basis.

      1.28 "Indenture" shall have the meaning set forth in Section 3.5(a) of
this Agreement.

      1.29 "Holding" shall mean The Town and Country Holding Company, LLC, a
Delaware limited liability company.

      1.30 "Holding II" shall mean The Town and Country Holding Company II, LLC,
a Delaware limited liability company.

      1.31 "LLC Contributions" means the series of transactions described in the
Recitals to this Agreement and Section 3.3(c).

      1.32 "Limited Partnership Interest" shall mean the Partnership Interest of
a Limited Partner.

      1.33 "Loss From Sale" shall mean any net loss of the Partnership for
federal income tax purposes resulting from a Capital Transaction; provided that
if the Book Value of a Partnership asset differs from its adjusted tax basis,
the net loss, if any, resulting from a Capital Transaction with respect to such
asset shall be computed with respect to its Book Value rather than its adjusted
tax basis.

      1.34 "Losses" shall mean all losses, damages, claims, costs, liabilities
and expenses (including, without limitation, reasonable attorney's and
accountant's fees and expenses).


                                      A-4
<PAGE>

      1.35 "MG-Inclusive Capital Account" of any Partner shall mean such
Partner's Capital Account balance (whether positive or negative) as of the end
of such fiscal year (after all distributions for such year but before any
allocations of income or deduction for such year), increased by such Partner's
share of Partnership Minimum Gain as of the end of such fiscal year.

      1.36 "Net Profits" and "Net 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), with the following adjustments:

      (a) Any income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this Section shall be added to such taxable income or loss;

      (b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this Section, shall be
subtracted from such taxable income or loss;

      (c) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year or other period,
computed in accordance with the terms of this Partnership Agreement;

      (d) Gain From Sale or Loss From Sale resulting from any disposition of
Partnership 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
such property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Book Value;

      (e) Notwithstanding any other provision of this Section, any items which
are specially allocated pursuant to Section 1 of Exhibit E to the Partnership
Agreement and Section 4.3 of the Partnership Agreement shall not be taken into
account in computing Net Profits or Net Losses; and

      (f) In the event the Book Value of any Partnership Property is adjusted
pursuant to Section 1.2(b)(ii) or (iii), the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset for
purposes of computing Gain From Sale or Loss From Sale.

      1.37 "New Companies" shall mean The TC-Barton's Crossing Company, The
TC-University Heights Company, The TC-Fox Run Company, The TC-McNair Farms
Company, The TC-Rolling Hills Company and The TC-Glen Company.

      1.38 "Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a
Partnership fiscal year equals the excess, if any, of the net increase, if any,
in the amount of Partnership Minimum Gain during that fiscal year over the
aggregate amount of any distributions during that fiscal year of proceeds of a
Nonrecourse Liability that are allocable to an increase in Partnership Minimum
Gain, determined in accordance with the provisions of Regulations Section
1.704-2(c).


                                      A-5
<PAGE>

      1.39 "Nonrecourse Liability" shall have the meaning set forth in
Regulations Section 1.752-1(a)(2).

      1.40 "Notes" shall have the meaning set forth in Section 3.5(a) of this
Agreement.

      1.41 "Original Companies" shall mean the twenty-six general partnerships
listed on Exhibit G hereto, and, where the context requires, any entity that
acquired assets in exchange for the disposition of assets held by an Original
Company where the basis of the acquired assets was determined pursuant to Code
Section 1031(d).

      1.42 "Original Interests" shall mean, as of the end of any taxable year,
any Percentage Interests attributable to a Limited Partnership Interest
originally held by Bal-Penn, Schulweis or Taylor; provided that such term shall
not include any Percentage Interest held by TC-Oriole.

      1.43 "Original Limited Partners" shall mean Bal-Penn, Schulweis or Taylor
and any other Limited Partner who succeeds to a portion of the Limited
Partnership Interest of Bal-Penn, Schulweis or Taylor; provided that such term
shall not include TC-Oriole.

      1.44 "Original Limited Partners' Special Allocation Fraction" shall mean,
from time to time, a fraction, the numerator of which is equal to the aggregate
percentage interest in the Original Companies contributed by or attributable to
continuing Original Limited Partners, and the denominator of which is equal to
56.727% (i.e., the sum of 49.500% for Bal-Penn, 4.950% for Schulweis and 2.277%
for Taylor).

      1.45 "Oriole" shall mean Oriole Realty Company, L.P., a Pennsylvania
limited partnership which was a party to the 1993 Agreement.

      1.46 "Oriole Partners" shall mean the partners of Oriole.

      1.47 "Partner Nonrecourse Debt" shall mean partner nonrecourse debt as
defined in Regulations Section 1.704-2(b)(4).

      1.48 "Partner Nonrecourse Debt Minimum Gain" shall mean an amount, with
respect to each Partner Nonrecourse Debt, equal to Partnership Minimum Gain that
would result if such Partner Nonrecourse Debt were treated as a Nonrecourse
Liability, deter-mined in accordance with Regulations Section 1.704-2(i)(5).

      1.49 "Partner Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(i)(1). The amount of Partner Nonrecourse Deductions
with respect to a Partner Nonrecourse Debt for a Partnership fiscal year equals
the excess, if any, of the net increase, if any, in the amount of Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt
during that fiscal year over the aggregate amount of any distributions during
that fiscal year to the Partner that bears the economic risk of loss for such
Partner Nonrecourse Debt to the extent such distributions are from the proceeds
of such Partner Nonrecourse Debt and are allocable to an increase in such
Partner Nonrecourse Debt Minimum Gain, deter-mined in accordance with
Regulations Section 1.704-2(i)(2).

      1.50 "Partnership Agreement" or "Agreement" shall mean this Third Amended
and Restated Agreement of Limited Partnership, including any Exhibits thereto,
as the same may be amended, restated or supplemented from time to time.


                                      A-6
<PAGE>

      1.51 "Partnership Interest" shall mean the interest of a Partner in the
Partnership.

      1.52 "Partnership Interest Fraction" as of any date shall mean a fraction
whose numerator is equal to the interest of the Partnership in the income of the
underlying properties and whose denominator is equal to the interest of the
Partnership in the income of the underlying properties plus the interest of TCT
and any subsidiaries of TCT in such income (other than any interest arising
through the Partnership) (which fraction is currently 98.01%). As of the
effective date of the LLC Contributions, the Partnership Interest Fraction shall
be 100%.

      1.53 "Partnership Minimum Gain" shall mean partnership minimum gain as
defined in Regulations Sections 1.704-(b)(2) and 1.704-2(d).

      1.54 "Partnership Property" shall mean all real and personal property
acquired by the Partnership and any improvements thereto, and shall include both
tangible and intangible property.

      1.55 "PC II Companies" means, collectively, The TC-Fairington Company, The
TC-Forest Ridge Company, The TC-Kirkman Company, The TC-McIntosh Company, The
TC-Perico Company, The TC-Twelve Oaks Company and The TC-Windermere Lakes
Company, each a Maryland general partnership.

      1.56 "Percentage Interest" shall mean the percentage interest of a Partner
as set forth on Exhibit H hereto; provided, however, that such percentages are
subject to adjustment as provided by Articles III, VIII, IX and XI of the
Partnership Agreement.

      1.57 "Properties" shall mean the assets of the Companies and any
improvements thereto.

      1.58 "Prospectus" shall mean the Prospectus, dated August 16, 1993,
relating to the sale of Common Shares pursuant to the Underwriting Agreement.

      1.59 "Regulations" shall mean the Treasury Regulations promulgated under
the Code from time to time.

      1.60 "Registration Statement" shall mean the registration statement (File
number 33-63150) filed under the Securities Act in respect of the offering of
Common Shares pursuant to the Underwriting Agreement, in the form in which such
Registration Statement was declared effective by the Securities and Exchange
Commission.

      1.61 "REIT Sub" shall mean The Town and Country Holding Corporation, a
wholly-owned subsidiary of TCT.

      1.62 "REIT Sub II" shall mean The Town and Country Holding Corporation II,
a wholly-owned subsidiary of TCT.

      1.63 "Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.

      1.64 "Stock Incentive Plan" shall mean TCT's First Amended and Restated
1993 Long-Term Incentive Plan and TCT's 1997 Long-Term Incentive Plan, each as
amended from time to


                                      A-7
<PAGE>

time in accordance with its respective terms, and any other plan of TCT pursuant
to which Common Shares may be issued or granted.

      1.65 "Supplemental Properties" shall mean assets of the Partnership or
partnership subsidiaries of the Partnership, other than the Properties, which
secure, directly, through a guarantee or otherwise, Nonrecourse Liabilities to
which the Properties are subject.

      1.66 "Town and Country Management" shall mean The Town and Country
Management Corporation, a Delaware corporation which was merged into the
Partnership in connection with the Formation.

      1.67 "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.

      1.68 "TMP Provisions" shall mean Chapter 63 of Subtitle F of the Code and
the Regulations promulgated thereunder.

      1.69 "Underwriting Agreement" shall mean the Underwriting Agreement, dated
August 16, 1993, among the Partnership and TCT and Goldman Sachs & Co., Bear,
Stearns & Co. Inc. and PaineWebber Incorporated, as representatives of the
several underwriters named therein.

      1.70 "Unit" shall mean a unit granted by TCT to the Limited Partners
pursuant to Article IX, each of which represents the right to convert a portion
of a Limited Partner's Partnership Interest into one Common Share, subject to
the anti-dilution adjustments in Exhibit J.


                                      A-8
<PAGE>

                                    Exhibit B

  Names, Addresses, Percentage Interests of the Partners immediately following
            the LLC Contributions (as referenced in Section 3.2(g))

<TABLE>
<S>                                                           <C>
GENERAL PARTNERS:
THE TOWN AND COUNTRY TRUST                                    74.254%
100 South Charles Street
Baltimore, MD 21201

THE TOWN AND COUNTRY ORIOLE
CORPORATION                                                   10.224%
100 South Charles Street
Baltimore, MD 21201

THE TOWN AND COUNTRY HOLDING
CORPORATION                                                    1.738%
100 South Charles Street
Baltimore, MD 21201

THE TOWN AND COUNTRY HOLDING
CORPORATION II                                                 0.252%
100 South Charles Street
Baltimore, MD 21201

with copy to:

Daniel G. Berick, Esq.
Squire, Sanders & Dempsey L.L.P.
4900 Key Center
127 Public Square
Cleveland, OH 44114

LIMITED PARTNERS:

THE BAL-PENN COMPANY                                          11.808%
Fourth Floor
25875 Science Park Drive
Beachwood, Ohio  44122

HARVEY SCHULWEIS                                               1.181%
50th Floor
9 West 57th Street
New York, New York  10019

with copy to:

Daniel G. Berick, Esq.
Squire, Sanders & Dempsey L.L.P.
4900 Key Center
127 Public Square
Cleveland, OH 44114
</TABLE>


                                      B-1
<PAGE>

<TABLE>
<S>                                                            <C>
PAUL TAYLOR, JR.                                               0.543%
The Taylor Simpson Group
One Rockefeller Plaza, Suite 2420
New York, NY 10020
</TABLE>


                                      B-2
<PAGE>

                                    Exhibit C

                         Listing of the PC II Companies

The TC-Fairington Company
The TC-Forest Ridge Company
The TC-Kirkman Company
The TC-McIntosh Company
The TC-Perico Company
The TC-Twelve Oaks Company
The TC-Windermere Lakes Company


                                      C-1
<PAGE>

                                    Exhibit D

                         Maintenance of Capital Accounts

Each Partner's Capital Account shall be determined and adjusted as follows:

(a)   (1) each Partner's Capital Account shall be increased by (i) such
      Partner's Capital Contribution, (ii) such Partner's distributive share of
      Net Profits and Gain From Sale, (iii) such Partner's distributive share of
      any items in the nature of income or gain which are specially allocated
      pursuant to Section 1 of Exhibit E, and Section 4.3(e), of the Partnership
      Agreement, and (iv) the amount of any Partnership liabilities assumed by
      such Partner within the meaning of Regulations Section
      1.704-1(b)(2)(iv)(c); and (2) each Partner's Capital Account shall be
      decreased by (i) the net agreed fair market value of Partnership Property
      and the amount of cash distributed to such Partner pursuant to this
      Partnership Agreement, (ii) such Partner's distributive share of Net
      Losses and Loss From Sale, (iii) such Partner's distributive share of
      items in the nature of deduction or loss which are specially allocated
      pursuant to Section 1 of Exhibit E, and Section 4.3(e), of the Partnership
      Agreement, and (iv) the amount of any liabilities of such Partner assumed
      by the Partnership within the meaning of Regulations Section
      1.704-1(b)(2)(iv)(c) or which are secured by any property contributed by
      such Partner to the Partnership.

(b)   In the event any Partnership Interest is transferred in accordance with
      the terms of this Partnership Agreement, the transferee shall succeed to
      the Capital Account of the transferor to the extent it relates to the
      transferred Partnership Interest.

(c)   In the event the Book Value of a Partnership asset is adjusted (other than
      for Depreciation) pursuant to the terms of this Partnership Agreement, the
      Capital Accounts of all Partners shall be adjusted simultaneously to
      reflect the aggregate net adjustments as if the Partnership recognized
      Gain From Sale or Loss From Sale equal to the amount of such aggregate net
      adjustment. The Book Value of the Partnership's assets have been adjusted
      in connection with the additional capital contribution by TCT referenced
      in Section 3.5(a).

(d)   In the event that the Partnership distributes an asset of the Partnership
      to a Partner, the Partners' Capital Accounts shall be adjusted to reflect
      the manner in which they would have shared any Gain From Sale or Loss From
      Sale that would have been recognized upon a taxable disposition of such
      asset at a price equal to its fair market value at the time of the
      distribution.

(e)   In the event that any distribution from the Partnership to a Partner
      results in an adjustment to the basis of Partnership assets pursuant to
      Code Section 734(b), the Partners' Capital Accounts shall be increased or
      decreased, as the case may be, by the amount of the adjustment
      concurrently with the distribution in accordance with, and to the extent
      permitted by, Regulations Section 1,704-1(b)(2)(iv)(m)(4) and (5).

(f)   The foregoing provisions and the other provisions of this Partnership
      Agreement relating to the maintenance of Capital Accounts are intended to
      comply with Regulations Section 1.704-1(b) and shall be interpreted and
      applied in a manner


                                      D-1
<PAGE>

      consistent with such Regulations. In the event that the General Partners
      shall determine that it is prudent to modify the manner in which the
      Capital Accounts, or any increases or decreases thereto, are computed in
      order to comply with such Regulations, the General Partners may make such
      modification with the Consent of the Limited Partners. The General
      Partners may also make any appropriate modifications with the Consent of
      the Limited Partners in the event that unanticipated events might
      otherwise cause this Partnership Agreement not to comply with Regulations
      Section 1.704-1(b).


                                      D-2
<PAGE>

                                    Exhibit E

                               Certain Allocations

Section 1. Special Allocations

      Prior to any allocation provided for in Section 4.3 of the Partnership
Agreement, the following special allocations shall be made for tax and capital
account purposes in the following order:

      (a) Depreciation. The Partnership's Depreciation initially will be
specially allocated entirely to Bal-Penn and Oriole pro rata. Following the
transaction set forth in Section 3.1(b)(ii) of the Partnership Agreement, the
Partnership's Depreciation shall be specially allocated to the Original Limited
Partners and TC-Oriole, pro rata, in proportion to their Percentage Interests.
Following the transaction set forth in Section 3.1(b)(iv) of the Partnership
Agreement, the Partnership's Depreciation for any taxable year will be specially
allocated as follows:

      (1)   The Depreciation attributable to the Properties will be specially
            allocated as follows:

            (i) first, to the Original Limited Partners, pro rata, in proportion
            to their Original Interests, in an amount equal to the product of
            (x) 85% of the amount of such Depreciation and (y) the Original
            Limited Partners' Special Allocation Fraction;

            (ii) second, if the amount of the Nonrecourse Liabilities to which
            the Properties are subject is less than $232,000,000, to the
            Original Limited Partners, pro rata, in proportion to their Original
            Interests, to the extent necessary to make the product of (x) the
            total amount of Depreciation attributable to the Properties that is
            specially allocated to the Original Limited Partners, when expressed
            as a percentage of the total amount of Depreciation attributable to
            the Properties and (y) the amount of the Nonrecourse Liabilities to
            which the Properties are subject, equal to the product of (A)
            $197,200,000 and (B) the Original Limited Partners' Special
            Allocation Fraction; provided, however, that the Depreciation
            allocated pursuant to this subparagraph (ii) shall not exceed the
            product of (I) 85% of the Depreciation attributable to the
            Properties, and (II) one minus the Original Limited Partners'
            Special Allocation Fraction; and

            (iii) third, the balance if any, to TCT.

      (2)   Supplemental Properties.

            (i) If the Nonrecourse Liabilities to which the Properties are
            subject do not exceed $232,000,000 the Depreciation attributable to
            the Supplemental Properties will be specially allocated as follows:

                  (A) first, to the Original Limited Partners, pro rata, in
                  proportion to their Original Interests, in an amount equal to
                  the product of (x) 85% of the amount of Depreciation
                  attributable to the Supplemental Properties and (y) the
                  Original Limited Partners' Special Allocation Fraction;


                                      E-1
<PAGE>

                  (B) second, to the Original Limited Partners, pro rata, in
                  proportion to their Original Interests, to the extent
                  necessary to make the product of (x) the total amount of
                  Depreciation attributable to the Properties and the
                  Supplemental Properties that is specially allocated to the
                  Original Limited Partners, when expressed as a percentage of
                  the total amount of Depreciation attributable to the
                  Properties and the Supplemental Properties and (y) the amount
                  of the Nonrecourse Liabilities to which the Properties are
                  subject, equal to the product of (I) $197,000,000 and (II) the
                  Original Limited Partners' Special Allocation Fraction;
                  provided, however, that the Depreciation allocated pursuant to
                  this subparagraph (B) shall not exceed the product of (1) 85%
                  of the Depreciation attributable to the Supplemental
                  Properties, and (2) one minus the Original Limited Partners'
                  Special Allocation Fraction; and

                  (C) third, the balance, if any, to TCT.

            (ii) If the Nonrecourse Liabilities to which the Properties are
            subject exceeds $232,000,000, the Depreciation attributable to the
            Supplemental Properties will be specially allocated as follows:

                  (A) first, to the Original Limited Partners, pro rata, in
                  proportion to their Original Interests, in an amount equal to
                  the product of (x) the excess of (I) the product of the total
                  amount of Depreciation attributable to the Properties and the
                  Supplemental Properties, multiplied by a fraction, the
                  numerator of which is $197,200,000, and the denominator of
                  which is the amount of the Nonrecourse Liabilities to which
                  the Properties are subject, over (II) 85% of the total
                  Depreciation attributable to the Properties, and (y) the
                  Original Limited Partners' Special Allocation Fraction;

                  (B) second, to TCT in an amount equal to the excess of (x) the
                  product of the total amount of Depreciation attributable to
                  the Properties and the Supplemental Properties, multiplied by
                  a fraction, the numerator of which is $34,800,000 and the
                  denominator of which is the amount of Nonrecourse Liabilities
                  to which the Properties are subject, over (y) 15% of the total
                  Depreciation attributable to the Properties;

                  (C) third, to TCT in an amount equal to the product of (x) the
                  amount set forth in clause (x) of subparagraph (2)(ii)(A)
                  above, and (y) one minus the Original Limited Partners'
                  Special Allocation Fraction; and

                  (D) fourth, to the Partners, pro rata, in proportion to their
                  Percentage Interests.

      (3)   Depreciation of the Partnership that is not specially allocated
            under paragraphs (1) or (2) shall be allocated to the Partners, pro
            rata, in proportion to their Percentage Interests.

      (b) Interest. The Partnership's deduction for interest for any taxable
year will be specially allocated as follows:


                                      E-2
<PAGE>

      (1)   Interest expense on the first $232,000,000 of Nonrecourse
            Liabilities to which the Properties are subject (such amount of
            interest expense being referred to as the "Current Interest") shall
            be allocated entirely to TCT.

      (2)   Interest expense in excess of the Current Interest shall be
            allocated to the Partners, pro rata, in proportion to their
            Percentage Interests.

      (c) Minimum Gain Chargebacks. If there is a net decrease in Partnership
Nonrecourse Debt Minimum Gain or Partner Minimum Gain during any Partnership
fiscal year, each Partner shall be specially allocated items of Partnership
income and Gain From Sale for such year (and if necessary, subsequent years)
determined in accordance with the requirements of Regulations Section 1.704-2(f)
or 1.704-2(i)(4) as applicable and the definition of "Book Value" in Section 1.2
of Exhibit A. This Section l(c) is intended to comply with the minimum gain
chargeback requirements of Regulations Sections 1.704-2(f) and 1.704-2(i)(4) and
shall be interpreted consistently therewith.

      (d) Section 754 Adjustment. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) and such gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.

      (e) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for
any taxable year shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i).

      (f) Adjustments. With the Consent of the Limited Partners, the General
Partners may adjust the special allocations provided for in Section l(a)(2) of
this Exhibit to the extent deemed necessary by the independent trustees of TCT
at the inception of a financing involving Supplemental Properties to allow TCT
to avoid any material risk that TCT would (i) fail to satisfy the REIT
Requirements or (ii) be subject to entity-level federal income or excise tax
liability.

      (g) Loss Allocations in Excess of Basis. If any allocation of Net Losses,
Net Loss on Sale, Depreciation or any other deduction to a Limited Partner would
exceed such Limited Partner's basis in his or its Partnership Interest
(determined after taking into account all allocations, contributions and
distributions for such year and based solely on information available to the
Partnership) as of the end of such taxable year (such excess being referred to
as the "Excess Losses"), items of income or gain shall be specially allocated to
such Limited Partner in an amount equal to the Excess Losses.

Section 2. Other Allocation Rules

      (a) For purposes of determining the Net Profits, Net Losses or any other
items allocable to any period, Net Profits, Net Losses and any such other items
shall be determined on a daily, monthly, or other basis, as determined by the
General Partners using any permissible method under Section 706 of the Code and
the Regulations thereunder.


                                      E-3
<PAGE>

      (b) In the event that the Partnership acquires a direct or indirect
interest in another partnership by way of contribution or owns a direct or
indirect interest in any other partnership at the time the Book Value of
Partnership property is adjusted pursuant to Section 1.2(a) of Exhibit A, the
allocation of the Partnership's distributive share of income, gain, loss, or
deduction of any such subsidiary partnership shall be made for purposes of this
Partnership Agreement as if the subsidiary partnership's assets were owned
directly by the Partnership and the Book Value of such assets were adjusted (i)
in accordance with Section 1.2(a) of Exhibit A when the interest in any such
subsidiary partnership is acquired by the Partnership, or (ii) in accordance
with Section 1.2(b) of Exhibit A at the time the Book Value of Partnership
property is adjusted pursuant thereto.

      (c) To the extent that any allocation of income or gain made pursuant to
this Partnership Agreement includes the allocation of an item of income or gain
that is recaptured as ordinary income under Code Sections 1245 or 1250, such
ordinary income shall, to the extent possible without affecting the amount of
overall income or loss allocated to any Partner, be allocated to the Partners
who received the allocation of the depreciation or cost recovery deductions that
generated the ordinary income recapture in proportion to their shares of such
deductions, and the remaining items of income or gain will be allocated to the
other Partners.

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

      (e) Certain of the allocations set forth in this Exhibit E (the
"Regulatory Allocations") are intended to comply with certain requirements of
Regulations Sections 1.704-1(b) and 1.704-2. To the extent the Regulatory
Allocations are inconsistent with the manner in which the Partners intend to
divide distributions as stated in the last sentence of Section 4.3(e), the
General Partners are authorized to divide other allocations of Net Profits, Net
Losses, Gain From Sale, Loss From Sale and other items among the Partners in any
reasonable manner so as to prevent the Regulatory Allocations from distorting
the manner in which Partnership distributions would be divided among the
Partners but for application of the Regulatory Allocations.

      (f) Consistent with the allocation of nonrecourse deductions attributable
to property financed with nonrecourse debt, the Nonrecourse Liabilities of the
Partnership initially shall be allocated to Bal-Penn and Oriole, pro rata.
Following the transaction set forth in Section 3.1(b)(ii) of the Partnership
Agreement, the Nonrecourse Liabilities of the Partnership shall be allocated to
the Original Limited Partners and TC-Oriole, pro rata, in proportion to their
Percentage Interests. Following the transaction set forth in Section 3.1(b)(iv)
of the Partnership Agreement, the Nonrecourse Liabilities of the Partnership
shall be allocated as follows:

            (1)   The first $232,000,000 of Nonrecourse Liabilities to which the
                  Properties are subject (such amount of liabilities being
                  referred to as the "Current Debt") shall be allocated:

                  (i) first, to the Original Limited Partners, pro rata, in
                  proportion to their Original Interests, in an amount equal to
                  the product of 85% of the Current Debt multiplied by Original
                  Limited Partners' Special Allocation Fraction;

                  (ii) second, if the amount of the Nonrecourse Liabilities to
                  which the Properties are subject is less than $232,000,000, to
                  the Original Limited


                                      E-4
<PAGE>

                  Partners, pro rata, in proportion to their Original Interests,
                  to the extent necessary to make the total amount of the
                  Nonrecourse Liabilities to which the Properties are subject
                  allocated to the Limited Partners equal to product of
                  $197,200,000 and the Original Limited Partners' Special
                  Allocation Fraction; and

                  (iii) third, the balance, if any, to TCT.

            (2)   Nonrecourse Liabilities in excess of the Current Debt shall be
                  allocated to the Partners, pro rata, in proportion to their
                  Percentage Interests.

      (g) The Partners are aware of the income tax consequences of the
allocations made by the Partnership Agreement and this Exhibit and hereby agree
to be bound by the provisions thereof and hereof in reporting their shares of
Partnership income and loss for income tax purposes.

      (h) The provisions of this Exhibit E and the other provisions of the
Partnership Agreement are intended to comply with the Regulations under Code
Section 752 and shall be interpreted and applied in a manner consistent with
such Regulations. In the event that the General Partners shall determine that it
is prudent to modify the manner of allocating Net Profits, Net Losses, Gain from
Sale, Loss From Sale or any items of income, gain, loss or deduction in order to
comply with such Regulations, the General Partners may make such modification,
with the reasonable Consent of the Limited Partners, provided that such
modification does not have a material effect on the amounts distributable to a
partner pursuant to the last sentence of Section 4.3(e) or on the special
allocations of Nonrecourse Liabilities, Depreciation or interest set forth in
this Exhibit E.

Section 3. Tax Allocations: Code Section 704(c)

      (a) In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss and deduction with respect to any property contributed to the
capital of the Partnership shall, solely for tax purposes, be allocated among
the Partners so as to take account of any variation between the adjusted basis
of such property to the Partnership for federal income tax purposes and its Book
Value at the time of contribution. In the event the Book Value of any
Partnership Property is adjusted (other than for Depreciation) pursuant to the
terms of this Partnership Agreement, subsequent allocations of income, gain,
loss and deduction with respect to such property shall take into account any
variation between the adjusted basis of such property for federal income tax
purposes and its Book Value immediately after the adjustment in the same manner
as under Code Section 704(c) and the Regulations thereunder. To the extent
possible and except as otherwise provided herein, tax allocations shall be made
in the same manner as allocations for Capital Account purposes.

      (b) Any elections or other decisions relating to the allocations made
pursuant to this Section 3 shall be made by the General Partners in any manner
that reasonably reflects the purpose and intention of this Partnership
Agreement. Allocations pursuant to this Section 3 are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Net Profits, Net
Losses, Gain from Sale, Loss From Sale or distributions pursuant to any
provision of this Partnership Agreement.

Section 4. Terms; Section 704(c) Gain


                                      E-5
<PAGE>

      References in this Exhibit to $197,200,000 shall be appropriately reduced
by the amount of any Partnership gain attributable to a sale, exchange or
disposition of one or more of the Properties to the extent that such gain is
allocated to the Limited Partners pursuant to Section 704(c) of the Code.


                                      E-6
<PAGE>

                                    Exhibit F

                               Tax Matters Partner

      (a) TCT shall be the "Tax Matters Partner" for the Partnership, as
provided in Regulations Section 301.6231(a)(7)-1. Each Partner, by the execution
of this Agreement, consents to such designation of the Tax Matters Partner and
agrees to execute, certify, acknowledge, deliver, swear to, file and record at
the appropriate public offices such documents as may be necessary or appropriate
to evidence such consent.

      (b) To the extent and in the manner provided by the TMP Provisions, the
Tax Matters Partner shall furnish the name, address, profits interest and
taxpayer identification number of each Partner, including any successor Limited
Partner, to the Secretary of the Treasury or his delegate ("Secretary").

      (c) To the extent and in the manner provided by the TMP Provisions, the
Tax Matters Partner shall keep each Partner informed of the administrative or
judicial proceedings for the adjustment at the Partnership or Company level of
any item required to be taken into account by a Partner for income tax purposes
(such administrative proceedings being referred to as a "tax audit" and such
judicial proceedings being referred to as "judicial review").

      (d) If the Tax Matters Partner, on behalf of the Partnership, receives a
notice relating to any partnership or nonpartnership item (within the meaning of
Code Sections 6231(a)(3) and (4), respectively) of the Partnership, the Tax
Matters Partner shall, within 30 days of receiving such notice, forward a copy
of such notice to the Partners who hold or held an interest in the profits or
losses of the Partnership for the Partnership taxable year to which the notice
relates.

      (e) The Tax Matters Partner is authorized, but not required:

      (1)   to enter into any settlement with the Internal Revenue Service
            ("IRS") or the Secretary with respect to any tax audit or judicial
            review, in which agreement the Tax Matters Partner may expressly
            state that such agreement shall bind the other Partners, except that
            such settlement agreement shall not bind any Partner who (within the
            time prescribed pursuant to the Code and Regulations thereunder)
            files a statement with the Secretary providing that the Tax Matters
            Partner shall not have the authority to enter into a settlement
            agreement on behalf of such Partner;

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

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

      (4)   to file a request for an administrative adjustment with the
            Secretary at any time and, if any part of such request is not
            allowed by the Secretary, to file an


                                      F-1
<PAGE>

            appropriate pleading (petition or complaint) for judicial review
            with respect to such request;

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

      (6)   to take any other action on behalf of the Partners or the
            Partnership in connection with any tax audit or judicial review
            proceeding to the extent permitted by the TMP Provisions.

      (f) The Partnership shall indemnify and reimburse the Tax Matters Partner
for all expenses, including legal and accounting fees (as such fees are
incurred), claims, liabilities, losses and damages incurred in connection with
any tax audit or judicial review proceeding with respect to the tax liability of
the Partners. The taking of any action and the incurring of any expense by the
Tax Matters Partner in connection with any such proceeding, except to the extent
required by law, is a matter in the discretion of the Tax Matters Partner and
the provisions on limitations of liability of the General Partners set forth in
this Agreement shall be fully applicable to the Tax Matters Partner in its
capacity as such.


                                      F-2
<PAGE>

                                    Exhibit G

                        Listing of the Original Companies

The TC-Hallfield Manor Company
The TC-Ridge-View Company
The TC-East Company
The TC-Harford Company
The TC-North Company
The TC-Northeast Company
The TC-Versailles Company
The TC-Charlesmont Company
The TC-Hollows Company
The TC-Laurel Company
The TC-Montgomery Company
The TC-Montpelier Company
The TC-South Company
The TC-Fox Haven Company
The TC-Garden Wood Company
The TC-West/Greensview Company
The TC-Rolling Road Company
The TC-Woodmoor Company
The TC-Allentown Company
The TC-Harrisburg East Company
The TC-Emmaus Company
The TC-Hanover Company
The TC-Harrisburg Company
The TC-Lancaster East Company
The TC-Lancaster West Company
The TC-York Company


                                      G-1
<PAGE>

                                    Exhibit H

                    Initial Capital Accounts of the Partners

<TABLE>
<CAPTION>
                                 Percentage Interest          Capital Account
                                 -------------------          ---------------
<S>                              <C>                          <C>
TCT                                    75.570%                   $263,500,000

TC-Oriole                              10.432%                   $ 40,437,400

Bal-Penn                               12.215%                   $ 47,350,586

Schulweis                               1.221%                   $  4,735,059

Taylor                                   .562%                   $  2,178,127
                                      -------                    ------------
       Totals                         100.000%                   $358,201,172
</TABLE>


                                       H-1
<PAGE>

                                    Exhibit I

               Units and Deemed Units Granted to Limited Partners

<TABLE>
<CAPTION>
Limited Partner                                Units         Deemed Units
---------------                                -----         ------------
<S>                                         <C>                    <C>
Bal-Penn                                    2,152,299              0
Schulweis                                     215,230              0
Taylor                                         99,006              0
</TABLE>


                                       I-1
<PAGE>

                                    Exhibit J

                          Terms and Conditions of Units

      The Units granted by TCT to the Limited Partners pursuant to Section
9.1(a) hereof shall be subject to the following terms and conditions:

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

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

      "Exercise Notice" shall have the meaning set forth in Paragraph 2 hereof.

      "Exercising Partners" shall have the meaning set forth in Paragraph 2
hereof.

      "SEC" shall mean the Securities and Exchange Commission.

      2. Delivery of Exercise Notices. Any one of more Limited Partners
("Exercising Partners"), subject to the limitations set forth herein, may
deliver to TCT written notice (the "Exercise Notice") pursuant to which such
Exercising Partners elect to convert some or all of their Units and Partnership
Interests into Common Shares subject to the limitations contained in Paragraph 4
below.

      3. Reserved.

      4. Limitation on Exercise of Units. Subject to Section 11.7 of the
Partnership Agreement, Units and related Partnership Interests may be converted
at any time. Notwithstanding the foregoing, no Units and related Partnership
Interests may be converted if such conversion would cause the Partnership to
cease to qualify as a limited partnership under the laws of the jurisdiction of
its organization, absent the approval of the General Partners.

      5. Computation of Purchase Price. Each Unit and the related portion of the
Limited Partner's Partnership Interest shall be convertible into one Common
Share, as adjusted from time to time as provided in Paragraph 13, below.

      6. Closing; Delivery of Exercise Notice. The closing of a conversion of a
Unit and the related Partnership Interest shall be held at the principal offices
of TCT, on the date agreed to by TCT and the Exercising Partner, which date in
no event shall be more than ten (10) days after the date of the Exercise Notice.

      7. Closing Deliveries. At the closing of the conversion of a Unit and the
related Partnership Interest, the Exercising Partner shall deliver to TCT or its
designee such instruments and documents in respect of such Exercising Partner's
due authority to transfer all of the right, title and interest in and to the
Unit and the related Partnership Interest to TCT or its designee and in respect
of the status of the Unit and the related Partnership Interest being
transferred, free and clear of all liens as may be requested by TCT or its
counsel.


                                      J-1
<PAGE>

      8. Term. Subject to Section 3.7 of the Agreement, the grant of the Units
by TCT shall be effective as of the date hereof and the Units shall terminate
for all purposes and in all respects upon the dissolution of the Partnership
(unless the Partnership is continued pursuant to Section 6.1).

      9. Covenants of TCT. To facilitate TCT's ability fully to perform its
obligations hereunder, TCT covenants and agrees as follows:

            (a) At all times during while any Units remain outstanding, TCT
      shall reserve for issuance such number of Common Shares as may be
      necessary to enable TCT to issue such shares upon conversion of all Units
      and related Partnership Interests which are from time to time outstanding.

            (b) As long as TCT shall be obligated to file periodic reports under
      the Exchange Act, TCT timely will file such reports in such manner as
      shall enable any recipient of Common Shares issued to Limited Partners
      hereunder to resell such shares in compliance with Rule 144 promulgated by
      the SEC pursuant to the Securities Act, or any successor rule or
      regulation or statute thereunder.

            (c) As long as any Units remain outstanding, the Limited Partners
      shall receive in a timely manner all reports filed by TCT with the SEC and
      all other communications transmitted from time to time by TCT to its
      shareholders generally.

            (d) TCT will use its best efforts promptly to advise each other
      Limited Partner upon TCT's receipt of an Exercise Notice from any
      Exercising Partner.

      10. Limited Partners' Covenant. Each Limited Partner covenants and agrees
with TCT that all Units (and the related portion of such Limited Partner's
Partnership Interest) converted hereunder shall be delivered to TCT free and
clear of all liens, and should any Liens exist or arise with respect to such
Units or Partnership Interests, TCT shall be under no obligation to acquire the
same. Each Limited Partner further agrees that, in the event any state or local
property transfer tax is payable as a result of the transfer of its Units and
Partnership Interest to TCT (or its designee), such Limited Partner shall assume
and pay such transfer tax.

      11. Fractional Interests. Only Partnership Interests corresponding to
whole numbers of Units may be converted. TCT shall not be required to issue
fractions of Common Shares on the conversion of Units and the related
Partnership Interests. If more than one Unit and the related Partnership
Interest shall be converted at the same time by the same Limited Partner, the
number of full Common Shares that shall be issuable upon the conversion thereof
shall be computed on the basis of the aggregate number of Common Shares
represented by the Units and related Partnership Interests so presented. If any
fraction of a Common Share would, except for the provisions of this Section 11,
be issuable on the conversion of any Units and related Partnership Interests (or
specified portion thereof), TCT shall pay an amount in cash equal to the Closing
Price of the immediately preceding Trading Day multiplied by such fraction.

      12. No Rights as Shareholders. Nothing contained in this Agreement or this
Exhibit J shall be construed as conferring upon any Limited Partner, in his or
its capacity as such, the right to vote or to receive dividends or other
distributions from TCT or to consent to or to receive notice as shareholders in
respect of any meeting of shareholders for the election of directors of TCT or
any other matter, or any rights whatsoever as shareholders of TCT, unless and
until such


                                      J-2
<PAGE>

Limited Partner becomes the holder of Common Shares upon the conversion of Units
and the related Partnership Interests.

      13. Adjustment of Number of Common Shares. (a) In case TCT shall pay or
make a dividend or other distribution in Common Shares on any of its shares of
beneficial interest, the number of Common Shares into which each Unit and the
related Partnership Interest thereafter may be converted shall be increased in
proportion to the increase in outstanding Common Shares resulting from such
dividend or other distribution, such increase to become effective immediately
after the opening of business on the day following the record date fixed for
such dividend or other distribution.

      (b) In case TCT shall issue rights or warrants to all holders of its
Common Shares entitling them to subscribe for or purchase Common Shares at a
price per share less than the current market price per Common Share (as defined
in paragraph (f) below), each Limited Partner which is a holder of a Unit shall
be entitled to receive such number of rights or warrants, as the case may be, as
he would have been entitled to receive had he converted his Units and the
related Partnership Interests immediately prior to the record date for such
issuance by TCT.

      (c) In case the outstanding Common Shares shall be subdivided into a
greater number of shares, the number of Common Shares into which each Unit and
the related Partnership Interest thereafter may be converted shall be increased
proportionately, and, conversely, in case outstanding Common Shares each shall
be combined into a smaller number of shares, the number of Common Shares into
which each Unit and the related Partnership Interest thereafter may be converted
shall be reduced proportionately, such increase or reduction, as the case may
be, to become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes effective.

      (d) In case the Common Shares shall be changed into the same or a
different number of shares of any class or classes of shares of beneficial
interest, whether by capital reorganization, reclassification, or otherwise
(other than subdivision or combination of shares or a stock dividend described
in paragraph (c) of this Paragraph) then and in each such event the Limited
Partners shall have the right thereafter to convert their Units and the related
Partnership Interests into the kind and amount of shares and other securities
and property which would have been received upon such reorganization,
reclassification or other change by holders of the number of Common Shares into
which the Units and the related Partnership Interests might have been converted
immediately prior to such reorganization, reclassification or change.

      (e) TCT may, but shall not be required to, make such adjustments to the
number of Common Shares issuable upon conversion of a Unit and the related
Partnership Interest, in addition to those required by paragraphs (a), (b), (c)
and (d) of this Section, and TCT's Board of Trustees shall have the power to
resolve any ambiguity or correct any error in the adjustments made pursuant to
this Section and its actions in so doing shall be final and conclusive.

      (f) For the purpose of any computation under paragraph (b) above, the
current market price per Common Share on any date shall be deemed to be the
average of the daily Closing Prices for the five consecutive Trading Days
selected by TCT commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. For the
purposes of this paragraph (f), the term "`ex' date", when used in respect of
any issuance or distribution, shall mean the first date on which the Common
Shares trade regular way on such exchange or in such market without the right to
receive such issuance or distribution.


                                      J-3
<PAGE>

                                    Exhibit K

       Terms and Conditions of Convertible Preferred Partnership Interests

      The Convertible Preferred Partnership Interests granted by the Partnership
to TCT pursuant to Section 3.5(a) of the Agreement shall be subject to the
following terms and conditions:

      1. Liquidation Preference. Upon the occurrence of the voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, TCT, as
holder of the Convertible Preferred Partnership Interests, shall be entitled to
be paid, before any distribution or payment is made to the Partners in
accordance with Section 7.2(c) of the Agreement, with respect to each
Convertible Preferred Partnership Interest held thereby, out of the assets of
the Partnership legally available for the payment of distributions, (i) an
amount in cash or, if applicable, other assets or property, equal to $1,000 (the
"Liquidation Preference") in reduction of the Capital Account of TCT, plus (ii)
an amount equal to any accrued but unpaid distributions payable with respect to
such Convertible Preferred Partnership Interests pursuant to Paragraph 2 below
as a guaranteed payment for the use of capital within the meaning of Section
707(c) of the Code and not in reduction of the Capital Account of TCT.

      2. Distributions. TCT, as holder of the Convertible Preferred Partnership
Interests, shall be entitled to receive, out of funds legally available for the
payment of distributions, distributions with respect to each Convertible
Preferred Partnership Interest held by TCT in such amounts and on such dates as
TCT is required to make payments of interest in respect of each $1,000 principal
amount of Notes pursuant to the Indenture. Any such distributions with respect
to Convertible Preferred Partnership Interests shall be made in preference to
any distributions or payments by the Partnership pursuant to Section 4.2 of the
Agreement. Each such distribution shall be a guaranteed payment for the use of
capital within the meaning of Section 707(c) of the Code and not in reduction of
the Capital Account of TCT. None of the Partnership's income will be allocated
in respect of the Convertible Preferred Partnership Interests except as provided
hereby.

      3. Conversion. To the extent that any Notes are converted into Common
Shares as provided in the Indenture, one Convertible Preferred Partnership
Interest shall be automatically converted into a Partnership Interest having the
economic equivalence of the number of Common Shares into which such Notes are
converted (after giving effect to any adjustments to the conversion rate
applicable to the Notes under the Indenture), and the Capital Account of TCT
shall be reduced accordingly. Notwithstanding the foregoing, no Convertible
Preferred Partnership Interests may be converted if such conversion would cause
the Partnership to cease to qualify as a limited partnership under the laws of
the jurisdiction of its organization, absent the approval of the General
Partners.

      4. Redemption. Upon the payment by TCT of the principal of any of the
Notes as and when the same shall become due and payable either at maturity or in
connection with any redemption or purchase of the Notes by TCT in accordance
with the Indenture, the Partnership shall redeem one Convertible Preferred
Partnership Interest for each $1,000 principal amount of Notes so repaid,
redeemed or purchased, at a price equal to the then applicable Liquidation
Preference. In the case of any such redemption, the Capital Account of TCT shall
be reduced accordingly.

<PAGE>

      5. No Voting Rights. In its capacity as a holder of the Convertible
Preferred Partnership Interests, TCT shall not be entitled or permitted to any
right to vote on any matter required or permitted to be voted upon by the
Partners (other than its rights as a General Partner of the Partnership), except
as required by law or insofar as an amendment to the Agreement would adversely
affect the rights of TCT, as holder of the Convertible Preferred Partnership
Interests; provided, however, that the foregoing shall not diminish in any way
the voting rights held hereunder by TCT in any capacity other than as a holder
of the Convertible Preferred Units.

      6. Term. The grant of the Convertible Preferred Partnership Interests
shall be effective as of the date hereof and the Convertible Preferred
Partnership Interests shall terminate for all purposes and in all respects upon
the liquidation or winding-up of the Partnership (unless the Partnership is
continued pursuant to Section 6.1 of the Agreement).

<PAGE>

                                   Schedule 1

                             Form of Exercise Notice

TO:    The Town and Country Trust
       Suite 1700
       100 South Charles Street
       Baltimore, Maryland 21201
       Telecopy: (410) 547-0789


FROM:  _____________________________________
       [Name]

       _____________________________________
       [Address]

      The undersigned, as a limited partner of The TC Operating Limited
Partnership, hereby elects to exercise his right to convert such portion of the
undersigned's Limited Partnership Interest as corresponds to _____ Units into
Common Shares of The Town and Country Trust, in accordance with Article IX of
the Third Amended and Restated Agreement of Limited Partnership of The TC
Operating Limited Partnership dated August 4, 2003.


                                           Date:_________________________


                                           Signature:____________________

STATE OF _____________)
                       )  SS:
COUNTY OF ____________)

      Subscribed and affirmed before me this _____ day of __________, 20__, by
____________________.


                                           _____________________________[SEAL]
                                           NOTARY PUBLIC


                                           _____________________________
                                           Print Name


                                           _____________________________
                                           Commission Expires