<PAGE>

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

                          SECOND AMENDED AND RESTATED

                       AGREEMENT OF LIMITED PARTNERSHIP

                                      OF

                   ELDERTRUST OPERATING LIMITED PARTNERSHIP

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



<PAGE>




                               TABLE OF CONTENTS

ARTICLE I DEFINED TERMS.......................................................1
ARTICLE II ORGANIZATIONAL MATTERS.............................................14
      Section 2.1 Organization................................................14
      Section 2.2 Name........................................................15
      Section 2.3 Registered Office and Agent; Principal Office...............15
      Section 2.4 Term........................................................15
ARTICLE III PURPOSE...........................................................15
      Section 3.1 Purpose and Business........................................15
      Section 3.2 Powers......................................................16
ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF
      PARTNERSHIP INTERESTS...................................................16
      Section 4.1 Capital  Contributions of the Partners;  Restatement of
             Capital Accounts on the Effective Date...........................16
      Section 4.2 Issuances of Partnership Interests..........................17
      Section 4.3 No Preemptive Rights........................................19
      Section 4.4 Other Contribution Provisions...............................19
      Section 4.5 No Interest on Capital......................................19
ARTICLE V DISTRIBUTIONS.......................................................19
      Section 5.1 Requirement and Characterization of Distributions...........19
      Section 5.2 Amounts Withheld............................................23
      Section 5.3 Distributions Upon Liquidation..............................23
      Section 5.4 Revisions to Reflect Issuance of Partnership Interests......23
ARTICLE VI ALLOCATIONS........................................................23
      Section 6.1 Allocations For Capital Account Purposes....................23
      Section 6.2 Revisions to Allocations to Reflect Issuance of Partnership
             Interests........................................................24
ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS.............................25
      Section 7.1 Management..................................................25
      Section 7.2 Certificate of Limited Partnership..........................29
      Section 7.3 Title to Partnership Assets.................................30
      Section 7.4 Reimbursement of the General Partner........................30
      Section 7.5  Outside Activities of the General Partner; Relationship of
             Shares to Partnership Units; Funding Debt........................32
      Section 7.6 Transactions with Affiliates................................33
      Section 7.7 Indemnification.............................................34
      Section 7.8 Liability of the General Partner............................36
      Section 7.9 Other Matters Concerning the General Partner................37
      Section 7.10 Reliance by Third Parties..................................37
      Section 7.11 Restrictions on General Partner's Authority................38
      Section 7.12 Loans by Third Parties.....................................39
ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS.......................39
      Section 8.1 Limitation of Liability.....................................39
      Section 8.2 Management of Business......................................39
      Section 8.3 Outside Activities of Limited Partners......................39
      Section 8.4 Return of Capital...........................................40
      Section 8.5 Rights of Limited Partners Relating to the Partnership......40


                                      i

<PAGE>

      Section 8.6 Redemption Right............................................41
ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS.............................44
      Section 9.1 Records and Accounting......................................44
      Section 9.2 Fiscal Year.................................................44
      Section 9.3 Reports.....................................................44
ARTICLE X TAX MATTERS.........................................................45
      Section 10.1 Preparation of Tax Returns.................................45
      Section 10.2 Tax Elections..............................................45
      Section 10.3 Tax Matters Partner........................................45
      Section 10.4 Organizational Expenses....................................47
      Section 10.5 Withholding................................................47
ARTICLE XI TRANSFERS AND WITHDRAWALS..........................................48
      Section 11.1 Transfer...................................................48
      Section 11.2 Transfers of Partnership Interests of General Partner......48
      Section 11.3 Limited Partners' Rights to Transfer.......................49
      Section 11.4 Substituted Limited Partners...............................51
      Section 11.5 Assignees..................................................51
      Section 11.6 General Provisions.........................................52
ARTICLE XII ADMISSION OF PARTNERS.............................................54
      Section 12.1 Admission of a Successor General Partner...................54
      Section 12.2 Admission of Additional Limited Partners...................54
      Section 12.3 Amendment of Agreement and Certificate of Limited
             Partnership......................................................55
ARTICLE XIII DISSOLUTION AND LIQUIDATION......................................55
      Section 13.1 Dissolution................................................55
      Section 13.2 Winding Up.................................................56
      Section 13.3 Compliance with Timing Requirements of Regulations.........57
      Section 13.4 Deemed Distribution and Recontribution.....................58
      Section 13.5 Rights of Limited Partners.................................58
      Section 13.6 Notice of Dissolution......................................58
      Section 13.7 Cancellation of Certificate of Limited Partnership.........58
      Section 13.8 Reasonable Time for Winding Up.............................59
      Section 13.9 Waiver of Partition........................................59
      Section 13.10 Liability of Liquidator...................................59
ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS......................59
      Section 14.1 Amendments.................................................59
      Section 14.2 Meetings of the Partners...................................61
ARTICLE XV GENERAL PROVISIONS.................................................62
      Section 15.1 Addresses and Notice.......................................62
      Section 15.2 Titles and Captions........................................62
      Section 15.3 Pronouns and Plurals.......................................62
      Section 15.4 Further Action.............................................62
      Section 15.5 Binding Effect.............................................62
      Section 15.6 Creditors..................................................62
      Section 15.7 Waiver.....................................................63
      Section 15.8 Counterparts...............................................63
      Section 15.9 Applicable Law.............................................63



                                      ii
<PAGE>

      Section 15.10 Invalidity of Provisions..................................63
      Section 15.11 Power of Attorney.........................................63
      Section 15.12 Entire Agreement..........................................65
      Section 15.13 No Rights as Shareholders.................................65
      Section 15.14 Limitation to Preserve REIT Status........................65







                                     iii
<PAGE>


                                   EXHIBIT A
                                   ---------
                      PARTNERS AND PARTNERSHIP INTERESTS

                                   EXHIBIT B
                                   ---------
                          CAPITAL ACCOUNT MAINTENANCE

                                   EXHIBIT C
                                   ---------
                           SPECIAL ALLOCATION RULES

                                   EXHIBIT D
                                   ---------
                             NOTICE OF REDEMPTION

                                   EXHIBIT E
                                   ---------
                         VALUE OF CONTRIBUTED PROPERTY

                                   EXHIBIT F
                                   ---------
                     FORM OF PARTNERSHIP UNIT CERTIFICATE

                                   EXHIBIT G
                                   ---------
                        DEFICIT RESTORATION OBLIGATIONS







                                      iv

<PAGE>


                          SECOND AMENDED AND RESTATED
                       AGREEMENT OF LIMITED PARTNERSHIP
                                      OF
                   ELDERTRUST OPERATING LIMITED PARTNERSHIP


         THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP,
dated as of __, 1998, is entered into by and among ElderTrust, a Maryland real
estate investment trust, as the General Partner of the Partnership, and Thomas
W. Balderston, Gregory H. Doyle, Richard R. Howard, D. Lee McCreary, Jr., MGI
Limited Partnership, a Delaware limited partnership, Edward B. Romanov, Jr.,
Senior LifeChoice Corporation, a Pennsylvania corporation, Michael R. Walker
and Joseph A. Williamson, as Limited Partners, together with any other Persons
who become Partners in the Partnership as provided herein.

         WHEREAS, the Partnership was formed on July 30, 1997, and, on July
30, 1997 the Partnership, adopted an Agreement of Limited Partnership;

         WHEREAS, on September 10, 1997, the Partnership adopted a First
Amended and Restated Agreement of Limited Partnership in the form of the Prior
Agreement;

         WHEREAS, the General Partner has been admitted to the Partnership as
an additional general partner pursuant to the terms of the Prior Agreement;

         WHEREAS, ElderTrust Realty Group, a Maryland corporation and the
initial general partner of the Partnership, has withdrawn from the Partnership
effective as of the Effective Date; and

         WHEREAS, the Partners desire to continue the business of the
Partnership pursuant to this Agreement;


         NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby amend
and restate the Prior Agreement in its entirety and agree to continue the
Partnership as a limited partnership under the Delaware Revised Uniform
Limited Partnership Act, as amended from time to time, as follows:


                                   ARTICLE I
                                 DEFINED TERMS

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

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

<PAGE>


                  "Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 12.2 hereof and who is
shown as such on the books and records of the Partnership.

                  "Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership Year (i)
increased by any amounts which such Partner is obligated to restore pursuant
to any provision of this Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5) and (ii) decreased by the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account
is intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

                  "Adjusted Capital Account Deficit" means, with respect to
any Partner, the deficit balance, if any, in such Partner's Adjusted Capital
Account as of the end of the relevant Partnership Year.

                  "Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Exhibit B.

                  "Adjustment Date" has the meaning set forth in Section 4.2.B.

                  "Affiliate" means, with respect to any Person, (i) any
Person directly or indirectly controlling, controlled by or under common
control with such Person, (ii) any Person owning or controlling ten percent
(10%) or more of the outstanding voting interests of such Person, (iii) any
Person of which such Person owns or controls ten percent (10%) or more of the
voting interests or (iv) any officer, director, general partner or trustee of
such Person or any Person referred to in clauses (i), (ii), and (iii) above.
For purposes of this definition, "control," when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

                  "Agreed Value" means (i) in the case of any Contributed
Property contributed to the Partnership as of the Effective Date, the amount
set forth on Exhibit E as the Agreed Value of such Property; (ii) in the case
of any other Contributed Property, the 704(c) Value of such property as of the
time of its contribution to the Partnership, reduced by any liabilities either
assumed by the Partnership upon such contribution or to which such property is
subject when contributed; and (iii) in the case of any property distributed to
a Partner by the Partnership, the Partnership's Carrying Value of such
property at the time such property is distributed, reduced by any indebtedness
either assumed by such Partner upon such distribution or to which such
property is subject at the time of distribution as determined under Section
752 of the Code and the regulations thereunder.

                  "Agreement" means this Agreement of Limited Partnership, as
it may be amended, supplemented or restated from time to time.


                                      2

<PAGE>

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

                  "Available Cash" means, subject to the final sentence of
this definition, with respect to any period for which such calculation is
being made:

                  (a) all cash revenues and funds received by the Partnership
from whatever source (excluding the proceeds of any Capital Contribution) plus
the amount of any reduction (including, without limitation, a reduction
resulting because the General Partner determines such amounts are no longer
necessary) in reserves of the Partnership, which reserves are referred to in
clause (b)(iv) below;

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

                           (i) all interest,  principal and other debt payments
made during such period by the Partnership,

                           (ii) all cash expenditures  (including capital
expenditures) made by the Partnership during such period,

                           (iii) investments in any entity (including loans
made thereto) to the extent that such investments are permitted under this
Agreement and are not otherwise described in clauses (b)(i) or (ii), and

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

                  Notwithstanding the foregoing, (i) during the term of the
Credit Agreement, Available Cash for any fiscal quarter of the Partnership
shall not exceed an amount which would result in a distribution to the General
Partner, in accordance with the provisions of Article V of this Agreement, of
an amount equal to 89% of the General Partner's estimated funds from
operations for such fiscal quarter; provided, that Available Cash may exceed
the limit set forth in this clause (i) to enable the General Partner to
distribute Available Cash to the General Partner in an amount sufficient to
enable the General Partner Entity to pay shareholder dividends that will (1)
satisfy the REIT Requirements of, and (2) avoid any federal income or excise
tax liability for, the General Partner Entity, and (ii) Available Cash shall
not include any cash received or reductions in reserves, or take into account
any disbursements made or reserves established, after commencement of the
dissolution and liquidation of the Partnership.

                  "Book-Tax Disparities" means, with respect to any item of
Contributed Property or Adjusted Property, as of the date of any
determination, the difference between the Carrying Value of such Contributed
Property or Adjusted Property and the adjusted basis thereof for federal
income tax purposes as of such date. A Partner's share of the Partnership's
Book-Tax Disparities in all of its Contributed Property and Adjusted Property
will be reflected by the difference between such Partner's Capital Account
balance as maintained pursuant to Exhibit B and the hypothetical balance of
such Partner's Capital Account computed as if it had been maintained strictly
in accordance with federal income tax accounting principles.


                                      3

<PAGE>

                  "Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Philadelphia, Pennsylvania are
authorized or required by law to close.

                  "Capital Account" means the Capital Account maintained for a
Partner pursuant to Exhibit B. The initial Capital Account balance for each
Partner who is a Partner on the Effective Date shall be the amount set forth
opposite such Partner's name on Exhibit A hereto.

                  "Capital Contribution" means, with respect to any Partner,
any cash, cash equivalents or the Agreed Value of Contributed Property which
such Partner contributes or is deemed to contribute to the Partnership
pursuant to Section 4.1 or 4.2.

                  "Carrying Value" means (i) with respect to a Contributed
Property or Adjusted Property, the 704(c) Value of such property reduced (but
not below zero) by all Depreciation with respect to such Contributed Property
or Adjusted Property, as the case may be, charged to the Partners' Capital
Accounts and (ii) with respect to any other Partnership property, the adjusted
basis of such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time
to time in accordance with Exhibit B, and to reflect changes, additions
(including capital improvements thereto) or other adjustments to the Carrying
Value for dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.

                  "Cash Amount" means an amount of cash equal to the Value on
the Valuation Date of the Shares Amount.

                  "Certificate" means the Certificate of Limited Partnership
relating to the Partnership filed in the office of the Delaware Secretary of
State, as amended from time to time in accordance with the terms hereof and
the Act.

                  "Class A" has the meaning set forth in Section 5.1.C.

                  "Class A Share" has the meaning set forth in Section 5.1.C.

                  "Class A Unit" means any Partnership Unit that is not
specifically designated by the General Partner as being of another specified
class of Partnership Units.

                  "Class B" has the meaning set forth in Section 5.1.C.

                  "Class B Share" has the meaning set forth in Section 5.1.C.

                  "Class B Unit" means a Partnership Unit that is specifically
designated by the General Partner as being a Class B Unit.


                                      4

<PAGE>

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

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

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

                  "Contributed Property" means each property or other asset
contributed to the Partnership, in such form as may be permitted by the Act,
but excluding cash contributed or deemed contributed to the Partnership. Once
the Carrying Value of a Contributed Property is adjusted pursuant to Exhibit
B, such property shall no longer constitute a Contributed Property for
purposes of Exhibit B, but shall be deemed an Adjusted Property for such
purposes.

                  "Conversion Factor" means 1.0; provided that, if the General
Partner Entity (i) declares or pays a dividend on its outstanding Shares in
Shares or makes a distribution to all holders of its outstanding Shares in
Shares, (ii) subdivides its outstanding Shares or (iii) combines its
outstanding Shares into a smaller number of Shares, the Conversion Factor
shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of Shares issued and outstanding on the
record date for such dividend, distribution, subdivision or combination
(assuming for such purposes that such dividend, distribution, subdivision or
combination has occurred as of such time) and the denominator of which shall
be the actual number of Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination; and provided further that if an entity shall cease
to be the General Partner Entity (the "Predecessor Entity") and another entity
shall become the General Partner Entity (the "Successor Entity"), the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which is the Value of one Share of the Predecessor
Entity, determined as of the date when the Successor Entity becomes the
General Partner Entity, and the denominator of which is the Value of one Share
of the Successor Entity, determined as of that same date. (For purposes of the
second provision in the preceding sentence, if any shareholders of the
Predecessor Entity will receive consideration in connection with the
transaction in which the Successor Entity becomes the General Partner Entity,
the numerator in the fraction described above for determining the adjustment
to the Conversion Factor (that is, the Value of one Share of the Predecessor
Entity) shall be the sum of the greatest amount of cash and the fair market
value (as determined in good faith by the General Partner) of any securities
and other consideration that the holder of one Share in the Predecessor Entity
could have received in such transaction (determined without regard to any
provisions governing fractional shares).) Any adjustment to the Conversion


                                      5

<PAGE>

Factor shall become effective immediately after the effective date of the
event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are
to be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if
a Specified Redemption Date shall fall between the record date and the
effective date of any event of the type described above, that the Conversion
Factor applicable to such redemption shall be adjusted to take into account
such event.

                  "Convertible Funding Debt" has the meaning set forth in
Section 7.5.F.

                  "Credit Agreement" means that certain Credit Agreement dated
as of the Effective Date among the General Partner, the Partnership, Various
Banks, Deutsche Bank AG, New York Branch, as Issuing Bank, and German American
Capital Corporation, as Administrative Agent.

                  "Debt" means, as to any Person, as of any date of
determination, (i) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services, (ii) all amounts owed by
such Person to banks or other Persons in respect of reimbursement obligations
under letters of credit, surety bonds and other similar instruments
guaranteeing payment or other performance of obligations by such Person, (iii)
all indebtedness for borrowed money or for the deferred purchase price of
property or services secured by any lien on any property owned by such Person,
to the extent attributable to such Person's interest in such property, even
though such Person has not assumed or become liable for the payment thereof,
and (iv) obligations of such Person incurred in connection with entering into
a lease which, in accordance with generally accepted accounting principles,
should be capitalized.

                  "Declaration of Trust" means the Declaration of Trust of the
General Partner filed in the State of Maryland on September 23, 1997, as
amended or restated from time to time.

                  "Deemed Partnership Interest Value" means, as of any date
with respect to any class of Partnership Interests, the Deemed Value of the
Partnership Interest of such class multiplied by the applicable Partner's
Percentage Interest of such class.

                  "Deemed Value of the Partnership Interest" means, as of any
date with respect to any class of Partnership Interests, (a) if the common
shares of beneficial interest (or other comparable equity interests) of the
General Partner Entity are Publicly Traded (i) the total number of shares of
beneficial interest (or other comparable equity interest) of the General
Partner Entity corresponding to such class of Partnership Interest (as
provided for in Section 4.2.B) issued and outstanding as of the close of
business on such date (excluding any treasury shares) multiplied by the Value
of a share of such beneficial interest (or other comparable equity interest)
on such date divided by (ii) the Percentage Interest of the General Partner in
such class of Partnership Interests on such date, and (b) otherwise, the
aggregate Value of such class of Partnership Interests determined as set forth
in the fourth and fifth sentences of the definition of Value.

                                      6
<PAGE>

                  "Deficit Restoration Agreement" means an agreement made by a
Partner and accepted by the Partnership whereby such Partner agrees to
contribute an amount of cash set forth in such Deficit Restoration Agreement
to the Partnership in the event of the liquidation of the Partnership pursuant
to Article XIII.

                  "Depreciation" means, for each fiscal year, an amount equal
to the federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year, except that if the
Carrying Value of an 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 Carrying Value as
the federal income tax depreciation, amortization, or other cost recovery
deduction for such year bears to such beginning adjusted tax basis; provided,
however, that if the federal income tax depreciation, amortization, or other
cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Carrying Value using any
reasonable method selected by the General Partner.

                  "Distribution Period" has the meaning set forth in Section
5.1.C.

                  "Effective Date" means the date of the closing of the
initial public offering of the General Partner pursuant to the Purchase
Agreement.

                  "ElderTrust Realty Group" means ElderTrust Realty Group,
Inc., a Maryland corporation and the initial general partner of the
Partnership.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

                  "ERISA Plan Investor" means (i) a Plan, (ii) a trust which
was established pursuant to a Plan, or a nominee for such trust or Plan, or
(iii) an entity whose underlying assets include assets of a Plan by reason of
such Plan's investment in such entity.

                  "ET Partnership" means ET Partnership, a Pennsylvania general
partnership.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Funding Debt" means the incurrence of any Debt by or on
behalf of the General Partner Entity for the purpose of providing funds to the
Partnership.

                  "General Partner" means ElderTrust, a Maryland real estate
investment trust, or any of its successors as a general partner of the
Partnership.

                  "General Partner Entity" means the General Partner;
provided, however, that if (i) the common shares of beneficial interest (or
other comparable equity interests) of the General Partner are at any time not
Publicly Traded and (ii) the common shares of beneficial interest (or other
comparable equity interests) of an entity that owns, directly or indirectly,
fifty percent (50%) or more of the common shares of beneficial interest (or
other comparable equity interests) of the General Partner are Publicly Traded,
the term "General Partner Entity" shall refer to such entity whose common
shares of beneficial interest (or other comparable equity securities) are
Publicly Traded. If both requirements set forth in clauses (i) and (ii) above
are not satisfied, then the term "General Partner Entity" shall mean the
General Partner.

                                      7
<PAGE>

                  "General Partner Payment" has the meaning set forth in Section
15.14 hereof.

                  "General Partnership Interest" means a Partnership Interest
held by the General Partner that is a general partnership interest. A General
Partnership Interest may be expressed as a number of Partnership Units.

                  "IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.

                  "Immediate Family" means, with respect to any natural
Person, such natural Person's spouse, parents, descendants, nephews, nieces,
brothers, and sisters.

                  "Incapacity" or "Incapacitated" means, (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating such Partner incompetent to manage his or
her Person or estate, (ii) as to any corporation which is a Partner, the
filing of a certificate of dissolution, or its equivalent, for the corporation
or the revocation of its charter, (iii) as to any partnership or limited
liability company which is a Partner, the dissolution and commencement of
winding up of the partnership or limited liability company, (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership, (v) as to any trustee of a trust which is
a Partner, the termination of the trust (but not the substitution of a new
trustee) or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency
or other similar law now or hereafter in effect, (b) the Partner is adjudged
as bankrupt or insolvent, or a final and nonappealable order for relief under
any bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files
an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f)
any proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of
a trustee, receiver of liquidator has not been vacated or stayed within ninety
(90) days of such appointment or (h) an appointment referred to in clause (g)
is not vacated within ninety (90) days after the expiration of any such stay.

                  "Indemnitee" means (i) any Person made a party to a
proceeding by reason of its status as (A) the General Partner, (B) a Limited
Partner, or (C) a trustee, director or officer of the Partnership, or the
General Partner and (ii) such other Persons (including Affiliates of the

                                      8

<PAGE>

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

                  "Limited Partner" means any Person named as a Limited
Partner in Exhibit A, as such Exhibit may be amended from time to time, or any
Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.

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

                  "Liquidating Event" has the meaning set forth in Section 13.1.

                  "Liquidator" has the meaning set forth in Section 13.2.A.

                  "MGI" means MGI Limited Partnership, a Delaware limited
partnership.

                  "Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain for such taxable period
over the Partnership's items of loss and deduction for such taxable period.
The items included in the calculation of Net Income shall be determined in
accordance with Exhibit B. If an item of income, gain, loss or deduction that
has been included in the initial computation of Net Income is subjected to the
special allocation rules in Exhibit C, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.

                  "Net Loss" means, for any taxable period, the excess, if
any, of the Partnership's items of loss and deduction for such taxable period
over the Partnership's items of income and gain for such taxable period. The
items included in the calculation of Net Loss shall be determined in
accordance with Exhibit B. If an item of income, gain, loss or deduction that
has been included in the initial computation of Net Loss is subjected to the
special allocation rules in Exhibit C, Net Loss or the resulting Net Income,
whichever the case may be, shall be recomputed without regard to such item.

                  "New Securities" means (i) any rights, options, warrants or
convertible or exchangeable securities having the right to subscribe for or
purchase shares of beneficial interest (or other comparable equity interest)
of the General Partner, excluding grants under any Share Option Plan, or (ii)
any Debt issued by the General Partner that provides any of the rights
described in clause (i).

                  "Nonrecourse Built-in Gain" means, with respect to any
Contributed Properties or Adjusted Properties that are subject to a mortgage
or negative pledge securing a Nonrecourse Liability, the amount of any taxable
gain that would be allocated to the Partners pursuant to Section 2.B of
Exhibit C if such properties were disposed of in a taxable transaction in full

                                      9

<PAGE>

satisfaction of such liabilities and for no other consideration.

                  "Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions
for a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).

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

                  "Notice of Redemption" means a Notice of Redemption
substantially in the form of Exhibit D.

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

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

                  "Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).

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

                  "Partnership" means the limited partnership formed under the
Act upon the terms and conditions set forth in this Agreement, or any
successor to such limited partnership.

                  "Partnership Interest" means a Limited Partnership Interest
or the General Partnership Interest and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the
terms and provisions of this Agreement. A Partnership Interest may be
expressed as a number of Partnership Units.

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

                  "Partnership Record Date" means the record date established
by the General Partner either (i) for the distribution of Available Cash
pursuant to Section 5.1 hereof, which record date shall be the same as the
record date established by the General Partner Entity for a distribution to
its shareholders of some or all of its portion of such distribution, or (ii)
if applicable, for determining the Partners entitled to vote on or consent to
any proposed action for which the consent or approval of the Partners is
sought pursuant to Section 14.2 hereof.

                                      10
<PAGE>

                  "Partnership Unit" means a fractional, undivided share of
the Partnership Interests of all Partners issued pursuant to Sections 4.1 and
4.2, and includes Class A Units, Class B Units and any other classes or series
of Partnership Units established after the date hereof. The number of
Partnership Units outstanding and the Percentage Interests in the Partnership
represented by such Partnership Units are set forth in Exhibit A, as such
Exhibit may be amended from time to time. The ownership of Partnership Units
shall be evidenced by a certificate in a form approved by the General Partner.

                  "Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.

                  "Percentage Interest" means, as to a Partner holding a class
of Partnership Interests, its interest in such class, determined by dividing
the Partnership Units of such class owned by such Partner by the total number
of Partnership Units of such class then outstanding as specified in Exhibit A,
as such exhibit may be amended from time to time, multiplied by the aggregate
Percentage Interest allocable to such class of Partnership Interests. If the
Partnership shall at any time have outstanding more than one class of
Partnership Interests, the Percentage Interest attributable to each class of
Partnership Interests shall be determined as set forth in Section 4.2.B.

                  "Person" means a natural person, partnership (whether
general or limited), trust, estate, association, corporation, limited
liability company, unincorporated organization, custodian, nominee or any
other individual or entity in its own or any representative capacity.

                  "Plan" means (i) an employee benefit plan subject to Title I
of ERISA or (ii) a plan as defined in Section 4975(e) of the Code.

                  "Predecessor Entity" has the meaning set forth in the
definition of "Conversion Factor" herein.

                  "Prior Agreement" means the First Amended and Restated
Agreement of Limited Partnership of the Partnership dated as of September 10,
1997, which Prior Agreement is amended and restated in its entirety by this
Agreement as of the Effective Date.

                  "Publicly Traded" means listed or admitted to trading on the
New York Stock Exchange, the American Stock Exchange or another national
securities exchange or designated for quotation on The Nasdaq Stock Market,
Inc. National Market, or any successor to any of the foregoing.

                  "Purchase Agreement" means that certain purchase agreement
among the General Partner and Merrill Lynch & Co., BT Alex. Brown Incorporated
and Goldman Sachs & Co., as representatives of the several underwriters, in
connection with the initial public offering of Shares by the General Partner

                  "Qualified REIT Subsidiary" means any Subsidiary of the
General Partner that is a "qualified REIT subsidiary" within the meaning of
Section 856(i) of the Code.


                                      11
<PAGE>

                  "Recapture Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required by Section 734
or Section 743 of the Code) upon the disposition of any property or asset of
the Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.

                  "Redeeming Partner" has the meaning set forth in Section
8.6.A.

                  "Redemption Amount" means either the Cash Amount or the
Shares Amount, as determined by the General Partner, in its sole and absolute
discretion; provided that if the Shares are not Publicly Traded at the time a
Redeeming Partner exercises its Redemption Right, the Redemption Amount shall
be paid only in the form of the Cash Amount unless the Redeeming Partner, in
its sole and absolute discretion, consents to payment of the Redemption Amount
in the form of the Shares Amount. A Redeeming Partner shall have no right,
without the General Partner's consent, in its sole and absolute discretion, to
receive the Redemption Amount in the form of the Shares Amount.

                  "Redemption Right" has the meaning set forth in Section 8.6.A.

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

                  "REIT" means a real estate investment trust under Section
856 of the Code.

                  "REIT Requirements" has the meaning set forth in Section
5.1.A.

                  "Residual Gain" or "Residual Loss" means any item of gain or
loss, as the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate
Book-Tax Disparities.

                  "Safe Harbor" has the meaning set forth in Section 11.6.F.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "704(c) Value" of any Contributed Property means the fair
market value of such property at the time of contribution as determined by the
General Partner using such reasonable method of valuation as it may adopt;
provided, however, subject to Exhibit B, the General Partner shall, in its
sole and absolute discretion, use such method as it deems reasonable and
appropriate to allocate the aggregate of the 704(c) Value of Contributed
Properties in a single or integrated transaction among each separate property
on a basis proportional to its fair market values. The 704(c) Values of the
Contributed Properties contributed to the Partnership as of the Effective Date
are set forth on Exhibit E.

                  "Share" means a share of beneficial interest (or other
comparable equity interest) of the General Partner Entity. Shares may be
issued in one or more classes or series in accordance with the terms of the
Declaration of Trust (or, if the General Partner is not the General Partner
Entity, the organizational documents of the General Partner Entity). If there
is more than one class or series of Shares, the term "Shares" shall, as the
context requires, be deemed to refer to the class or series of Shares that
correspond to the class or series of Partnership Interests for which the
reference to Shares is made. When used with reference to Class A Units, the
term "Shares" refers to common shares of beneficial interest (or other
comparable equity interest) of the General Partner Entity.

                                      12
<PAGE>

                  "Shares Amount" means a number of Shares equal to the
product of the number of Partnership Units offered for redemption by a
Redeeming Partner times the Conversion Factor; provided that, if the General
Partner Entity issues to all holders of Shares rights, options, warrants or
convertible or exchangeable securities entitling such holders to subscribe for
or purchase Shares or any other securities or property (collectively, the
"rights"), then the Shares Amount shall also include such rights that a holder
of that number of Shares would be entitled to receive.

                  "Share Option Plan" means any equity incentive plan of the
General Partner, the Partnership and/or any Affiliate of the Partnership.

                  "Specified Redemption Date" means the tenth Business Day
after receipt by the General Partner of a Notice of Redemption; provided that,
if the Shares are not Publicly Traded, the Specified Redemption Date means the
thirtieth Business Day after receipt by the General Partner of a Notice of
Redemption.

                  "Subsidiary" means, with respect to any Person, any
corporation, limited liability company, trust, partnership or joint venture,
or other entity of which a majority of (i) the voting power of the voting
equity securities or (ii) the outstanding equity interests is owned, directly
or indirectly, by such Person.

                  "Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 11.4.

                  "Successor Entity" has the meaning set forth in the definition
of "Conversion Factor" herein.

                  "Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership for
cash or a related series of transactions that, taken together, result in the
sale or other disposition of all or substantially all of the assets of the
Partnership for cash.

                  "Termination Transaction" has the meaning set forth in Section
11.2.B.

                  "Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i)
the fair market value of such property (as determined under Exhibit B) as of
such date, over (ii) the Carrying Value of such property (prior to any
adjustment to be made pursuant to Exhibit B) as of such date.

                  "Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i)
the Carrying Value of such property (prior to any adjustment to be made
pursuant to Exhibit B) as of such date, over (ii) the fair market value of
such property (as determined under Exhibit B) as of such date.

                                      13
<PAGE>

                  "Valuation Date" means the date of receipt by the General
Partner of a Notice of Redemption or, if such date is not a Business Day, the
first Business Day thereafter.

                  "Value" means, with respect to any outstanding Shares of the
General Partner Entity that are Publicly Traded, the average of the daily
market price for the ten consecutive trading days immediately preceding the
date with respect to which value must be determined. The market price for each
such trading day shall be the closing price, regular way, on such day, or if
no such sale takes place on such day, the average of the closing bid and asked
prices on such day. If the outstanding Shares of the General Partner Entity
are Publicly Traded and the Shares Amount includes rights that a holder of
Shares would be entitled to receive, then the Value of such rights shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. If the Shares of the General Partner Entity are not Publicly
Traded, the Value of the Shares Amount per Partnership Unit offered for
redemption (which will be the Cash Amount per Partnership Unit offered for
redemption payable pursuant to Section 8.6.A) means the amount that a holder
of one Partnership Unit would receive if each of the assets of the Partnership
were to be sold for its fair market value on the Specified Redemption Date,
the Partnership were to pay all of its outstanding liabilities, and the
remaining proceeds were to be distributed to the Partners in accordance with
the terms of this Agreement. Such Value shall be determined by the General
Partner, acting in good faith and based upon a commercially reasonable
estimate of the amount that would be realized by the Partnership if each asset
of the Partnership (and each asset of each partnership, limited liability
company, trust, joint venture or other entity in which the Partnership owns a
direct or indirect interest) were sold to an unrelated purchaser in an arms'
length transaction where neither the purchaser nor the seller were under
economic compulsion to enter into the transaction (without regard to any
discount in value as a result of the Partnership's minority interest in any
property or any illiquidity of the Partnership's interest in any property). In
connection with determining the Deemed Value of the Partnership Interest for
purposes of determining the number of additional Partnership Units issuable
upon a Capital Contribution funded by an underwritten public offering or an
arm's length private placement of shares of beneficial interest (or other
comparable equity interest) of the General Partner, the Value of such shares
shall be the public offering or arm's length private placement price per share
of such class of beneficial interest (or other comparable equity interest)
sold.

                                  ARTICLE II
                            ORGANIZATIONAL MATTERS


Section 2.1           Organization

                  The Partnership is a limited partnership  organized pursuant
to the  provisions of the Act and upon the terms and  conditions  set forth in
the Prior Agreement. The Partners hereby agree to continue the business of the
Partnership upon the terms and conditions set forth in this Agreement.  Except

                                      14

<PAGE>

as expressly provided herein to the contrary, the rights and obligations of
the Partners and the administration and termination of the Partnership shall
be governed by the Act. The Partnership Interest of each Partner shall be
personal property for all purposes.


Section 2.2           Name

                  The name of the Partnership is ElderTrust Operating Limited
Partnership. The Partnership's business may be conducted under any other name
or names deemed advisable by the General Partner, including the name of the
General Partner or any Affiliate thereof. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership at any time and
from time to time and shall notify the Limited Partners of such change in the
next regular communication to the Limited Partners.


Section 2.3           Registered Office and Agent; Principal Office

                  The address of the registered office of the Partnership in
the State of Delaware shall be located at Corporation Trust Center, 1209
Orange Street, Wilmington, County of New Castle, Delaware 19801, and the
registered agent for service of process on the Partnership in the State of
Delaware at such registered office shall be Corporation Trust Company. The
principal office of the Partnership shall be 415 McFarlan Road, Suite 202,
Kennett Square, PA 19348, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the General Partner deems advisable.


Section 2.4           Term

                  The term of the Partnership commenced on July 30, 1997 and
shall continue until December 31, 2096, unless it is dissolved sooner pursuant
to the provisions of Article XIII or as otherwise provided by law.

                                  ARTICLE III
                                    PURPOSE


Section 3.1           Purpose and Business

                  The purpose and nature of the business to be conducted by
the Partnership is (i) to conduct any business that may be lawfully conducted
by a limited partnership organized pursuant to the Act; provided, however,
that such business shall be limited to and conducted in such a manner as to
permit the General Partner Entity at all times to be classified as a REIT,
unless the General Partner Entity ceases to qualify or is not qualified as a
REIT for any reason or reasons not related to the business conducted by the
Partnership, (ii) to enter into any corporation, partnership, joint venture,

                                      15

<PAGE>

trust, limited liability company or other similar arrangement to engage in any
of the foregoing or the ownership of interests in any entity engaged, directly
or indirectly, in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, the Partners
acknowledge that the status of the General Partner Entity as a REIT inures to
the benefit of all the Partners and not solely to the General Partner Entity
or its Affiliates.


Section 3.2           Powers

                  The Partnership is empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described
herein and for the protection and benefit of the Partnership, including,
without limitation, full power and authority, directly or through its
ownership interest in other entities, to enter into, perform and carry out
contracts of any kind, borrow money and issue evidences of indebtedness,
whether or not secured by mortgage, deed of trust, pledge or other lien,
acquire, own, manage, improve and develop real property, and lease, sell,
transfer and dispose of real property; provided, however, that the Partnership
shall not take, or refrain from taking, any action which, in the judgment of
the General Partner, in its sole and absolute discretion, (i) could adversely
affect the ability of the General Partner Entity to continue to qualify as a
REIT, (ii) could subject the General Partner Entity to any additional taxes
under Section 857 or Section 4981 of the Code or (iii) could violate any law
or regulation of any governmental body or agency having jurisdiction over the
General Partner or its securities, unless such action (or inaction) shall have
been specifically consented to by the General Partner in writing.

                                  ARTICLE IV
                      CAPITAL CONTRIBUTIONS AND ISSUANCES
                           OF PARTNERSHIP INTERESTS


Section 4.1           Capital Contributions of the Partners; Restatement of
Capital Accounts on the Effective Date

                  ElderTrust  Realty  Group,  Edward B.  Romanov,  Jr., D. Lee
McCreary,  Jr. and ET Partnership previously made Capital Contributions to the
Partnership.  Pursuant to the Act and the Prior Agreement, the General Partner
has been admitted to the Partnership as an additional  limited partner without
having made a capital  contribution.  On the Effective Date, ElderTrust Realty
Group shall  withdraw from the  Partnership.  Also on the  Effective  Date, ET
Partnership shall be liquidated and Michael R. Walker,  Edward B. Romanov, Jr.
and MGI shall acquire the limited partnership  interests previously held by ET
Partnership.  On the  Effective  Date,  the  General  Partner  and the Limited
Partners other than MGI, Edward B. Romanov, Jr. and D. Lee McCreary, Jr. shall
make the Capital  Contributions  described in the section captioned "Formation
Transactions"  in the final  prospectus  of the General  Partner in connection
with the initial  public  offering of the Shares.  On the Effective  Date, the
Partnership  shall be recapitalized so that the Partners shall own Partnership
Units in the  amounts  set  forth in  Exhibit A and  shall  have a  Percentage
Interest  in the  Partnership  as set forth in  Exhibit  A,  which  Percentage
Interest  shall be  adjusted  in  Exhibit A from  time to time by the  General

                                      16

<PAGE>

Partner to the extent necessary to reflect accurately redemptions, Capital
Contributions, the issuance of additional Partnership Units or similar events
having an effect on a Partner's Percentage Interest. To the extent the
Partnership acquires any property by the merger of any other Person into the
Partnership, Persons who receive Partnership Interests in exchange for their
interests in the Person merging into the Partnership shall become Partners and
shall be deemed to have made Capital Contributions as provided in the
applicable merger agreement and as set forth in Exhibit A. A number of
Partnership Units held by the General Partner equal to one-tenth of one
percent (0.1%) of all outstanding Partnership Units (as of the Effective Date)
shall be deemed to be the General Partner Partnership Units and shall be the
General Partnership Interest of such General Partner. All other Partnership
Units held by the General Partners shall be deemed to be Limited Partnership
Interests and shall be held by the General Partner in its capacity as a
Limited Partner in the Partnership. Except as provided in Sections 7.5 and
10.5 hereof, the Partners shall have no obligation to make any additional
Capital Contributions or provide any additional funding to the Partnership
(whether in the form of loans, repayments of loans or otherwise). Except for
those Partners listed on Exhibit G who have entered into one or more Deficit
Restoration Obligation Agreements and have agreed thereby to contribute an
amount of cash up to the amount listed next to each such Partner's name on
Exhibit G in the event of the liquidation of the Partnership pursuant to
Article XIII, no Partner shall have any obligation to restore any deficit that
may exist in its Capital Account, either upon a liquidation of the Partnership
or otherwise.


Section 4.2           Issuances of Partnership Interests

                  A. General. The General Partner is hereby authorized to
cause the Partnership from time to time to issue to Partners (including the
General Partner and its Affiliates) or other Persons (including, without
limitation, in connection with the contribution of property to the
Partnership) Partnership Units or other Partnership Interests in one or more
classes, or in one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, including rights, powers and duties senior
to Limited Partnership Interests, all as shall be determined, subject to
applicable Delaware law, by the General Partner in its sole and absolute
discretion, including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series
of Partnership Interests to share in Partnership distributions and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; provided that, no such Partnership Units
or other Partnership Interests shall be issued to the General Partner unless
either (a) the Partnership Interests are issued in connection with the grant,
award or issuance of Shares or other equity interests in the General Partner
having designations, preferences and other rights such that the economic
interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights
(except voting rights) of the Partnership Interests issued to the General
Partner in accordance with this Section 4.2.A or (b) the additional

                                      17

<PAGE>

Partnership Interests are issued to all Partners holding Partnership Interests
in the same class in proportion to their respective Percentage Interests in
such class. If the Partnership issues Partnership Interests pursuant to this
Section 4.2.A, the General Partner shall make such revisions to this Agreement
(including but not limited to the revisions described in Section 5.4, Section
6.2 and Section 8.6) as it deems necessary to reflect the issuance of such
Partnership Interests.

                  B. Percentage Interest Adjustments in the Case of Capital
Contributions for Partnership Units. Upon the acceptance of additional Capital
Contributions in exchange for Partnership Units and if the Partnership shall
have outstanding more than one class of Partnership Interests, the Percentage
Interest related thereto shall be equal to a fraction, the numerator of which
is equal to the amount of cash, if any, plus the Agreed Value of Contributed
Property, if any, contributed with respect to such additional Partnership
Units and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership Interests for all outstanding classes (computed as of the
Business Day immediately preceding the date on which the additional Capital
Contributions are made (an "Adjustment Date")) plus (ii) the aggregate amount
of additional Capital Contributions contributed to the Partnership on such
Adjustment Date in respect of such additional Partnership Units. The
Percentage Interest of each other Partner holding Partnership Interests not
making a full pro rata Capital Contribution shall be adjusted to a fraction
the numerator of which is equal to the sum of (i) the Deemed Partnership
Interest Value of such Limited Partner (computed as of the Business Day
immediately preceding the Adjustment Date) plus (ii) the amount of additional
Capital Contributions (such amount being equal to the amount of cash, if any,
plus the Agreed Value of Contributed Property, if any, so contributed), if
any, made by such Partner to the Partnership in respect of such Partnership
Interest as of such Adjustment Date and the denominator of which is equal to
the sum of (i) the Deemed Value of the Partnership Interests of all
outstanding classes (computed as of the Business Day immediately preceding
such Adjustment Date) plus (ii) the aggregate amount of the additional Capital
Contributions contributed to the Partnership on such Adjustment Date in
respect of such additional Partnership Interests. For purposes of calculating
a Partner's Percentage Interest pursuant to this Section 4.2.B, cash Capital
Contributions by a General Partner will be deemed to equal the cash
contributed by such General Partner plus (a) in the case of cash contributions
funded by an offering of any equity interests in or other securities of the
General Partner, the offering costs attributable to the cash contributed to
the Partnership, and (b) in the case of Partnership Units issued pursuant to
Section 7.5.E, an amount equal to the difference between the Value of the
Shares sold pursuant to any Share Option Plan and the net proceeds of such
sale.

                  C. Classes of Partnership Units. From and after the
Effective Date, subject to Section 4.2.A above, the Partnership shall have two
classes of Partnership Units entitled "Class A Units" and "Class B Units."
Either Class A Units or Class B Units, at the election of the General Partner,
in its sole and absolute discretion, may be issued to newly admitted Partners
in exchange for the contribution by such Partners of cash, real estate
partnership interests, stock, notes or other assets or consideration;
provided, that all Partnership Units issued to Partners on the Effective Date
shall be Class A Units; and, provided further, that any Partnership Unit that
is not specifically designated by the General Partner as being of a particular
class shall be deemed to be a Class A Unit. Each Class B Unit shall be
converted automatically into a Class A Unit on the day immediately following
the Partnership Record Date for the Distribution Period (as defined in Section

                                      18

<PAGE>

5.1.C) in which such Class B Unit was issued, without the requirement for any
action by either the Partnership or the Partner holding the Class B Unit.

                  D. Certain Restrictions on Issuances of Partnership Units or
Other Partnership Interests. Notwithstanding the foregoing, in no event may
the General Partner cause the Partnership to issue to Partners (including the
General Partner and its affiliates) or other Persons any Partnership Units or
other Partnership Interests (i) if such issuance would cause the Partnership
Interests of "benefit plan investors" to become "significant," as those terms
are used in 29 C.F.R. ss. 2510.3-101(f), or any successor regulation thereto,
or would cause the Partnership to become, with respect to any employee benefit
plan subject to Title I of ERISA, a "party-in-interest" (as defined in Section
3(14) of ERISA) or, with respect to any plan defined in Section 4975(e) of the
Code, a "disqualified person" (as defined in Section 4975(e) of the Code), or
(ii) if such issuance would, in the opinion of counsel to the Partnership,
cause any portion of the assets of the Partnership to constitute assets of any
ERISA Plan Investor pursuant to 29 C.F.R. ss. 2510.3-101, or any successor
regulation thereto.


Section 4.3           No Preemptive Rights

                  Except to the extent expressly granted by the Partnership
pursuant to another agreement, no Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership or (ii) issuance or sale of any
Partnership Units or other Partnership Interests.


Section 4.4           Other Contribution Provisions

                  If any Partner is admitted to the Partnership and is given a
Capital Account in exchange for services rendered to the Partnership, such
transaction shall be treated by the Partnership and the affected Partner as if
the Partnership had compensated such Partner in cash, and the Partner had
contributed such cash to the capital of the Partnership.


Section 4.5           No Interest on Capital

                  No Partner shall be entitled to interest on its Capital
Contributions or its Capital Account.

                                   ARTICLE V
                                 DISTRIBUTIONS


Section 5.1           Requirement and Characterization of Distributions

                  A. General. The General Partner shall distribute at least
quarterly an amount equal to one hundred percent (100%) of Available Cash
generated by the Partnership during such quarter or shorter period to the
Partners who are Partners on the Partnership Record Date with respect to such
quarter or shorter period as provided in Sections 5.1.B, 5.1.C and 5.1.D;

                                      19

<PAGE>

provided, that during the term of the Credit Agreement, the General Partner
may not make any distribution with respect to a fiscal quarter until the
General Partner has released its quarterly earnings report with respect to
such fiscal quarter. Notwithstanding anything to the contrary contained
herein, in no event may a Partner receive a distribution of Available Cash
with respect to a Partnership Unit for a quarter or shorter period if such
Partner is entitled to receive a distribution with respect to a Share for
which such Partnership Unit has been redeemed or exchanged. Unless otherwise
expressly provided for herein or in an agreement at the time a new class of
Partnership Interests is created in accordance with Article IV hereof, no
Partnership Interest shall be entitled to a distribution in preference to any
other Partnership Interest. The General Partner shall make such reasonable
efforts, as determined by it in its sole and absolute discretion and
consistent with the qualification of the General Partner Entity as a REIT, to
distribute Available Cash (a) to Limited Partners so as to preclude any such
distribution or portion thereof from being treated as part of a sale of
property of the Partnership by a Limited Partner under Section 707 of the Code
or the Regulations thereunder; provided that, the General Partners and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any distribution to a Limited Partner being so
treated, and (b) to the General Partner in an amount sufficient to enable the
General Partner Entity to pay shareholder dividends that will (1) satisfy the
requirements for qualification as a REIT under the Code and the Regulations
(the "REIT Requirements") of, and (2) avoid any federal income or excise tax
liability for, the General Partner Entity.

                  B. Method. (i) Each holder of Partnership Interests that is
entitled to any preference in distribution shall be entitled to a distribution
in accordance with the rights of any such class of Partnership Interests (and,
within such class, pro rata in proportion to the respective Percentage
Interests on such Partnership Record Date); and

                  (ii) To the extent there is Available Cash remaining after
the payment of any preference in distribution in accordance with the foregoing
clause (i), with respect to Partnership Interests that are not entitled to any
preference in distribution, pro rata to each such class in accordance with the
terms of such class (and, within each such class, pro rata in proportion to
the respective Percentage Interests on such Partnership Record Date).

                  C. Distributions When Class B Units Are Outstanding. If for
any quarter or shorter period with respect to which a distribution is to be
made (a "Distribution Period") Class B Units are outstanding on the
Partnership Record Date for such Distribution Period, the General Partner
shall allocate the Available Cash with respect to such Distribution Period
available for distribution with respect to the Class A Units and Class B Units
collectively between the Partners who are holders of Class A Units ("Class A")
and the Partners who are holders of Class B Units ("Class B") as follows:

                                      20
<PAGE>

                                            (1) Class A shall receive that
                           portion of the Available Cash (the "Class A Share")
                           determined by multiplying the amount of Available
                           Cash by the following fraction:

                                           A x Y
                                --------------------------
                                      (A x Y)+(B x X)


                                            (2) Class B shall receive that
                           portion of the Available Cash (the "Class B Share")
                           determined by multiplying the amount of Available
                           Cash by the following fraction:

                                           B x X
                                --------------------------
                                      (A x Y)+(B x X)


                                            (3) For purposes of the foregoing
                           formulas, (i) "A" equals the number of Class A
                           Units outstanding on the Partnership Record Date
                           for such Distribution Period; (ii) "B" equals the
                           number of Class B Units outstanding on the
                           Partnership Record Date for such Distribution
                           Period; (iii) "Y" equals the number of days in the
                           Distribution Period; and (iv) "X" equals the number
                           of days in the Distribution Period for which the
                           Class B Units were issued and outstanding.

                  The Class A Share shall be distributed among Partners
holding Class A Units on the Partnership Record Date for the Distribution
Period in accordance with the number of Class A Units held by each Partner on
such Partnership Record Date; provided that, in no event may a Partner receive
a distribution of Available Cash with respect to a Class A Unit if a Partner
is entitled to receive a distribution out of such Available Cash with respect
to a Share for which such Class A Unit has been redeemed or exchanged. The
Class B Shares shall be distributed among the Partners holding Class B Units
on the Partnership Record Date for the Distribution Period in accordance with
the number of Class B Units held by each Partner on such Partnership Record
Date. In no event shall any Class B Units be entitled to receive any
distribution of Available Cash for any Distribution Period ending prior to the
date on which such Class B Units are issued.

                  D. Distributions When Class B Units Have Been Issued on
Different Dates. If Class B Units which have been issued on different dates
are outstanding on the Partnership Record Date for any Distribution Period,
then the Class B Units issued on each particular date shall be treated as a
separate series of Partnership Units for purposes of making the allocation of

                                      21

<PAGE>

Available Cash for such Distribution Period among the holders of Partnership
Units (and the formula for making such allocation, and the definitions of
variables used therein, shall be modified accordingly). Thus, for example, if
two series of Class B Units are outstanding on the Partnership Record Date for
any Distribution Period, the allocation formula for each series, "Series B1"
and "Series B2" would be as follows:

                                            (1) Series B1 shall receive that
                           portion of the Available Cash determined by
                           multiplying the amount of Available Cash by the
                           following fraction:

                                                   B1 x X1
                                    --------------------------------------
                                         (A x Y)+(B1 x X1)+(B2 x X2)


                                            (2) Series B2 shall receive that
                           portion of the Available Cash determined by
                           multiplying the amount of Available Cash by the
                           following fraction:

                                                   B2 x X2
                                    --------------------------------------
                                         (A x Y)+(B1 x X1)+(B2 x X2)


                                            (3) For purposes of the foregoing
                           formulas the definitions set forth in Section
                           5.1.C.3 remain the same except that (i) "B1" equals
                           the number of Partnership Units in Series B1
                           outstanding on the Partnership Record Date for such
                           Distribution Period; (ii) "B2" equals the number of
                           Partnership Units in Series B2 outstanding on the
                           Partnership Record Date for such Distribution
                           Period; (iii) "X1" equals the number of days in the
                           Distribution Period for which the Partnership Units
                           in Series B1 were issued and outstanding; and (iv)
                           "X2" equals the number of days in the Distribution
                           Period for which the Partnership Units in Series B2
                           were issued and outstanding.

                  E. Minimum Distributions if Shares Not Publicly Traded. In
addition (and without regard to the amount of Available Cash), if the Shares
of the General Partner Entity are not Publicly Traded, the General Partner
shall make cash distributions with respect to the Class A Units at least
annually for each taxable year of the Partnership beginning prior to the
fifteenth (15th) anniversary of the Effective Date in an aggregate amount with

                                      22



<PAGE>

respect to each such taxable year at least equal to 95% of the Partnership's
taxable income for such year allocable to the Class A Units, with such
distributions to be made not later than 60 days after the end of such year.


Section 5.2           Amounts Withheld

                  All amounts withheld pursuant to the Code or any provisions
of any state or local tax law and Section 10.5 with respect to any allocation,
payment or distribution to the General Partner, the Limited Partners or
Assignees shall be treated as amounts distributed to the General Partner,
Limited Partners or Assignees pursuant to Section 5.1 for all purposes under
this Agreement.


Section 5.3           Distributions Upon Liquidation

                  Proceeds from a Terminating Capital Transaction shall be
distributed to the Partners in accordance with Section 13.2.


Section 5.4           Revisions to Reflect Issuance of Partnership Interests

                  If the Partnership issues Partnership Interests to the
General Partner or any Additional Limited Partner pursuant to Article IV
hereof, the General Partner shall make such revisions to this Article V and
Exhibit A as it deems necessary to reflect the issuance of such additional
Partnership Interests without the requirements for any other consents or
approvals.

                                  ARTICLE VI
                                  ALLOCATIONS


Section 6.1           Allocations For Capital Account Purposes

                  For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the Partnership's
items of income, gain, loss and deduction (computed in accordance with Exhibit
B) shall be allocated among the Partners in each taxable year (or portion
thereof) as provided herein below.

                  A. Net Income. After giving effect to the special
allocations set forth in Section 1 of Exhibit C, Net Income shall be allocated
(i) first, to the General Partner to the extent that Net Losses previously
allocated to the General Partner pursuant to the last sentence of Section
6.1.B exceed Net Income previously allocated to the General Partner pursuant
to this clause (i) of Section 6.1.A, (ii) second, to the holders of any
Partnership Interests that are entitled to any preference in distribution in
accordance with the rights of any such class of Partnership Interests until
each such Partnership Interest has been allocated, on a cumulative basis
pursuant to this clause (ii), Net Income equal to the amount of distributions
received which are attributable to the preference of such class of Partnership
Interests (and, within such class, pro rata in proportion to the respective
Percentage Interests as of the last day of the period for which such
allocation is being made) and (iii) third, with respect to Partnership
Interests that are not entitled to any preference in the allocation of Net

                                      23


<PAGE>

Income, pro rata to each such class in accordance with the terms of such class
(and, within such class, pro rata in proportion to the respective Percentage
Interests as of the last day of the period for which such allocation is being
made).

                  B. Net Losses. After giving effect to the special
allocations set forth in Section 1 of Exhibit C, Net Losses shall be allocated
(i) first, to the holders of any Partnership Interests that are entitled to
any preference in distribution in accordance with the rights of any such class
of Partnership Interests to the extent that any prior allocations of Net
Income to such class of Partnership Interests pursuant to Section 6.1.A(ii)
exceed, on a cumulative basis, distributions with respect to such Partnership
Interests pursuant to clause (i) of Section 5.1.B (and, within such class, pro
rata in proportion to the respective Percentage Interests as of the last day
of the period for which such allocation is being made) and (ii) second, with
respect to classes of Partnership Interests that are not entitled to any
preference in distribution, pro rata to each such class in accordance with the
terms of such class (and, within such class, pro rata in proportion to the
respective Percentage Interests as of the last day of the period for which
such allocation is being made); provided that Net Losses shall not be
allocated to any Partner (including the General Partner) pursuant to this
Section 6.1.B to the extent that such allocation would cause such Partner
(including the General Partner) to have an Adjusted Capital Account Deficit
(or increase any existing Adjusted Capital Account Deficit) at the end of such
taxable year (or portion thereof). All Net Losses in excess of the limitations
set forth in this Section 6.1.B shall be allocated to the General Partner.

                  C. Allocation of Nonrecourse Debt. For purposes of
Regulation Section 1.752-3(a), the Partners agree that Nonrecourse Liabilities
of the Partnership in excess of the sum of (i) the amount of Partnership
Minimum Gain and (ii) the total amount of Nonrecourse Built-in Gain shall be
allocated among the Partners in accordance with their respective Percentage
Interests.

                  D. Recapture Income. Any gain allocated to the Partners upon
the sale or other taxable disposition of any Partnership asset shall, to the
extent possible after taking into account other required allocations of gain
pursuant to Exhibit C, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains
as Recapture Income.


Section 6.2           Revisions to Allocations to Reflect Issuance of
Partnership Interests

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

                                      24

<PAGE>

                                  ARTICLE VII
                     MANAGEMENT AND OPERATIONS OF BUSINESS


Section 7.1           Management

                  A. Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business and
affairs of the Partnership are and shall be exclusively vested in the General
Partner, and no Limited Partner shall have any right to participate in or
exercise control or management power over the business and affairs of the
Partnership. The General Partner may not be removed by the Limited Partners
with or without cause. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this Agreement,
the General Partner, subject to Section 7.11, shall have full power and
authority to do all things deemed necessary or desirable by it to conduct the
business of the Partnership, to exercise all powers set forth in Section 3.2
and to effectuate the purposes set forth in Section 3.1, including, without
limitation:

                           (1)      the making of any expenditures, the
                                    lending or borrowing of money (including,
                                    without limitation, making prepayments on
                                    loans and borrowing money to permit the
                                    Partnership to make distributions to its
                                    Partners in such amounts as are required
                                    under Section 5.1.E or will permit the
                                    General Partner Entity (so long as the
                                    General Partner Entity qualifies as REIT)
                                    to avoid the payment of any federal income
                                    tax (including, for this purpose, any
                                    excise tax pursuant to Section 4981 of the
                                    Code) and to make distributions to its
                                    shareholders sufficient to permit the
                                    General Partner Entity to maintain REIT
                                    status), the assumption or guarantee of,
                                    or other contracting for, indebtedness and
                                    other liabilities, the issuance of
                                    evidences of indebtedness (including the
                                    securing of same by mortgage, deed of
                                    trust or other lien or encumbrance on the
                                    Partnership's assets) and the incurring of
                                    any obligations the General Partner Entity
                                    deems necessary for the conduct of the
                                    activities of the Partnership;

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

                           (3)      the acquisition, disposition, mortgage,
                                    pledge, encumbrance, hypothecation or
                                    exchange of any or all of the assets of
                                    the Partnership (including the exercise or
                                    grant of any conversion, option, privilege
                                    or subscription right or other right
                                    available in connection with any assets at
                                    any time held by the Partnership) or the
                                    merger or other combination of the

                                      25



<PAGE>

                                    Partnership with or into another entity on
                                    such terms as the General Partner deems
                                    proper;


                           (4)      the use of the assets of the Partnership
                                    (including, without limitation, cash on
                                    hand) for any purpose consistent with the
                                    terms of this Agreement and on any terms
                                    it sees fit, including, without
                                    limitation, the financing of the conduct
                                    of the operations of the General Partner,
                                    the Partnership or any of the
                                    Partnership's Subsidiaries, the lending of
                                    funds to other Persons (including, without
                                    limitation, the Partnership's
                                    Subsidiaries) and the repayment of
                                    obligations of the Partnership and its
                                    Subsidiaries and any other Person in which
                                    the Partnership has an equity investment
                                    and the making of capital contributions to
                                    its Subsidiaries;

                           (5)      the management, operation, leasing,
                                    landscaping, repair, alteration,
                                    demolition or improvement of any real
                                    property or improvements owned by the
                                    Partnership or any Subsidiary of the
                                    Partnership or any Person in which the
                                    Partnership has made a direct or indirect
                                    equity investment;

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

                           (7)      the mortgage, pledge, encumbrance or
                                    hypothecation of any assets of the
                                    Partnership, and the use of the assets of
                                    the Partnership (including, without
                                    limitation, cash on hand) for any purpose
                                    consistent with the terms of this
                                    Agreement and on any terms it sees fit,
                                    including, without limitation, the
                                    financing of the conduct or the operations
                                    of the General Partner or the Partnership,
                                    the lending of funds to other Persons
                                    (including, without limitation, any
                                    Subsidiaries of the Partnership) and the
                                    repayment of obligations of the
                                    Partnership, any of its Subsidiaries and
                                    any other Person in which it has an equity
                                    investment;

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

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

                                      26


<PAGE>

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

                           (11)     the selection, designation of powers,
                                    authority and duties and the dismal of
                                    employees of the Partnership (including,
                                    without limitation, employees having
                                    titles such as "president," "vice
                                    president," "secretary" and "treasurer")
                                    and agents, outside attorneys,
                                    accountants, consultants and contractors
                                    of the Partnership and the determination
                                    of their compensation and other terms of
                                    employment or hiring;

                           (12)     the maintenance of such insurance for the
                                    benefit of the Partnership and the
                                    Partners as it deems necessary or
                                    appropriate;

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

                           (14)     the control of any matters affecting the
                                    rights and obligations of the Partnership,
                                    including the settlement, compromise,
                                    submission to arbitration or any other
                                    form of dispute resolution or abandonment
                                    of any claim, cause of action, liability,
                                    debt or damages due or owing to or from
                                    the Partnership, the commencement or
                                    defense of suits, legal proceedings,
                                    administrative proceedings, arbitrations
                                    or other forms of dispute resolution, the
                                    representation of the Partnership in all
                                    suits or legal proceedings, administrative
                                    proceedings, arbitrations or other forms
                                    of dispute resolution, the incurring of
                                    legal expense and the indemnification of
                                    any Person against liabilities and
                                    contingencies to the extent permitted by
                                    law;

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

                                      27


<PAGE>

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

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

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

                           (19)     the making, executing and delivering of
                                    any and all deeds, leases, notes, deeds to
                                    secure debt, mortgages, deeds of trust,
                                    security agreements, conveyances,
                                    contracts, guarantees, warranties,
                                    indemnities, waivers, releases or other
                                    legal instruments or agreements in writing
                                    necessary or appropriate in the judgment
                                    of the General Partner for the
                                    accomplishment of any of the powers of the
                                    General Partner enumerated in this
                                    Agreement;

                           (20)     the distribution of cash to acquire
                                    Partnership Units held by a Limited
                                    Partner in connection with a Limited
                                    Partner's exercise of its Redemption Right
                                    under Section 8.6;

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

                           (22)     the acceptance on behalf of the
                                    Partnership of any Deficit Restoration
                                    Obligation Agreement made by any Partner,
                                    and the amendment and restatement of
                                    Exhibit G to reflect accurately at all
                                    times the names of the Partners who have
                                    made one or more Deficit Restoration
                                    Agreements which have been accepted by the
                                    Partnership and the aggregate amounts
                                    obligated by such Partners pursuant to
                                    such Deficit Restoration Agreements, which

                                      28


<PAGE>

                                    amendment and restatement, notwithstanding
                                    anything in this Agreement to the contrary,
                                    shall not be deemed an amendment of this
                                    Agreement.

                  B. No Approval by Limited Partners. Except as provided in
Section 7.11, each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement,
the Act or any applicable law, rule or regulation, to the full extent
permitted under the Act or other applicable law. The execution, delivery or
performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement
or of any duty stated or implied by law or equity.

                  C. Insurance. At all times from and after the date hereof,
the General Partner may cause the Partnership to obtain and maintain (i)
casualty, liability and other insurance on the properties of the Partnership
and (ii) liability insurance for the Indemnitees hereunder and (iii) such
other insurance as the General Partner, in its sole and absolute discretion,
determines to be necessary.

                  D. Working Capital and Other Reserves. At all times from and
after the date hereof, the General Partner may cause the Partnership to
establish and maintain working capital reserves in such amounts as the General
Partner, in its sole and absolute discretion, deems appropriate and reasonable
from time to time, including upon liquidation of the Partnership under Article
XIII.

                  E. No Obligation to Consider Tax Consequences of Limited
Partners. In exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action
taken (or not taken) by any of them. The General Partner and the Partnership
shall not have liability to a Limited Partner for monetary damages or
otherwise for losses sustained, liabilities incurred or benefits not derived
by such Limited Partner in connection with such decisions, provided that the
General Partner has acted in good faith and pursuant to its authority under
this Agreement.


Section 7.2           Certificate of Limited Partnership

                  The General Partner has previously filed the Certificate
with the Secretary of State of Delaware. To the extent that such action is
determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other state, the
District of Columbia or other jurisdiction in which the Partnership may elect
to do business or own property. Subject to the terms of Section 8.5.A(4), the
General Partner shall not be required, before or after filing, to deliver or

                                      29



<PAGE>

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


Section 7.3           Title to Partnership Assets

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


Section 7.4           Reimbursement of the General Partner

                  A. No Compensation. Except as provided in this Section 7.4
and elsewhere in this Agreement (including the provisions of Articles V and VI
regarding distributions, payments and allocations to which it may be
entitled), the General Partner shall not be compensated for its services as
general partner of the Partnership.

                  B. Responsibility for Partnership Expenses. The Partnership
shall be responsible for and shall pay all expenses relating to the
Partnership's organization, the ownership of its assets and its operations.
The General Partner shall be reimbursed on a monthly basis, or such other
basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to the ownership and operation
of, or for the benefit of, the Partnership (including, without limitation,
expenses related to the operations of the General Partner and to the
management and administration of any Subsidiaries of the General Partner or
the Partnership or Affiliates of the Partnership, such as auditing expenses
and filing fees); provided that, the amount of any such reimbursement shall be
reduced by (i) any interest earned by the General Partner with respect to bank
accounts or other instruments or accounts held by it on behalf of the
Partnership as permitted in Section 7.5.A (which interest is considered to
belong to the Partnership and shall be paid over to the Partnership to the
extent not applied to reimburse the General Partner for expenses hereunder);
and (ii) any amount derived by the General Partner from any investments
permitted in Section 7.5.A. The General Partner shall determine in good faith
the amount of expenses incurred by it related to the ownership and operation

                                      30



<PAGE>

of, or for the benefit of, the Partnership. If certain expenses are incurred
for the benefit of the Partnership and other entities (including the General
Partner), such expenses will be allocated to the Partnership and such other
entities in such a manner as the General Partner in its sole and absolute
discretion deems fair and reasonable. Such reimbursements shall be in addition
to any reimbursement to the General Partner pursuant to Section 10.3.C and as
a result of indemnification pursuant to Section 7.7. All payments and
reimbursements hereunder shall be characterized for federal income tax
purposes as expenses of the Partnership incurred on its behalf, and not as
expenses of the General Partner.

                  C. Partnership Interest Issuance Expenses. The General
Partner shall also be reimbursed for all expenses it incurs relating to any
issuance of Partnership Interests, Shares, Debt of the Partnership or the
General Partner or rights, options, warrants or convertible or exchangeable
securities pursuant to Article IV (including, without limitation, all costs,
expenses, damages and other payments resulting from or arising in connection
with litigation related to any of the foregoing), all of which expenses are
considered by the Partners to constitute expenses of, and for the benefit of,
the Partnership.

                  D. Purchases of Shares by the General Partner. If the
General Partner exercises its rights under the Declaration of Trust to
purchase Shares or otherwise elects to purchase from its shareholders Shares
in connection with a share repurchase or similar program or for the purpose of
delivering such Shares to satisfy an obligation under any dividend
reinvestment or equity purchase program adopted by the General Partner, any
employee equity purchase plan adopted by the General Partner or any similar
obligation or arrangement undertaken by the General Partner in the future, the
purchase price paid by the General Partner for those Shares and any other
expenses incurred by the General Partner in connection with such purchase
shall be considered expenses of the Partnership and shall be reimbursable to
the General Partner, subject to the conditions that: (i) if those Shares
subsequently are to be sold by the General Partner, the General Partner shall
pay to the Partnership any proceeds received by the General Partner for those
Shares (provided that a transfer of Shares for Partnership Units pursuant to
Section 8.6 would not be considered a sale for such purposes); and (ii) if
such Shares are not retransferred by the General Partner within thirty (30)
days after the purchase thereof, the General Partner shall cause the
Partnership to cancel a number of Partnership Units (rounded to the nearest
whole Partnership Unit) held by the General Partner equal to the product
attained by multiplying the number of those Shares by a fraction, the
numerator of which is one and the denominator of which is the Conversion
Factor.

                  E. Reimbursement not a Distribution. If and to the extent
any reimbursement made pursuant to this Section 7.4 is determined for federal
income tax purposes not to constitute a payment of expenses of the
Partnership, the amount so determined shall constitute a guaranteed payment
with respect to capital within the meaning of Section 707(c) of the Code,
shall be treated consistently therewith by the Partnership and all Partners
and shall not be treated as a distribution for purposes of computing the
Partners' Capital Accounts.

                                      31


<PAGE>


Section 7.5         Outside  Activities of the General  Partner;  Relationship
                    of Shares to  Partnership  Units; Funding Debt

                  A. General. Without the Consent of the Outside Limited
Partners, the General Partner shall not, directly or indirectly, enter into or
conduct any business other than in connection with the ownership, acquisition
and disposition of Partnership Interests as a General Partner or Limited
Partner and the management of the business of the Partnership and such
activities as are incidental thereto. Without the Consent of the Outside
Limited Partners, the assets of the General Partner shall be limited to
Partnership Interests and permitted debt obligations of the Partnership (as
contemplated by Section 7.5.F), so that Shares and Partnership Units are
completely fungible except as otherwise specifically provided herein;
provided, that the General Partner shall be permitted to hold such bank
accounts or similar instruments or accounts in its name as it deems necessary
to carry out its responsibilities and purposes as contemplated under this
Agreement and its organizational documents (provided that accounts held on
behalf of the Partnership to permit the General Partner to carry out its
responsibilities under this Agreement shall be considered to belong to the
Partnership and the interest earned thereon shall, subject to Section 7.4.B,
be applied for the benefit of the Partnership); and, provided further, that
the General Partner shall be permitted to acquire, directly or through a
Qualified REIT Subsidiary or limited liability company, up to a one percent
(1%) interest in any partnership or limited liability company at least
ninety-nine percent (99%) of the equity of which is owned, directly or
indirectly, by the Partnership. The General Partner and any of its Affiliates
may acquire Limited Partnership Interests and shall be entitled to exercise
all rights of a Limited Partner relating to such Limited Partnership
Interests.

                  B. Repurchase of Shares. If the General Partner exercises
its rights under the Declaration of Trust to purchase Shares or otherwise
elects to purchase from its shareholders Shares in connection with a share
repurchase or similar program or for the purpose of delivering such shares to
satisfy an obligation under any dividend reinvestment or share purchase
program adopted by the General Partner, any employee share purchase plan
adopted by the General Partner or any similar obligation or arrangement
undertaken by the General Partner in the future, then the General Partner
shall cause the Partnership to purchase from the General Partner that number
of Partnership Units of the appropriate class equal to the product obtained by
multiplying the number of Shares purchased by the General Partner times a
fraction, the numerator of which is one and the denominator of which is the
Conversion Factor, on the same terms and for the same aggregate price that the
General Partner purchased such Shares.

                  C. Forfeiture of Shares. If the Partnership or the General
Partner acquires Shares as a result of the forfeiture of such Shares under a
restricted or similar share plan, then the General Partner shall cause the
Partnership to cancel that number of Partnership Units equal to the number of
Shares so acquired, and, if the Partnership acquired such Shares, it shall
transfer such Shares to the General Partner for cancellation.

                  D. Issuances of Shares. After the Effective Date, the
General Partner shall not grant, award, or issue any additional Shares (other
than Shares issued pursuant to Section 8.6 hereof or pursuant to a dividend or

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<PAGE>

distribution (including any share split) of Shares to all of its
shareholders), other equity securities of the General Partner, New Securities
or Convertible Funding Debt unless (i) the General Partner shall cause,
pursuant to Section 4.2.A hereof, the Partnership to issue to the General
Partner Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences
and other rights, all such that the economic interests are substantially the
same as those of such additional Shares, other equity securities, New
Securities or Convertible Funding Debt, as the case may be, and (ii) the
General Partner transfers to the Partnership, as an additional Capital
Contribution, the proceeds from the grant, award, or issuance of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, or from the exercise of rights contained in
such additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be. Without limiting the foregoing, the General
Partner is expressly authorized to issue additional Shares, other equity
securities, New Securities or Convertible Funding Debt, as the case may be,
for less than fair market value, and the General Partner is expressly
authorized, pursuant to Section 4.2.A hereof, to cause the Partnership to
issue to the General Partner corresponding Partnership Interests, as long as
(a) the General Partner concludes in good faith that such issuance is in the
interests of the General Partner and the Partnership (for example, and not by
way of limitation, the issuance of Shares and corresponding Partnership Units
pursuant to a share purchase plan providing for purchases of Shares, either by
employees or shareholders, at a discount from fair market value or pursuant to
employee share options that have an exercise price that is less than the fair
market value of the Shares, either at the time of issuance or at the time of
exercise) and (b) the General Partner transfers all proceeds from any such
issuance or exercise to the Partnership as an additional Capital Contribution.

                  E. Share Option Plan. If at any time or from time to time,
the General Partner sells Shares pursuant to any Share Option Plan, the
General Partner shall transfer the net proceeds of the sale of such Shares to
the Partnership as an additional Capital Contribution in exchange for an
amount of additional Partnership Units equal to the number of Shares so sold
divided by the Conversion Factor.

                  F. Funding Debt. The General Partner may incur a Funding
Debt, including, without limitation, a Funding Debt that is convertible into
Shares or otherwise constitutes a class of New Securities ("Convertible
Funding Debt"), subject to the condition that the General Partner lend to the
Partnership the net proceeds of such Funding Debt; provided, that Convertible
Funding Debt shall be issued pursuant to Section 7.5.D above; and, provided
further, that the General Partner shall not be obligated to lend the net
proceeds of any Funding Debt to the Partnership in a manner that would be
inconsistent with the General Partner's ability to remain qualified as a REIT.
If the General Partner enters into any Funding Debt, the loan to the
Partnership shall be on comparable terms and conditions, including interest
rate, repayment schedule and costs and expenses, as are applicable with
respect to or incurred in connection with such Funding Debt.


Section 7.6           Transactions with Affiliates

                  A. Transactions with Certain Affiliates. Except as expressly
permitted  by  this  Agreement,   the  Partnership   shall  not,  directly  or

                                      33



<PAGE>

indirectly, sell, transfer or convey any property to, or purchase any property
from, or borrow funds from, or lend funds to, any Partner or any Affiliate of
the Partnership or the General Partner that is not also a Subsidiary of the
Partnership, except pursuant to transactions that are on terms that are fair
and reasonable and no less favorable to the Partnership than would be obtained
from an unaffiliated third party.

                  B. Conflict Avoidance. The General Partner is expressly
authorized to enter into, in the name and on behalf of the Partnership, a
right of first opportunity arrangement and other conflict avoidance agreements
with various Affiliates of the Partnership and the General Partner on such
terms as the General Partner, in its sole and absolute discretion, believes is
advisable.

                  C. Benefit Plans Sponsored by the Partnership. The General
Partner, in its sole and absolute discretion and without the approval of the
Limited Partners, may propose and adopt on behalf of the Partnership employee
benefit plans funded by the Partnership for the benefit of employees of the
General Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them.


Section 7.7           Indemnification

                  A. General. The Partnership shall indemnify each Indemnitee
to the fullest extent provided by the Act from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including, without
limitation, attorneys fees and other legal fees and expenses), judgments,
fines, settlements and other amounts arising from or in connection with any
and all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, incurred by the Indemnitee and relating to
the Partnership or the General Partner or the operation of, or the ownership
of property by, any of them as set forth in this Agreement in which any such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established by a final determination of a court of
competent jurisdiction that: (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceeding and either was committed
in bad faith or was the result of active and deliberate dishonesty, (ii) the
Indemnitee actually received an improper personal benefit in money, property
or services or (iii) in the case of any criminal proceeding, the Indemnitee
had reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guarantee, contractual obligation for any
indebtedness or other obligation or otherwise, for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into
one or more indemnity agreements consistent with the provisions of this
Section 7.7 in favor of any Indemnitee having or potentially having liability
for any such indebtedness. The termination of any proceeding by judgment,
order or settlement does not create a presumption that the Indemnitee did not
meet the requisite standard of conduct set forth in this Section 7.7.A. The
termination of any proceeding by conviction or upon a plea of nolo contendere
or its equivalent, or an entry of an order of probation prior to judgment,
creates a rebuttable presumption that the Indemnitee acted in a manner
contrary to that specified in this Section 7.7.A with respect to the subject

                                      34



<PAGE>

matter of such proceeding. Any indemnification pursuant to this Section 7.7
shall be made only out of the assets of the Partnership, and any insurance
proceeds from the liability policy covering the General Partner and any
Indemnitee, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.7.

                  B. Advancement of Expenses. Reasonable expenses expected to
be incurred by an Indemnitee shall be paid or reimbursed by the Partnership in
advance of the final disposition of any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative made or
threatened against an Indemnitee upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief
that the standard of conduct necessary for indemnification by the Partnership
as authorized in this Section 7.7.A has been met and (ii) a written
undertaking by or on behalf of the Indemnitee to repay the amount if it shall
ultimately be determined that the standard of conduct has not been met.

                  C. No Limitation of Rights. The indemnification provided by
this Section 7.7 shall be in addition to any other rights to which an
Indemnitee or any other Person may be entitled under any agreement, pursuant
to any vote of the Partners, as a matter of law or otherwise, and shall
continue as to an Indemnitee who has ceased to serve in such capacity unless
otherwise provided in a written agreement pursuant to which such Indemnitee is
indemnified.

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

                  E. Benefit Plan Fiduciary. For purposes of this Section 7.7,
(i) excise taxes assessed on an Indemnitee, or for which the Indemnitee is
otherwise found liable, in connection with an ERISA Plan Investor pursuant to
applicable law shall constitute fines within the meaning of this Section 7.7
and (ii) actions taken or omitted by the Indemnitee in connection with an
ERISA Plan Investor in the performance of its duties shall be deemed to be for
a purpose which is not opposed to the best interests of the Partnership.

                  F. No Personal Liability for Limited Partners. In no event
may an Indemnitee subject any of the Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.

                  G. Interested Transactions. An Indemnitee shall not be
denied indemnification in whole or in part under this Section 7.7 because the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.

                                      35


<PAGE>

                  H. Benefit. The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their employees, officers, directors, trustees,
heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons. Any amendment,
modification or repeal of this Section 7.7, or any provision hereof, shall be
prospective only and shall not in any way affect the limitation on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or related to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.

                  I. Indemnification Payments Not Distributions. If and to the
extent any payments to the General Partner pursuant to this Section 7.7
constitute gross income to the General Partner (as opposed to the repayment of
advances made on behalf of the Partnership), such amounts shall constitute
guaranteed payments within the meaning of Section 707(c) of the Code, shall be
treated consistently therewith by the Partnership and all Partners, and shall
not be treated as distributions for purposes of computing the Partners'
Capital Accounts.

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


Section 7.8           Liability of the General Partner

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

                  B. No Obligation to Consider Separate Interests of Limited
Partners or Shareholders. The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership, that the General
Partner is under no obligation to consider the separate interests of the
Limited Partners (including, without limitation, the tax consequences to
Limited Partners or Assignees) in deciding whether to cause the Partnership to
take (or decline to take) any actions, and that the General Partner shall not
be liable for monetary damages for losses sustained, liabilities incurred or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.

                  C. Actions of Agents. Subject to its obligations and duties
as General Partner set forth in Section 7.1.A, the General Partner may
exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its
agents. The General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by the General Partner in
good faith.

                                      36


<PAGE>

                  D. Effect of Amendment. Notwithstanding any other provision
contained herein, any amendment, modification or repeal of this Section 7.8 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be
asserted.


Section 7.9           Other Matters Concerning the General Partner

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

                  B. Reliance on Advisors. The General Partner may consult
with legal counsel, accountants, appraisers, management consultants,
investment bankers and other consultants and advisers selected by it, and any
act taken or omitted to be taken in reliance upon the opinion of such Persons
as to matters which the General Partner reasonably believes to be within such
Person's professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such opinion.

                  C. Action Through Agents. The General Partner shall have the
right, in respect of any of its powers or obligations hereunder, to act
through any of its duly authorized officers and a duly appointed attorney or
attorneys-in-fact. Each such attorney shall, to the extent provided by the
General Partner in the power of attorney, have full power and authority to do
and perform all and every act and duty which is permitted or required to be
done by the General Partner hereunder.

                  D. Actions to Maintain REIT Status or Avoid Taxation of the
General Partner Entity. Notwithstanding any other provisions of this Agreement
or the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership undertaken in the good faith belief that such action or omission
is necessary or advisable in order (i) to protect the ability of the General
Partner Entity to continue to qualify as a REIT or (ii) to allow the General
Partner Entity to avoid incurring any liability for taxes under Section 857 or
4981 of the Code, is expressly authorized under this Agreement and is deemed
approved by all of the Limited Partners.


Section 7.10          Reliance by Third Parties

                  Notwithstanding anything to the contrary in this Agreement,
any Person dealing with the Partnership shall be entitled to assume that the
General Partner has full power and authority, without consent or approval of

                                      37



<PAGE>

any other Partner or Person, to encumber, sell or otherwise use in any manner
any and all assets of the Partnership, to enter into any contracts on behalf
of the Partnership and to take any and all actions on behalf of the
Partnership, and such Person shall be entitled to deal with the General
Partner as if the General Partner were the Partnership's sole party in
interest, both legally and beneficially. Each Limited Partner hereby waives
any and all defenses or other remedies which may be available against such
Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with
the General Partner or its representatives be obligated to ascertain that the
terms of this Agreement have been complied with or to inquire into the
necessity or expedience of any act or action of the General Partner or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution
and delivery of such certificate, document or instrument, this Agreement was
in full force and effect, (ii) the Person executing and delivering such
certificate, document or instrument was duly authorized and empowered to do so
for and on behalf of the Partnership, and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.


Section 7.11          Restrictions on General Partner's Authority

                  A. Consent Required. The General Partner may not take any
action in contravention of an express prohibition or limitation of this
Agreement without the written Consent of (i) all Partners adversely affected
or (ii) such lower percentage of the Limited Partnership Interests as may be
specifically provided for under a provision of this Agreement or the Act.

                  B. Sale of All Assets of the Partnership. Except as provided
in Article XIII, the General Partner may not, directly or indirectly, cause
the Partnership to sell, exchange, transfer or otherwise dispose of all or
substantially all of the Partnership's assets in a single transaction or a
series of related transactions (including by way of merger (including a
triangular merger), consolidation or other combination with any other Persons)
(i) if such merger, sale or other transaction is in connection with a
Termination Transaction permitted under Section 11.2.B hereof, without the
Consent of the Partners holding at least a majority of the then outstanding
Partnership Units (including any Partnership Units held by the General
Partner), or (ii) otherwise, without the Consent of the Outside Limited
Partners; provided, that the General Partner may cause the Partnership to
enter into the Credit Agreement as of the Effective Date and to execute such
transactions in connection therewith (including a transfer of Partnership
property pursuant to a mortgage or deed of trust, a pledge agreement or any
similar security agreement) as the General Partner deems appropriate in its
sole discretion.


                                      38


<PAGE>

Section 7.12          Loans by Third Parties

                  The Partnership may incur Debt, or enter into similar
credit, guarantee, financing or refinancing arrangements for any purpose
(including, without limitation, in connection with any acquisition of
property) with any Person that is not the General Partner upon such terms as
the General Partner determines appropriate; provided that, except for Debt
incurred by the General Partner in connection with the Credit Agreement, the
Partnership shall not incur any Debt that is recourse to the General Partner,
except to the extent otherwise agreed to by such General Partner in its sole
discretion.

                                 ARTICLE VIII
                  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS


Section 8.1           Limitation of Liability

                  The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement, including Section
10.5 and Section 13.3, or under the Act.


Section 8.2           Management of Business

                  No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, employee, partner,
agent or trustee of the General Partner, the Partnership or any of their
Affiliates, in their capacity as such) shall take part in the operation,
management or control (within the meaning of the Act) of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.


Section 8.3           Outside Activities of Limited Partners

                  Subject to Section 7.5 hereof, and subject to any agreements
entered into pursuant to Section 7.6.C hereof and to any other agreements
entered into by a Limited Partner or its Affiliates with the Partnership or a
Subsidiary, any Limited Partner (other than the General Partner) and any
officer, director, employee, agent, trustee, Affiliate or shareholder of any
Limited Partner shall be entitled to and may have business interests and
engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct or indirect
competition with the Partnership. Neither the Partnership nor any Partners
shall have any rights by virtue of this Agreement in any business ventures of
any Limited Partner or Assignee. None of the Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any business ventures of any other Person
(other than the General Partner to the extent expressly provided herein), and


                                      39
<PAGE>

such Person (other than the General Partner) shall have no obligation pursuant
to this Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.


Section 8.4           Return of Capital

                  Except pursuant to the right of redemption set forth in
Section 8.6, no Limited Partner shall be entitled to the withdrawal or return
of its Capital Contribution, except to the extent of distributions made
pursuant to this Agreement or upon termination of the Partnership as provided
herein. No Limited Partner or Assignee shall have priority over any other
Limited Partner or Assignee either as to the return of Capital Contributions
(except as permitted by Section 4.2.A) or, except to the extent provided by
Exhibit C or as permitted by Sections 4.2.A, 5.1.B(i), 6.1.A(ii) and 6.1.B(i),
or otherwise expressly provided in this Agreement, as to profits, losses,
distributions or credits.


Section 8.5           Rights of Limited Partners Relating to the Partnership

                  A. General. In addition to other rights provided by this
Agreement or by the Act, and except as limited by Section 8.5.D, each Limited
Partner shall have the right, for a purpose reasonably related to such Limited
Partner's interest as a limited partner in the Partnership, upon written
demand with a statement of the purpose of such demand and at such Limited
Partner's own expense:

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

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

                           (3)      to obtain a current list of the name and
                                    last known business, residence or mailing
                                    address of each Partner;

                           (4)      to obtain a copy of this Agreement and the
                                    Certificate and all amendments thereto,
                                    together with executed copies of all
                                    powers of attorney pursuant to which this
                                    Agreement, the Certificate and all
                                    amendments thereto have been executed; and

                           (5)      to obtain true and full information
                                    regarding the amount of cash and a
                                    description and statement of any other
                                    property or services contributed by each
                                    Partner and which each Partner has agreed
                                    to contribute in the future, and the date
                                    on which each became a Partner.

                                      40
<PAGE>

                  B. Notice of Conversion Factor. The Partnership shall notify
each Limited Partner upon request of the then current Conversion Factor and
any changes that have been made thereto.

                  C. Notice of Extraordinary Transaction of the General
Partner Entity. The General Partner Entity shall not make any extraordinary
distributions of cash or property to its shareholders or effect a merger
(including, without limitation, a triangular merger), a sale of all or
substantially all of its assets or any other similar extraordinary transaction
without notifying the Limited Partners of its intention to make such
distribution or effect such merger, sale or other extraordinary transaction at
least twenty (20) Business Days prior to the record date to determine
shareholders eligible to receive such distribution or to vote upon the
approval of such merger, sale or other extraordinary transaction (or, if no
such record date is applicable, at least twenty (20) business days before
consummation of such merger, sale or other extraordinary transaction). This
provision for such notice shall not be deemed (i) to permit any transaction
that otherwise is prohibited by this Agreement or requires a Consent of the
Partners or (ii) to require a Consent of the Limited Partners to a transaction
that does not otherwise require Consent under this Agreement. Each Limited
Partner agrees, as a condition to the receipt of the notice pursuant hereto,
to keep confidential the information set forth therein until such time as the
General Partner Entity has made public disclosure thereof and to use such
information during such period of confidentiality solely for purposes of
determining whether to exercise the Redemption Right; provided, however, that
a Limited Partner may disclose such information to its attorney, accountant
and/or financial advisor for purposes of obtaining advice with respect to such
exercise so long as such attorney, accountant and/or financial advisor agrees
to receive and hold such information subject to this confidentiality
requirement.

                  D. Confidentiality. Notwithstanding any other provision of
this Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its
sole and absolute discretion to be reasonable, any information that (i) the
General Partner reasonably believes to be in the nature of trade secrets or
other information the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or could damage the
Partnership or its business or (ii) the Partnership is required by law or by
agreements with unaffiliated third parties to keep confidential.


Section 8.6           Redemption Right

                  A. General. (i) Subject to Section 8.6.C, at any time on or
after fourteen months following the closing of the initial public offering of
Shares by the General Partner, the holder of a Partnership Unit (if other than
the General Partner or the General Partner Entity or any Subsidiary of either
the General Partner or the General Partner Entity) shall have the right (the
"Redemption Right") to require the Partnership to redeem such Partnership
Unit, with such redemption to occur on the Specified Redemption Date and at a
redemption price equal to and in the form of the Cash Amount to be paid by the
Partnership. Any such Redemption Right shall be exercised pursuant to a Notice
of Redemption delivered to the Partnership (with a copy to the General
Partner) by the Limited Partner who is exercising the Redemption Right (the
"Redeeming Partner"). A Limited Partner may exercise the Redemption Right from

                                      41
<PAGE>

time to time, without limitation as to frequency, with respect to part or all
of the Units that it owns, as selected by the Limited Partner, provided that a
Limited Partner may not exercise the Redemption Right for less than one
thousand (1,000) Partnership Units unless such Redeeming Partner then holds
less than one thousand (1,000) Partnership Units, in which event the Redeeming
Partner must exercise the Redemption Right for all of the Partnership Units
held by such Redeeming Partner, and provided further that, with respect to a
Limited Partner which is an entity, such a Limited Partner may exercise the
Redemption Right for less than one thousand (1,000) Partnership Units without
regard to whether or not such Limited Partner is exercising the Redemption
Right for all of the Partnership Units held by such Limited Partner as long as
such Limited Partner is exercising the Redemption Right on behalf of one or
more of its equity owners in respect of one hundred percent (100%) of such
equity owners' interests in such Limited Partner.

                           (ii)     The  Redeeming  Partner  shall  have no
right with respect to any Partnership Units so redeemed to receive any
distributions paid after the Specified Redemption Date with respect to such
Partnership Units.

                            (iii) The Assignee of any Limited Partner may
exercise the rights of such Limited Partner pursuant to this Section 8.6, and
such Limited Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such Limited
Partner's Assignee. In connection with any exercise of such rights by such
Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by
the Partnership directly to such Assignee and not to such Limited Partner.

                            (iv) If the General Partner provides notice to the
Limited Partners, pursuant to Section 8.5.C hereof, the Redemption Right shall
be exercisable, without regard to whether the Partnership Units have been
outstanding for any specified period, during the period commencing on the date
on which the General Partner provides such notice and ending on the record
date to determine shareholders eligible to receive such distribution or to
vote upon the approval of such merger, sale or other extraordinary transaction
(or, if no such record date is applicable, at least twenty (20) business days
before the consummation of such merger, sale or other extraordinary
transaction). If this subparagraph (iv) applies, the Specified Redemption Date
is the date on which the Partnership and the General Partner receive notice of
exercise of the Redemption Right, rather than ten (10) Business Days after
receipt of the notice of redemption.

                           (v) Notwithstanding anything contained herein to the
contrary, the Partners hereby agree that immediately following the
recapitalization of the Partnership as provided in Section 4.1 hereof, Edward
B. Romanov, Jr. and Michael R. Walker shall be permitted to redeem certain
Partnership Units which they will own as of the Effective Time for Shares on a
one-for-one basis, as provided in the section captioned "Formation
Transactions" in the final prospectus of the General Partner in connection
with the initial public offering of the Shares.

                  B. General Partner Assumption of Right. (i) If a Limited
Partner has delivered a Notice of Redemption, the General Partner may, in its
sole and absolute discretion (subject to the limitations on ownership and

                                      42
<PAGE>

transfer of Shares set forth in the Declaration of Trust), elect to assume
directly and satisfy a Redemption Right by paying to the Redeeming Partner
either the Cash Amount or the Shares Amount, as the General Partner determines
in its sole and absolute discretion (provided that payment of the Redemption
Amount in the form of Shares shall be in Shares registered for resale under
Section 12 of the Exchange Act and listed for trading on the exchange or
national market on which the Shares are Publicly Traded, and provided further
that, if the Shares are not Publicly Traded at the time a Redeeming Partner
exercises its Redemption Right, the Redemption Amount shall be paid only in
the form of the Cash Amount unless the Redeeming Partner, in its sole and
absolute discretion, consents to payment of the Redemption Amount in the form
of the Shares Amount), on the Specified Redemption Date, whereupon the General
Partner shall acquire the Partnership Units offered for redemption by the
Redeeming Partner and shall be treated for all purposes of this Agreement as
the owner of such Partnership Units. Unless the General Partner, in its sole
and absolute discretion, shall exercise its right to assume directly and
satisfy the Redemption Right, the General Partner shall not have any
obligation to the Redeeming Partner or to the Partnership with respect to the
Redeeming Partner's exercise of the Redemption Right. If the General Partner
shall exercise its right to satisfy the Redemption Right in the manner
described in the first sentence of this Section 8.6.B and shall fully perform
its obligations in connection therewith, the Partnership shall have no right
or obligation to pay any amount to the Redeeming Partner with respect to such
Redeeming Partner's exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and the General Partner shall, for federal
income tax purposes, treat the transaction between the General Partner and the
Redeeming Partner as a sale of the Redeeming Partner's Partnership Units to
the General Partner. Nothing contained in this Section 8.6.B shall imply any
right of the General Partner to require any Limited Partner to exercise the
Redemption Right afforded to such Limited Partner pursuant to Section 8.6.A.

                            (ii) If the General Partner determines to pay the
Redeeming Partner the Redemption Amount in the form of Shares, the total
number of Shares to be paid to the Redeeming Partner in exchange for the
Redeeming Partner's Partnership Units shall be the applicable Shares Amount.
If this amount is not a whole number of Shares, the Redeeming Partner shall be
paid (i) that number of Shares which equals the nearest whole number less than
such amount plus (ii) an amount of cash which the General Partner determines,
in its reasonable discretion, to represent the fair value of the remaining
fractional Share which would otherwise be payable to the Redeeming Partner.

                            (iii) Each Redeeming Partner agrees to execute
such documents as the General Partner may reasonably require in connection
with the issuance of Shares upon exercise of the Redemption Right.

                  C. Exceptions to Exercise of Redemption Right.
Notwithstanding the provisions of Sections 8.6.A and 8.6.B, a Partner shall
not be entitled to exercise the Redemption Right pursuant to Section 8.6.A if
(but only as long as) the delivery of Shares to such Partner on the Specified
Redemption Date (i) would be prohibited under the Declaration of Trust or (ii)
would be prohibited under applicable federal or state securities laws or
regulations (in each case regardless of whether the General Partner would in
fact assume and satisfy the Redemption Right).

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<PAGE>

                  D. No Liens on Partnership Units Delivered for Redemption.
Each Limited Partner covenants and agrees with the General Partner that all
Partnership Units delivered for redemption shall be delivered to the
Partnership or the General Partner, as the case may be, free and clear of all
liens, and, notwithstanding anything contained herein to the contrary, neither
the General Partner nor the Partnership shall be under any obligation to
acquire Partnership Units which are or may be subject to any liens. Each
Limited Partner further agrees that, if any state or local property transfer
tax is payable as a result of the transfer of its Partnership Units to the
Partnership or the General Partner, such Limited Partner shall assume and pay
such transfer tax.

                  E. Additional Partnership Interests. If the Partnership
issues Partnership Interests to any Additional Limited Partner pursuant to
Article IV, the General Partner shall make such revisions to this Section 8.6
as it determines are necessary to reflect the issuance of such Partnership
Interests (including setting forth any restrictions on the exercise of the
Redemption Right with respect to such Partnership Interests).

                                  ARTICLE IX
                    BOOKS, RECORDS, ACCOUNTING AND REPORTS


Section 9.1           Records and Accounting

                  The General Partner shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records with respect
to the Partnership's business, including, without limitation, all books and
records necessary to provide to the Limited Partners any information, lists
and copies of documents required to be provided pursuant to Section 9.3. Any
records maintained by or on behalf of the Partnership in the regular course of
its business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided
that the records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.


Section 9.2           Fiscal Year

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


Section 9.3           Reports

                  A. Annual Reports. As soon as practicable, but in no event
later than the date on which the General Partner Entity mails its annual
report to its shareholders, the General Partner Entity shall cause to be
mailed to each Limited Partner an annual report, as of the close of the most
recently ended Partnership Year, containing financial statements of the
Partnership, or of the General Partner Entity if such statements are prepared
solely on a consolidated basis with the Partnership, for such Partnership
Year, presented in accordance with generally accepted accounting principles,
such statements to be audited by a nationally recognized firm of independent

                                      44
<PAGE>

public accountants selected by the General Partner Entity.

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

                                   ARTICLE X
                                  TAX MATTERS


Section 10.1          Preparation of Tax Returns

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


Section 10.2          Tax Elections

                  Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code (including, without limitation, the
election under Section 754 of the Code). The General Partner shall have the
right to seek to revoke any such election upon the General Partner's
determination in its sole and absolute discretion that such revocation is in
the best interests of the Partners.


Section 10.3          Tax Matters Partner

                  A. General. The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes. Pursuant to
Section 6223(c)(3) of the Code, upon receipt of notice from the IRS of the
beginning of an administrative proceeding with respect to the Partnership, the
tax matters partner shall furnish the IRS with the name, address, tax payer
identification number and profit interest of each of the Limited Partners and
any Assignees; provided, however, that such information is provided to the
Partnership by the Limited Partners.

                  B.       Powers.  The tax matters partner is authorized, but
not required:

                           (1)      to enter into any settlement with the IRS
                                    with respect to any administrative or
                                    judicial proceedings for the adjustment of
                                    Partnership items required to be taken


                                      45
<PAGE>

                                    into account by a Partner for income tax
                                    purposes (such administrative proceedings
                                    being referred to as a "tax audit" and such
                                    judicial proceedings being referred to as
                                    "judicial review"), and in the settlement
                                    agreement the tax matters partner may
                                    expressly state that such agreement shall
                                    bind all Partners, except that such
                                    settlement agreement shall not bind any
                                    Partner (i) who (within the time prescribed
                                    pursuant to the Code and Regulations) files
                                    a statement with the IRS providing that the
                                    tax matters partner shall not have the
                                    authority to enter into a settlement
                                    agreement on behalf of such Partner or (ii)
                                    who is a "notice partner" (as defined in
                                    Section 6231(a)(8) of the Code) or a member
                                    of a "notice group" (as defined in Section
                                    6223(b)(2) of the Code);

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

                           (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 IRS at any time and,
                                    if any part of such request is not allowed
                                    by the IRS, to file an appropriate
                                    pleading (petition or complaint) for
                                    judicial review with respect to such
                                    request;

                           (5)      to enter into an agreement with the IRS 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; and

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

                  The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of the
tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.7 shall be fully applicable to the tax
matters partner in its capacity as such.

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<PAGE>

                  C. Reimbursement. The tax matters partner shall receive no
compensation for its services. All third party costs and expenses incurred by
the tax matters partner in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Partnership. Nothing
herein shall be construed to restrict the Partnership from engaging an
accounting firm and/or law firm to assist the tax matters partner in
discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.


Section 10.4          Organizational Expenses

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


Section 10.5          Withholding

                  Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Section 1441, 1442, 1445 or 1446 of the
Code. Any amount paid on behalf of or with respect to a Limited Partner shall
constitute a loan by the Partnership to such Limited Partner, which loan shall
be repaid by such Limited Partner within fifteen (15) days after notice from
the General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to
the Limited Partner or (ii) the General Partner determines, in its sole and
absolute discretion, that such payment may be satisfied out of the available
funds of the Partnership which would, but for such payment, be distributed to
the Limited Partner. Any amounts withheld pursuant to the foregoing clauses
(i) or (ii) shall be treated as having been distributed to such Limited
Partner. Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner's Partnership
Interest to secure such Limited Partner's obligation to pay to the Partnership
any amounts required to be paid pursuant to this Section 10.5. If a Limited
Partner fails to pay any amounts owed to the Partnership pursuant to this
Section 10.5 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Limited Partner and shall succeed to all rights
and remedies of the Partnership as against such defaulting Limited Partner
(including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks,
as published from time to time in The Wall Street Journal, plus four (4)
percentage points (but not higher than the maximum lawful rate under the laws
of the Commonwealth of Pennsylvania) from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. Each


                                      47
<PAGE>

Limited Partner shall take such actions as the Partnership or the General
Partner shall request to perfect or enforce the security interest created
hereunder.

                                  ARTICLE XI
                           TRANSFERS AND WITHDRAWALS


Section 11.1          Transfer

                  A. Definition. The term "transfer," when used in this
Article XI with respect to a Partnership Interest or a Partnership Unit, shall
be deemed to refer to a transaction by which a General Partner purports to
assign all or any part of its General Partnership Interest to another Person
or by which a Limited Partner purports to assign all or any part of its
Limited Partnership Interest to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or
any other disposition by law or otherwise. The term "transfer" when used in
this Article XI does not include any redemption or repurchase of Partnership
Units by the Partnership from a Partner or acquisition of Partnership Units
from a Limited Partner by the General Partner pursuant to Section 8.6 or
otherwise. No part of the interest of a Limited Partner shall be subject to
the claims of any creditor, any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.

                  B. General. No Partnership Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Article XI. Any transfer or purported transfer of a Partnership
Interest not made in accordance with this Article XI shall be null and void.


Section 11.2          Transfers of Partnership Interests of General Partner

                  A. The General Partner may not transfer any of its
Partnership Interest (including both its General Partnership Interest and its
Limited Partnership Interest) except in connection with a transaction
described in Section 11.2.B, as permitted pursuant to Section 11.2.C or as
otherwise expressly permitted under this Agreement, nor shall the General
Partner withdraw as General Partner except in connection with a transaction
described in Section 11.2.B.

                  B. The General Partner shall not engage in any merger
(including a triangular merger), consolidation or other combination with or
into another person, sale of all or substantially all of its assets or any
reclassification, recapitalization or change of outstanding Shares (other than
a change in par value, or from par value to no par value, or as a result of a
subdivision or combination as described in the definition of "Conversion
Factor") ("Termination Transaction"), unless the Termination Transaction has
been approved by the Consent of the Partners holding at least a majority of
the then outstanding Partnership Units (including any Partnership Units held
by the General Partner) and in connection with which all Limited Partners
either will receive, or will have the right to elect to receive, for each
Partnership Unit an amount of cash, securities, or other property equal to the
product of the Conversion Factor multiplied by the greatest amount of cash,


                                      48
<PAGE>

securities or other property paid to a holder of Shares corresponding to such
Partnership Unit in consideration of one such Share at any time during the
period from and after the date on which the Termination Transaction is
consummated; provided that, if, in connection with the Termination
Transaction, a purchase, tender or exchange offer shall have been made to and
accepted by the holders of more than fifty percent (50%) of the outstanding
Shares, each holder of Partnership Units shall receive, or shall have the
right to elect to receive without any right of Consent set forth above in this
subsection B, the greatest amount of cash, securities, or other property which
such holder would have received had it exercised the Redemption Right and
received Shares in exchange for its Partnership Units immediately prior to the
expiration of such purchase, tender or exchange offer and had thereupon
accepted such purchase, tender or exchange offer.

                  C. Notwithstanding the foregoing, with the consent of the
Partners holding at least a majority of the outstanding Partnership Units
(including any Partnership Units held by the General Partner), the General
Partner may transfer all or a portion of its Partnership Interest pursuant to
a grant of a security interest or other encumbrance effected in a bona fide
transaction or as a result of the exercise of remedies related thereto;
provided, that the Partners hereby agree that, effective as of the Effective
Date, the General Partner may pledge any or all of its Partnership Interest to
one or more lenders in connection with the execution and delivery of the
Credit Agreement.


Section 11.3          Limited Partners' Rights to Transfer

                  A. General. Except to the extent expressly permitted in
Sections 11.3 B, 11.3.C and 11.3.D or in connection with the exercise of a
Redemption Right pursuant to Section 8.6, a Limited Partner may not transfer
all or any portion of its Partnership Interest, or any of such Limited
Partner's rights as a Limited Partner, without the prior written consent of
the General Partner. Any transfer otherwise permitted under Sections 11.3B,
11.3C or 11.3D shall be subject to the conditions set forth in Section 11.3E,
11.3 F and 11.3G, and all permitted transfers shall be subject to Section
11.4.

                  B. Incapacitated Limited Partners. If a Limited Partner is
subject to Incapacity, the executor, administrator, trustee, committee,
guardian, conservator or receiver of such Limited Partner's estate shall have
all the rights of a Limited Partner, but not more rights than those enjoyed by
other Limited Partners for the purpose of settling or managing the estate and
such power as the Incapacitated Limited Partner possessed to transfer all or
any part of its interest in the Partnership. The Incapacity of a Limited
Partner, in and of itself, shall not dissolve or terminate the Partnership.

                  C. Permitted Transfers. A Limited Partner may transfer, with
or without the consent of the General Partner, all or a portion of its
Partnership Interest (i) in the case of a Limited Partner who is an
individual, to a member of his Immediate Family, any trust formed for the
benefit of himself and/or members of his Immediate Family, or any partnership,


                                      49
<PAGE>

limited liability company, joint venture, corporation or other business entity
comprised only of himself and/or members of his Immediate Family and entities
the ownership interests in which are owned by or for the benefit of himself
and/or members of his Immediate Family, (ii) in the case of a Limited Partner
which is a trust, to the beneficiaries of such trust, (iii) in the case of a
Limited Partner which is a partnership, limited liability company, joint
venture, corporation or other business entity to which Partnership Units were
transferred pursuant to (i) above, to its partners, owners, or stockholders,
as the case may be, who are members of the Immediate Family of or are actually
the Person(s) who transferred Partnership Units to it pursuant to (i) above,
(iv) in the case of a Limited Partner which acquired Partnership Units as of
the Effective Date and which is a partnership, limited liability company,
joint venture, corporation or other business entity, to its partners, owners,
or stockholders, as the case may be, or the Persons owning the beneficial
interests in any of its partners, owners or stockholders which are entities,
(v) pursuant to a gift or other transfer without consideration, (vi) pursuant
to applicable laws of descent or distribution, (vii) to another Limited
Partner, and (vii) pursuant to a grant of security interest or other
encumbrance effected in a bona fide transaction or as a result of the exercise
of remedies related thereto, subject to the provisions of Section 11.3G
hereof. A trust or other entity will be considered formed "for the benefit" of
a Partner's Immediate Family even though some other Person has a remainder
interest under or with respect to such trust or other entity.

                  D. Transfers After One Year From Closing of Initial Public
Offering. A Limited Partner may transfer, with or without the consent of the
General Partner, all or a portion of his Partnership Units at any time after
the date that is twelve (12) months after the closing of the initial public
offering of Shares by the General Partner.

                  E. No Transfers Violating Securities Laws. The General
Partner may prohibit any transfer of Partnership Units by a Limited Partner
unless it receives a written opinion of legal counsel (which opinion and
counsel shall be reasonably satisfactory to the Partnership) to such Limited
Partner that such transfer would not require filing of a registration
statement under the Securities Act or would not otherwise violate any federal,
or state securities laws or regulations applicable to the Partnership or the
Partnership Unit or, at the option of the Partnership, an opinion of legal
counsel to the Partnership to the same effect.

                  F. No Transfers Affecting Tax Status of Partnership. No
transfer of Partnership Units by a Limited Partner (including a redemption or
exchange pursuant to Section 8.6) may be made to any Person if (i) in the
opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation for
federal income tax purposes or would result in a termination of the
Partnership for federal income tax purposes (except as a result of the
redemption or exchange for Shares of all Partnership Units held by all Limited
Partners other than the General Partner or the General Partner Entity or any
Subsidiary of either the General Partner or the General Partner Entity or
pursuant to a transaction expressly permitted under Section 7.11.B or Section
11.2), (ii) in the opinion of legal counsel for the Partnership, it would
adversely affect the ability of the General Partner Entity to continue to
qualify as a REIT or would subject the General Partner Entity to any
additional taxes under Section 857 or Section 4981 of the Code or (iii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning
of Section 7704 of the Code.

                  G. No Transfers to Holders of Nonrecourse Liabilities. No
pledge or transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan


                                      50
<PAGE>

constitutes a Nonrecourse Liability without the consent of the General
Partner, in its sole and absolute discretion; provided that, as a condition to
such consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the Redemption
Amount any Partnership Units in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such
lender under Section 752 of the Code.


Section 11.4          Substituted Limited Partners

                  A. Consent of General Partner. No Limited Partner shall have
the right to substitute a transferee as a Limited Partner in its place. The
General Partner shall, however, have the right to consent to the admission of
a transferee of the interest of a Limited Partner pursuant to this Section
11.4 as a Substituted Limited Partner, which consent may be, given or withheld
by the General Partner in its sole and absolute discretion. The General
Partner's failure or refusal to permit a transferee of any such interests to
become a Substituted Limited Partner shall not give rise to any cause of
action against the Partnership or any Partner.

                  B. Rights of Substituted Limited Partner. A transferee who
has been admitted as a Substituted Limited Partner in accordance with this
Article XI shall have all the rights and powers and be subject to all the
restrictions and liabilities of a Limited Partner under this Agreement. The
admission of any transferee as a Substituted Limited Partner shall be
conditioned upon the transferee executing and delivering to the Partnership an
acceptance of all the terms and conditions of this Agreement (including,
without limitation, the provisions of Section 15.11) and such other documents
or instruments as may be required to effect the admission.

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


Section 11.5          Assignees

                  If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section
11.3 as a Substituted Limited Partner, as described in Section 11.4, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses,
gain, loss and Recapture Income attributable to the Partnership Units assigned
to such transferee, and shall have the rights granted to the Limited Partners
under Section 8.6, but shall not be deemed to be a holder of Partnership Units
for any other purpose under this Agreement, and shall not be entitled to vote
such Partnership Units in any matter presented to the Limited Partners for a
vote (such Partnership Units being deemed to have been voted on such matter in
the same proportion as all other Partnership Units held by Limited Partners
are voted). If any such transferee desires to make a further assignment of any
such Partnership Units, such transferee shall be subject to all the provisions


                                      51
<PAGE>

of this Article XI to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of Partnership Units.


Section 11.6          General Provisions

                  A. Withdrawal of Limited Partner. No Limited Partner may
withdraw from the Partnership other than as a result of a permitted transfer
of all of such Limited Partner's Partnership Units in accordance with this
Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.6.

                  B. Termination of Status as Limited Partner. Any Limited
Partner who shall transfer all of its Partnership Units in a transfer
permitted pursuant to this Article XI or pursuant to redemption of all of its
Partnership Units under Section 8.6 shall cease to be a Limited Partner.

                  C. Timing of Transfers. Transfers pursuant to this Article
XI may only be made upon three business days prior notice, unless the General
Partner otherwise agrees.

                  D. Allocations. If any Partnership Interest is transferred
during any quarterly segment of the Partnership's fiscal year in compliance
with the provisions of this Article XI or redeemed or transferred pursuant to
Section 8.6, Net Income, Net Losses, each item thereof and all other items
attributable to such interest for such fiscal year shall be divided and
allocated between the transferor Partner and the transferee Partner by taking
into account their varying interests during the fiscal year in accordance with
Section 706(d) of the Code, using the interim closing of the books method
(unless the General Partner, in its sole and absolute discretion, elects to
adopt a daily, weekly, or a monthly proration period, in which event Net
Income, Net Losses, each item thereof and all other items attributable to such
interest for such fiscal year shall be prorated based upon the applicable
method selected by the General Partner). Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer
or redemption occurs shall be allocated to the Person who is a Partner as of
midnight on the last day of said month. All distributions of Available Cash
attributable to any Partnership Unit with respect to which the Partnership
Record Date is before the date of such transfer, assignment or redemption
shall be made to the transferor Partner or the Redeeming Partner, as the case
may be, and, in the case of a transfer or assignment other than a redemption,
all distributions of Available Cash thereafter attributable to such
Partnership Unit shall be made to the transferee Partner.

                  E. Additional Restrictions. In addition to any other
restrictions on transfer herein contained, including without limitation the
provisions of this Article XI, in no event may any transfer or assignment of a
Partnership Interest by any Partner (including pursuant to Section 8.6) be
made without the express consent of the General Partner, in its sole and


                                      52
<PAGE>

absolute discretion, (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of
applicable law; (iii) of any component portion of a Partnership Interest, such
as the Capital Account, or rights to distributions, separate and apart from
all other components of a Partnership Interest; (iv) if in the opinion of
legal counsel to the Partnership such transfer would cause a termination of
the Partnership for federal or state income tax purposes (except as a result
of the redemption or exchange for Shares of all Partnership Units held by all
Limited Partners or pursuant to a transaction expressly permitted under
Section 7.11.B or Section 11.2); (v) if in the opinion of counsel to the
Partnership, such transfer would cause the Partnership to cease to be
classified as a partnership for federal income tax purposes (except as a
result of the redemption or exchange for Shares of all Partnership Units held
by all Limited Partners or pursuant to a transaction expressly permitted under
Section 7.11.B or Section 11.2); (vi) if such transfer would cause the
Partnership Interests of "benefit plan investors" to become "significant," as
those terms are used in 29 C.F.R. ss. 2510.3-101(f), or any successor
regulation thereto, or would cause the Partnership to become, with respect to
any employee benefit plan subject to Title I of ERISA, a "party-in-interest"
(as defined in Section 3(14) of ERISA) or, with respect to any plan defined in
Section 4975(e) of the Code, a "disqualified person" (as defined in Section
4975(e) of the Code); (vii) if such transfer would, in the opinion of counsel
to the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any ERISA Plan Investor pursuant to 29 C.F.R. ss.
2510.3-101, or any successor regulation thereto; (viii) if such transfer
requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (ix) if such transfer is
effectuated through an "established securities market" or a "secondary market"
(or the substantial equivalent thereof) within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a "publicly traded
partnership," as such term is defined in Section 469(k)(2) or Section 7704(b)
of the Code (provided that this clause (ix) shall not be the basis for
limiting or restricting in any manner the exercise of the Redemption Right
under Section 8.6 unless, and only to the extent that, outside tax counsel
provides to the General Partner an opinion to the effect that, in the absence
of such limitation or restriction, there is a significant risk that the
Partnership will be treated as a "publicly traded partnership" and, by reason
thereof, taxable as a corporation); (x) if such transfer subjects the
Partnership or the activities of the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA,
each as amended; (xi) such transfer could adversely affect the ability of the
General Partner Entity to remain qualified as a REIT; or (xii) if in the
opinion of legal counsel for the transferring Partner (which opinion and
counsel shall be reasonably satisfactory to the Partnership) or legal counsel
for the Partnership, such transfer would adversely affect the ability of the
General Partner Entity to continue to qualify as a REIT or subject the General
Partner Entity to any additional taxes under Section 857 or Section 4981 of
the Code.

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

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<PAGE>

of Section 7704 of the Code) (the "Safe Harbors"). The General Partner shall
take all steps reasonably necessary or appropriate to prevent any trading of
interests or any recognition by the Partnership of transfers made on such
markets and, except as otherwise provided herein, to insure that at least one
of the Safe Harbors is met; provided, however, that the foregoing shall not
authorize the General Partner to limit or restrict in any manner the right of
any holder of a Partnership Unit to exercise the Redemption Right in
accordance with the terms of Section 8.6 unless, and only to the extent that,
outside tax counsel provides to the General Partner an opinion to the effect
that, in the absence of such limitation or restriction, there is a significant
risk that the Partnership will be treated as a "publicly traded partnership"
and, by reason thereof, taxable as a corporation.

                                  ARTICLE XII
                             ADMISSION OF PARTNERS


Section 12.1          Admission of a Successor General Partner

                  A successor to all of the General Partner's General
Partnership Interest pursuant to Section 11.2 who is proposed to be admitted
as a successor General Partner shall be admitted to the Partnership as the
General Partner, effective upon such transfer. Any such transferee shall carry
on the business of the Partnership without dissolution. In each case, the
admission shall be subject to such successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms and conditions
of this Agreement and such other documents or instruments as may be required
to effect the admission.


Section 12.2          Admission of Additional Limited Partners

                  A. General. No Person shall be admitted as an Additional
Limited Partner without the consent of the General Partner, which consent
shall be given or withheld in the General Partner's sole and absolute
discretion. A Person who makes a Capital Contribution to the Partnership in
accordance with this Agreement, including without limitation, under Section
4.1.C, or who exercises an option to receive Partnership Units shall be
admitted to the Partnership as an Additional Limited Partner only with the
consent of the General Partner and only upon furnishing to the General Partner
(i) evidence of acceptance in form satisfactory to the General Partner of all
of the terms and conditions of this Agreement, including, without limitation,
the power of attorney granted in Section 15.11 and (ii) such other documents
or instruments as may be required in the discretion of the General Partner to
effect such Person's admission as an Additional Limited Partner. The admission
of any Person as an Additional Limited Partner shall become effective on the
date upon which the name of such Person is recorded on the books and records
of the Partnership, following the consent of the General Partner to such
admission.

                  B. Allocations to Additional Limited Partners. If any
Additional Limited Partner is admitted to the Partnership on any day other
than the first day of a Partnership Year, then Net Income, Net Losses, each

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<PAGE>

item thereof and all other items allocable among Partners and Assignees for
such Partnership Year shall be allocated among such Additional Limited Partner
and all other Partners and Assignees by taking into account their varying
interests during the Partnership Year in accordance with Section 706(d) of the
Code, using the interim closing of the books method (unless the General
Partner, in its sole and absolute discretion, elects to adopt a daily, weekly
or monthly proration method, in which event Net Income, Net Losses, and each
item thereof would be prorated based upon the applicable period selected by
the General Partner). Solely for purposes of making such allocations, each of
such items for the calendar month in which an admission of any Additional
Limited Partner occurs shall be allocated among all the Partners and Assignees
including such Additional Limited Partner. All distributions of Available Cash
with respect to which the Partnership Record Date is before the date of such
admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions of Available Cash thereafter
shall be made to all the Partners and Assignees including such Additional
Limited Partner.


Section 12.3          Amendment of Agreement and Certificate of Limited
Partnership

                  For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act
to amend the records of the Partnership and, if necessary, to prepare as soon
as practical an amendment of this Agreement (including an amendment of Exhibit
A) and, if required by law, shall prepare and file an amendment to the
Certificate and may for this purpose exercise the power of attorney granted
pursuant to Section 15.11 hereof.

                                 ARTICLE XIII
                          DISSOLUTION AND LIQUIDATION


Section 13.1          Dissolution

                  The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the
admission of a successor General Partner in accordance with the terms of this
Agreement. Upon the withdrawal of the General Partner, any successor General
Partner shall continue the business of the Partnership. The Partnership shall
dissolve, and its affairs shall be wound up, upon the first to occur of any of
the following ("Liquidating Events") :

                            (i) the expiration of its term as provided in
Section 2.4 hereof;

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

                            (iii) through December 31, 2046, an election to
dissolve the Partnership made by the General Partner with the consent of
Limited Partners who hold ninety percent (90%) of the outstanding Units held
by Limited Partners (including Units held by the General Partner);

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<PAGE>

                            (iv) an election to dissolve the Partnership made
by the General Partner, in its sole and absolute discretion after December 31,
2046;

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

                            (vi) the sale of all or substantially all of the
assets and properties of the Partnership for cash or for marketable
securities; or

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

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


Section 13.2          Winding Up

                  A. General. 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, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner (or, if there is no
remaining General Partner, any Person elected by a majority in interest of the
Limited Partners (the "Liquidator")) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of
the Partnership's liabilities and property and the Partnership property shall
be liquidated as promptly as is consistent with obtaining the fair value
thereof, and the proceeds therefrom (which may, to the extent determined by
the General Partners, include equity or other securities of the General
Partners or any other entity) shall be applied and distributed in the
following order:

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

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

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

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<PAGE>

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

                  The General Partner shall not receive any additional
compensation for any services performed pursuant to this Article XIII.

                  B. Deferred Liquidation. Notwithstanding the provisions of
Section 13.2.A which require liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate
sale of part or all of the Partnership's assets would be impractical or would
cause undue loss to the Partners, the Liquidator may, in its sole and absolute
discretion, defer for a reasonable time the liquidation of any assets except
those necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) or distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of Section 13.2.A,
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such distributions in kind shall be made only
if, in the good faith judgment of the Liquidator, such distributions in kind
are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as
the Liquidator deems reasonable and equitable and to any agreements governing
the operation of such properties at such time. The Liquidator shall determine
the fair market value of any property distributed in kind using such
reasonable method of valuation as it may adopt.


Section 13.3          Compliance with Timing Requirements of Regulations

                  Subject to Section 13.4, if the Partnership is "liquidated"
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions
shall be made under this Article XIII to the General Partner and Limited
Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). Except for those Partners listed on Exhibit G
who have entered into one or more Deficit Restoration Obligation Agreements
and have agreed thereby to contribute an amount of cash up to the amount
listed next to each such Partner's name on Exhibit 4.6 in the event of the
liquidation of the Partnership pursuant to this Article XIII, if any Partner
has a deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which such liquidation occurs), such Partner shall have no
obligation to make any contribution to the capital of the Partnership with
respect to such deficit, and such deficit shall not be considered a debt owed
to the Partnership or to any other Person for any purpose whatsoever. In the
discretion of the General Partner, a pro rata portion of the distributions
that would otherwise be made to the General Partner and Limited Partners
pursuant to this Article XIII may be: (A) distributed to a trust established
for the benefit of the General Partner and Limited Partners for the purposes
of liquidating Partnership assets, collecting amounts owed to the Partnership
and paying any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the
Partnership (in which case the assets of any such trust shall be distributed
to the General Partner and Limited Partners from time to time, in the
reasonable discretion of the General Partner, in the same proportions as the
amount distributed to such trust by the Partnership would otherwise have been

                                      57
<PAGE>

distributed to the General Partner and Limited Partners pursuant to this
Agreement); or (B) withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such
withheld amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.


Section 13.4          Deemed Distribution and Recontribution

                  Notwithstanding any other provision of this Article XIII, if
the Partnership is deemed liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
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.
Instead, for federal income tax purposes and for purposes of maintaining
Capital Accounts pursuant to Exhibit B, the Partnership shall be deemed to
have distributed its assets in kind to the General Partner and Limited
Partners, who shall be deemed to have assumed and taken such assets subject to
all Partnership liabilities, all in accordance with their respective Capital
Accounts. Immediately thereafter, the General Partner and Limited Partners
shall be deemed to have recontributed the Partnership assets in kind to the
Partnership, which shall be deemed to have assumed and taken such assets
subject to all such liabilities.


Section 13.5          Rights of Limited Partners

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


Section 13.6          Notice of Dissolution

                  If a Liquidating Event occurs or an event occurs that would,
but for provisions of an election or objection by one or more Partners
pursuant to Section 13.1, result in a dissolution of the Partnership, the
General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners and to all other parties with whom the
Partnership regularly conducts business (as determined in the discretion of
the General Partner).


Section 13.7          Cancellation of Certificate of Limited Partnership

                  Upon the completion of the liquidation of the Partnership
cash and property as provided in Section 13.2, the Partnership shall be
terminated and the Certificate and all qualifications of the Partnership as a
foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.

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<PAGE>


Section 13.8          Reasonable Time for Winding Up

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


Section 13.9          Waiver of Partition

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


Section 13.10         Liability of Liquidator

                  The Liquidator shall be indemnified and held harmless by the
Partnership in the same manner and to the same degree as an Indemnitee may be
indemnified pursuant to Section 7.7.

                                  ARTICLE XIV
                 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS


Section 14.1          Amendments

                  A. General. Amendments to this Agreement may be proposed by
a General Partner or by any Limited Partners holding twenty-five percent (25%)
or more of the Partnership Interests. Following such proposal (except an
amendment pursuant to Section 14.1.B), the General Partner shall submit any
proposed amendment to the Limited Partners. The General Partner shall seek the
written vote of the Partners on the proposed amendment or shall call a meeting
to vote thereon and to transact any other business that it may deem
appropriate. For purposes of obtaining a written vote, the General Partner may
require a response within a reasonable specified time, but not less than
fifteen (15) days, and failure to respond in such time period shall constitute
a vote which is consistent with the General Partner's recommendation with
respect to the proposal. Except as provided in Section 14.1.B, 14.1.C or
14.1.D, a proposed amendment shall be adopted and be effective as an amendment
hereto if it is approved by the General Partner and it receives the Consent of
Partners holding a majority of the Percentage Interests of the Limited
Partners (including Limited Partnership Interests held by the General
Partner).

                  B. Amendments Not Requiring Limited Partner Approval.
Notwithstanding Section 14.1.A or 14.1.C, the General Partner shall have the
power, without the consent of the Limited Partners, to amend this Agreement as
may be required to facilitate or implement any of the following purposes:

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

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<PAGE>

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

                           (3)      to set forth the designations, rights,
                                    powers, duties, and preferences of the
                                    holders of any additional Partnership
                                    Interests issued pursuant to Article IV;

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

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

                  The General Partner shall notify the Limited Partners when
any action under this Section 14.1.B is taken in the next regular
communication to the Limited Partners.

                  C. Amendments Requiring Limited Partner Approval (Excluding
General Partners). Notwithstanding Section 14.1.A, without the Consent of the
Outside Limited Partners, the General Partner shall not amend Section 4.2.A,
Section 5.1.E, Section 7.1.A (second sentence only), Section 7.5, Section 7.6,
Section 7.8, Section 7.11.B, Section 11.2, Section 13.1 (other than Section
13.1(iii) which can be amended only with a Consent of 90% of the Partnership
Units (including Partnership Units held by the General Partner), this Section
14.1.C or Section 14.2.

                  D. Other Amendments Requiring Certain Limited Partner
Approval. Notwithstanding anything in this Section 14.1 to the contrary, this
Agreement shall not be amended with respect to any Partner adversely affected
without the Consent of such Partner adversely affected if such amendment would
(i) convert a Limited Partner's interest in the Partnership into a general
partner's interest, (ii) modify the limited liability of a Limited Partner,
(iii) amend Section 7.11.A, (iv) amend Article V or Article VI (except as
permitted pursuant to Sections 4.2, 5.1.E, 5.4, 6.2 and 14.1(B)(3)), (v) amend
Section 8.6 or any defined terms set forth in Article I that relate to the
Redemption Right (except as permitted in Section 8.6.E), or (vi) amend this
Section 14.1.D. This Section 14.1.D does not require unanimous consent of all
Partners adversely affected unless the amendment is to be effective against
all Partners adversely affected.

                  E. Amendment and Restatement of Exhibit A or Exhibit G Not
An Amendment. Notwithstanding anything in this Article XIV or elsewhere in

                                      60
<PAGE>

this Agreement to the contrary, any amendment and restatement of Exhibit A or
Exhibit G hereto by the General Partner to reflect events or changes otherwise
authorized or permitted by this Agreement, whether pursuant to Section
7.1.A(21) or Section 7.1A(22) hereof or otherwise, shall not be deemed an
amendment of this Agreement and may be done at any time and from time to time,
as necessary by the General Partner without the Consent of the Limited
Partners.


Section 14.2          Meetings of the Partners
                  A. General. Meetings of the Partners may be called by the
General Partner and shall be called upon the receipt by the General Partner of
a written request by Limited Partners holding twenty-five percent (25%) or
more of the Partnership Interests. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven (7) days nor more than thirty (30) days prior to
the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of
Partners or may be given in accordance with the procedure prescribed in
Section 14.1.A. Except as otherwise expressly provided in this Agreement, the
Consent of holders of a majority of the Percentage Interests held by Limited
Partners (including Limited Partnership Interests held by the General Partner)
shall control.

                  B. Actions Without a Meeting. Any action required or
permitted to be taken at a meeting of the Partners may be taken without a
meeting if a written consent setting forth the action so taken is signed by a
majority of the Percentage Interests of the Partners (or such other percentage
as is expressly required by this Agreement). Such consent may be in one
instrument or in several instruments, and shall have the same force and effect
as a vote of a majority of the Percentage Interests of the Partners (or such
other percentage as is expressly required by this Agreement). Such consent
shall be filed with the General Partner. An action so taken shall be deemed to
have been taken at a meeting held on the effective date so certified.

                  C. Proxy. Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Limited Partner
or its attorney-in-fact. No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the Limited Partner
executing it, such revocation to be effective upon the Partnership's receipt
of written notice thereof.

                  D. Conduct of Meeting. Each meeting of Partners shall be
conducted by the General Partner or such other Person as the General Partner
may appoint pursuant to such rules for the conduct of the meeting as the
General Partner or such other Person deem appropriate.

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<PAGE>

                                  ARTICLE XV
                              GENERAL PROVISIONS


Section 15.1          Addresses and Notice

                  Any notice, demand, request or report required or permitted
to be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when
sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address set forth in Exhibit A
or such other address as the Partners shall notify the General Partner in
writing.


Section 15.2          Titles and Captions

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


Section 15.3          Pronouns and Plurals

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


Section 15.4          Further Action

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


Section 15.5          Binding Effect

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


Section 15.6          Creditors

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

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<PAGE>


Section 15.7          Waiver

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


Section 15.8          Counterparts

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


Section 15.9          Applicable Law

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


Section 15.10         Invalidity of Provisions

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


Section 15.11         Power of Attorney

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

                           (1)      execute, swear to, acknowledge, deliver,
                                    file and record in the appropriate public
                                    offices (a) all certificates, documents
                                    and other instruments (including, without
                                    limitation, this Agreement and the
                                    Certificate and all amendments or
                                    restatements thereof) that the General
                                    Partner or any Liquidator deems

                                      63
<PAGE>

                                    appropriate or necessary to form, qualify or
                                    continue the existence or qualification of
                                    the Partnership as a limited partnership (or
                                    a partnership in which the limited partners
                                    have limited liability) in the State of
                                    Delaware and in all other jurisdictions in
                                    which the Partnership may conduct business
                                    or own property, (b) all instruments that
                                    the General Partner or any Liquidator deem
                                    appropriate or necessary to reflect any
                                    amendment, change, modification or
                                    restatement of this Agreement in accordance
                                    with its terms, (c) all conveyances and
                                    other instruments or documents that the
                                    General Partner or any Liquidator deems
                                    appropriate or necessary to reflect the
                                    dissolution and liquidation of the
                                    Partnership pursuant to the terms of this
                                    Agreement, including, without limitation, a
                                    certificate of cancellation, (d) all
                                    instruments relating to the admission,
                                    withdrawal, removal or substitution of any
                                    Partner pursuant to, or other events
                                    described in, Article XI, XII or XIII hereof
                                    or the Capital Contribution of any Partner
                                    and (e) all certificates, documents and
                                    other instruments relating to the
                                    determination of the rights, preferences and
                                    privileges of Partnership Interests; and

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

                  Nothing contained in this Section 15.11 shall be construed
as authorizing the General Partner or any Liquidator to amend this Agreement
except in accordance with Article XIV hereof or as may be otherwise expressly
provided for in this Agreement.

                  B. Irrevocable Nature. The foregoing power of attorney is
hereby declared to be irrevocable and a power coupled with an interest, in
recognition of the fact that each of the Partners will be relying upon the
power of the General Partner or any Liquidator to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership,
and it shall survive and not be affected by the subsequent Incapacity of any
Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner's or Assignee's Partnership Units and shall extend to such
Limited Partner's or Assignee's heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby agrees to be
bound by any representation made by the General Partner or any Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses which may be available
to contest, negate or disaffirm the action of the General Partner or any
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner's or
Liquidator's request therefor, such further designation, powers of attorney
and other instruments as the General Partner or the Liquidator, as the case
may be, deems necessary to effectuate this Agreement and the purposes of the
Partnership.

                                      64
<PAGE>


Section 15.12         Entire Agreement

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


Section 15.13         No Rights as Shareholders

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


Section 15.14         Limitation to Preserve REIT Status

                  To the extent that any amount paid or credited to the
General Partner or any of its officers, directors, trustees, employees or
agents pursuant to Section 7.4 or Section 7.7 would constitute gross income to
the General Partner for purposes of Section 856(c)(2) or 856(c)(3) of the Code
(a "General Partner Payment") then, notwithstanding any other provision of
this Agreement, the amount of such General Partner Payment for any fiscal year
shall not exceed the lesser of:

                            (i) an amount equal to the excess, if any, of (a)
4.20% of the General Partner's total gross income (but not including the
amount of any General Partner Payments) for the fiscal year which is described
in subsections (A) though (H) of Section 856(c)(2) of the Code over (b) the
amount of gross income (within the meaning of Section 856(c)(2) of the Code)
derived by the General Partner from sources other than those described in
subsections (A) through (H) of Section 856(c)(2) of the Code (but not
including the amount of any General Partner Payments); or

                            (ii) an amount equal to the excess, if any of (a)
25% of the General Partner's total gross income (but not including the amount
of any General Partner Payments) for the fiscal year which is described in
subsections (A) through (I) of Section 856(c)(3) of the Code over (b) the
amount of gross income (within the meaning of Section 856(c)(3) of the Code)
derived by the General Partner from sources other than those described in
subsections (A) through (I) of Section 856(c)(3) of the Code (but not
including the amount of any General Partner Payments);

                  provided, however, that General Partner Payments in excess
of the amounts set forth in subparagraphs (i) and (ii) above may be made if
the General Partner, as a condition precedent, obtains an opinion of tax
counsel that the receipt of such excess amounts would not adversely affect the
General Partner's ability to qualify as a REIT. To the extent General Partner
Payments may not be made in a year due to the foregoing limitations, such
General Partner Payments shall carry over and be treated as arising in the
following year, provided, however, that such amounts shall not carry over for


                                      65
<PAGE>

more than five years, and if not paid within such five year period, shall
expire; provided further, that (i) as General Partner Payments are made, such
payments shall be applied first to carry over amounts outstanding, if any, and
(ii) with respect to carry over amounts for more than one Partnership Year,
such payments shall be applied to the earliest Partnership Year first.

                                      66


<PAGE>



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

                                GENERAL PARTNER:


                                ELDERTRUST


                                By:          /s/ Edward B. Romanov, Jr.
                                             --------------------------
                                Name:        Edward B. Romanov, Jr.
                                Title:       President and Chief Executive
                                              Officer



                                LIMITED PARTNERS:

                                /s/ D. Lee McCreary, Jr.
                                ------------------------
                                D. Lee McCreary, Jr.


                                MGI Limited Partnership

                                By:   MGI, Inc.

                                      By:        /s/ Michael R. Walker
                                             -------------------------
                                             Michael R. Walker
                                             President


                                      /s/ Edward B. Romanov, Jr.
                                --------------------------------
                                Edward B. Romanov, Jr.


                                Thomas W. Balderston
                                Gregory H. Doyle
                                Richard R. Howard
                                Senior LifeChoice Corp.
                                Michael R. Walker
                                Joseph A. Williamson

                                By:          /s/ Edward B. Romanov, Jr.
                                    -----------------------------------
                                    Edward B. Romanov, Jr.
                                    Attorney-in-Fact


                                      67
<PAGE>


                                   EXHIBIT A
                      PARTNERS AND PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>
                                               Class A            Class B          Agreed Initial         Percentage
Name and Address of Partner                  Partnership        Partnership        Capital Account         Interest
---------------------------                  -----------        -----------        ---------------        ----------
GENERAL PARTNER:
<S>                                               <C>             <C>                   <C>                  <C>
     ElderTrust                                  7,873              --          $        141,714             0.100%
     415 McFarlan Road
     Suite 202
     Kennett Square, PA 19348

LIMITED PARTNERS:

     Thomas W. Balderston                        8,330              --          $        149,940             0.106%
     1972 Thatch Palm Drive
     Boca Raton, FL 33432

     Gregory H. Doyle                           13,545              --          $        243,810             0.172%
     2462 River Road
     New Hope, PA 18938

     ElderTrust                              7,382,227              --          $    132,880,086            93.777%
     415 McFarlan Road
     Suite 202
     Kennett Square, PA 19348

     Richard R. Howard                           5,215              --          $         93,870             0.066%
     c/o Genesis Health
         Ventures, Inc.
     148 West State Street
     Kennett Square, PA 19348

     D. Lee McCreary, Jr.                       12,000              --          $        216,000             0.152%
     c/o ElderTrust
     415 McFarlan Road
     Suite 202
     Kennett Square, PA 19348

     MGI Limited Partnership                   131,250              --          $      2,362,500             1.667%
     c/o Genesis Health
         Ventures, Inc.
     148 West State Street
     Kennett Square, PA 19348

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             Class A            Class B          Agreed Initial         Percentage
Name and Address of Partner                  Partnership        Partnership      Capital Account         Interest
---------------------------                  ------------       -----------      ---------------        ----------

<S>                                            <C>               <C>          <C>                          <C>
     Edward B. Romanov, Jr.                    118,750              --          $      2,137,500             1.509%
     c/o ElderTrust
     415 McFarlan Road
     Suite 202
     Kennett Square, PA 19348

     Senior LifeChoice Corp.                   165,850              --          $      2,985,300             2.107%
     2393 Kimberton Road
     Suite 200
     Kimberton, PA 19442

     Michael R. Walker                          21,875              --          $        393,750             0.278%
     c/o ElderTrust
     415 McFarlan Road
     Suite 202
     Kennett Square, PA 19348

     Joseph A. Williamson                        5,215              --          $         93,870             0.066%
     P.O. Box 450
     Unionville, PA 19375

TOTAL                                        7,872,130              --          $    141,698,340           100.000%
                                             ============       ===========        =============        ==========
</TABLE>







                                      A-2

<PAGE>

                                   EXHIBIT B

                          CAPITAL ACCOUNT MAINTENANCE


1.       Capital Accounts of the Partners

         A. The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section l.704-l(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions and any other deemed contributions made by such Partner to the
Partnership pursuant to this Agreement and (ii) all items of Partnership
income and gain (including income and gain exempt from tax) computed in
accordance with Section 1.B hereof and allocated to such Partner pursuant to
Section 6.1 of the Agreement and Exhibit C thereof, and decreased by (x) the
amount of cash or Agreed Value of all actual and deemed distributions of cash
or property made to such Partner pursuant to this Agreement and (y) all items
of Partnership deduction and loss computed in accordance with Section 1.B
hereof and allocated to such Partner pursuant to Section 6.1 of the Agreement
and Exhibit C thereof.

         B. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) (1) of the Code shall be included in taxable income or loss),
with the following adjustments:

                  (1)      Except as otherwise provided in Regulations Section
                           1.704-1(b)(2)(iv)(m), the computation of all items
                           of income, gain, loss and deduction shall be made
                           without regard to any election under Section 754 of
                           the Code which may be made by the Partnership,
                           provided that the amounts of any adjustments to the
                           adjusted bases of the assets of the Partnership
                           made pursuant to Section 734 of the Code as a
                           result of the distribution of property by the
                           Partnership to a Partner (to the extent that such
                           adjustments have not previously been reflected in
                           the Partners' Capital Accounts) shall be reflected
                           in the Capital Accounts of the Partners in the
                           manner and subject to the limitations prescribed in
                           Regulations Section l.704-1(b)(2)(iv) (m)(4).

                  (2)      The computation of all items of income, gain, and
                           deduction shall be made without regard to the fact
                           that items described in Sections 705(a)(l)(B) or
                           705(a)(2)(B) of the Code are not includable in
                           gross income or are neither currently deductible
                           nor capitalized for federal income tax purposes.

                  (3)      Any income, gain or loss attributable to the
                           taxable disposition of any Partnership property
                           shall be determined as if the adjusted basis of
                           such property as of such date of disposition were
                           equal in amount to the Partnership's Carrying Value
                           with respect to such property as of such date.
<PAGE>

                  (4)      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.

                  (5)      In the event the Carrying Value of any Partnership
                           Asset is adjusted pursuant to Section 1.D hereof,
                           the amount of any such adjustment shall be taken
                           into account as gain or loss from the disposition
                           of such asset.

                  (6)      Any items specially allocated under Section 2 of
                           Exhibit C hereof shall not be taken into account.

          C. Generally, a transferee (including any Assignee) of a Partnership
Unit shall succeed to a pro rata portion of the Capital Account of the
transferor; provided, however, that, if the transfer causes a termination of
the Partnership under Section 708(b)(l)(B) of the Code, the Partnership's
properties shall be deemed, solely for federal income tax purposes, to have
been distributed in liquidation of the Partnership to the holders of the
Partnership units (including the transferee) and recontributed by such Persons
in reconstitution of the Partnership. In such event, the Carrying Values of
the Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section 1.D(2) hereof. The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the
principles of this Exhibit B.

          D.            (1) Consistent with the provisions of Regulations
                            Section 1.704-1(b)(2)(iv)(f), and as provided in
                            Section 1.D(2), the Carrying Values of all
                            Partnership assets shall be adjusted upward or
                            downward to reflect any Unrealized Gain or
                            Unrealized Loss attributable to such Partnership
                            property, as of the times of the adjustments
                            provided in Section 1.D(2) hereof, as if such
                            Unrealized Gain or Unrealized Loss had been
                            recognized on an actual sale of each such property
                            and allocated pursuant to Section 6.1 of the
                            Agreement.

                       (2)  Such adjustments shall be made as of the following
                            times: (a) immediately prior to 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; (b) immediately
                            prior to the distribution by the Partnership to a
                            Partner of more than a de minimis amount of
                            property as consideration for an interest in the
                            Partnership; and (c) immediately prior to the
                            liquidation of the Partnership within the meaning
                            of Regulations Section 1.704-l(b)(2)(ii)(g),
                            provided however that adjustments pursuant to
                            clauses (a) and (b) above shall be made only if the
                            General Partner determines that such adjustments
                            are necessary or appropriate to reflect the
                            relative economic interests of the Partners in the
                            Partnership.


                                      B-2
<PAGE>

                  (3)      In accordance with Regulations Section 1.704-
                           l(b)(2)(iv)(e), the Carrying Value of Partnership
                           assets distributed in kind shall be adjusted upward
                           or downward to reflect any Unrealized Gain or
                           Unrealized Loss attributable to such Partnership
                           property, as of the time any such asset is
                           distributed.

                  (4)      In determining Unrealized Gain or Unrealized Loss
                           for purposes of this Exhibit B, the aggregate cash
                           amount and fair market value of all Partnership
                           assets (including cash or cash equivalents) shall
                           be determined by the General Partner using such
                           reasonable method of valuation as it may adopt, or
                           in the case of a liquidating distribution pursuant
                           to Article XIII of the Agreement, shall be
                           determined and allocated by the Liquidator using
                           such reasonable methods of valuation as it may
                           adopt. The General Partner, or the Liquidator, as
                           the case may be, shall allocate such aggregate fair
                           market value among the assets of the Partnership in
                           such manner as it determines in its sole and
                           absolute discretion to arrive at a fair market
                           value for individual properties.

         E. The provisions of the Agreement (including this Exhibit B and the
other Exhibits to the 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 consistent with such Regulations. In
the event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities
which are secured by contributed or distributed property or which are assumed
by the Partnership, the General Partner, or the Limited Partners) are computed
in order to comply with such Regulations, the General Partner may make such
modification without regard to Article XIV of the Agreement, provided that it
is not likely to have a material effect on the amounts distributable to any
Person pursuant to Article XIII of the Agreement upon the dissolution of the
Partnership. The General Partner also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section l.704-l(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section l.704-1(b).

2.       No Interest
         -----------

         No interest shall be paid by the Partnership on Capital Contributions
or on balances in Partners' Capital Accounts.

3.       No Withdrawal
         -------------

         No Partner shall be entitled to withdraw any part of its Capital
Contribution or Capital Account or to receive any distribution from the
Partnership, except as provided in Articles IV, V, VII and XIII of the
Agreement.


                                     B-3
<PAGE>

                                   EXHIBIT C

                           SPECIAL ALLOCATION RULES


1.                Special Allocation Rules.

                  Notwithstanding any other provision of the Agreement or this
Exhibit C, the following special allocations shall be made in the following
order:

                  A. Minimum Gain Chargeback. Notwithstanding the provisions
of Section 6.1 of the Agreement or any other provisions of this Exhibit C, if
there is a net decrease in Partnership Minimum Gain during any Partnership
Year, each Partner shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Partner's share of the net decrease in Partnership Minimum Gain,
as determined under Regulations Section 1.704-2(g). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Regulations Section
1.704-2(f)(6). This Section 1.A is intended to comply with the minimum gain
chargeback requirements in Regulations Section 1.704-2(f) and for purposes of
this Section 1.A only, each Partner's Adjusted Capital Account Deficit shall
be determined prior to any other allocations pursuant to Section 6.1 of this
Agreement with respect to such Partnership Year and without regard to any
decrease in Partner Minimum Gain during such Partnership Year.

                  B. Partner Minimum Gain Chargeback. Notwithstanding any
other provision of Section 6.1 of this Agreement or any other provisions of
this Exhibit C (except Section 1.A hereof), if there is a net decrease in
Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership Year, each Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i) (5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Partner's share of the net decrease in
Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i) (5). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each General Partner and Limited Partner pursuant
thereto. The items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(i) (4). This Section 1.B is intended to comply
with the minimum gain chargeback requirement in such Section of the
Regulations and shall be interpreted consistently therewith. Solely for
purposes of this Section 1.B, each Partner's Adjusted Capital Account Deficit
shall be determined prior to any other allocations pursuant to Section 6.1 of
the Agreement or this Exhibit with respect to such Partnership Year, other
than allocations pursuant to Section 1.A hereof.

                  C. Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described
in Regulations Sections 1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or
1.704- l(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.A and 1.B hereof with respect to such Partnership Year, such
Partner has an Adjusted Capital Account Deficit, items of Partnership income
<PAGE>

and gain (consisting of a pro rata portion of each item of Partnership income,
including gross income and gain for the Partnership Year) shall be
specifically allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, its Adjusted Capital
Account Deficit created by such adjustments, allocations or distributions as
quickly as possible. This Section 1.C is intended to constitute a "qualified
income offset" under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

                  D. Gross Income Allocation. In the event that any Partner
has an Adjusted Capital Account Deficit at the end of any Partnership Year
(after taking into account allocations to be made under the preceding
paragraphs hereof with respect to such Partnership Year), each such Partner
shall be specially allocated items of Partnership income and gain (consisting
of a pro rata portion of each item of Partnership income, including gross
income and gain for the Partnership Year) in an amount and manner sufficient
to eliminate, to the extent required by the Regulations, its Adjusted Capital
Account Deficit.

                  E. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that the Partnership's Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner
is authorized, upon notice to the Limited Partners, to revise the prescribed
ratio for such Partnership Year to the numerically closest ratio which would
satisfy such requirements.

                  F. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership 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 Sections 1.704-2(b)(4) and 1.704-2(i).

                  G. Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Section 734(b)
or 743(b) of the Code is required, pursuant to Regulations Section
1.704-l(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 item of 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.

2.       Allocations for Tax Purposes
         ----------------------------

                  A. Except as otherwise provided in this Section 2, for
federal income tax purposes, each item of income, gain, loss and deduction
shall be allocated among the Partners in the same manner as its correlative
item of "book" income, gain, loss or deduction is allocated pursuant to
Section 6.1 of the Agreement and Section 1 of this Exhibit C.

                  B. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss, and deduction shall be allocated for federal income tax purposes
among the Partners as follows:


                                      C-2

<PAGE>

                           (1)      (a) In the case of a Contributed Property,
                                    such items attributable thereto shall be
                                    allocated among the Partners consistent
                                    with the principles of Section 704(c) of
                                    the Code to take into account the
                                    variation between the 704(c) Value of such
                                    property and its adjusted basis at the
                                    time of contribution (taking into account
                                    Section 2.C of this Exhibit C); and

                                    (b) any item of Residual Gain or Residual
                                    Loss attributable to a Contributed
                                    Property shall be allocated among the
                                    Partners in the same manner as its
                                    correlative item of "book" gain or loss is
                                    allocated pursuant to Section 6.1 of the
                                    Agreement and Section 1 of this Exhibit C.

                           (2)      (a) In the case of an Adjusted Property,
                                    such items shall

                                            (i) first, be allocated among the
                                    Partners in a manner consistent with the
                                    principles of Section 704(c) of the Code
                                    to take into account the Unrealized Gain
                                    or Unrealized Loss attributable to such
                                    property and the allocations thereof
                                    pursuant to Exhibit B;

                                            (ii) second, in the event such
                                    property was originally a Contributed
                                    Property, be allocated among the Partners
                                    in a manner consistent with Section 2.B(1)
                                    of this Exhibit C; and

                                    (b) any item of Residual Gain or Residual
                                    Loss attributable to an Adjusted Property
                                    shall be allocated among the Partners in the
                                    same manner its correlative item of "book"
                                    gain or loss is allocated pursuant to
                                    Section 6.1 of the Agreement and Section 1
                                    of this Exhibit C.

                           (3) all other items of income, gain, loss and
                           deduction shall be allocated among the Partners the
                           same manner as their correlative item of "book"
                           gain or loss is allocated pursuant to Section 6.1
                           of the Agreement and Section 1 of this Exhibit C.

                  C. To the extent Regulations promulgated pursuant to Section
704(c) of the Code permit a Partnership to utilize alternative methods to
eliminate the disparities between the Carrying Value of property and its
adjusted basis, the General Partner shall, subject to the following, have the
authority to elect the method to be used by the Partnership and such election
shall be binding on all Partners. With respect to the Contributed Property
transferred to the Partnership as of the Effective Date, the Partnership shall
elect to use the "traditional method" set forth in Treasury Regulation ss.
1.704-3(b).


                                     C-3
<PAGE>


                                   EXHIBIT D

                             NOTICE OF REDEMPTION


                  The undersigned hereby irrevocably (i) redeems _________
Partnership Units in ElderTrust Operating Limited Partnership in accordance
with the terms of the Agreement of Limited Partnership of ElderTrust Operating
Limited Partnership, as amended, and the Redemption Right referred to therein,
(ii) surrenders such Partnership Units and all right, title and interest
therein and (iii) directs that the Cash Amount or Shares Amount (as determined
by the General Partner) deliverable upon exercise of the Redemption Right be
delivered to the address specified below, and if Shares are to be delivered,
such Shares be registered or placed in the name(s) and at the address(es)
specified below. The undersigned hereby represents, warrants, and certifies
that the undersigned (a) has marketable and unencumbered title to such
Partnership Units, free and clear of the rights of or interests of any other
person or entity, (b) has the full right, power and authority to redeem and
surrender such Partnership Units as provided herein and (c) has obtained the
consent or approval of all persons or entities, if any, having the right to
consult or approve such redemption and surrender.


                  Dated:________     Name of Limited Partner:___________________




                                            ------------------------------------
                        (Signature of Limited Partner)




                                            ------------------------------------
                                            (Street Address)


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



                                Signature Guaranteed by:

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



                  If Shares are to be issued, issue to:

                  Name:

                  Please insert social security or identifying number:



<PAGE>
                                   EXHIBIT E

                         VALUE OF CONTRIBUTED PROPERTY


<TABLE>
<CAPTION>
Partner                       Underlying Property                       704(c) Value        Agreed Value
-------                       -------------------                       ------------        ------------
<S>                              <C>                                     <C>                     <C>
ElderTrust                    Cash                                $       133,021,800       $      133,021,800

Thomas W. Balderston          Interest in Windsor Office          $           435,940       $          149,940
                              Building and Windsor Clinic and
                              Training Facility Properties

Gregory H. Doyle              Interest in Windsor Office          $           435,940       $          149,940
                              Building and Windsor Clinic and
                              Training Facility Properties

                              General Partnership Interest in     $           213,537       $           93,870
                              Salisbury Medical Office Building
                              General Partnership

Richard R. Howard             General Partnership Interest in     $           213,537       $           93,870
                              Salisbury Medical Office Building
                              General Partnership

D. Lee McCreary, Jr.          Restatement of Pre-existing         $           216,000       $          216,000
                              Equity Interest in Partnership

MGI Limited Partnership       Restatement of Pre-existing         $         2,362,500       $        2,362,500
                              Equity Interest in Partnership

Edward B. Romanov, Jr.        Restatement of Pre-existing         $         2,137,500       $        2,137,500
                              Equity Interest in Partnership
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


Partner                       Underlying Property                       704(c) Value        Agreed Value
-------                       -------------------                       ------------        ------------
<S>                                <C>                                    <C>                     <C>
Senior LifeChoice Corp.       General Partner Interest in         $        21,081,450       $         2,985,300
                              Senior LifeChoice of Paoli, L.P.
                              and General Partner and Limited
                              Partner Interests in Senior
                              LifeChoice of Kimberton, L.P.

Michael R. Walker             Interest in Windsor Office          $           299,880       $           299,880
                              Building and Windsor Clinic and
                              Training Facility Properties

                              General Partnership Interest in     $            93,870       $            93,870
                              Salisbury Medical Office Building
                              General Partnership

Joseph A. Williamson          General Partnership Interest in     $           213,537       $            93,870
                              Salisbury Medical Office Building
                              General Partnership
</TABLE>
                                     E-2
<PAGE>


                                   EXHIBIT F

                           FORM OF UNIT CERTIFICATE


























<PAGE>
================================================================================
                   ELDERTRUST OPERATING LIMITED PARTNERSHIP
                       (A Delaware Limited Partnership)


   CERTIFICATE NUMBER                                 Number Of Class A Units

         A-___                                              _________

   THIS CERTIFIES THAT

                                         [PARTNER]




                  is the owner of record of the number of Class A Partnership
Units of limited partnership interest ("Partnership Units") indicated above in
ElderTrust Operating Limited Partnership, a Delaware limited partnership (the
"Partnership"). This Certificate has been issued solely to evidence that the
above named partner appears as a signatory to, and that the above number of
Partnership Units stand in such partner's name in the Second Amended and
Restated Agreement of Limited Partnership of the Partnership, as amended (the
"Partnership Agreement"). This Certificate does not grant or carry with it any
rights to the income, profits or assets of the Partnership, such rights and
interests being derived solely from the Partnership Agreement. The interest
represented by all or any of the Partnership Units may not be transferred
except in accordance with the terms of the Partnership Agreement.



                   ELDERTRUST OPERATING LIMITED PARTNERSHIP



  Dated:  January 30, 1998                   By:     ELDERTRUST

                                General Partner


                                             By      ___________________________
                                                     D. Lee McCreary, Jr.
                                                     Vice President and Chief
                                                      Financial Officer
================================================================================


                                     F-2
<PAGE>


                                   EXHIBIT G

                        DEFICIT RESTORATION OBLIGATIONS



         The following Partners have made one or more Deficit Restoration
Obligation Agreements which have been accepted by the Partnership whereby each
such Partner has agreed to contribute the aggregate amount of cash set forth
next to such Partner's name below in the event of the liquidation of the
Partnership:

                   Partner              Aggregate Deficit Restoration Obligation
                   -------              ----------------------------------------

          [TO BE COMPLETED FOLLOWING COMPLETION OF FINAL TAX RETURNS
                          FOR PROPERTY PARTNERSHIPS]