EXHIBIT A

         IT IS UNLAWFUL TO  CONSUMMATE A SALE OR TRANSFER OF THIS  SECURITY,  OR
ANY INTEREST THEREIN OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE  COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

                           FIFTH AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT


        OWENS MORTGAGE INVESTMENT FUND, A CALIFORNIA LIMITED PARTNERSHIP


         THIS FIFTH  AMENDED AND RESTATED  LIMITED  PARTNERSHIP  AGREEMENT  (the
"Agreement"),  dated  November 10,  2000,  is made and entered into by and among
Owens Financial Group, Inc. as General Partner (the "General Partner"),  and the
Limited  Partners  of Owens  Mortgage  Investment  Fund,  a  California  Limited
Partnership (hereinafter referred to collectively as the "Limited Partners").

RECITALS

         A. Owens Mortgage  Investment  Fund, a California  Limited  Partnership
(the  "Partnership")  was formed on June 14, 1984, under the California  Uniform
Limited  Partnership  Act, under the name "Owens  Mortgage  Investment Fund II".
Effective  October 16,  1992,  the  Partnership  changed its name to its current
name.

         B. The Limited  Partnership  Agreement  was amended and  restated as of
October 16, 1992,  December 14, 1998,  February 16, 1999, and April 17, 2000 and
it is desired to again amend and restate the Agreement as hereinafter set forth.

The Partners therefore agree as follows:

I.       FORMATION

         1.  California  Revised  Limited  Partnership  Act. The Partnership was
formed  on June 14,  1984  and,  until  the  February  16,  1999  amendment  and
restatement  (the  'Third  Amendment  and  Restatement'),  was  governed  by and
pursuant to the provisions of California  Corporations Code, Title 2, Chapter 2,
known as the Uniform Limited  Partnership Act (the "Act").  The General Partner,
pursuant to and by the Third Amendment and Restatement, elected under California
Corporations  Code  Section   15712(b)(1)  to  have  the  Partnership   governed
thenceforth by California  Corporations Code, Title 2, Chapter 3, the California
Revised Limited Partnership Act.

         2. Name.  The name of the  Partnership  is "Owens  Mortgage  Investment
Fund, a California Limited Partnership."

         3.  Place  of  Business.  The  principal  place  of  business  for  the
Partnership is located at 2221 Olympic Blvd., Walnut Creek, CA 94595;  provided,
however, that the General Partner may change the address of the principal office
by notice in writing to all Limited Partners.  In addition,  the Partnership may
maintain  such other  offices and places of business as the General  Partner may
deem advisable at any other place or places within the United States.

         4.  Addresses  for  the  General  Partner  and  Limited  Partners.  The
principal  place of business of the General  Partner is 2221 Olympic  Boulevard,
Walnut Creek,  California 94595. The address for each of the Limited Partners is
that address  shown on the books and records of the  Partnership  located at its
principal  place of  business.  The Limited  Partners  may change such places of
residence  by written  notice to the  Partnership,  which  notice  shall  become
effective upon receipt.

         5. Term.  The  Partnership  commenced on June 14, 1984.  Unless earlier
dissolved under the provisions of this Agreement,  the Partnership will dissolve
on December 31, 2034. The Partnership may be extended by the affirmative vote of
a Majority-In-Interest of the Limited Partners.

         6. Purpose. The business and purposes of the Partnership are to make or
purchase  first,  second,  third,  wraparound,  participating  and  construction
mortgage loans and mortgage loans on leasehold  interests,  and to do all things
reasonably related thereto, including, but not limited to, developing,  managing
and either holding for investment or disposing of real property acquired through
foreclosure.

         7. Agent for Service of Process;  Tax Matters  Partner.  So long as the
General  Partner  maintains a principal  place of  business in  California,  the
General  Partner  is the  Partnership's  agent for  service of  process.  If the
General Partner moves from California, the Limited Partners will designate a new
agent for  service of  process.  The General  Partner  also is the "Tax  Matters
Partner" as defined in Section  6231(a)(7) of the Internal Revenue Code of 1986,
as amended.

II.      DEFINITIONS

         The following terms shall have the following respective meanings:

         "Acquisition and Origination Expenses" means expenses including but not
limited to legal fees and expenses, travel and communications expenses, costs of
appraisals,  accounting  fees  and  expenses,  title  insurance  funded  by  the
Partnership,  and miscellaneous  expenses related to the origination,  selection
and  acquisition of mortgages,  whether or not acquired.  The General Partner or
its Affiliates  shall not receive  reimbursement  of Acquisition and Origination
Expenses.

         "Acquisition  and  Origination  Fees"  means  the total of all fees and
commissions  paid to the General  Partner by any party in connection with making
or  investing in Mortgage  Loans.  Included in the  computation  of such fees or
commissions  shall be any selection fee,  mortgage  placement fee,  nonrecurring
management fee, and any  origination  fee, loan fee, or points paid by borrowers
to the General Partner, or any fee of a similar nature, however designated.

         "Administrator"   means  the  agency  or  official   administering  the
securities  law of a state in which Units are  registered or qualified for offer
and sale.

         "Affiliate"  means: (i) any person directly or indirectly  controlling,
controlled  by, or under common  control with  another  person;  (ii) any person
owning  or  controlling  ten  percent  (10%) or more of the  outstanding  voting
securities of such other person; (iii) any officer, director, or partner of such
person; and (iv) if such other person is an officer,  director,  or partner, any
company for which such person acts in such capacity.

         "Capital Account" means the definition in Article III hereof.

         "Capital  Contribution"  means the total investment and contribution to
the  capital  of the  Partnership  by a Partner  in cash or by way of  automatic
reinvestment  of  Partnership  distributions  and,  in the  case of the  General
Partner, its Carried Interest as hereinafter defined.

         "Capital Transaction" means the repayment of principal or prepayment of
a Mortgage Loan to the extent  classified as a return of capital under the Code,
and the  foreclosure,  sale,  exchange,  condemnation,  eminent domain taking or
other  disposition  of a Mortgage  Loan or Real  Property  subject to a Mortgage
Loan,  or the payment of  insurance  or a guarantee  with  respect to a Mortgage
Loan.

         "Carried Interest"  (previously called "Promotional  Interest") means a
Partnership  Interest held by the General  Partner,  which  participates  in all
allocations  and  distributions,  equal to one half (1/2) of one percent (1%) of
the aggregate  Capital Accounts of the Limited  Partners,  said Carried Interest
being an expense of the  Partnership,  subject  to the  limitation  set forth in
Article IX. 1. (c) of this Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or corresponding provisions of subsequent revenue laws.

         "Controlling  Person"  means any  Person,  whatever  their  title,  who
performs  functions for the General  Partner similar to those of (i) chairman or
member of the board of directors;  (ii) executive or senior management,  such as
the  president,  vice-president,  or chief  financial  officer;  or (iii)  those
holding 5% or more equity interest in the General Partner or a Person having the
power to direct or cause the direction of the General  Partner,  whether through
the ownership of voting securities, by contract, or otherwise.

         "Front-End  Fees" means fees and expenses  paid by any party to acquire
assets  for the  Partnership,  including  Organization  and  Offering  Expenses,
Acquisition and Origination Expenses, Acquisition and Origination Fees, interest
on deferred fees and expenses, and any other similar fees, however designated by
the General Partner.

         "Independent  Expert" means a Person with no material  current or prior
business or personal  relationship  with the General Partner who is engaged to a
substantial  extent in the business of rendering opinions regarding the value of
assets of the type held by the Partnership, and who is qualified to perform such
work.

         "Investment   in   Mortgage   Loans"   means  the   amount  of  Capital
Contributions  used to make or invest in Mortgage  Loans or the amount  actually
paid or  allocated  to the  purchase  of  mortgages,  working  capital  reserves
allocable  thereto (except that working capital reserves in excess of 3.0% shall
not be  included),  and  other  cash  payments  such as  interest  and taxes but
excluding Front-End Fees.

         "Late Payment  Charges" means  additional  charges paid by borrowers on
delinquent  loans and loans past  maturity  held by the  Partnership,  including
additional interest and late payment fees.

         "Majority-In-Interest" means Limited Partners holding a majority of the
outstanding Units (excluding any Units held by the General Partner).

         "Management  Fee"  means a fee  paid to the  General  Partner  or other
Persons for management and administration of the Partnership.

         "Mortgage  Loans" means  investments of the Partnership that are notes,
debentures,  bonds, and other evidence of indebtedness or obligations  which are
negotiable or nonnegotiable and which are secured or collateralized by mortgages
or deeds of trust.

         "NASAA  Guidelines" means the Mortgage Program  Guidelines of the North
American Securities  Administrators  Association,  Inc. adopted on September 10,
1996.

         "Net Income Available for  Distribution"  means Profits and Losses,  as
defined  below,  reduced by amounts  set aside for  restoration  or  creation of
reserves and increased by amounts  provided by the reduction or  elimination  of
reserves at the discretion of the General Partner.

         "Net   Proceeds"   means  the  net  cash   proceeds  from  any  Capital
Transaction.

         "Net Worth" means the excess of total assets over total  liabilities as
determined by generally accepted  accounting  principles,  except that if any of
such assets have been depreciated,  then the amount of the depreciation relative
to any particular  asset may be added to the  depreciated  cost of such asset to
compute total assets, provided that the amount of depreciation may be added only
to the extent that the amount resulting after adding such  depreciation does not
exceed the fair market value of such asset.

         "Organization  and Offering  Expenses" means those expenses incurred in
connection with and in preparing for registration and subsequently  offering and
distributing Units to the public,  including sales commissions,  if any, paid to
broker-dealers  in connection with the distribution of Units and any advertising
expenses.

         "Partners"  means the holders of Partnership  interests,  including the
General Partner and the Limited Partners.

         "Partnership  Interest"  means a  limited  partnership  unit  or  other
indicium of ownership in the Partnership.

         "Person"   means  any   natural   person,   partnership,   corporation,
association, or other legal entity.

         "Profits and Losses"  means,  for each fiscal year or other period,  an
amount  equal to the  Partnership's  taxable  income  or loss  for such  year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income,  gain,  loss,  or  deduction  required to be stated  separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss).

         "Program"  means a limited or general  partnership,  limited  liability
company,  limited liability  partnership,  trust, joint venture,  unincorporated
association or similar organization other than a corporation formed and operated
for the primary purpose of investment in mortgage loans.

         "Property   Management   Fee"   means  any  fee  paid  for   day-to-day
professional property management services.

         "Prospectus"  shall  mean  the  prospectus  that  forms  a part  of the
effective  registration  statement under the Securities Act of 1933, as amended,
including any preliminary prospectus.

         "Real property" means and includes land and any buildings,  structures,
improvements,  fixtures,  and equipment  located on or used in  connection  with
land,  but does  not  include,  deeds of  trust,  mortgages,  mortgage  loans or
interests therein.

         "Regulations" means, except where the context indicates otherwise,  the
permanent,  temporary,  proposed,  or proposed and temporary  regulations of the
United States Department of the Treasury under the Code, as such regulations may
be lawfully changed from time to time.

         "Reinvested    Distributions"   means   Units   purchased   under   the
Partnership's  Reinvested Distribution Plan that is described in Article III. 3.
of this Agreement.

         "Roll-Up"  means  a  transaction  involving  the  acquisition,  merger,
conversion,  or consolidation,  either directly or indirectly of the Partnership
and the issuance of securities of a Roll-Up Entity. Such term does not include a
transaction  involving the  conversion of corporate,  trust,  limited  liability
company, or association form of only the Partnership if, as a consequence of the
transaction,  there  will  be no  significant  adverse  change  in  any  of  the
following:  (a)  Partners'  voting  rights;  (b) the  term of  existence  of the
Partnership; (c) General Partner compensation;  (d) the Partnership's investment
objectives.

         "Roll-Up  Entity" means a partnership,  real estate  investment  trust,
corporation,  trust,  limited  liability  company or other  entity that would be
created or would survive after the successful  completion of a proposed  Roll-Up
transaction.

         "Sponsor"   means  the  General  Partner  or  any  Person  directly  or
indirectly  instrumental  in  organizing,  wholly or in part,  a Program  or any
Person who will  manage or  participate  in the  management  of a  Program,  any
Afflilate of any such Person,  but does not include a Person whose only relation
with the  Program  is as that of an  independent  property  manager,  whose only
compensation  is as such.  Sponsor  does not include  wholly  independent  third
parties such as attorneys, accountants, and underwriters whose only compensation
is for professional services rendered in connection with the offering of Program
Interests.

         "Unit"  means  an  interest  in  the   Partnership   and  represents  a
contribution  either in cash or through  reinvestment  of  distributions  of One
Dollar  ($1.00) to the  capital of the  Partnership  by a Limited  Partner,  and
entitles the holder  thereof to the rights and interests of Limited  Partners as
herein provided.

III.     PARTNERSHIP INTEREST AND CAPITAL

         1. Capital  Contributions  of Partners.  The capital of the Partnership
shall be  contributed  by the  Limited  Partners  and the General  Partner.  The
Limited  Partners  shall  contribute to the capital of the  Partnership  cash or
reinvested  distributions  in the  amount of One  Dollar  ($1.00)  for each Unit
subscribed.  The  General  Partner  shall  contribute  to  the  capital  of  the
Partnership  cash in an amount  equal to one-half of one percent  (1/2 of 1%) of
the  aggregate  of the Capital  Accounts of the  Limited  Partners.  The General
Partner  shall  also  receive  the  Carried  Interest  in  the  capital  of  the
Partnership.

         2. Sale of Units. In the General Partner's sole discretion, Units up to
an aggregate  outstanding  amount of $500,000,000 may be offered and sold by the
Partnership.  Purchasers of such Units shall become Limited Partners immediately
on acceptance of subscriptions by the General  Partner.  Subscriptions  shall be
accepted or rejected by the  Partnership  within 30 days of their receipt by the
General  Partner;  if  rejected,  all funds will be returned  to the  subscriber
within 10 business days.

         3. Limited Partners'  Reinvested  Distributions:  A Limited Partner may
elect to participate in the  Partnership's  Reinvested  Distributions  Plan (the
"Plan") at the time of his  purchase of Units,  by making  such  election in the
form of the  Subscription  Agreement for Units executed by each Limited Partner.
Participation  in the Plan will  commence  as of the date of  acceptance  by the
Partnership of the Limited Partner's  Subscription  Agreement.  Subsequently,  a
Limited  Partner  may revoke any  previous  election  or make a new  election to
participate  in the Plan by  sending  written  notice to the  Partnership.  Such
notice  shall be  effective  for the month in which the notice is  received,  if
received  at  least  ten  (10)  days  prior  to the end of the  calendar  month;
otherwise the notice is effective the following month.

         Distributions  to which a Limited Partner  participating in the Plan is
entitled shall be used to purchase  additional Units at $1.00 per Unit. Units so
purchased under the Plan are credited to the Limited  Partner's  Capital Account
as of the  first day of the month  following  the month in which the  Reinvested
Distribution  is made.  If a Limited  Partner  revokes a  previous  election  to
participate in the Plan, distributions made by the Partnership subsequent to the
month in which the  revocation  notice is received by the  Partnership  shall be
made in cash to the Limited Partner instead of being reinvested in Units.

         The  General  Partner  will  mail  to  each  Limited  Partner  who is a
participant  in the  Plan a  statement  of  account  describing  the  Reinvested
Distributions  received,  the number of Units  purchased  thereby,  the purchase
price per Unit,  and the total  number  of Units  held by the  Limited  Partner,
within thirty (30) days after the Reinvested  Distributions  have been credited.
The General Partner will also mail an updated Prospectus to each Limited Partner
each time a new Prospectus is filed,  which fully describes the Plan,  including
the  minimum  investment  amount,  the type or source of  proceeds  which may be
reinvested and the tax consequences of the reinvestment to the Limited Partners.

         Each Limited  Partner who is a participant in the Plan must continue to
meet the investor suitability standards described in the Subscription  Agreement
and Prospectus for participation in each reinvestment.  It is the responsibility
of each Limited Partner to notify the General  Partner  promptly if he or she no
longer meets the suitability standards.

         The terms and conditions of the Plan may be amended,  supplemented,  or
terminated  for any  reason by the  Partnership  at any time by  mailing  notice
thereof at least thirty (30) days prior to the effective  date of such action to
each  Limited  Partner who is a  participant  in the Plan at his last address of
record.

         The General Partner,  in its sole discretion,  may suspend or terminate
the Plan if:

                  (a) it  determines  that the Plan  impairs  the capital or the
operations of the Partnership or that an emergency makes continuance of the Plan
not reasonably practicable;

                  (b) any  governmental or regulatory  agency with  jurisdiction
over the Partnership so demands for the protection of Limited Partners;

                  (c) in the opinion of counsel for the  Partnership,  such Plan
is not  permitted by federal or state law; or  repurchase,  sales,  assignments,
transfers  and the  exchange  of Units in the  Partnership  within the  previous
twelve (12) consecutive  months would result in the Partnership being considered
terminated within the meaning of Section 708 of the Code; or

                  (d)  it  determines  that  allowing  any  further   Reinvested
Distributions  would give rise to a material risk that the Partnership  would be
treated for any  taxable  year as a "publicly  traded  partnership,"  within the
meaning of Code Section 7704.

         4. Nonassessability of Units. The Units are nonassessable.  Once a Unit
has been  paid for in full,  the  holder of the Unit has no  obligation  to make
additional Capital Contributions to the Partnership.

         5. Capital  Accounts.  The Partnership shall maintain a Capital Account
for each Partner.  Initially,  the Capital  Account of each Partner shall be the
amount  equal  to the  initial  Capital  Contribution  made by such  Partner  in
exchange for his or her interest in the Partnership.  Thereafter, each Partner's
Capital Account shall be maintained in accordance with the provisions of Section
1.704-1(b)(2)(iv) of the Regulations and will be determined as follows:

                  (a) To each Partner's  Capital Account there shall be credited
the amount of cash  contributed  by such  Partner to the  Partnership,  and such
Partner's distributive share of Partnership profits.

                  (b) To each Partner's  Capital  Account there shall be debited
the amount of cash distributed to such Partner pursuant to any provision of this
Agreement and such Partner's distributive share of Partnership losses.

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

         The foregoing  provisions  and the other  provisions of this  Agreement
relating to the  maintenance  of Capital  Accounts  are  intended to comply with
Regulation  Section  1.704-1(b) and shall be interpreted and applied in a manner
consistent  with  such  Regulations.  In the  event the  General  Partner  shall
reasonably  determine  that it is  prudent  to  modify  the  manner in which the
Capital  Accounts,  or any debits or credits  thereto,  are computed in order to
comply with such  Regulations,  the General Partner may make such  modification,
provided  that  it is not  likely  to  have a  material  effect  on the  amounts
distributable   to  any  Partner  pursuant  to  Article  XIII  hereof  upon  the
dissolution  of the  Partnership.  The General  Partner  also shall (a) 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  1.704-1(b)(2)(iv)(q),  and (b) make any  appropriate
modifications in the event unanticipated events (for example, the acquisition by
the Partnership of oil or gas properties) might otherwise cause this Partnership
not to comply with Regulation Section 1.704-1(b).

         Neither a Limited Partner nor a General Partner is entitled to withdraw
any part of his or its Capital Account or to receive any distributions  from the
Partnership except as specifically provided in this Agreement. No interest shall
be paid on any Capital Contribution.

         6. No Liability of Limited Partners.  A Limited Partner shall not be or
become liable for the  obligations of the  Partnership in an amount in excess of
his Capital Account.

IV.      MANAGEMENT

         1. Control in General  Partner.  Subject to the  limitations of Article
IV.5 of this Agreement.,  and except as otherwise  expressly stated elsewhere in
this Agreement,  the General Partner has exclusive  control over the business of
the  Partnership,  including  the power to assign  duties,  to determine  how to
invest the Partnership's assets, to sign bills of sale, title documents, leases,
notes,  security  agreements,  Mortgage  Loans  and  contracts,  and  to  assume
direction  of the business  operations.  As manager of the  Partnership  and its
business,  the General  Partner has all duties  generally  associated  with such
position,  including,  but not limited to, dealing with Limited Partners,  being
responsible  for all  accounting,  tax and legal  matters,  performing  internal
reviews of the Partnership's  investments and loans, determining how and when to
invest the Partnership's  capital,  and determining the course of action to take
with respect to  Partnership  loans that are in default;  and has all the powers
with respect and  ancillary  thereto.  Without  limiting the  generality  of the
foregoing, such powers include the right:

                  (a)  To  evaluate  potential  Partnership  investments  and to
expend the  capital  of the  Partnership  in  furtherance  of the  Partnership's
business;

                  (b)  To  acquire,  hold,  lease,  sell,  trade,  exchange,  or
otherwise dispose of all or any portion of Partnership  property or any interest
therein at such price and upon such terms and conditions as the General  Partner
may deem proper;

                  (c) To cause  the  Partnership  to  become  a joint  venturer,
partner or member of an entity formed to own, develop, operate and/or dispose of
properties  owned or co-owned by the Partnership  acquired  through or resulting
from foreclosure of a Mortgage Loan;

                  (d) To manage, operate and develop Partnership property, or to
employ and supervise a property  manager who may, or may not, be an Affiliate of
the General Partner;

                  (e) To borrow money from banks and other lending  institutions
for any Partnership purpose,  and as security therefor,  to encumber Partnership
property;

                  (f) To repay in whole or in part, refinance, increase, modify,
or extend, any obligation, affecting Partnership property;

                  (g) To  employ  from  time  to  time,  at the  expense  of the
Partnership,  persons, including the General Partner or its Affiliates, required
for the operation of the Partnership's  business,  including employees,  agents,
independent contractors,  brokers, accountants,  attorneys, and others; to enter
into  agreements  and  contracts  with such  persons  on such terms and for such
compensation  as the General  Partner  determines to be reasonable;  and to give
receipts,  releases, and discharges with respect to all of the foregoing and any
matters   incident  thereto  as  the  General  Partner  may  deem  advisable  or
appropriate;  provided, however, that any such agreement or contract between the
Partnership  and the General Partner or between the Partnership and an Affiliate
of the General Partner shall contain a provision that such agreement or contract
may be terminated by the Partnership without penalty on sixty (60) days' written
notice and without  advance notice if the General  Partner or Affiliate who is a
party to such contract or agreement  resigns or is removed pursuant to the terms
of this  Agreement.  Whenever  possible,  contracts  between the Partnership and
others shall contain a provision  recognizing  that the Limited  Partners  shall
have no personal liability for performance or observance of the contract;

                  (h) To maintain,  at the expense of the Partnership,  adequate
records and accounts of all operations and  expenditures and furnish the Limited
Partners with annual  statements of account as of the end of each calendar year,
together with all necessary tax-reporting information;

                  (i) To purchase, at the expense of the Partnership,  liability
and other insurance to protect the property of the Partnership and its business;

                  (j) To refinance,  recast, modify,  consolidate, or extend any
Mortgage Loan or other investment owned by the Partnership;

                  (k) To pay  all  expenses  incurred  in  connection  with  the
operation of the Partnership;

                  (l) To file tax  returns on behalf of the  Partnership  and to
make any and all elections available under the Code, as amended;

                  (m) Without the  consent of the Limited  Partners,  to modify,
delete,  add to or correct from time to time any provision of this Agreement for
one or more of the following  reasons,  provided no such change shall  adversely
affect the rights of Limited Partners:

                          (i) To cure any ambiguity or formal defect or omission
herein;

                          (ii) To  grant  to  Limited  Partners  any  additional
rights,  remedies,  powers  or  authorities  that  may be  lawfully  granted  or
conferred upon them;

                          (iii) To conform this Agreement to applicable laws and
regulations,  including without limitation, federal and state securities and tax
laws and regulations, and the NASAA Guidelines; and

                          (iv) To make any other change in this Agreement which,
in the judgment of the General Partner,  does not adversely affect the rights of
the Limited Partners.

                  (n)  To  elect  to  have  the  Partnership   governed  by  the
California Revised Limited Partnership Act, California  Corporations Code, Title
2, Chapter 3, pursuant to Section 15712(b)(1) thereof.

The General Partner shall give prompt written notice to all Limited  Partners of
each change to this Agreement made pursuant to Subsection (m).

         2. Limitations on General Partner's Authority.  Without the concurrence
of a Majority-in-Interest, the General Partner has no authority to:

                  (a) amend this Agreement in any respect that adversely affects
the rights of the Limited Partners;

                  (b) do any act in contravention of this Agreement;

                  (c) do any act which would make it  impossible to carry on the
ordinary business of the Partnership;

                  (d) confess a judgment against the Partnership;

                  (e) possess  Partnership  property or assign the rights of the
Partnership in property for other than a partnership purpose;

                  (f) admit a person as a General Partner;

                  (g)  voluntarily  withdraw  as  General  Partner  unless  such
withdrawal  would not  affect the tax  status of the  Partnership  and would not
materially adversely affect the Limited Partners;

                  (h) sell, pledge,  refinance, or exchange all or substantially
all of the assets of the Partnership;

                  (i) dissolve the Partnership;

                  (j)  cause  the   merger  or  other   reorganization   of  the
Partnership;

                  (k) grant to the General  Partner or any of its  Affiliates an
exclusive right to sell any Partnership assets;

                  (l) receive or permit the General  Partner or any Affiliate of
the  General  Partner  to  receive  any  insurance  brokerage  fee or write  any
insurance policy covering the Partnership or any Partnership property;

                  (m) receive from the  Partnership a rebate or  participate  in
any reciprocal  business  arrangement  which would enable the General Partner or
any of its Affiliates to do so;

                  (n) commingle the Partnership's assets with those of any other
Person;

                  (o) use or permit another to use the  Partnership's  assets in
any manner, except for the exclusive benefit of the Partnership;

                  (p) pay or award,  directly or indirectly,  any commissions or
other  compensation to any person engaged by a potential investor for investment
advice as an  inducement  to such  advisor  to  advise  the  purchase  of Units;
provided,  however,  that  this  clause  shall not  prohibit  the  normal  sales
commissions  payable to a registered  broker-dealer  or other properly  licensed
person for selling Units; or

                  (q)  receive,  directly or  indirectly,  a  commission  or fee
(except as permitted under Article IX. of this Agreement) in connection with the
reinvestment or distribution of Net Proceeds.

         3. Right to Purchase Receivables and Loans. As long as the requirements
of Article VI. 9 of this  Agreement  are met, the General  Partner,  in its sole
discretion, may at any time, but is not obligated to:

                  (a) purchase from the Partnership  the interest  receivable or
principal on delinquent Mortgage Loans held by the Partnership;

                  (b) purchase from a senior lienholder the interest  receivable
or principal on mortgage loans senior to Mortgage Loans held by the  Partnership
held by such senior lienholder;

                  (c) use its own  monies to cover any  other  costs  associated
with Mortgage Loans held by the Partnership  such as property  taxes,  insurance
and legal expenses;

         4. Extent of General  Partner's  Obligation  and  Fiduciary  Duty.  The
General Partner shall devote such time to the business of the Partnership as the
General Partner determines, in good faith, to be reasonably necessary to conduct
the business of the  Partnership.  The General  Partner shall not be required to
devote  all of its  business  time to the  affairs of the  Partnership,  and the
General  Partner and its Affiliates may engage for their own account and for the
account of others in any other  business  ventures  and  employments,  including
ventures and employments  having a business  similar or identical or competitive
with  the  business  of the  Partnership.  The  General  Partner  has  fiduciary
responsibility  for the  safekeeping  and use of all  funds  and  assets  of the
Partnership,  whether or not in the General Partner's possession or control, and
the General  Partner will not employ,  or permit another to employ such funds or
assets in any manner except for the exclusive  benefit of the  Partnership.  The
General  Partner will not allow the assets of the  Partnership  to be commingled
with the assets of the  General  Partner or any other  Person.  The  Partnership
shall not permit a Limited  Partner to contract away the fiduciary  duty owed to
such Limited Partner by the General Partner under common law. If at any time the
General  Partner  owns any  Units as a Limited  Partner,  its right to vote such
Units will be waived and not  considered  outstanding in any vote for removal of
the General Partner or regarding any transaction between the Partnership and the
General Partner.

         5.       Liability and Indemnification of General Partner.

                  (a)  Neither the  General  Partner nor any of its  Affiliates,
agents or  attorneys  (hereinafter,  an  "Indemnified  Party")  shall be liable,
responsible or  accountable  in damages or otherwise to any other  Partner,  the
Partnership,  its receiver or trustee (the Partnership,  its receiver or trustee
are hereinafter  referred to as "Indemnitors") for, and the Indemnitors agree to
indemnify,  pay, protect and hold harmless each Indemnified Party (on the demand
of  such   Indemnified   Party)  from  and  against  any  and  all  liabilities,
obligations, losses, damages, actions, judgments, suits, proceedings, reasonable
costs, reasonable expenses and disbursements (including, without limitation, all
reasonable  costs and expenses of defense,  appeal and settlement of any and all
suits,  actions or proceedings  instituted against such Indemnified Party or the
Partnership and all reasonable costs of  investigation in connection  therewith)
(collectively  referred to as  "Liabilities"  for the remainder of this Section)
which may be imposed on, incurred by, or asserted against such Indemnified Party
or the  Partnership  in any way  relating  to or  arising  out of any  action or
inaction on the part of the Partnership or on the part of such Indemnified Party
in connection with services to or on behalf of the Partnership (and with respect
to an Indemnified  Party which is an Affiliate of the General Partner for an act
which the General Partner would be entitled to  indemnification if such act were
performed by it) which such  Indemnified  Party in good faith  determined was in
the best  interest  of the  Partnership.  Notwithstanding  the  foregoing,  each
Indemnified Party shall be liable, responsible and accountable,  and neither the
Partnership  nor  Indemnitor  shall be liable to an Indemnified  Party,  for any
portion of such Liabilities which resulted from such Indemnified Party's (i) own
fraud,  gross negligence or misconduct or knowing  violation of law, (ii) breach
of fiduciary  duty to the  Partnership  or any Partner,  or (iii) breach of this
Agreement, regardless of whether or not any such act was first determined by the
Indemnified  Party,  in  good  faith,  to  be  in  the  best  interests  of  the
Partnership.  If any action  suit or  proceeding  shall be pending  against  the
Partnership  or any  Indemnified  Party  relating  to or arising out of any such
action or inaction,  such Indemnified  Party shall have the right to employ,  at
the  reasonable  expense  of  the  Partnership  (subject  to the  provisions  of
Subsection 5(b), below),  separate counsel of such indemnified Party's choice in
such action,  suit or proceeding.  The  satisfaction  of the  obligations of the
Partnership  under this  Section  shall be from and limited to the assets of the
Partnership and no Limited Partner shall have any personal  liability on account
thereof.

                  (b) Cash advances  from  Partnership  funds to an  Indemnified
Party  for legal  expenses  and other  costs  incurred  as a result of any legal
action  initiated  against  an  Indemnified  Party  by  a  Limited  Partner  are
prohibited.  Cash advances from  Partnership  funds to an Indemnified  Party for
reasonable  legal  expenses  and other  costs  incurred as a result of any legal
action or  proceeding  are  permissible  if (i) such suit,  action or proceeding
relates  to or  arises  out  of any  action  or  inaction  on  the  part  of the
Indemnified  Party in the performance of its duties or provision of its services
on behalf of the Partnership;  (ii) such suit, action or proceeding is initiated
by a third party who is not a Limited Partner;  and (iii) the Indemnified  Party
undertakes  by written  agreement to repay any funds  advanced  pursuant to this
Section in the cases in which such  Indemnified  Party  would not be entitled to
indemnification  under Subsection 5(a) above. If advances are permissible  under
this Section, the Indemnified Party shall have the right to bill the Partnership
for, or otherwise  request the  Partnership to pay, at any time and from time to
time after such  Indemnified  Party  shall  become  obligated  to make  payments
therefor,  any and all amounts for which such Indemnified Party believes in good
faith  that  such  Indemnified  Party  is  entitled  to  indemnification   under
Subsection  5(a)  above.  The  Partnership  shall pay any and all such bills and
honor any and all such  requests  for payment  within 60 days after such bill or
request is received.  In the event that a final  determination  is made that the
Partnership  is not so  obligated  for any  amount  paid  by it to a  particular
Indemnified Party, such Indemnified Party will refund such amount within 60 days
of such final determination, and in the event that a final determination is made
that the  Partnership is so obligated for any amount not paid by the Partnership
to a particular  Indemnified Party, the Partnership will pay such amount to such
Indemnified Party within 60 days of such final determination.

                  (c)  Notwithstanding  anything to the  contrary  contained  in
Subsection  7(a) above,  neither the General  Partner nor any of its Affiliates,
agents, or attorneys,  nor any person acting as a broker-dealer  with respect to
the Units shall be indemnified  from any liability,  loss or damage  incurred by
them  arising due to an alleged  violation of federal or state  securities  laws
unless (i) there has been a successful  adjudication on the merits of each count
involving  alleged  securities law  violations as to the particular  Indemnified
Party, or (ii) such claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the particular Indemnified Party, or (iii)
a court of competent  jurisdiction  approves a settlement of the claims  against
the  particular   Indemnified  Party  and  finds  that  indemnification  of  the
settlement  and related costs should be made.  Prior to seeking a court approval
for  indemnification,  the General  Partner  shall  undertake to cause the party
seeking  indemnification  to apprise the court of the position of the Securities
and Exchange  Commission  and the California  Commissioner  of the Department of
Corporations with respect to indemnification for securities violations.

                  (d) The Partnership shall not incur the cost of the portion of
any  insurance  which  insures any party  against any liability as to which such
party is prohibited from being indemnified as set forth above.

                  (e) For  purposes of this  Section 5, an  Affiliate,  agent or
attorney of the General Partner shall be indemnified by the Partnership  only in
circumstances  where  such  person  has  performed  an  act  on  behalf  of  the
Partnership  or the General  Partner  within the scope of the  authority  of the
General  Partner and for which the General  Partner  would have been entitled to
indemnification had such act been performed by it.

V.       VOTING AND OTHER RIGHTS OF LIMITED PARTNERS

         1. No Limited  Partner,  as such,  shall take part in the management of
the business of, or transact any  business  for, the  Partnership,  nor have the
power  to  sign  for or bind  the  Partnership  to any  agreement  or  document.
Notwithstanding   the   foregoing,   Limited   Partners   holding   at  least  a
Majority-In-Interest  may, without the concurrence of the General Partner,  vote
or consent in writing in accordance  with Article VII.3 of this  Agreement  (and
such vote or consent will be required) to:

                  (a) amend this Agreement  (except for any amendment  permitted
to be made by the  General  Partner as  provided  in Article  IV. 4. (m) of this
Agreement;  provided  that any  amendment  which  modifies the  compensation  or
distributions  to which the General  Partner is  entitled  or which  affects the
duties of the General  Partner shall require the written  consent of the General
Partner).

                  (b) dissolve and windup the Partnership,

                  (c)  remove  the  General  Partner  and  elect one or more new
General Partners (see Article XII. 1. and 2.), or

                  (d) approve or disapprove the sale,  pledge,  refinancing,  or
exchange of all or substantially all of the assets of the Partnership.

         2. The Limited Partners and their designated representatives shall have
access to all books and records of the Partnership during normal business hours.
An alphabetical -list of the names,  addresses and business telephone numbers of
all  Limited  Partners  along  with the  number of Units held by each of them is
maintained  as a part of the books and records of the  Partnership  and shall be
made  available on request to any Limited  Partner or his  representative  for a
stated  purpose  including,  without  limitation,  matters  relating  to Limited
Partners' voting rights,  tender offers,  and the exercise of Limited  Partners'
rights  under  federal  proxy law. A copy of the Limited  Partner  list shall be
mailed to any Limited  Partner  requesting  it within ten  business  days of the
request  and may  include a  reasonable  charge for the copy work.  The  Limited
Partner  list  shall be  updated at least  quarterly  to reflect  changes in the
information contained therein.

         If the General Partner neglects or refuses to exhibit,  produce or mail
a copy of the Limited  Partner list as requested,  the General  Partner shall be
liable to any Partner  requesting the list for the costs,  including  attorneys'
fees,  incurred by that Partner for  compelling  the production of the list, and
for actual damages suffered by any Partner by reason of such refusal or neglect.
It shall be a defense  that the actual  purpose and reason for the  requests for
inspection or for a copy thereof,  or of using the same for a commercial purpose
other  than in the  interest  of the  Partner  relative  to the  affairs  of the
Partnership.  The General Partner may require the Partner requesting the Limited
Partner  list to  represent  that the  list is not  requested  for a  commercial
purpose  unrelated to the Partner's  interest in the  Partnership.  The remedies
provided hereunder to Partners requesting copies of the list are in addition to,
and shall not in any way limit,  other  remedies  available  to  Partners  under
federal law, or the laws of California.

VI.      INVESTMENT AND OPERATING POLICIES

         1.  The  General  Partner  shall  commit  at  least  86.5%  of  Capital
Contributions  to  Investment in Mortgage  Loans.  The  Partnership  may make or
purchase Mortgage Loans of such duration and on such real property and with such
additional  security  as the  General  Partner  in  its  sole  discretion  shall
determine.  Such Mortgage  Loans may be senior to other  mortgage  loans on such
property,  or junior to other mortgage  loans on such property,  all in the sole
discretion of the General Partner.

         The Partnership  normally shall not make or invest in Mortgage Loans on
any one  property if at the time of the  acquisition  of the loan the  aggregate
amount of all Mortgage Loans outstanding on the property, including loans of the
Partnership,  would exceed an amount equal to 80% of the appraised  value of the
property  as   determined   by   independent   appraisal,   unless   substantial
justification exists because of the presence of other underwriting criteria. For
purposes  of this  Subsection,  the  "aggregate  amount  of all  Mortgage  Loans
outstanding  on the  property,  including the loans of the  Partnership,  shall
include all  interest  (excluding  contingent  participations  in income  and/or
appreciation in value of the mortgaged  property),  the current payment of which
may be deferred pursuant to the terms of such loans. This restriction applies to
all loans, including construction loans.

         2. The  Partnership  will not incur  indebtedness  for the  purpose  of
making or purchasing Mortgage Loans, except:

                  (a) to prevent  default under prior loans or to discharge them
entirely if this becomes necessary to protect the Partnership's  Mortgage Loans,
and

                  (b) to  assist in the  development  or  operation  of any real
property on which the Partnership  has theretofore  made or purchased a Mortgage
Loan and has  subsequently  taken  over the  operation  thereof  as a result  of
default or to protect such Mortgage Loan.

                  The total amount of  indebtedness  incurred by the Partnership
shall at no time exceed the sum of 10% of the aggregate fair market value of all
Partnership  loans.  The General  Partner  shall be  prohibited  from  providing
financing to the Partnership.

         3. The  Partnership  will limit any single Mortgage Loan and will limit
its  Mortgage  Loans  to any one  borrower  to not more  than  10% of the  total
Partnership assets as of the date the loan is made or purchased.

         4.  The  Partnership  may not  invest  in or  make  Mortgage  Loans  on
unimproved real property in an amount in excess of 25% of the total  Partnership
assets.

         5. The  Partnership  may not invest in real  estate  contracts  of sale
otherwise  known as land sale contracts  unless such contracts are in recordable
form and appropriately recorded in the chain of title.

         6. The  Partnership  shall require that a mortgagee's  or owner's title
insurance  policy as to the priority of a mortgage or the  condition of title be
obtained in connection  with the making or purchasing of each Mortgage Loan. The
Partnership  shall  also  receive an  independent,  on-site  appraisal  for each
property on which it makes or  purchases a Mortgage  Loan.  All such  appraisals
shall be conducted by an Independent Expert. Such appraisals will be retained at
the office of the  Partnership  and will be available for review and duplication
by any  Limited  Partner  for a period of at least five years after the last day
that the Partnership holds a mortgage secured by the subject property.

         7. There shall at all times be title,  fire, and casualty  insurance in
an amount equal to the Partnership's  Mortgage Loan plus any outstanding  senior
lien on the security  property naming the Partnership and any senior  lienholder
as loss payees,  and, where such senior lienholder  exists, a Request for Notice
of Default  shall be  recorded  in the county  where the  security  property  is
situated.

         8.  Mortgage  Loans may be  purchased  from the General  Partner or its
Affiliates only if the General  Partner  acquires such loans in its own name and
temporarily  holds title thereto for the purpose of facilitating the acquisition
of such loans, and provided that such loans are purchased by the Partnership for
a price no greater  than the cost of such loans to the General  Partner  (except
compensation in accordance with Article IX of this Agreement), there is no other
benefit arising out of such transactions to the General Partner,  such loans are
not in default,  and  otherwise  satisfy all  requirements  of this  Article VI.
Accordingly,  all income generated (except Acquisition and Origination Fees) and
expenses  associated  with a  Mortgage  Loan so  acquired  shall be  treated  as
belonging to the  Partnership.  The General Partner shall not sell a loan to the
Partnership if the cost of the loan exceeds the funds reasonably  anticipated to
be available to the Partnership to purchase the loan.

         Normally, when the Partnership has sufficient funds available to invest
in a specific  Mortgage  Loan,  the General  Partner  will give the  Partnership
priority in purchasing such Mortgage Loan over other Persons to whom the General
Partner may sell Mortgage Loans as a part of its business.  Factors that further
influence  the  General  Partner in  determining  whether  the  Partnership  has
priority over other investors include the following: (i) All loans originated by
the General  Partner which are secured by property  located outside the State of
California  and that  satisfy  investment  criteria of the  Partnership  will be
acquired by the Partnership;  (ii) All  hypothecation  loans will be acquired by
the Partnership.

         9. The  Partnership  shall  not  sell a  Mortgage  Loan to the  General
Partner  unless  all of the  following  criteria  are  met:  (i) the  loan is in
default;  (ii) the General  Partner pays the Partnership an amount in cash equal
to the cost of the loan to the  Partnership  (including  all cash  payments  and
carrying costs related  thereto);  and (iii) the General  Partner assumes all of
the  Partnership's  obligations and liabilities  incurred in connection with the
holding of the loan by the Partnership.

         10. The  Partnership  shall not acquire a loan from, or sell a loan to,
another Program in which the General Partner has an interest.

         11. The Partnership shall not sell a foreclosed property to the General
Partner or to another Program in which the General Partner has an interest.

         12. The Partnership will maintain a contingency reserve in an aggregate
amount of at least  1-1/2% of the  aggregate  Capital  Accounts  of the  Limited
Partners.  The cash Capital  Contributions  of the General Partner  specified in
Article III.1. of this Agreement,  up to a maximum of 1/2 of 1% of the aggregate
Capital  Accounts of the Limited  Partners,  will be available as an  additional
contingency reserve if considered necessary by the General Partner.

         13.  The  Partnership  will  not  reinvest  Net  Income  Available  for
Distribution,  unless it is Limited  Partners'  Reinvested  Distributions  under
Article III. 3. of this Agreement.

         14. No loans may be made by the  Partnership to the General  Partner or
an Affiliate except as provided in Article IV. 5. of this Agreement.



VII.     ACCOUNTING RECORDS, REPORTS AND MEETINGS

         1. Books of Accounts and Records.  The Partnership's  books and records
are maintained in accordance with Code Section 703(a) at the principal office of
the Partnership,  and each Partner has access thereto at all reasonable times as
provided in Article V.2. of this Agreement.  The books and records shall be kept
in  accordance  with sound  accounting  practices  and  principles  applied in a
consistent  manner by the Partnership and shall reflect all  transactions and be
appropriate  and adequate for the business of the  Partnership.  The Partnership
shall file all required documents with the applicable regulatory agencies.

         2. Cash and Cash  Equivalents  and Marketable  Securities.  Partnership
cash, cash  equivalents and marketable  securities are deposited and/or invested
in the name of the Partnership in one or more financial institutions  designated
by the General  Partner and shall be withdrawn  on the  signature of the General
Partner or any Person or Persons authorized by it.

         3.  Meetings  of Limited  Partners.  Special  meetings  of the  Limited
Partners  to vote  upon  any  matters  as to  which  the  Limited  Partners  are
authorized to take action under this  Agreement may be called at any time by the
General Partner,  or a Limited Partner or Limited Partners holding more than ten
percent (10%) of the outstanding Units by delivering  written notice,  either in
person,  or by registered mail, of such call to the General Partner.  As soon as
possible,  but in all cases  within  ten (10)  days  following  receipt  of such
request, and at any time a meeting is called by the General Partner, the General
Partner shall cause a written notice, either in person or by registered mail, to
be  given to the  Limited  Partners  entitled  to vote at such  meeting,  that a
meeting  will  be  held  at a time  and  place  fixed  by the  General  Partner,
convenient to the Limited Partners, which is not less than fifteen (15) days nor
more than  sixty  (60) days  after the  sending  of the  notice of the  meeting.
Included  with the notice of the meeting  shall be a detailed  statement  of the
action proposed, including a verbatim statement of the wording of any resolution
proposed for adoption by the Limited  Partners and of any proposed  amendment to
this  Agreement.  There  shall be deemed to be a quorum  at any  meeting  of the
Partnership at which a Majority-In-Interest  attend such meeting in person or by
a valid proxy.  The General Partner shall be entitled to notice of and to attend
all  meetings  of the  Limited  Partners,  regardless  of whether  called by the
General  Partner.  Any action  that may be taken at any  meeting of the  Limited
Partners may be taken  without a meeting if a consent in writing,  setting forth
the  action  so  taken,   shall  be  signed  by  Limited   Partners   holding  a
Majority-in-Interest.

         4. Reports. Within sixty (60) days after the end of each fiscal year of
the  Partnership,  the General Partner will deliver to each Limited Partner such
information as is necessary for the  preparation by each Limited  Partner of his
federal income tax return.

         Within  sixty  days (60)  days  after  the end of each  quarter  of the
Partnership,  the General Partner will transmit to each Limited Partner a report
which  includes a balance  sheet,  a statement  of income for the  quarter  then
ended, a statement of cash flows for the quarter then ended and other  pertinent
information  regarding the  Partnership  and its  activities  during the quarter
covered by the report, all of which may be unaudited.

         Within one hundred twenty (120) days after the end of the Partnership's
calendar  year,  the General  Partner will  transmit to each Limited  Partner an
annual report which will include financial statements of the Partnership audited
by the Partnership's  independent  public accountants and prepared on an accrual
basis  in  accordance  with  generally  accepted  accounting  principles.   Such
financial  statements  will  include  the  Partnership's  statements  of income,
balance  sheets,  statements of cash flows and  statements of Partners'  capital
with a reconciliation with respect to information  furnished to Limited Partners
for income tax  purposes.  The  annual  report for each year will  report on the
Partnership's  activities  for that year and identify the source of  Partnership
distributions as is deemed reasonably necessary by the General Partner to advise
the Limited Partners of the affairs of the Partnership.  In addition, the annual
report will contain a breakdown of the costs  reimbursed to the General  Partner
and Affiliates.  The Partnership's independent certified public accountants must
perform  agreed-upon  procedures  to verify the  allocation of such costs to the
Partnership  by,  at a  minimum,  a review  of the time  records  of  individual
employees  (the costs of whose  services  were  reimbursed)  and a review of the
specific nature of the work performed by each such employee. This review will be
reported on by the independent  certified public accountants in a report that is
separate from the  Partnership's  audited financial  statements.  The additional
costs of such  verification  will be  itemized  by said  accountants  and may be
reimbursed  to the General  Partner by the  Partnership  only to the extent that
such reimbursement when added to the costs for administrative  services rendered
does not exceed the  competitive  rate for such  services as  determined by this
paragraph.

         The Partnership  will have available upon written request for review by
Limited  Partners  a copy of the  information  filed  with  the  Securities  and
Exchange  Commission  on Form 10-K not more  than  ninety  (90)  days  after the
closing of the fiscal year end, and on Form 10-Q not more than  forty-five  (45)
days after the closing of each other quarterly  fiscal period,  by dissemination
of such Form 10-K and Form 10-Q or any other report containing substantially the
same information as required by Form 10-K and Form 10-Q.

VIII.    ALLOCATIONS AND DISTRIBUTIONS

         1. Allocations of Profits and Losses. Profits and Losses for any fiscal
year shall be allocated:  (i)  ninety-nine  and 01/100  percent  (99.01%) to the
Limited  Partners  in  proportion  to their  Capital  Accounts,  and (ii) 99/100
percent (.99%) to the General Partner.

         2. Distributions.

                  (a)  Net  Income  Available  for   Distribution.   Net  Income
Available for  Distribution  shall be allocated  ninety-nine  percent and 01/100
(99.01%)  to the  Limited  Partners  and 99/100  percent  (.99%) to the  General
Partner and shall be distributed  in cash to those Limited  Partners who have on
file with the Partnership their written election to receive such  distributions.
A pro rata share of the total Net Income  Available for  Distribution to Limited
Partners shall be distributed monthly in cash to each Limited Partner who has on
file with the Partnership his written election to receive such distributions, in
proportion  to the weighted  average  Capital  Account of each  Limited  Partner
during  the  preceding  calendar  month.  All sums of Net Income  Available  for
Distribution  not so  distributed  to the  Limited  Partners  shall be  credited
proportionately  to the Capital  Accounts of the remaining  Limited Partners and
reinvested in Units in  accordance  with Article  III.3 of this  Agreement.  The
General Partner's  proportionate  share of Net Income Available for Distribution
shall be distributed to the General Partner or credited to its Capital Accounts.

                  (b) Net Proceeds.  Net Proceeds,  if any, may be reinvested in
new Mortgage Loans,  may be used to improve or maintain  properties  acquired by
the Partnership  through  foreclosure,  may be used to pay operating expenses or
may be distributed to the Partners,  in each event in the sole discretion of the
General  Partner.  In the  event  of any  distributions  of Net  Proceeds,  such
distributions  shall  be  made  to the  Partners  according  to the  allocations
described in Subsection 2 (a) above,  provided that no such distributions are to
be made to the  General  Partner  with  respect to that  portion of its  Capital
Account  represented by the Carried  Interest,  until the Limited Partners shall
have received 100% of their Capital Accounts.  Reinvestment of Net Proceeds will
not take place unless sufficient cash will be distributed to Partners to pay any
state or federal income tax created by the Capital  Transaction that created the
Net Proceeds.

IX.      TRANSACTIONS BETWEEN THE PARTNERSHIP AND
         THE GENERAL PARTNER

         1.  Compensation to General Partner from the  Partnership.  The General
Partner is entitled  to receive the  following  fees,  compensation  and expense
reimbursements from the Partnership:

                  (a)  Management  Fee.  In   consideration  of  the  management
services rendered to the Partnership, the General Partner is entitled to receive
from the Partnership a Management Fee payable  monthly,  subject to a maximum of
2.75% per annum,  of the average  unpaid balance of the  Partnership's  Mortgage
Loans at the end of each month in the calendar year. Although the Management Fee
is paid monthly, the maximum payment is calculated on an annual basis; thus, the
Management  Fee in any one month could exceed  .2292% (2.75% / 12 months) of the
unpaid  balance of the  Partnership's  Mortgage  Loans at the end of such month,
provided that the maximum  annual  Management  Fee shall not exceed 2.75% of the
average  unpaid balance of the  Partnership's  Mortgage Loans at the end of each
month in the calendar  year. In the event the Management Fee paid by the General
Partner in a calendar  year  exceeds  such  2.75%,  the  General  Partner  shall
promptly  refund  such  excess to the  Partnership.  The  Management  Fee may be
accrued  without  interest  when  Partnership  funds are not  available  for its
payment.  Any accrued  Management  Fee may be paid from the next  available  Net
Income Available for Distribution or Net Proceeds. No Management Fee may be paid
from Partnership reserves.

                  (b)  Loan  Servicing  Fee.  The  General  Partner  may  act as
servicing agent with respect to all  Partnership  loans,  in  consideration  for
which it shall be entitled to receive from the Partnership a monthly fee, which,
when  added  to all  other  fees  paid in  connection  with the  servicing  of a
particular loan, does not exceed the lesser of the customary, competitive fee in
the  community  where  the loan is placed  for the  provision  of such  mortgage
services on that type of loan or up to 0.25% per annum of the unpaid  balance of
the Partnership's Mortgage Loans at the end of each month.

                  (c) Carried Interest (previously the "Promotional  Interest").
The  Carried  Interest  can  only be  taken if a  minimum  of  86.5% of  Capital
Contributions are committed to Investment in Mortgages.

                  (d) Partnership  Expenses.  All of the Partnership's  expenses
shall  be  billed  directly,  to the  extent  practicable,  to and  paid  by the
Partnership.  Reimbursement to the General Partner,  or its Affiliates,  for any
expenses paid by the General  Partner,  or its  Affiliates,  including,  but not
limited to, legal and accounting  expenses,  filing fees, printing costs, goods,
services  and  materials  used by or for the  Partnership  will be made from Net
Income Available for Distribution immediately following the expenditure.  Except
as indicated in this Article IX.1(d), the General Partner or any affiliate shall
not be reimbursed by the  Partnership for services for which the General Partner
is  entitled  to  compensation  by way of a  separate  fee.  Excluded  from  the
allowable reimbursement shall be: (i) rent or depreciation,  utilities,  capital
equipment,  or other administrative  items; and (ii) salaries,  fringe benefits,
travel  expenses,  and other  administrative  items incurred or allocated to any
Controlling  Person of the  General  Partner  or  Affiliates.  The  Partnership,
however,  may reimburse the General  Partner and any affiliate for salaries (and
related salary expenses,  but excluding expenses incurred in connection with the
administration of the Partnership) for nonmanagement and nonsupervisory services
which could be performed,  directly for the Partnership by independent  parties,
such as legal,  accounting,  transfer agent,  data  processing and  duplicating.
There shall be no reimbursement for management and supervisory  personnel (e.g.,
services of employees of the General  Partner or its  Affiliates who oversee the
work which would have been performed by an  independent  party if such party had
been so engaged).  The amounts charged to the  Partnership  shall not exceed the
lesser of (a) the actual cost of such  services,  or (b) the  amounts  which the
Partnership  would be required  to pay to  independent  parties  for  comparable
services.  Reimbursement  may also be made for the  allocable  cost  charged  by
independent  parties for  maintenance  and repair of data  processing  and other
special purpose equipment used for or by the Partnership.  The reimbursement for
expenses  provided  for in this  Article  IX.1(d)  shall be made to the  General
Partner regardless of whether any distributions are made to the Limited Partners
under the provisions of Article VIII.2.

                  (e) No Other  Fees.  The  General  Partner is not  entitled to
receive real estate brokerage  commissions,  Property Management Fees, insurance
service fees or a Promotional Interest (as defined by the NASAA Guidelines) from
the  Partnership.  In addition,  the General  Partner is not entitled to receive
reimbursement  of Acquisition and Origination  Expenses  incurred by the General
Partner or its  Affiliates  in the  origination,  selection and  acquisition  of
Mortgage Loans.

         2. Payments by Borrowers.

                  (a) Acquisition  and Origination  Fees. The General Partner or
its  Affiliates  shall be  entitled to receive  and retain all  Acquisition  and
Origination  Fees  paid  or  payable  by  borrowers  for  services  rendered  in
connection with the evaluation and consideration of potential investments of the
Partnership.

                  (b) Late Payment  Charges.  The General  Partner shall receive
all Late  Payment  Charges paid by  borrowers  on  delinquent  loans held by the
Partnership.

X.       ASSIGNMENT OF INTEREST: SUBSTITUTED LIMITED PARTNERS

         1.  General  Partner.  The interest of a General  Partner  shall not be
assignable in whole or in part,  except when a  substitution  is made by vote of
the Limited Partners or as provided in Article XI.2.

         2.  Partnership   Interests.  A  Limited  Partner's  interests  in  the
Partnership may be transferred by written instrument satisfactory in form to the
General   Partner,   accompanied  by  such  assurance  of  the  genuineness  and
effectiveness of each signature and the obtaining of any necessary  governmental
or  other  approvals  as may be  reasonably  required  by the  General  Partner,
provided, however, that:

                  (a) no  transfer  may be made  of a  fractional  unit,  and no
transfer may be made if, as a result of such transfer,  a Limited Partner (other
than one transferring all of his units) will own fewer than two thousand (2,000)
units except where such transfer occurs by operation of law;

                  (b) no transfer may be made except where the transfer complies
with  any  restriction   imposed  under  applicable  state  securities  laws  or
regulations with regard to suitability standards;

                  (c) no transfer  may be made if, in the opinion of tax counsel
for the  Partnership,  it would  jeopardize  the status of the  Partnership as a
partnership for Federal or any applicable state income tax purposes; and

                  (d) the transferor  will pay in advance all legal,  recording,
and accounting  costs in connection  with any transfer,  and the cost of any tax
advice necessary under Subsection 2(b) above.

         Assignments  complying  with  the  above  shall  be  recognized  by the
Partnership  not  later  than the last day of the  calendar  month in which  the
written notice of assignment is received by the Partnership.

         No  assignee  of a  Limited  Partner  shall  have the right to become a
Limited  Partner  unless the  General  Partner has  consented  in writing to the
substitution of such Limited  Partner,  the granting or denial of which shall be
within the absolute discretion of the General Partner.

XI.      DEATH, LEGAL INCOMPETENCY, OR WITHDRAWAL OF A LIMITED PARTNER

         1. Effect of Death or Legal  Incompetency  of a Limited  Partner on the
Partnership.  The death or legal  incompetency  of a Limited  Partner  shall not
cause a dissolution  of the  Partnership  or entitle the Limited  Partner or his
estate to a return of capital.

         2.   Rights  of  Personal   Representative.   On  the  death  or  legal
incompetency of a Limited Partner,  his personal  representative  shall have all
the  rights of a Limited  Partner  for the  purpose  of  settling  his estate or
managing his property, including the rights of assignment and withdrawal.

         3. Withdrawal of Limited Partners.  To withdraw,  or partially withdraw
from the Partnership,  a Limited Partner must give written notice thereof to the
General  Partner and may thereafter  obtain the return,  in cash, of his Capital
Account, or the portion thereof as to which he requests withdrawal, within 61 to
91 days after written notice of withdrawal is delivered to the General  Partner,
subject to the following limitations:

                  (a)  except  with   regard  to  the  right  of  the   personal
representative of a deceased Limited Partner under Section 2 of this Article XI,
no notice of  withdrawal  shall be  honored  and no  withdrawal  made  until the
expiration  of at least  one year  from the date of a  purchase  of Units by any
Limited Partner on or after the date of effectiveness  of this Agreement,  other
than by way of Reinvested Distributions discussed in Article III. 3.

                  (b) any such cash payments in return of an outstanding Capital
Account  shall be made by the  Partnership  only from Net  Proceeds  and Capital
Contributions.

                  (c) a maximum of  $100,000  may be  withdrawn  by any  Limited
Partner during any calendar quarter;

                  (d) the Limited  Partners shall have the right to receive such
distributions  of cash from their Capital Accounts only to the extent such funds
are available;  the General Partner shall not be required to establish a reserve
fund for the purpose of funding such payments;  the General Partner shall not be
required  to use any other  sources of  Partnership  funds  other than those set
forth in  Subsection  3(a) above;  the General  Partner shall not be required to
sell or otherwise  liquidate any portion of the Partnership's  loan portfolio or
any other asset in order to make a cash distribution of any Capital Account;

                  (e) during the ninety (90) days  following  receipt of written
notice of  withdrawal  from a Limited  Partner,  the General  Partner  shall not
refinance any loans of the  Partnership  or reinvest any Net Proceeds or Capital
Contributions  in new loans or other nonliquid  investment  unless and until the
Partnership  has  sufficient  funds  available to distribute to the  withdrawing
Limited  Partner  the  amount  of  his  Capital  Account  in  cash  that  he  is
withdrawing;

                  (f) the amount to be  distributed to any  withdrawing  Limited
Partner  shall be a sum equal to the amount of such  Limited  Partner's  Capital
Account as of the date of such distribution, as to which the Limited Partner has
given a notice of withdrawal under this Subsection 3,  notwithstanding that such
sum may be greater or lesser than such Limited Partner's  proportionate share of
the current fair market value of the Partnership's net assets;

                  (g)  in  no  event  shall  the  General   Partner  permit  the
withdrawal  during any calendar year of total amounts from the Capital  Accounts
of Limited  Partners  that exceeds ten percent  (10%) of the  aggregate  Capital
Accounts of all outstanding Limited Partners' Units, except upon the vote of the
Limited Partners to dissolve the Partnership pursuant to Article V above;

                  (h)  requests  by  Limited  Partners  for  withdrawal  will be
honored in the order in which they are received by the General  Partner.  If any
request may not be honored,  due to any limitations imposed by this subsection 3
(except the one year  holding  limitation  set forth in  Subsection  3(a)),  the
General Partner will so notify the requesting Limited Partner in writing,  whose
request,  if not withdrawn by the Limited Partner,  will subsequently be honored
if and when the limitation no longer is imposed; and

                  (i)  if a  Limited  Partner's  Capital  Account  would  have a
balance of less than  $2,000  following  a  requested  withdrawal,  the  General
Partner,  at its  discretion,  may distribute to such Limited Partner the entire
balance in such account.

XII.     BANKRUPTCY, WITHDRAWAL, REMOVAL, OR DISSOLUTION OF THE GENERAL PARTNER

         1. Removal of the General Partner.  A  Majority-In-Interest  by vote or
written  consent  given in accordance  with Article VII.3 of this  Agreement may
remove the General  Partner.  Written  notice of such removal  setting forth the
effective  date thereof shall be served upon the General  Partner and, as of the
effective  date,  shall  terminate  all of its  rights  and  powers as a General
Partner.

         2.  Dissolution  or  Continuance  of  Partnership.   The  filing  of  a
certificate of dissolution,  withdrawal,  removal, or adjudication of bankruptcy
of the General  Partner  (any of which  events is referred to  hereafter  as the
"Terminating Event,"and the General Partner affected as the "Terminated General
Partner")  shall  immediately  destroy  the  agency  relationship   between  the
Partnership and the Terminated  General  Partner.  No other events affecting the
General  Partner  shall  constitute or be a  "Terminating  Event." A Terminating
Event shall  dissolve  the  Partnership  and cause it to be wound up pursuant to
Subsection  (b) below,  unless the  Partnership  is  continued  by a new general
partner   elected   in   place  of  the   Terminated   General   Partner   by  a
Majority-In-Interest, as set forth in (a) below.

                  (a) Following a Terminating  Event, if a  Majority-In-Interest
of the Limited  Partners  promptly  by written  consent  agree to  continue  the
business of the Partnership and within six (6) months of such Terminating  Event
admit one or more General Partners,  then the Partnership shall continue without
dissolution  and winding up. A successor  General  Partner  must be named if the
newly admitted General Partner under this provision is an individual.

                  (b) If a Majority-In-Interest  do not agree by written consent
to continue the business of the  Partnership  or do not act to admit one or more
new  General  Partners  within  six (6)  months of the  Terminating  Event,  the
Partnership  is dissolved and its affairs  shall be wound up in accordance  with
Article 8 of the California  Revised Limited  Partnership Act, Sections 15681 to
15685, and Article XIII of this Agreement.

         3. Rights of  Terminated  General  Partner.  Upon the  occurrence  of a
Terminating  Event, the Partnership shall pay to the Terminated  General Partner
all  amounts  then  accrued and owing to the  Terminated  General  Partner.  The
Partnership shall also terminate the Terminated  General  Partner's  interest in
Partnership profits, gains, losses, net proceeds,  distributions, and capital by
payment  of an  amount  equal  to the  then  present  fair  market  value of the
Terminated General Partner's interest  determined by agreement of the Terminated
General Partner and the Partnership, or, if they cannot agree, by arbitration in
accordance with the then current rules of the American Arbitration  Association.
The expense of  arbitration  is to be borne  equally by the  Terminated  General
Partner and the  Partnership.  The method of payment to the  Terminated  General
Partner  must be fair  and  must  protect  the  solvency  and  liquidity  of the
Partnership.  Where the termination is voluntary,  the method of payment will be
deemed presumptively fair where it provides for a non-interest bearing unsecured
promissory note with principal payable,  if at all, from distributions which the
Terminated General Partner otherwise would have received under the Agreement had
the General  Partner not terminated.  Where the termination is involuntary,  the
method of payment  will be deemed  presumptively  fair where it provides  for an
interest  bearing  promissory note coming due in no less than 5 years with equal
installments each year.

XIII. DISSOLUTION AND WINDING UP

         1. Upon the vote or  written  consent of a  Majority-In-Interest  or as
otherwise  provided in this Agreement,  the  Partnership  shall be dissolved and
wound up, the  assets  shall be  liquidated  and  converted  to cash and the net
proceeds  distributed  to  the  Partners  after  payment  of  the  debts  of the
Partnership as provided herein and by applicable law. In settling accounts after
liquidation,  the monies of the  Partnership  shall be applied in the  following
manner:

                  (a) the liabilities of the Partnership to creditors other than
the General Partner shall be paid or otherwise adequately provided for;

                  (b) the  liabilities of the Partnership to the General Partner
shall be paid or otherwise provided for; and

                  (c) the remaining  assets shall be  distributed to the Limited
Partners  and the  General  Partner  in the  same  manner  as Net  Proceeds  are
distributed under Article VIII.2(b) hereof.

         2.  In  the  event  that,  upon  dissolution  and  winding  up  of  the
Partnership,  following the sale or other disposition of all of its assets,  and
after  crediting  any gain or charging any loss  pursuant to Article  VIII,  the
General Partner shall have a deficient balance in its Capital Account,  then the
General  Partner shall  contribute in cash to the capital of the  Partnership an
amount which is equal to such deficit in its Capital Account.

XIV.  ROLL-UP

         1.  In  connection  with  a  proposed  Roll-up,  an  appraisal  of  all
Partnership  assets shall be obtained from a competent,  Independent  Expert. If
the appraisal will be included in the Prospectus used to offer the securities of
a Roll-Up Entity,  the appraisal shall be filed with the Securities and Exchange
Commission  and the states as an Exhibit to the  Registration  Statement for the
offering.  Partnership  assets shall be appraised  on a  consistent  basis.  The
appraisal shall be based on an evaluation of all relevant  information and shall
indicate the value of the Partnership's assets as of a date immediately prior to
the announcement of the proposed Roll-Up.  The appraisal shall assume an orderly
liquidation of the Partnership's  assets over a 12-month period,  shall consider
other  balance  sheet items,  and shall be net of the assumed cost of sale.  The
terms of the engagement of the  Independent  Expert shall clearly state that the
engagement is for the benefit of the  Partnership  and its Limited  Partners.  A
summary  of the  independent  appraisal,  indicating  all  material  assumptions
underlying  the  appraisal,  shall be  included  in a report to the  Partners in
connection with the proposed Roll-up.

         2. In connection  with a proposed  Roll-up,  the person  sponsoring the
Roll-up shall provide each Limited  Partner with a document which  instructs the
Limited  Partner on the proper  procedure for voting against or dissenting  from
the Roll-Up and shall offer to Limited  Partners voting "no" on the proposal the
choice of: (a) accepting the  securities  of the Roll-Up  Entity  offered in the
proposed Roll-Up;  or (b) one of the following (i) remaining as Limited Partners
in the Partnership and preserving their interests  therein on the same terms and
conditions as existed  previously,  or (ii) receiving cash in an amount equal to
the Limited Partners' pro rata share of the appraised value of the net assets of
the Partnership.

         3. The Partnership  shall not participate in any proposed Roll-Up which
would result in Limited  Partners having  democracy rights in the Roll-Up Entity
which are less than  those  provided  for under  Articles  IV, V and VII of this
Agreement. If the Roll-Up Entity is a corporation,  the voting rights of Limited
Partners shall  correspond to the voting rights provided for in these guidelines
to the greatest extent possible.

         4. The Partnership  shall not participate in any proposed Roll-Up which
includes  provisions  which would operate to materially  impede or frustrate the
accumulation  of shares by any purchaser of the securities of the Roll-Up Entity
(except  to the  minimum  extent  necessary  to  preserve  the tax status of the
Roll-Up Entity).  The Partnership  shall not participate in any proposed Roll-Up
which would limit the ability of a Limited Partner to exercise the voting rights
of its securities of the Roll-Up on the basis of the number of Partnership Units
held by that Limited Partner.

         5. The  Partnership  shall not  participate in any proposed  Roll-Up in
which the  Limited  Partners'  rights of access to the  records  of the  Roll-Up
Entity will be less than those provided for under Article V of this Agreement.

         6. The  Partnership  shall not  participate in any proposed  Roll-Up in
which any of the costs of the  transaction  would be borne by the Partnership if
the Roll-Up is not approved by the Limited Partners.

XV.   INVESTMENTS IN OR WITH OTHER PROGRAMS

         1. The Partnership shall be permitted to invest in general partnerships
or joint ventures  (including  entities in limited liability company and limited
liability  partnership form) with non-Affiliates that own one or more particular
loans,  if the  Partnership,  alone or  together  with any  publicly  registered
Affiliate of the  Partnership  meeting the  requirements  of paragraph 2 of this
Subsection,  acquires a controlling  interest in such a general  partnership  or
joint venture,  but in no event shall duplicate fees be permitted.  For purposes
of this paragraph,  "controlling  interest" means an equity interest  possessing
the power to direct or cause the direction of the management and policies of the
general partnership or joint venture, including the authority to:

                  (a)  review  all   contracts   entered  into  by  the  general
partnership or joint venture that will have a material effect on its business or
assets;

                  (b) cause a sale of the loan or its interest  therein  subject
in certain cases where required by the  partnership or joint venture  agreement,
to limits as to time,  minimum  amounts,  and/or a right of first refusal by the
joint venture partner or consent of the joint venture partner;

                  (c) approve budgets and major capital expenditures, subject to
a stated minimum amount;  (d) veto any sale of the loan, or,  alternatively,  to
receive a specified preference on sale or proceeds; and

                  (e)  exercise a right of first  refusal on any desired sale by
the joint venture partner of its interest in the mortgage except for transfer to
an Affiliate of the joint venture partner.

         2. The Partnership shall be permitted to invest in general partnerships
or joint ventures with other publicly  registered  Affiliates of the Partnership
if all of the following conditions are met:

                  (a)  the  Programs  have  substantially  identical  investment
objectives.

                  (b) there are no duplicate fees.

                  (c) the compensation to Sponsors is substantially identical in
each Program.

                  (d) each program must have a right of first  refusal to buy if
the other Programs wish to sell assets held in the joint venture.

                  (e) the  investment  of each Program is on  substantially  the
same terms and conditions.

                  (f) the Prospectus  discloses the potential risk of impasse on
joint venture  decisions  since no Program  controls and the potential risk that
while a  Program  may have the right to buy the asset  from the  partnership  or
joint venture, it may not have the resources to do so.

         3. The Partnership shall be permitted to invest in general partnerships
or joint ventures with Affiliates other than publicly  registered  Affiliates of
the Partnership only under the following conditions:

                  (a) the  investment  is  necessary to relieve the Sponsor from
any  commitment to purchase a loan entered into in compliance  with Article III.
6. prior to the closing of the offering period of the Program;

                  (b) there are no duplicate fees;

                  (c) the investment of each entity is on substantially the same
terms and conditions;

                  (d) the Program  provides for a right of first  refusal to buy
if the Sponsor wishes to sell a loan held in the joint venture; and

                  (e) the Prospectus  discloses the potential risk of impasse on
joint venture decisions.

         4. Other than as  specifically  permitted in paragraphs 2 and 3 of this
Subsection,  the  Partnership  shall  not be  permitted  to  invest  in  general
partnerships or joint ventures with Affiliates.

         5. The Partnership shall be permitted to invest in general  partnership
interests of limited partnerships only if the Partnership alone or together with
any publicly registered Affiliate of the Partnership meeting the requirements of
paragraph 2 of this  Article  acquires a  "controlling  interest"  as defined in
paragraph 1 of this Article, no duplicate fees are permitted,  and no additional
compensation beyond that permitted by Article IX shall be paid to the Sponsor.

         6. A Program  that is an  "upper-tier  Program"  shall be  permitted to
invest in interests of other Programs (the  "lower-tier  Programs")  only if the
conditions  provided for under  Sections V.G. 6. and 7. of the NASAA  Guidelines
are met.

XVI.     SIGNATURES

         Any security agreement, chattel mortgage, lease, contract of sale, bill
of sale, or other similar document to which the Partnership is a party, shall be
executed by the General Partner, and no other signatures shall be required.

XVII.    SPECIAL POWER OF ATTORNEY

         Any person who becomes a Limited  Partner after the  effective  date of
this Agreement  shall execute and deliver to the General Partner a special power
of attorney in form acceptable to the General Partner (existing Limited Partners
having  already  executed and  delivered  same) in which the General  Partner is
constituted and appointed as the  attorney-in-fact for such Limited Partner with
power  and  authority  to  act in  his  name  and  on  his  behalf  to  execute,
acknowledge,  and  swear to in the  execution,  acknowledgment,  and  filing  of
documents,  which shall include,  by way of illustration  but not of limitation,
the following:

         1. This Agreement and all certificates of Limited Partnership,  as well
as all  amendments  to the  foregoing  which,  under  the  laws of the  State of
California or the laws of any other state,  are required to be filed or recorded
or which the General Partner deems it advisable to file or record;

         2. All other instruments or documents which may be required to be filed
or  recorded  by  the  Partnership  under  the  laws  of  any  state  or by  any
governmental  agency, or which the General Partner deems it advisable to file or
record; and

         3. All  instruments  or  documents  which may be required to effect the
continuation  of the  Partnership,  the admission of  additional or  substituted
Limited  Partners,  the withdrawal of Limited  Partners,  or the dissolution and
termination  of  the  Partnership,   provided  such   continuation,   admission,
withdrawal and  dissolution  and termination are in accordance with the terms of
this Agreement.

         The special power of attorney to be concurrently granted upon admission
as such by each Limited Partner:

         1.  is a  special  power  of  attorney  coupled  with an  interest,  is
irrevocable,  shall survive the death of the granting  Limited  Partner,  and is
limited to those matters herein set forth;

         2.  shall  survive  an  assignment  by a Limited  Partner of all or any
portion of his Units  except  that,  where the  assignee of the Units owned by a
Limited  Partner has been  approved by the General  Partner for admission to the
Partnership  as a  substituted  Limited  Partner,  the special power of attorney
shall survive each assignment for the purpose of enabling the General Partner to
execute,  acknowledge,  and file any instrument or document  necessary to effect
such substitution.

XVIII.   MISCELLANEOUS

         1. Notices. Any notice,  payment,  demand, or communication required or
permitted to be given by any provision of this Agreement shall be deemed to have
been  sufficiently  given or served for all purposes if delivered  personally to
the party or to an officer of the party to whom the same is directed, or if sent
by  registered  or  certified  mail,  postage and charges  prepaid  addressed as
follows:

         If to the General Partner:

                  Owens Financial Group, Inc.
                  2221 Olympic Boulevard
                  P. O. Box 2400
                  Walnut Creek, CA 94595

         If to a Limited Partner, at such Limited Partner's address for purposes
of notice which is set forth on the books and records of the Partnership,  or in
either case as the General Partner or a Limited Partner shall designate pursuant
to the notice provision  hereof.  Any such notice shall be deemed to be given on
the date on which the same was  deposited in a regularly  maintained  receptacle
for the deposit of United States mail, addressed and sent as aforesaid.

         2.  Application of California  Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.

         3.  Execution in  Counterparts.  This  Agreement may be executed in any
number of  counterparts  with the same effect as if all  parties  hereto had all
signed the same document. All counterparts shall be construed together and shall
constitute one agreement.

         4.  Waiver  of  Action  for  Partition.  Each  of  the  parties  hereto
irrevocably  waives during the term of the  Partnership  any right that he or it
may have to maintain  any action for  partition  with respect to the property of
the Partnership.

         5.  Assignability.  Except as expressly limited herein, each and all of
the covenants,  terms,  provisions,  and agreements  herein  contained  shall be
binding  upon and inure to the  benefit  of the  successors  and  assigns of the
respective parties hereto.

         6.  Interpretation.  As used in this Agreement,  the masculine includes
the feminine and neuter and the singular  includes the plural,  as determined by
the context.

         7. Captions.  Paragraphs,  titles, or captions in no way define, limit,
extend,  or describe  the scope of this  Agreement  nor the intent of any of its
provisions.

         8. Adjustment of Basis. The General Partner may elect, pursuant to Code
Section 754, to adjust the basis of Partnership property under the circumstances
and in the manner  provided in Code  Sections 734 and 743.  The General  Partner
shall, in the event of such an election,  take all necessary steps to effect the
election.

         9.   Entire   Agreement.   This   Agreement   constitutes   the  entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof.

         IN WITNESS  WHEREOF,  the  undersigned  have  executed  this  Agreement
effective this 15th day of November, 2000.

GENERAL PARTNER:


OWENS FINANCIAL GROUP, INC.


By:      /William C. Owens/
         William C. Owens, President

LIMITED PARTNERS:

By:      OWENS FINANCIAL GROUP, INC., GENERAL PARTNER


By:      /William C. Owens/
         William C. Owens, President
         As Attorney-In-Fact for the Limited Partners