EXHIBIT A

                   REDWOOD EQUIPMENT LEASING INCOME FUND L.P.
              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
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                                                                                TABLE OF CONTENTS

                                                                                                                            Page
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                            Preliminary Statement          ................................................................. A-3
                            Article I - Defined Terms              ......................................................... A-3
                            Article II- Name; Purpose; Term and Certificate                ................................. A-9
                               Section 2.1          Name; Continuation        .............................................. A-9
                               Section 2.2          Place of Registered Office         ..................................... A-9
                               Section 2.3          Purpose       .......................................................... A-10
                               Section 2.4          Term       ............................................................. A-10
                               Section 2.5          Recording of Certificate        ........................................ A-10
                            Article III - Partners; Capital              ................................................... A-10
                               Section 3.1          General Partner; Assignor Limited Partner; ABR Special Limited Partner.. A-10
                               Section 3.2          Investors        ........................................................A-10
                               Section 3.3          MNC Special Limited Partner          ................................... A-11
                               Section 3.4          Partnership Capital         ............................................ A-12
                               Section 3.5          Liability of Partners and Investors          ........................... A-12
                            Article IV - Allocations, Distributions and Applicable Rules                    ................ A-12
                               Section 4.1          Allocation of Profit or Loss          .................................. A-12
                               Section 4.2          Distribution of Net Disposition Proceeds           ..................... A-14
                               Section 4.3          Distribution of Distributable Cash           ........................... A-14
                               Section 4.4          Liquidation or Dissolution          .................................... A-15
                               Section 4.5          General and Special Rules          ..................................... A-15
                            Article V - Rights, Powers and Duties of the General Part                      ................ .A-17
                               Section 5.1          Management and Control of the Partnership; Tax Matters Partner  .......  A-17
                               Section 5.2          Authority of General Partner           ................................. A-18
                               Section 5.3          Authority of Investors           ....................................... A-21
                               Section 5.4          Restrictions on Authority           .................................... A-21
                               Section 5.5          Authority of Partners and Affiliated Persons to Deal with Partnership.   A-23
                               Section 5.6          Duties and Obligations of the General Partner             .............. A-24
                               Section 5.7          Compensation of General Partner             ............................ A-26
                               Section 5.8          Other Businesses of Partners           ................................. A-26
                                                    Liability of General Partner and Affiliates to Limited Partners or
                               Section 5.9            Investors             ................................................ A-26
                               Section 5.10         Indemnification           .............................................. A-26
                            Article VI - Transferability of a General Partner's Interest                    ................ A-27
                                                    Removal, Voluntary Retirement or Withdrawal of a General Partner;
                               Section 6.1          Transfer of Interests               .................................... A-27
                               Section 6.2          Election and Admission of Successor or Additional General Partners   .   A-27
                               Section 6.3          Events of Withdrawal of a General Partner .............................. A-28
                               Section 6.4          Liability of a Withdrawn General Partner   ............................. A-28
                               Section 6.5          Valuation of Partnership Interest of General Partner ................... A-28
                            Article VIII - Assignment of Assignee Units to Investors; Transferability of Limited
                                 Partner Interests and Units                  .............................................. A-29
                               Section 7.1          Assignment of the Assignee Units to Investors        ................... A-29
                               Section 7.2          Transferability of Units            .................................... A-30
                                                    Death, Bankruptcy or Adjudication of Incompetence of an Investor or a
                               Section 7.3            Limited Partner              ......................................... A-31
                                      
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                            Section 7.4          Effective Date        ...................................................... A-31
                            Section 7.5          Substitute Limited Partners           ...................................... A-31
                            Section 7.6          Retirement or Withdrawal of an Investor             ........................ A-31
                         Article VIII - Dissolution, Liquidation and Termination of the Partnership              ............ A-32
                            Section 8.1          Events Causing Dissolution              .................................... A-32
                            Section 8.2          Liquidation               .................................................. A-32
                            Section 8.3          Capital Contribution Upon Dissolution                 ...................... A-33
                         Article IX - Certain Payments to the General Partner and Affiliates                    ............. A-33
                                                 Reimbursement of Certain Costs and Expenses of the General Partner and
                            Section 9.1             their Affiliates                ......................................... A-33
                            Section 9.2          Fees and Other Payments                 .................................... A-34
                         Article X - Books and Records; Bank Accounts; Reports                      ......................... A-35
                              Books and Records                .............................................................. A-35
                              Bank Accounts                .................................................................. A-35
                              Reports                ........................................................................ A-36
                              Federal Tax Elections                 ......................................................... A-37
                         Article XI - Meetings of Investors                       ... ....................................... A-38
                              Calling Meetings                ............................................................... A-38
                              Notice; Procedure                 ............................................................. A-38
                              Right to Vote                 ................................................................. A-38
                              Proxies; Rules                 ................................................................ A-38
                         Article XII - General Provisions                      .............................................. A-39
                            Section 12.1       Appointment of General Partner as Attorney-in-Fact               ............. A-39
                             Waiver of Partition                  ........................................................... A-39
                              Notification                 .................................................................. A-39
                             Word Meanings                 .................................................................. A-39
                             Binding Provisions                  ............................................................ A-39
                             Applicable Law                 ................................................................. A-39
                             Counterparts                  .................................................................. A-40
                            Section   Separability of Provisions                ............................................. A-40
                            Section   Paragraph Titles                 ...................................................... A-40
                            Section   Entire Agreement                 ...................................................... A-40
                            Section 12.11     Amendments                 .................................................... A-40
                         Signatures                  ........................................................................ A-42
                         Schedule A                  ........................................................................ A-43


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                                       A-2
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                   REDWOOD EQUIPMENT LEASING INCOME FUND L.P.
              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
      THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as
                  of October 19, 1989, is by and among Redwood Leasing,  Inc., a
                  Maryland  corporation,  as General  Partner,  Redwood  Leasing
                  Holding Company, Inc., a Maryland corporation, as the Assignor
                  Limited   Partner,    Maryland   National   Leasing   Services
                  Corporation,  a  Maryland  corporation,  as  the  MNC  Special
                  Limited   Partner   and   Realty   Associates   1988   Limited
                  Partnership,  a  Maryland  limited  partnership,  as  the  ABR
                  Special Limited Partner.

                                                          Preliminary Statement
                       Redwood   Equipment   Leasing   Income  Fund  L.P.   (the
                  "Partnership") was formed by the General Partner, the Assignor
                  Limited  Partner,  the MNC Special Limited Partner and the ABR
                  Special Limited Partner as a Delaware limited partnership upon
                  the recording of a certificate of limited partnership with the
                  Secretary  of State of the State of  Delaware  on October  l9,
                  1989 and the execution of an Agreement of Limited  Partnership
                  on November l7, 1989, effective as of even date herewith.
                       The  parties  hereto  desire to amend and  restate in its
                  entirety the Agreement of Limited Partnership.
                       NOW,  THEREFORE,  in consideration of the mutual promises
                  made  herein,  the  parties  hereto,  intending  to be legally
                  bound, hereby agree as follows:


                                                               ARTICLE I
                                                           DEFINED TERMS
                       The defined terms used in this  Agreement  shall,  unless
                  the context otherwise  expressly  requires,  have the meanings
                  specified in this Article I.
                       "ABR Special  Limited  Partner"  means Realty  Associates
                  1988 Limited  Partnership,  a Maryland limited partnership and
                  an Affiliate of the General Partner.
                       "Accountants"  means such firm of  independent  certified
                  public  accountants  as shall be engaged  from time to time by
                  the General Partner on behalf of the Partnership.
                       "Acquisition Expenses" means expenses of the Partnership,
                  including, but not limited to, legal fees and expenses, travel
                  and communications expenses,  costs of appraisals,  accounting
                  fees and  expenses,  and  miscellaneous  expenses  related  to
                  selection  and  acquisition  of  Equipment,   whether  or  not
                  acquired.
                       "Acquisition  Fees"  means  the  total  of all  fees  and
                  commissions  paid by any party on behalf of the Partnership in
                  connection  with the selection or purchase of any Equipment by
                  the  Partnership,  including,  without  limitation,  Equipment
                  purchased  through a  reinvestment  of the proceeds of Sale of
                  its  Equipment  or any  funds  generated  from its  operations
                  pursuant to Section 5.2B.  Included in the computation of such
                  fees or commissions  shall be any  commission,  selection fee,
                  financing  fee,  non-recurring  management fee or any fee of a
                  similar nature, however designated.
     "Act"  means  the  Delaware  Revised  Uniform  Limited  Partnership  Act (6
DEL.C.ss. 17-101 et. seq.) as amended or modified from time to time. "Additional
General Partner" means any Person who is admitted as an Additional  
General Partner of the Partnership,under the  provisions  of Article  VI,  
after the date of this Agreement.
                       "Additional  Equipment"  means all Equipment  acquired by
                  the Partnership, other than the Specified Equipment.
                       "Adjusted  Capital  Balance"  of a Partner or an Investor
                  means the Capital  Contribution of the Partner or the Assignor
                  Limited Partner made on behalf of an Investor,  less all prior
                  distributions of

                                                                   A-3

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                  Distributable  Cash and Net  Disposition  Proceeds made to the
                  Partner or Investor and the predecessor holders of such Units,
                  other  than   distributions   made  in  satisfaction  of  such
                  Partner's  or  Investor's  Cumulative  Return  at the  time of
                  reference thereto.
                       "Affiliate"  means (i) any Person  directly or indirectly
                  controlling,  controlled  by  or  under  common  control  with
                  another  Person (ii) any Person owning or  controlling  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 any such capacity.
                       "Agreement" means this Amended and Restated  Agreement of
                  Limited Partnership as originally executed and as amended from
                  time to time, as the context requires. Words such as "herein",
                  "hereafter," "hereof," "hereto," "hereby"and "hereunder," when
                  used with reference to this Agreement, refer to this Agreement
                  as a whole unless the context otherwise requires.
                       "Assigned   Limited   Partnership   Interest"   means   a
                  Partnership Interest which is credited to the Assignor Limited
                  Partner on the books and records of the Partnership in respect
                  of a  purchase  of one  Unit  by an  Investor.  Each  Assigned
                  Limited Partnership  Interest represents a contribution to the
                  capital of the  Partnership  equal to $25,  regardless  of any
                  reduction in Selling Commissions.
                       "Assignee  Units"  means the  ownership  interests  of an
                  Investor in the Partnership at any particular time,  including
                  the right of such Investor to any and all benefits to which an
                  Investor  may be entitled as provided in this  Agreement.  The
                  ownership  interests of the Investors in the  Partnership  are
                  sometimes referred to herein as "Units".
                       "Assignor  Limited Partner" means Redwood Leasing Holding
                  Company,   Inc.  which  will  (i)  own  any  Assigned  Limited
                  Partnership  Interests issued pursuant to Sections 3.2 and 7.1
                  hereof,  and (ii)  transfer  and assign to those  Persons  who
                  acquire  Units all of its  rights  and  interest  in  Assigned
                  Limited Partnership  Interests in accordance with Sections 3.2
                  and 7.1 hereof.
                       "Capital   Account"   means  (i)  the  separate   account
                  maintained  and  adjusted  on the  books  and  records  of the
                  Partnership for each Partner and (ii) the separate  subaccount
                  of  the  Capital  Account  of  the  Assignor  Limited  Partner
                  maintained and adjusted for each Investor.  Each Partner's and
                  Inves-  tor's  Capital  Account is  credited  with his Capital
                  Contributions  and his  distributive  share of Profit (or item
                  thereof).  Each  Partner's or  Investor's  Capital  Account is
                  debited  with  the  cash  and the  fair  market  value  of any
                  property  distributed  to him (net of  liabilities  assumed by
                  such  Partner  or  Investor  and  liabilities  to  which  such
                  distributed  property is subject),  and his distributive share
                  of Loss (and deduction (or item thereof)).  Each Partner's and
                  Investor's  Capital Account shall also be adjusted pursuant to
                  Section   4.5  hereof  and  as  required  by  the  Income  Tax
                  Regulations  promulgated  under  Section 704 of the Code.  Any
                  questions concerning a Partner's or Investor's Capital Account
                  shall be  resolved by the  General  Partner in its  reasonably
                  exercised discretion, applying principles consistent with this
                  Agreement and the regulations promulgated under Section 704 of
                  the Code in order to assure that all  allocations  herein will
                  have   substantial   economic  effect  or  will  otherwise  be
                  respected  for  income  tax  purposes.  For  purposes  of this
                  Agreement,  a  Partner  or  Investor  who has  more  than  one
                  Partnership Interest or Unit, as the case may be, shall have a
                  single  Capital  Account that reflects all of his  Partnership
                  Interests  and  Units,  regardless  of the class of  Interests
                  owned (e.g., general or limited) and regardless of the time or
                  manner  in which the  Partnership  Interests  and  Units  were
                  acquired.
                       "Capital Contribution" means the total amount of cash and
                  the fair market value of any other assets  contributed  to the
                  Partnership  by a Partner (net of  liabilities  assumed by the
                  Partnership  and  liabilities  to which  any such  contributed
                  assets are subject)  and,  with  respect to an  Investor,  the
                  Capital  Contribution of the Assignor  Limited Partner made on
                  behalf of such  Investor  (without  regard to any reduction of
                  Selling  Commissions)  reduced by the amount of any uninvested
                  funds returned to the Investor or Partner  pursuant to Section
                  5.6F.   Any  reference  in  this   Agreement  to  the  Capital
                  Contribution  of a  then-Partner  or Investor  shall include a
                  Capital  Contribution  previously made by any prior Partner or
                  Investor  with  respect  to  the  Interest  or  Unit  of  such
                  then-Partner or  then-Investor,  except to the extent that all
                  or a portion of the Interest or Unit of any prior Partner or

                                                                     A-4
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                   Investor  shall  have  been  terminated  and the  portion  so
                   terminated  not   transferred  to  a  successor   Partner  or
                   Investor.
                        "Certificate"   means   the   Certificate   of   Limited
                   Partnership  establishing the Partnership,  as filed with the
                   office of the  Secretary of State of the State of Delaware on
                   October l9,  1989,  as it may be amended from time to time in
                   accordance with the terms of this Agreement and the Act.
                        "Code"means  the  Internal  Revenue  Code  of  l986,  as
                   amended (or any corresponding provision of succeeding law).
                        "Competitive   Equipment  Sales  Commission"  means  the
                   brokerage fee which would be paid to unaffiliated persons for
                   services  rendered in connection with the purchase or sale of
                   Equipment  which is reasonable,  customary and competitive in
                   light of the size, type and location of the Equipment.
                        "Controlling Person" of the General Partner or Affiliate
                   thereof  means any person who (a) performs  functions for the
                   General  Partner  or  Affiliate  similar  to  those  of (i) a
                   Chairman or member of the Board of Directors,  (ii) executive
                   management,  such  as  a  President,  or a  Vice-  President,
                   Secretary or Treasurer,  or (iii) senior  management;  or (b)
                   holds a 5% or more equity  interest in the General Partner or
                   Affiliate,  or has the power to direct or cause the direction
                   of the General  Partner,  or Affiliate,  whether  through the
                   ownership of voting securities, by contract or otherwise.
                        "Cumulative  Return"  means  an  amount  equal  to a 12%
                   cumulative annual return,  compounded daily, on an Investor's
                   Adjusted Capital Balance, less any Distributable Cash and any
                   Net  Disposition  Proceeds  distributed  to such  Investor in
                   respect  of  the  Cumulative   Return  pursuant  to  Sections
                   4.2A(i),  4.3A(i)  and 4.3D.  Calculation  of the  Cumulative
                   Return  shall  commence  as of the  earlier  of (i) the final
                   closing for the sale of Units or (ii) March 31, 1990.
                       "Distributable  Cash"  means,  with respect to any fiscal
                   period,  the excess,  if any,  of (i) all cash funds  derived
                   from the  operations of the  Partnership  during such period,
                   including the yield from the Interim  Investments  and excess
                   cash reserves  deemed  distributable  by the General  Partner
                   pursuant to Section 5.6G hereof but  excluding  receipts from
                   the  sale,   exchange  or  other   disposition  of  Equipment
                   (including  insurance  proceeds or lease  indemnity  payments
                   arising from the loss or destruction of Equipment),  Warrants
                   and Warrant Stock, or other Partnership  property,  over (ii)
                   all  cash  disbursed  in the  operations  of the  Partnership
                   during such period,  including cash used to pay, or establish
                   reasonable reserves for, operating expenses,  fees (including
                   Equipment and Lease Management Fees and Equipment  Re-leasing
                   Fees),   commissions,   debt  service  and  loan  repayments,
                   contingencies  and  anticipated  obligations,  except  to the
                   extent any such payment is made out of reserves set aside for
                   such purpose.  Distributable  Cash shall not include  amounts
                   distributed or to be distributed under Section 4.2 hereof.
                        "Due Diligence Expense  Reimbursement Fee" means the fee
                   equal to 1.0% of the Gross  Proceeds of the Offering  allowed
                   to the Selling  Agent,  which may be reallowed to  Soliciting
                   Dealers, for advisory services,  due diligence activities and
                   the reimbursement of expenses.
                       "Entity"   means   any   general   partnership,   limited
                   partnership,   corporation,  joint  venture,  trust,  estate,
                   business trust, cooperative,  association or other legal form
                   of organization.
                        "Equipment"  means any  equipment  and related  tangible
                   personal  property  and any  interest  therein,  whether held
                   directly or indirectly through a nominee, trust or otherwise.
                        "Equipment  and  Lease  Management  Fee"  means  the fee
                   payable to the  Manager in  accordance  with the terms of the
                   Management  Agreement  and  Section  9.2A(vi)  hereof for its
                   services in managing the leasing,  financing and  refinancing
                   of the Equipment.
                        "Equipment  Re-Leasing Fee" means the fee payable to the
                   Manager  in  accordance  with  the  terms  of the  Management
                   Agreement  and Section  9.2A(vii)  hereof for its services in
                   releasing  Equipment  to a Person  other  than  the  original
                   lessee or its Affiliates.

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                       "Escrow  Agent"  means  Mercantile-Safe  Deposit  & Trust
                  Company,  or such other  escrow  agent  chosen by the  General
                  Partner to hold  funds from  Persons  who have  subscribed  to
                  become  Investors  pending the assignment of Assignee Units to
                  them.
                       "Front-End  Fees"  means  fees and  expenses  paid by any
                  Person for any services  rendered  during the  organization or
                  acquisition  phase of the Partnership,  including the Offering
                  and  Organization  Expense  Fee,  the  Due  Diligence  Expense
                  Reimbursement  Fee, the Selling  Commissions,  the Acquisition
                  Expenses, the Acquisition Fees, the Leasing Fees and any other
                  similar fees.  Notwithstanding  the foregoing,  Front-End Fees
                  shall not include any Acquisition Fees or Acquisition Expenses
                  paid by a  manufacturer  of Equipment to any of its  employees
                  unless  such  Persons  are  Affiliates  of the  Manager or the
                  General Partner.
                       "Full  Payout  Lease"  means a lease of  Equipment  under
                  which the  non-cancellable  rental payments during the initial
                  term of the lease, on a net present value basis,  are at least
                  sufficient to recover the contract  purchase price paid by the
                  Partnership  in connection  with the purchase of the Equipment
                  plus all Acquisition Fees applicable thereto.
     "General  Partner"  means  Redwood  Leasing,  Inc.  and  any  other  Person
designated  as a General  Partner in the  Schedule  and any Person who becomes a
Successor  or  Additional  General  Partner  as  provided  herein,  in each such
Person's  capacity as a General Partner of the  Partnership.  
                    "Gross Proceeds of the Offering" means the aggregate of
                  the  proceeds  from the sale of Units in the  Offering,  which
                  amount is equal to the total of all Capital  Contributions  of
                  the Investors.
                       "Interest"  or  "Partnership  Interest"  means the entire
                  ownership   interest  (which  may  be  segmented  into  and/or
                  expressed   as  a   percentage   of  various   rights   and/or
                  liabilities) of a Partner in the Partnership at any particular
                  time,  including  the  right  of such  Partner  to any and all
                  benefits to which a Partner may be entitled as provided in the
                  Agreement  and in the Act,  together with the  obligations  of
                  such  Partner to comply with all the terms and  provisions  of
                  this Agreement and of the Act.
                       "Interim  Investments"  means the short-term  investments
                  made with the Net  Proceeds  of the  Offering  until  such Net
                  Proceeds of the  Offering are  disbursed  for  acquisition  of
                  Equipment.
                       "Investment  in  Equipment"  means the  amount of Capital
                  Contributions  actually  paid or  allocated  to the  purchase,
                  manufacture or renovation of Equipment (including the purchase
                  of  equipment,  working  capital  reserves  allocable  thereto
                  (except  that working  capital  reserves in excess of 3% shall
                  not be included), and other cash payments such as interest and
                  taxes) but excluding Front-End Fees.
                       "Investor"  means (i) any  Person  who holds an  Assignee
                  Unit and is  reflected as an Investor on the books and records
                  of the Partnership, (ii) any Investor who has been admitted to
                  the Partnership as a Substitute  Limited  Partner  pursuant to
                  Section   7.5  hereof  and  (iii)   except   where   otherwise
                  specifically provided to the contrary, the MNC Special Limited
                  Partner. The term "Investor" shall not include the ABR Special
                  Limited Partner.
                       "Leasing   Fees"   means   the  total  of  all  fees  and
                  commissions  paid by any Person in connection with the initial
                  lease of Equipment.
                       "Limited Partner" means any Person who is designated as a
                  Limited Partner on the books and records of the Partnership at
                  the time of reference thereto,  in each such Person's capacity
                  as a Limited Partner of the Partnership.
                       "Limited   Partnership   Interest"  means  the  ownership
                  interest of the Assignor Limited Partner and all other Limited
                  Partners in the Partnership.
                       "Limited  Partnership  Interest Percentage" in respect of
                  any Investor means the percentage  obtained by converting to a
                  percentage  the fraction  having the number of Assignee  Units
                  owned by such  Investor as its numerator and having the number
                  of  Assignee  Units  owned  by all  Investors  at the  time of
                  reference thereto as its denominator.
                                                                      A-6
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                        "Majority  Vote  of  the   Investors"   shall  mean  the
                   affirmative  vote of  Investors  owning  more than 50% of the
                   outstanding  Units or the  consent of  Investors  owning more
                   than 50% of the outstanding Units, as the case may be.
                        "Manager"  means MNC  Leasing,  a division of MNC Credit
                   Corp, which is an indirect subsidiary of MNC Financial, Inc.,
                   a Maryland  corporation,  or any  successor  employed  by the
                   Partnership  to manage the leasing,  financing,  refinancing,
                   re-leasing  and selling of the Equipment in  accordance  with
                   Section 5.2A(xix).
                        "Management  Agreement"means  the agreement  between the
                   Manager and the  Partnership  under  which the Manager  shall
                   manage the leasing,  financing,  refinancing,  re-leasing and
                   selling of the Equipment.
                        "Minimum  Gain" means with respect to each  non-recourse
                   liability   of  the   Partnership   and  subject  to  certain
                   adjustments      pursuant      to     Income     Tax     Reg.
                   ss.1.704-lT(b)(4)(iv)(c),  the  amount  of gain (of  whatever
                   character),   if  any,   that  would  be   realized   by  the
                   Partnership,  if the  Partnership  disposed  of (in a taxable
                   transaction)  any of the assets  subject to such liability in
                   full  satisfaction of the liability.  For this purpose,  only
                   the  portion  of the  assets'  adjusted  basis  allocated  to
                   non-recourse  liabilities of the  Partnership  shall be taken
                   into account.
     "Minimum  Offering Amount" means the amount of $2,000,000 in Gross Proceeds
of the Offering.
     "MNC Special  Limited  Partner" means Maryland  National  Leasing  Services
Corporation, an Affiliate of the Manager.
                        "Net  Disposition  Proceeds"  means  the  cash  proceeds
                   realized by the Partnership from the sale,  exchange or other
                   disposition  of Equipment  (including  insurance  proceeds or
                   lease indemnity payments arising from the loss or destruction
                   of  Equipment)  or  other  Partnership  property,   including
                   Warrants  and Warrant  Stock,  less all  related  Partnership
                   liabilities  and  expenses   relating  to  the   transaction,
                   including but not limited to, fees or commissions paid to any
                   unaffiliated  Persons and, subject to Sections 5.2A(viii) and
                   9.2A(viii),  fees or  commissions  paid to the Manager or its
                   Affiliates.
                        "Net Lease" means a lease under which the lessee assumes
                   responsibility  for,  and bears the cost of, all  expenses of
                   operation of the  Equipment  (including  insurance,  repairs,
                   maintenance  and service  costs and sales,  use,  property or
                   similar taxes  associated  with the  Equipment) and bears the
                   risk of physical loss of the Equipment.
                        "Net Lease Provisions"  means  contractual  arrangements
                   under which the lessee assumes  responsibility for, and bears
                   the  cost  of,  insurance,  taxes,  maintenance,  repair  and
                   operation of the leased  asset and where the  non-cancellable
                   rental  payments  under the lease are  absolutely  net to the
                   lessor.
     "Net  Proceeds of the  Offering"  means the Gross  Proceeds of the Offering
less the Selling Commis- sions, the Due Diligence Expense Reimbursement Fee, and
the Offering and Organization Expense Fee.
                        "Notification"   means   a   writing,   containing   the
                   information  required by this Agreement to be communicated to
                   any Person,  sent or delivered  to such Person in  accordance
                   with the provisions of Section 12.3 of this Agreement.
                        "Offering"  means the  offering  and sale of Units for a
                   minimum of $2,000,000 and a maximum of $25,000,000 (which may
                   be  increased  at the  discretion  of the General  Partner to
                   $75,000,000), as more fully described in the Prospectus.
                        "Offering  and  Organization   Expense  Fee"  means  the
                   non-accountable  fee  paid to the  General  Partner  equal to
                   5.65% of the  Gross  Proceeds  of the  Offering,  payable  in
                   accordance  with  Section  9.2A(ii)   hereof,   for  services
                   rendered   and  costs   incurred  in   connection   with  the
                   organization of the Partnership and the offering of Units.
                        "Operating Lease" means a lease of Equipment under which
                   the  non-cancellable  rental payments during the initial term
                   of  the  lease,  on  a  net  present  value  basis,  are  not
                   sufficient to recover the

                                                        A-7
<PAGE>

                 contract  purchase price paid by the  Partnership in connection
                 with the purchase of the Equipment  plus all  Acquisition  Fees
                 applicable thereto.
                       "Partner" means any General Partner or Limited Partner.
                       "Partnership"  means the  limited  partnership  formed in
                 accordance with this Agreement by the parties  hereto,  as said
                 limited partnership may from time to time be constituted.
                       "Payout"  means  the  date on  which  each  Investor  has
                 received  from  distributions  of  Distributable  Cash  and Net
                 Disposition  Proceeds a return of his Adjusted  Capital Balance
                 and payment of his Cumulative Return.
                       "Person" means any individual or Entity.
                       "Profit" or "Loss"  means,  for each fiscal year or other
                 period,  an amount equal to the Partner-  ship's taxable income
                 or  loss  for  such  year  or   period,   with  the   following
                 adjustments:  (i) any income of the Partnership  that is exempt
                 from federal  income tax shall be added to such taxable  income
                 or loss;  (ii) any  income  or  deduction  which is  separately
                 allocated  pursuant to Article IV shall be  excluded  from such
                 taxable  income  or loss;  and (iii)  any  expenditures  of the
                 Partnership  described in Section 705(a)p(2)(B) of the Code, or
                 treated  as  Section  705(a)(2)(B)  of  the  Code  expenditures
                 pursuant to Income Tax Reg.  ss.1.704-1(b)(2)(iv)(i) other than
                 syndication  expenses  described  in  Section  4.5L,  shall  be
                 subtracted  from  such  taxable  income  or  loss.   Except  as
                 otherwise  provided  herein,  each item of income,  gain, loss,
                 deduction,   preference   or   recapture   entering   into  the
                 computation of Profit or Loss  hereunder  shall be allocated to
                 each  Partner  in the same  proportion  as Profit  and Loss are
                 allocated.
                       "Profit from Operations" or "Loss from Operations"  means
                 Profit  or Loss of the  Partnership,  as  applicable,  from any
                 source other than a Sale.
                       "Prospectus" means the Partnership's Prospectus contained
                 in the  Registration  Statement  filed  on Form  S-1  with  the
                 Securities and Exchange  Commission for the registration of the
                 Units under the  Securities  Act of 1933,  in the final form in
                 which it is filed with the Securities  and Exchange  Commission
                 and as thereafter  supplemented  pursuant to Rule 424 under the
                 Securities  Act of 1933.  Any reference  herein to "date of the
                 Prospectus"  shall  be  deemed  to  refer  to the  date  of the
                 Prospectus  in the form filed  pursuant  to Rule  424(b) of the
                 Securities Act of 1933.
                       "Sale" means any sales or exchanges or other dispositions
                 of  Equipment,  condemnations,  recoveries of damage awards and
                 insurance proceeds (other than business or rental  interruption
                 insurance proceeds).
                       "Schedule"  means  Schedule  A annexed  hereto as amended
                 from time to time and as so  amended  at the time of  reference
                 thereto.
                       "Selling  Agent"  means Alex.  Brown  Realty  Securities,
                 Inc., an Affiliate of the General Partner, which will offer the
                 Units on a best  efforts  basis  pursuant to the Selling  Agent
                 Agreement.
     "Selling Agent Agreement"  means that certain  agreement to be entered into
by the Partnership Alex. Brown Realty Securities, Inc., and the General Partner,
pursuant to which Alex.  Brown Realty  Securities,  Inc. will offer and sell the
Units on a best efforts basis.
                       "Selling  Commissions"  means the  maximum  total (or any
                 portion  thereof) of 7% of the Gross  Proceeds of the  Offering
                 paid to the  Selling  Agent or  Soliciting  Dealers  for  their
                 efforts  in  offering  the  Units.   The  7%  maximum   Selling
                 Commissions  will be reduced for volume purchases and purchases
                 by the MMC Special  Limited  Partner and certain  Affiliates of
                 the Manager as specified in the Prospectus.
                       "Specified  Equipment"  means the Equipment  described in
                 the  Prospectus  and  in a  schedule  to  be  affixed  to  this
                 Agreement   by  amendment   or  any   Equipment   purchased  in
                 substitution of such Equipment.
                       "Sponsor"   means  any  Person   directly  or  indirectly
                 instrumental in organizing,  wholly or in part, the Partnership
                 or who will  manage or  participate  in the  management  of the
                 Partnership, and any

                                                                    A-8
<PAGE>
                   Affiliate of such Person, but does not include (a) any Person
                   whose only  relationship  with the Partnership or the General
                   Partner is that of an  independent  property  manager if such
                   person's only  compensation  from the  Partnership  is in the
                   form  of fees  for the  performance  of  property  management
                   services,  or (b)  wholly-independent  third  parties such as
                   attorneys,   accountants   and   broker-dealers   whose  only
                   compensation   from  the  Partnership  is  for   professional
                   services  rendered  in  connection  with the  Offering or the
                   operations of the  Partnership.  Sponsors of the  Partnership
                   include the General Partner and the Manager.
                        "Subordinated  Disposition Fee" means the fee payable to
                   the  Manager  upon the Sale of any  item of  Equipment  in an
                   amount  equal to the lesser of  one-half  of the  Competitive
                   Equipment Sales Commission, or 3% of the contract sales price
                   received by the  Partnership  in connection  with the Sale of
                   the Equipment.
                        "Substitute  Limited Partner" means any Investor who has
                   elected  to convert  from an  Investor  to a Limited  Partner
                   pursuant to Section 7.5 of this Agreement.
                        "Successor  General  Partner"  means any  Person  who is
                   admitted as a Successor  General  Partner to the  Partnership
                   under the  provisions  of  Article  VI after the date of this
                   Agreement.
                        "Tax  Matters   Partner"   means  the  General   Partner
                   designated  in Section  5.1C as the tax matters  partner,  as
                   defined in Section 6231(a)(7) of the Code.
                        "Termination  Date of the Offering"  means the date upon
                   which the Offering terminates,  which, if not extended at the
                   election  of the  General  Partner,  will be on or before the
                   date one (1) year from the date of the Prospectus.
                       "Unit"  means  (i)  an  Assignee  Unit  representing  the
                   assignment  by the Assignor  Limited  Partner of one Assigned
                   Limited Partnership  Interest,  (ii) the Partnership Interest
                   attributable  to one Unit of any  Investor  who has  become a
                   Substitute Limited Partner pursuant to Section 7.5 hereof and
                   (iii)  the  Partnership  Interest  attributable  to one  Unit
                   purchased  by the MNC  Special  Limited  Partner  pursuant to
                   Section 3.3 hereof.
                        "Warrants" means an option, warrant or right to acquire,
                   by purchase,  conversion or exchange, an equity security of a
                   lessee  of  Equipment,   obtained  by  the   Partnership   in
                   connection with the execution of a lease of Equipment to such
                   lessee.
                     "Warrant Stock" means the shares of common stock, preferred
                   stock or other equity security of a lessee of the Partnership
                   upon exercise, conversion or exchange of a Warrant.
                        "Working  Capital  Reserves"  means the  portion  of the
                   Gross  Proceeds of the Offering set aside as working  capital
                   reserves pursuant to Section 5.6G.


                                                               ARTICLE II
                                            NAME; PURPOSE; TERM AND CERTIFICATE

                   Section 2.1 Name; Continuation
                        T'he  Partners  hereby  agree to  continue  the  limited
                   partnership  known as "Redwood  Equipment Leasing Income Fund
                   L.P." Such name shall be used at all times in connection with
                   the Partnership's  business and affairs;  provided,  however,
                   that the  Partnership  may use  trade  names in its  business
                   operations. The Partnership shall be governed by the Act.

                   Section 2.2 Place of Registered Office
                        The  address  of the  registered  office in the State of
                   Delaware of the Partnership is Corporation Trust Center, 1209
                   Orange Street,  Wilmington,  Delaware 19801;  the name of the
                   registered agent for service of process on the Partnership in
                   the State of  Delaware  at that  address  is The  Corporation
                   Trust Company. The Partnership's  principal place of business
                   is 225 East Redwood Street,  4th Floor,  Baltimore,  Maryland
                   21202 or such  other  place(s)  as the  General  Partner  may
                   hereafter determine.

                                                                    A-9
<PAGE>

                 Notification  of any change in the  location  of the  principal
                 office  shall be  given to the  Partners  and  Investors  on or
                 before the date of any such change.

                 Section 2.3 Purpose
                      The  purpose  of  the  Partnership  is to  engage  in  the
                 business   of   acquiring,   owning,   leasing  and  selling  a
                 diversified portfolio of Equipment including but not limited to
                 aircraft,   construction  and  manufacturing  equipment,   high
                 technology  and  testing  equipment,  production  and  material
                 handling  equipment,   transportation  equipment,  medical  and
                 biotechnology  equipment,  laboratory  and  testing  equipment,
                 telecommunications and computer equipment, restaurant equipment
                 and  furniture  and  fixtures  and  otherwise   deal  with  the
                 Equipment  and  Partnership  property  including  Warrants  and
                 Warrant  Stock owned or acquired in connection  therewith.  The
                 Partnership  may own Equipment  directly or indirectly  through
                 joint  ventures  or  general   partnerships,   subject  to  the
                 provisions contained herein. The Partnership may do any and all
                 things  necessary,  convenient or incidental to the achievement
                 of the foregoing.

                 Section 2.4 Term
                      The  Partnership  shall  continue until December 31, 2019,
                 unless the  Partnership is sooner  dissolved in accordance with
                 the provisions of this Agreement.

                 Section 2.5 Recording of Certificate
                      The General  Partner  shall take all  necessary  action to
                 maintain  the   Partnership  in  good  standing  as  a  limited
                 partnership under the Act, including,  without limitation,  the
                 filing  of the  Certificate  and such  amendments  and  further
                 certificates  as may be  necessary  under the Act and as may be
                 deemed necessary or advisable by the General Partner to qualify
                 the  Partnership  to do business in other  states.  The General
                 Partner   shall  not  be   required  to  send  a  copy  of  the
                 Partnership's filed Certificate to each Partner and Investor.


                                                              ARTICLE III
                                                        PARTNERS; CAPITAL
     Section 3.1 General Partner;  Assignor Limited Partner; ABR Special Limited
Partner A. The name,  address and Capital  Contribution of the General  Partner,
the Assignor Limited
                 Partner  and the ABR Special  Limited  Partner are set forth on
                 the  Schedule.  Upon the  dissolution  and  termination  of the
                 Partnership,  on or  before  the  later  of the last day of the
                 fiscal year in which the dissolution of the Partnership  occurs
                 or  ninety  (90)  days  after  the date of  dissolution  of the
                 Partnership,   the  General   Partner   shall  make  a  Capital
                 Contribution  to the  Partnership  in an  amount  equal  to the
                 lesser  of (i) the  deficit  balance,  if any,  in its  Capital
                 Account   or  (ii)  the   excess   of  1.01%  of  the   Capital
                 Contributions of the Investors and Limited Partners  (excluding
                 capital contributions of the Assignor Limited Partner on behalf
                 of  Investors)  over  the  Capital   Contributions   previously
                 contributed by the General Partner attributable to its interest
                 as General Partner.
                      B. The  General  Partner  and its  Affiliates  may also be
                 Investors   or  Limited   Partners  to  the  extent  that  they
                 separately purchase or become transferees of Units and, to such
                 extent,  shall be treated  as  Investors  or Limited  Partners,
                 subject to the limitations contained in this Agreement.
                      Any  purchases  of Units  by the  General  Partner  or its
                 Affiliates in connection  with the initial  public  offering of
                 Units shall not be counted in  determining  whether the minimum
                 number of Units  necessary for the Minimum  Offering Amount has
                 been achieved.

                 Section 3.2 Investors
                      A. The General  Partner is authorized to accept orders for
                 Units  pursuant to the Offering.  All orders for Units shall be
                 held in trust  and  deposited  in an  escrow  account  with the
                 Escrow Agent. Orders for Units shall be accepted or rejected by
                 the General Partner within thirty (30) days after their receipt
                 by the Escrow Agent.

                                                                  A-10

<PAGE>

                       B. Upon the receipt by the Escrow  Agent of orders for an
                    amount  equal to the  Minimum  Offering  Amount,  the Escrow
                    Agent shall  release the funds in the escrow  account to the
                    Assignor  Limited Partner which shall  immediately  transmit
                    such funds to the Partnership.  Subsequent  orders for Units
                    that are accepted by the General  Partner  shall be released
                    from the escrow account and  transmitted to the  Partnership
                    or  returned  to   subscribers   in   accordance   with  the
                    Prospectus.  Upon  release of an  Investor's  funds from the
                    escrow  account  to the  Partnership,  an  Assigned  Limited
                    Partnership  Interest  shall  be  credited  to the  Assignor
                    Limited  Partner on the books and records of the Partnership
                    in respect  of such Unit and the  Assignor  Limited  Partner
                    shall assign all of its rights with respect to such Assigned
                    Limited  Partnership  Interest to the Investor to the extent
                    permitted  by, and in  accordance  with,  the  Agreement and
                    applicable  law. The Assignor  Limited Partner hereby agrees
                    to exercise any and all rights with respect to such Assigned
                    Limited Partnership Interest as directed by the Investor.
                        C. Any  interest  earned  on  moneys  paid by  Investors
                    during  the  period  such  moneys  are held in escrow by the
                    Escrow Agent shall be paid to the Partnership  following the
                    release of orders  and shall be  distributed  in  accordance
                    with Section 4.5A hereof. Persons whose orders for Units are
                    rejected by the  General  Partner  shall be  returned  their
                    moneys within ten (10) days after such rejection.
                        D. No order for Units sold as part of the Offering shall
                    be accepted after the Termination  Date of the Offering.  If
                    the General  Partner  does not accept  orders  totalling  an
                    amount equal to the Minimum Offering Amount on or before the
                    Termination  Date of the  Offering,  the Escrow  Agent shall
                    promptly return all moneys deposited by subscribers together
                    with any interest earned on such moneys.
                        E. For  purposes  of this  Agreement,  an  Investor  who
                    acquires  Units in the Offering  shall be  recognized  as an
                    Investor  with  respect  to such Units on the date that such
                    Investor's funds are released from the escrow account to the
                    Partnership.

                    Section 3.3 MNC Special Limited Partner
                        A. On  each  date  that  Investors  subscribing  for and
                    purchasing  Units are recognized as such on the books of the
                    Partnership in accordance with Section 3.2B, the MNC Special
                    Limited   Partner  shall   purchase  that  number  of  Units
                    necessary to maintain an investment in the Partnership equal
                    to 4.9%  of all  outstanding  Units,  subject  to a  maximum
                    purchase obligation of $2,500,000 (i.e., 107,526 Units). The
                    purchase  of such Units by the MNC Special  Limited  Partner
                    shall be on the  same  basis  as  Units  purchased  by other
                    Investors,  provided  that an  amount  equal to the  Selling
                    Commissions  payable  with  respect to such  Units  shall be
                    returned to the MNC Special Limited Partner.
                        B.  Upon  the   dissolution   and   termination  of  the
                    Partnership  (or the  Interest  of the MNC  Special  Limited
                    Partner),  on or  before  the  later  of the last day of the
                    fiscal year in which the  dissolution of the Partnership (or
                    the liquidation of such Interest) occurs or ninety (90) days
                    after the dissolution of the Partnership (or the liquidation
                    of such  Interest),  the MNC Special  Limited  Partner shall
                    make a Capital  Contribution to the Partnership in an amount
                    equal to the least of (i) the  deficit  balance,  if any, in
                    its  Capital   Account,   (ii)  the   aggregate   amount  of
                    distributions of Net Disposition  Proceeds and Distributable
                    Cash that it has received or (iii) the excess, if any of the
                    Investors'  aggregate Capital  Contributions (other than the
                    Capital  Contributions  of the MNC Special Limited  Partner)
                    over   the   amount   of  Net   Disposition   Proceeds   and
                    Distributable  Cash  distributed or to be distributed to the
                    Investors  (other  than the MNC  Special  Limited  Partner),
                    provided  that in no event  shall the amount to be  returned
                    exceed the  investment  in the  Partnership  made by the MNC
                    Special Limited Partner pursuant to Section 3.3A.
                        C.  Affiliates  of the Manager may also be  Investors or
                    Limited Partners to the extent that they separately purchase
                    or become transferees of Units and, to such extent, shall be
                    treated as  Investors  or Limited  Partners,  subject to the
                    limitations  contained in this  Agreement.  Any purchases of
                    Units by the officers  and  directors of the Manager and MNC
                    Credit  Corporation  in connection  with the initial  public
                    offering of Units shall be made net of Selling Commissions.

                                                                       A-11
<PAGE>

                 Section 3.4 Partnership Capital
                      A. Each  Partner's  and  Investor's  Capital  Contribution
                 shall be paid in cash on or prior to the date of such Partner's
                 admission to the  Partnership or the date of the recognition of
                 the Investor on the books and records of the Partnership.
                      B. Except to the extent of any interest  income  earned on
                 an Investor's Capital  Contribution while it is held in escrow,
                 and later  distributed  to such  Investor  pursuant  to Section
                 4.5A,  no Partner or  Investor  shall be paid  interest  on any
                 Capital Contribution.
                      C.  Except as  otherwise  provided in this  Agreement,  no
                 Partner  or  Investor  shall  have the  right to  withdraw,  or
                 receive  any  return  of,  his  Capital  Contribution  prior to
                 December 31, 2019.
                      D. Under  circumstances  requiring a return of any Capital
                 Contribution,  no  Partner  shall  have the  right to demand or
                 receive property other than cash.

                 Section 3.5 Liability of Partners and Investors
                      A. Except as provided in Section  17-607 of the Act, or in
                 Section 3.3 with  respect to the MNC Special  Limited  Partner,
                 the Limited  Partners and Investors shall be liable only to pay
                 their Capital  Contributions and no Limited Partner or Investor
                 will  be   personally   liable  for  the  debts,   liabilities,
                 contracts, or other obligations of the Partnership.
                      B. Except as set forth in Section 3.5A, no Limited Partner
                 or  Investor  shall  be  required  to  lend  any  funds  to the
                 Partnership or, after his Capital  Contribution  has been fully
                 paid,  to  make  any  further   capital   contribution  to  the
                 Partnership, nor, except as set forth in Section 3.3, shall any
                 Limited   Partner  or  Investor  be  liable  for  or  have  any
                 obligation  to restore  any  negative  balance  in his  Capital
                 Account.
                      C.  Subject to the  provisions  of Sections 3.1 and 5.9 of
                 this Agreement, the General Partner shall not have any personal
                 liability for the repayment of the Capital  Contribution or the
                 Cumulative  Return of any  Limited  Partner or  Investor  or be
                 required to repay to the  Partnership all or any portion of any
                 negative  balance  of  the  Capital  Accounts  of  the  Limited
                 Partners or the Investors.


                                   ARTICLE IV
                 ALLOCATIONS, DISTRIBUTIONS AND APPLICABLE RULES

                 Section 4.1 Allocation of Profit or Loss
                      A.  Profit  (including  any Profit  from any  deemed  Sale
                 pursuant to Section 4.5) shall be  allocated  in the  following
                 order of priority:
                          (i) First,  Profit  shall be allocated to the Partners
                      and Investors in proportion  to, and to the extent of, any
                      Loss  allocated to the Partners and Investors  pursuant to
                      Section  4.1B(ii),  4.1B(iii)  and  4.1B(iv) for all prior
                      fiscal  years,  in reverse order and priority to the order
                      and priority  specified under Section 4.1B(ii),  4.1B(iii)
                      and 4.1B(iv) to offset such prior  allocations of Loss. To
                      the  extent  that  any  allocations  of  Loss  are  offset
                      pursuant to this Section 4.1A(i), such allocations of Loss
                      shall be disregarded for purposes of computing  subsequent
                      allocations pursuant to this Section 4.1.
                          (ii) Second,  Profit not allocated pursuant to Section
                      4.1A(i)  shall be allocated (a) in the case of Profit from
                      Operations,  98% to the  Investors  and 2% to the  General
                      Partner and (b) in the case of Profit from a Sale,  99% to
                      the  Investors  and 1% to the General  Partner,  until the
                      Capital  Account of each  Investor  is equal to the sum of
                      his Adjusted  Capital  Balance plus his unpaid  Cumulative
                      Return, if any.
                          (iii) Third,  Profit not allocated pursuant to Section
                      4.1A (i) and Section  4.1A (ii) shall be  allocated to the
                      General  Partner until the Capital  Account of the General
                      Partner is equal to its Adjusted Capital Balance.

                                                                   A-12
<PAGE>

                             (iv)  Fourth,   any   remaining   Profit  shall  be
                        allocated  90%  to  the  Investors  (including  the  MNC
                        Special Limited Partner),  5% to the MNC Special Limited
                        Partner,  1% to the  General  Partner  and 4% to the ABR
                        Special  Limited  Partner.  B. Loss  (including any Loss
                        from any deemed Sale  pursuant to Section  4.5) shall be
                        allocated in
                    the following order of priority:
                             (i) First,  Loss shall be allocated to the Partners
                        and  Investors in  proportion  to, and to the extent of,
                        any  Profit  allocated  to the  Partners  and  Investors
                        pursuant to Section 4.1A(ii), 4.1A(iii) and 4.lA(iv) for
                        all prior fiscal years, in reverse order and priority to
                        the order and priority specified under Section 4.1A(ii),
                        4.lA(iii) and 4.1A(iv), to offset such prior allocations
                        of Profit.  To the extent that any allocations of Profit
                        are  offset  pursuant  to  this  Section  4.1B(i),  such
                        allocations of Profit shall be disregarded  for purposes
                        of  computing  subsequent  allocations  pursuant to this
                        Section 4.1.
                            (ii)  Second,  any Loss not  allocated  pursuant  to
                        Section  4.1B(i)  shall  be  allocated  99% to  the  MNC
                        Special  Limited  Partner and 1% to the General  Partner
                        until the  aggregate  Loss  allocated to the MNC Special
                        Limited  Partner  under this  Section  4.1B(ii) for such
                        fiscal year and all prior  fiscal  years is equal to the
                        aggregate  Capital  Contributions  of  the  MNC  Special
                        Limited  Partner made  pursuant to Section 3.3A (reduced
                        by  any   prior  or   contemporaneous   allocations   of
                        syndication  expenses  to the  Special  Limited  Partner
                        under Section 4.5L).
                             (iii) Third,  if one or more  Partners or Investors
                        has a positive Capital  Account,  any Loss not allocated
                        pursuant  to  Sections  4.lB(i)  and  4.lB(ii)  shall be
                        allocated to such  Investors or Partners,  in proportion
                        to  their  positive  Capital  Accounts,  until  all such
                        positive Capital Accounts have zero balances.
                             (iv) Fourth,  any remaining Loss shall be allocated
                        99% to the Investors and 1% to the General Partner.

                        C.  For each  fiscal  year,  all  Profit  and Loss  from
                    Operations   allocated   pursuant  to  Section  4.1  to  the
                    Investors  shall be  allocated  among the  Persons  that are
                    recognized as Investors  during such year by determining the
                    Profit and Loss from  Operations  attributable to each month
                    during such year and by allocating the amount of such Profit
                    and Loss from Operations among Persons who are recognized as
                    Investors  on the  books  of the  Partnership  on the  first
                    business  day  of  such  month.  The  Profit  or  Loss  from
                    Operations  attributable  to each month of the  fiscal  year
                    shall be determined in the discretion of the General Partner
                    either (i) by  dividing  the Profit or Loss from  Operations
                    for such year by the number of days in such  year,  and then
                    multiplying  such per diem  amount by the  number of days in
                    each month or (ii) by an interim closing of the books of the
                    Partnership on a monthly basis.
                        D.  All  Profit  or  Loss  from  a Sale  (including  all
                    "recapture  income"  attributable to an installment Sale, as
                    defined in Section 453(i) of the Code) allocated pursuant to
                    Section  4.1  hereof  with  respect  to any  Unit  which  is
                    transferred  during a taxable year of the Partnership  shall
                    be allocated to the Persons  recognized (in accordance  with
                    Section 7.4 hereof) as  Investors  as of the first  business
                    day of the month  that  includes  the date on which the Sale
                    occurs;  provided,  however,  that all such  Profit  or Loss
                    which is  attributable  to an  installment or other deferred
                    Sale (other than recapture income) shall be allocated to the
                    Persons recognized as Investors as of the first business day
                    of the month that  includes  the date on which the  deferred
                    Net Disposition  Proceeds from such Sale are received by the
                    Partnership, and the allocable cash basis items with respect
                    thereto shall be allocated as required  under Section 706(d)
                    of the Code and the Income Tax Regulations thereunder.
                        E.   Notwithstanding   Sections   4.1C  and  4.1D,   the
                    Partnership  shall  adopt  the  daily  proration  method  of
                    allocating  Profit and Loss (whether from operations or from
                    Sales)  among  persons  who become  Investors  pursuant to a
                    closing   of  the  sale  of  the  Units  on  or  before  the
                    Termination Date of the Offering. Accordingly, each Investor
                    shall begin to be allocated Profit,  and Loss on the date he
                    is recognized on the books of the Partnership.

                                                                       A-13


<PAGE>

                  Section 4.2 Distribution of Net Disposition Proceeds
                        A. Upon a Sale that does not constitute a Sale of all or
                   substantially all of the Equipment,  Net Disposition Proceeds
                   which are not reinvested in Additional  Equipment pursuant to
                   Section  5.2B shall be  distributed,  credited and applied in
                   the following order of priority:
                             (i)  First,  99%  to  the  Investors  and 1% to the
                        General  Partner  until each  Investor  has  received an
                        amount equal to his unpaid  Cumulative  Return,  if any,
                        and then his Adjusted Capital Balance.
                             (ii)  Second,  to the  General  Partner,  an amount
                             equal to its Adjusted Capital Balance. (iii) Third,
                             any  Net  Disposition   Proceeds   remaining  after
                             payment of the Subordinated
                        Disposition   Fee  shall  be  distributed   90%  to  the
                        Investors  (including the MNC Special Limited  Partner),
                        5% to the MNC Special Limited Partner, 1% to the General
                        Partner and 4% to the ABR Special  Limited  Partner.  B.
                        Upon  the  Sale  of  all  or  substantially  all  of the
                        Equipment, Net Disposition Proceeds shall be
                   allocated to the Partners and  Investors,  in  proportion  to
                   their  positive  Capital  Accounts,  after the  allocation of
                   Profit and Loss pursuant to Sections 4.1A and 4.1B, until all
                   such Capital Accounts have been reduced to zero.
                        C.  All  Net  Disposition  Proceeds  distributable  with
                   respect  to any Unit  which is  transferred  during a taxable
                   year of the  Partnership  shall be distributed to the Persons
                   recognized  (in  accordance   with  Section  7.4  hereof)  as
                   Investors  as of the first  business  day of the  month  that
                   includes  the  date  on  which  the  Sale  occurs;  provided,
                   however,  that all Net Disposition  Proceeds  received by the
                   Partnership  as a result of an  installment or other deferred
                   Sale  shall be  distributed  to the  Persons  recognized  (in
                   accordance  with  Section 7.4 hereof) as  Investors as of the
                   first  business  day of the month that  includes  the date on
                   which the deferred Net  Disposition  Proceeds are received by
                   the Partnership.

                   Section 4.3 Distribution of Distributable Cash
                        A. Distributable Cash, if any, for each year, or portion
                   thereof,  which is not  reinvested  in  Additional  Equipment
                   pursuant to Section 5.2B shall be  distributed,  credited and
                   applied in the following order of priority:
                        (i) First,  98% to the  Investors  and 2% to the General
                   Partner  until each  Investor has received an amount equal to
                   his unpaid  Cumulative  Return, if any, and then his Adjusted
                   Capital Balance.
                        (ii) Second, to the General Partner,  an amount equal to
                        its  Adjusted   Capital   Balance.   (iii)  Third,   any
                        Distributable   Cash  remaining  after  payment  of  the
                        Subordinated Disposition Fee
                   shall be distributed 90% to the Investors  (including the MNC
                   Special  Limited  Partner),  5% to the  MNC  Special  Limited
                   Partner,  1% to the General Partner and 4% to the ABR Special
                   Limited Partner.

                   To the extent practicable,  the General Partner will endeavor
                   to make  distributions of  Distributable  Cash on a quarterly
                   basis.
                        B. All Distributable Cash distributable to the Investors
                   pursuant to Section 4.3A, if any,  attributable to each month
                   of a fiscal  quarter shall be  distributed  among the Persons
                   recognized  as Investors on the books of the  Partnership  on
                   the  first  business  day of such  month  during  the  fiscal
                   quarter. The Distributable Cash attributable to each month of
                   the fiscal  quarter shall be determined in the  discretion of
                   the  General  Partner  either (i) by  dividing  the amount of
                   Distributable  Cash for such quarter by the number of days in
                   the quarter, and then multiplying such per diem amount by the
                   number of days in each month or (ii) by an interim closing of
                   the books of the Partnership on a monthly basis.
                        C.  Notwithstanding  Section  4.3B,  Distributable  Cash
                   distributable  to the Investors  pursuant to Section 4.3A for
                   any  fiscal  quarter  before  the  Termination  Date  of  the
                   Offering  shall be  distributed  among the Persons who become
                   Investors  during such  quarter  pursuant to a closing of the
                   sale of

                                                                         A-14
<PAGE>

                    Units on or before the  Termination  Date of the Offering in
                    accordance   with  the  number  of  days  each  Investor  is
                    recognized   as  such   during  the  fiscal   quarter.   The
                    Distributable  Cash  attributable  to each day of the fiscal
                    quarter  shall be  determined  by  dividing  the  amount  of
                    Distributable Cash for such quarter by the number of days in
                    such quarter.
                        D.  Notwithstanding  the provisions of Section 4.3A, the
                    General Partner is hereby  authorized to make  distributions
                    of Distributable  Cash to some or all of the Investors after
                    the  Termination  Date of the  Offering in order to equalize
                    the Cumulative Return outstanding on all Units.

                    Section 4.4 Liquidation or Dissolution
                        A. If the  Partnership  is liquidated or dissolved,  the
                    net proceeds from such  liquidation,  as provided in Article
                    VIII,  shall be  distributed  first to creditors,  including
                    Partners  who  are  creditors,   to  the  extent   otherwise
                    permitted by law (whether by payment or by  establishment of
                    reserves),  other  than  liabilities  for  distributions  to
                    Partners and Investors, and any remaining net proceeds shall
                    be distributed in proportion to the Capital  Accounts of the
                    Partners and Investors,  determined after the allocations in
                    Sections 4.lA, 4.lB and 4.5.
                        B. All  distributions  under this  Section  4.4 shall be
                    made by the end of the taxable  year of  liquidation  of the
                    Partnership  or,  within  ninety  (90)  days of the  date of
                    liquidation, whichever is later.

                    Section 4.5 General and Special Rules
                        A. The timing and amount of all  distributions  shall be
                    determined by the General Partner. Notwithstanding any other
                    provision of this Agreement,  the General Partner shall have
                    authority to make the following  distributions to certain of
                    the  Investors:  First,  if the  Partnership  has realized a
                    savings on Selling  Commissions  payable by the  Partnership
                    with  respect to the  purchase of Units by an  Investor  (as
                    more fully set forth in the Prospectus), the General Partner
                    shall  make a  distribution  to such  Investor  equal to the
                    amount of such savings realized by the Partnership.  Second,
                    if  any  interest  is  earned  on  an   Investor's   Capital
                    Contribution while it is held in escrow pending  recognition
                    as an Investor  under Article VII,  such  interest  shall be
                    paid  by  the   Partnership  to  such  Investor  and  Profit
                    attributable to such interest shall be allocated in the same
                    manner.
                        B.  Subject to all of the special  rules of this Section
                    4.5,  if any  property  or  assets  of the  Partnership  are
                    distributed to the Partners in kind, such property or assets
                    first shall be valued on the basis of the fair market  value
                    thereof  to  determine  the  Profit or Loss that  would have
                    resulted if such property or assets had been sold,  and then
                    such  Profit  or Loss  shall be  allocated  as  provided  in
                    Section  4.1A  and  Section  4.1B,  and  shall  be  properly
                    credited  or charged to the Capital  Accounts in  accordance
                    with   Income  Tax  Reg.   ss.1.704-1(b)(2)(iv)(e)   or  any
                    successor  provision  thereto.  Any Partner  entitled to any
                    interest  in such  property  or assets  shall  receive  such
                    interest as a  tenant-in-common  with all other  Partners so
                    entitled.  The fair market value of such  property or assets
                    shall be determined by an independent appraiser who shall be
                    selected by the General  Partner.  This Section 4.5B governs
                    income  tax  consequences  only  and  shall  not be  read or
                    construed  as  authorizing  the   distribution  in  kind  of
                    property or assets of the Partnership.
                        C. Notwithstanding  Section 4.1 hereof, if an allocation
                    of Loss (or item  thereof) to an Investor or a Partner would
                    cause or  increase a deficit  balance in his or its  Capital
                    Account in excess of:  (i) in the case of an  Investor  or a
                    Partner other than the MNC Special  Limited  Partner and the
                    General Partner, his proportionate share of Minimum Gain (as
                    defined in Income Tax Regulation  ss.1.704-  1T(b)(4)(iv)(f)
                    and  (h)(5)),  (ii) in the case of the MNC  Special  Limited
                    Partner, the sum of the amount it is obligated to restore to
                    the  Partnership  pursuant  to Section  3.3B  hereof and its
                    proportionate  share of Minimum  Gain (as  defined in Income
                    Tax Regulation ss.1.704-lT(b)(4)(iv)(f) and (h)(5)) or (iii)
                    in the case of the  General  Partner,  the sum of the amount
                    which it is obligated to restore to the Partnership pursuant
                    to Section 3.1 hereof and its proportionate share of Minimum
                    Gain    (as    defined    in    Income    Tax     Regulation
                    ss.1.704-lT(b)(4)(iv)(f)  and  (h)(5))  (in each case,  such
                    excess being  referred to  hereafter as the "Excess  Deficit
                    Balance"),  then the  allocation  shall  not be made to such
                    Investor or Partner.  Instead,  such Loss (or  deduction  or
                    item thereof)  shall be allocated  first to the Partners and
                    Investors having positive Capital Accounts, in proportion to
                    such positive Capital Accounts until all

                                                                        A-15

<PAGE>

                 such positive  Capital  Accounts have been reduced to zero, and
                 any  additional  Loss (or deduction or item  thereof)  shall be
                 allocated  to the General  Partner.  For purposes of making the
                 determination   set  forth  above,  each  Investor's  and  each
                 Partner's   Capital   Account   balance  shall  be  reduced  by
                 reasonably expected allocations or adjustments of loss (or item
                 thereof) including Loss from a Sale under Income Tax Regulation
                 ss.ss.1.704-1(b)(2)(ii)(d)(4)   and  (5),  and  by   reasonably
                 expected  distributions  to the extent not offset by reasonably
                 expected Capital Account increases ("Account Reduction Items").
                 For purposes of calculating reasonably expected Capital Account
                 increases,  the value of the  Partner-  ship's  assets shall be
                 presumed to be equal to their adjusted basis for federal income
                 tax purposes.
                      D. Notwithstanding  Section 4.1 hereof, in accordance with
                 Income    Tax    Regulation    ss.ss.1.704-     l(b)(2)(ii)(d),
                 1.704-IT(b)(4)(iv)(e)(2) and  1.7041T(b)(4)(iv)(h)(4),  (i) if,
                 in any fiscal  year of the  Partnership,  an Account  Reduction
                 Item  unexpectedly  causes  or  increases  an  Investor's  or a
                 Partner's  Excess  Deficit  Balance,  or (ii) if there is a net
                 decrease in Partnership  Minimum Gain,  including  Minimum Gain
                 attributable to Partner  Nonrecourse  Debt as defined in Income
                 Tax Regulation ss.1.704-IT(b)(4)(iv)(h), during a taxable year,
                 then each Investor or Partner with an Excess Deficit Balance or
                 a share of Minimum Gain, shall be specially allocated, in order
                 to eliminate such Excess  Deficit  Balance or reflect his share
                 of the  reduction  in Minimum  Gain,  Profit and, to the extent
                 necessary,  gross income (as defined in Section 61 of the Code)
                 in an amount  and  manner  required  by Income  Tax  Regulation
                 ss.ss.1.7041(b)(2)(ii)(d)   and   1.704-IT(b)(4)(iv)(e)(2)  and
                 (h)(4).  All  nonrecourse  deductions  attributable  to Partner
                 Nonrecourse  debt  (determined  in  accordance  with Income Tax
                 Regulations  ss.1.704-IT(b)(4)(iv)(h)(3)) shall be allocated to
                 the Partner that bears the economic  risk of loss for such debt
                 (within    the    meaning    of    Income    Tax    Regulations
                 ss.1.704-IT(b)(4)(iv)(k)(1)).  Any  remaining  Profit  or Loss,
                 after adjustment has been made for allocation of income or gain
                 pursuant to this Section 4.5D, shall be allocated in accordance
                 with  Section  4.1  hereof.   The  General   Partner  shall  be
                 authorized  to  interpret  and apply this Section 4.5D so as to
                 satisfy   the    requirements    of   Income   Tax   Regulation
                 ss.ss.1.704-1(b)(2)(ii)(d),     1.704    IT(b)(4)(iv)(e)    and
                 1.704-IT(b)(4)(iv)(h) and any successor provisions.
                      E. Any special allocations of Profit, Loss or gross income
                 under  Section  4.5D shall be taken into  account in  computing
                 subsequent allocations of Profit or Loss, so that to the extent
                 possible,  the aggregate amounts of Profit or Loss allocated to
                 each Partner or Investor will be equal to the aggregate amounts
                 that would have been  allocated  to them in the  absence of the
                 unexpected  Account  Reduction Items or nonrecourse  deductions
                 attributable to Partner Nonrecourse Debt.
                      F. Notwithstanding anything to the contrary that may be 
                    expressed or implied in this Agreement, if at any time the 
                    allocation provisions of this Article IV do not
                 result in the allocation to the General  Partner of at least 1%
                 of the  Profit or Loss being  allocated,  the  General  Partner
                 shall be allocated 1% thereof.

                      G. It is the  intent  of the  General  Partner  that  each
                 Investor's and Partner's  distributive share of Profit and Loss
                 shall be  determined  and  allocated  in  accordance  with this
                 Article IV to the fullest extent  permitted by Sections  704(b)
                 and 706 of the Code.  Therefore,  if the Partnership is advised
                 by the Accountants or the Partnership's legal counsel, that the
                 allocations  provided  in  Article  IV of  this  Agreement  are
                 unlikely to be respected for federal  income tax purposes,  the
                 General  Partner has been  granted the power in Section  12.11B
                 hereof to amend the allocation provisions of this Agreement, on
                 advice of the Accountants or the  Partnership's  legal counsel,
                 to the minimum extent  necessary to conform to Sections  704(b)
                 and 706 of the Code the plan of allocations  and  distributions
                 of Profit  and  Loss,  Distributable  Cash and Net  Disposition
                 Proceeds provided in this Agreement.
                      H.  Notwithstanding  any other provision of this Agreement
                 the General  Partner may,  after giving ninety (90) days' prior
                 Notification  to the Investors,  (i) adopt any other method for
                 determining,  in the event of transfers of Units, the Investors
                 entitled  to  distributions   of  Distributable   Cash  or  Net
                 Disposition  Proceeds that the General Partner,  subject to the
                 review  and  approval  of  the  Account  ants,   determines  is
                 reasonable,   and  (ii)  allocate  Profit  or  Loss  among  the
                 Investors  during the taxable year in any other manner that the
                 General  Partner,  determines  satisfies  the  requirements  of
                 Section 706 of the Code, but only to the extent such allocation
                 of Profit and Loss incorporates the minimum

                                                                   A-16

<PAGE>

                  changes  required to comply with such section and is supported
                  by an opinion of counsel to the Partnership.
                       I. Allocations and  distributions to Investors as a class
                  shall be made to each Investor  entitled to such allocation or
                  distribution based upon the ratio of the number of Units owned
                  by each such  Investor  to the  number  of Units  owned by all
                  Investors entitled to such allocation or distribution.
                       J. If a  deduction  for any fee paid in  accordance  with
                  this  Agreement is denied by the Internal  Revenue  Service on
                  the basis that such fee was a distribution to a Partner by the
                  Partnership,  the  Partner  who  received  such  fee  shall be
                  specially  allocated  an amount of gross  income  equal to the
                  amount of the disallowed deduction.
                       K. For purposes of  determining  the relative  amounts of
                  Distributable   Cash  and  Net  Disposition   Proceeds  to  be
                  distributed  to the Investors and Partners  under Sections 4.2
                  and  4.3  and  the  amounts  to be  reinvested  in  Additional
                  Equipment under Section 5.2B, all  distributions  to Investors
                  during  any  fiscal  year  shall be  deemed  made  first  from
                  Distributable Cash and then from Net Disposition Proceeds. Any
                  Distributable Cash of Net Disposition Proceeds remaining after
                  such  distributions  shall be deemed  reinvested in Additional
                  Equipment.
                       L. Syndication expenses of the Partnership (as defined in
                  Treasury  Regulations  Section 1.709- 2(b)) shall be specially
                  allocated  among the  Investors (i) in an amount equal to that
                  actually  charged  with respect to each  Investor's  Units and
                  (ii)  with  respect  to  syndication  expenses  that  are  not
                  specifically  charged with respect to Units,  in proportion to
                  the respective number of Units owned each Investor.
                       M. Capital gains and losses  realized by the  Partnership
                  in any fiscal year shall be allocated  among the Investors and
                  Partners  in the  same  proportion  that  Profit  or  Loss  is
                  allocated to such Persons under  Sections  4.1A,  4.1B and the
                  other  provisions  of this  Section  4.5.  Allocations  of tax
                  credits,  tax credit recapture,  and any items related thereto
                  shall be allocated to the Investors and Partners  according to
                  their  interests  in such items as  determined  by the General
                  Partner  taking into  account the  principles  of Treas.  Reg.
                  ss.1.704-1(b)(4)(ii).


                                    ARTICLE V
                RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER

     Section 5.1 Management and Control of the Partnership; Tax Matters Partner
                       A. Subject to the  Majority  Vote of the  Investors  when
                  required by this Agreement, the General Partner shall have the
                  exclusive  right to manage and  control  the  business  of the
                  Partnership.
                       B. No Limited  Partner or  Investor  (except  one who may
                  also be a General  Partner,  and then only in his  capacity as
                  General  Partner)  shall have the right to  participate in the
                  control  of the  business  of the  Partnership,  or  have  any
                  authority or right to act for or bind the Partnership.
                       C. The General  Partner is hereby  designated to serve as
                  the  Partnership's  Tax Matters  Partner and shall have all of
                  the powers and  responsibilities  of such position as provided
                  in Sections  6221 et seq.  of the Code.  All third party costs
                  and expenses incurred by the General Partner in performing its
                  duties  as  Tax  Matters   Partner   shall  be  borne  by  the
                  Partnership, as shall all expenses incurred by the Partnership
                  and/or  the Tax  Matters  Partner in  connection  with any tax
                  audit or tax-related  administrative  or judicial  proceeding.
                  Each Partner and Investor shall be  responsible  for all costs
                  incurred by such  Partner or Investor  with respect to any tax
                  audit or tax-related  administrative or judicial proceeding in
                  connection  with such  Partner's or Investor's tax returns and
                  all  costs  incurred  by any  such  Partner  or  Investor  who
                  participates in any tax audit or tax-related administrative or
                  judicial  proceeding  of or  against  the  Partnership  or any
                  Partner.  Each  Partner  and  Investor  hereby  (i)  expressly
                  authorizes   the  Tax  Matters   Partner  to  enter  into  any
                  settlement  with the Internal  Revenue Service with respect to
                  any tax matter,  tax item, tax issue,  tax audit,  or judicial
                  proceeding,  which settlement shall be binding on all Partners
                  and  Investors;  (ii) waives the right to  participate  in any
                  administrative  or  judicial   proceeding  in  which  the  tax
                  treatment of any Partnership item is to be

                                                                    A-17

<PAGE>

                  determined; and (iii) agrees to execute such consents, waivers
                  or other  documents as the Tax Matters  Partner may  determine
                  are  necessary to  accomplish  the  provisions of this Section
                  5.1C.  The Tax Matters  Partner shall have no liability to any
                  Partner  or  Investor  or  the   Partnership,   and  shall  be
                  indemnified by the  Partnership to the full extent provided by
                  law, for any act or omission performed or omitted by it within
                  the scope of the authority  conferred on it by this Agreement,
                  except for acts of negligence or for damages  arising from any
                  misrepresentation  or breach of any other  agreement  with the
                  Partnership.  The  liability  and  indemnification  of the Tax
                  Matters  Partner  shall be determined in the same manner as is
                  provided in Sections 5.9 and 5.10 hereof.

                  Section 5.2 Authority of the General Partner
                      A.  Except  to  the  extent  otherwise   provided  herein,
                  including, without limitation, Sections 5.3A, 5.4 and 5.5, the
                  General  Partner for, and in the name of and on behalf of, the
                  Partnership is hereby authorized and empowered:
                           (i) to enter into any kind of activity and to perform
                      and carry out  contracts of any kind  necessary  to, or in
                      connection  with, or incidental to the  accomplishment  of
                      the  purposes  of  the   Partnership,   so  long  as  said
                      activities  and  contracts  may be lawfully  carried on or
                      performed by a limited  partnership  under applicable laws
                      and regulations;
                           (ii) to engage  Persons,  including  the  Sponsors as
                      provided  in Article  IX, to provide  services or goods to
                      the  Partnership,  upon such terms as the General  Partner
                      deems fair and  reasonable and in the best interest of the
                      Partnership,  provided,  however,  that, as to services or
                      goods provided by a Sponsor (except for those services for
                      which compensation is specifically  authorized in Sections
                      9.1 and 9.2 of this  Agreement),  (a) the compensation for
                      such services or goods must be comparable and  competitive
                      with the price that  would be  charged  by  non-affiliated
                      persons or entities rendering similar types and quality of
                      services in the same or comparable  geographic  locations;
                      (b) the  compensation  and other  terms of such  contracts
                      shall be fully  disclosed to the  Investors in the reports
                      of  the  Partnership;  (c)  the  Sponsor  must  have  been
                      previously  engaged  in the  business  of  providing  such
                      services or goods,  independent of the  Partnership and as
                      an ongoing business;  and (d) all such transactions  shall
                      be  embodied  in a written  contract  that  describes  the
                      services or goods to be provided and the  compensation  to
                      be  paid,  which  contract  may  only be  modified  by the
                      Majority Vote of the  Investors,  and which contract shall
                      permit  termination  without  penalty  on sixty  (60) days
                      notice;
                           (iii) to operate the business of the  Partnership  in
                      accordance with the Partnership's  objectives and policies
                      set forth in the Prospectus and to acquire,  hold,  lease,
                      sell,  trade,  exchange or otherwise dispose of all or any
                      portion of the Partnership's Equipment, the leases related
                      thereto and other Partnership property,  including but not
                      limited to Warrants and Warrant Stock;
                           (iv) to maintain  and operate the  Equipment so as to
                      comply  with  the  provisions  of  any  lease  of,  or any
                      indebtedness secured by, the Equipment;
                           (v) to cause the  Partnership  to reinvest all or any
                      portion of the  Partnership's  Distributable  Cash and Net
                      Disposition Proceeds in Additional  Equipment,  subject to
                      the conditions of Section 5.2B;
                           (vi) subject to the provisions of Section  5.4A(xvi),
                      to borrow  money from banks or others  (including,  to the
                      extent  permitted  by this  Agreement,  a  Sponsor  or any
                      Affiliates  thereof) for any  Partnership  purpose and, as
                      security  therefor,  to  encumber  the  Equipment  and the
                      leases related  thereto or other  Partnership  property or
                      place  title in the name of a nominee  for the  purpose of
                      obtaining such financing;
                           (vii)  to  repay  in  whole  or in  part,  refinance,
                      increase,  modify or extend any  obligation  affecting the
                      Partnership's  Equipment,  the leases  related  thereto or
                      other Partnership property;
                           (viii) to engage a sales agent  (including a Sponsor)
                      to sell any  Partnership  Equipment  or assets or portions
                      thereof upon such terms and  conditions as are deemed fair
                      and  reasonable  by the  General  Partner and to be in the
                      best interest of the Partnership, and to pay reasonable

                                                                   A-18

<PAGE>
                        compensation for such services;  provided, however, that
                        the total sales  commission  paid to all persons for the
                        Sale of any Partnership  Equipment or assets,  shall not
                        exceed the Competitive  Equipment  Sales  Commission for
                        like equipment and, in addition,  if a Sponsor  provides
                        substantial  services in such regard, to pay the Sponsor
                        up to the  lesser  of (a)  one-half  of the  Competitive
                        Equipment  Sales  Commission  or (b) 3% of the  contract
                        sales   price  for  the   Equipment   received   by  the
                        Partnership, provided, however, that the payment of such
                        sales commission to the Sponsor shall be subordinated to
                        distributions of Distributable  Cash and Net Disposition
                        Proceeds to the  Investors  and  Partners  until  Payout
                        occurs;
                             (ix) to recognize transferees of Units as Investors
                        and to admit  Substitute  Limited Partners in accordance
                        with the terms  described in the  Prospectus and Article
                        VII of this Agreement;
                             (x) to invest Working Capital Reserves and, pending
                        the investment of the Partnership's assets in Equipment,
                        to invest the Partnership's  assets  (excluding  Working
                        Capital  Reserves),  in  interest-bearing  accounts  and
                        short-term   investments,   including   obligations   of
                        federal, state and local governments and their agencies,
                        regulated  investment  companies,  commercial  paper and
                        certificates of deposit of federally-insured  commercial
                        banks,  savings banks or savings and loan  associations;
                        provided, however, that such investments are short-term,
                        highly-liquid   and   provide   appropriate   safety  of
                        principal;
                             (xi) to  purchase  casualty,  liability  and  other
                        insurance to protect the Partnership's Equipment and its
                        business  and to cause  the  Partnership  to enter  into
                        insurance  or   reinsurance   arrangements   with  other
                        Persons, including an Affiliate of a Sponsor, to provide
                        such insurance; provided, however, that the premiums for
                        any insurance obtained through an Affiliate of a Sponsor
                        or pursuant to an insurance or  reinsurance  arrangement
                        with an  Affiliate  of a Sponsor  shall not  exceed  the
                        lowest quote  obtained from two  unaffiliated  insurance
                        carriers;
                             (xii)  to  exercise  any  and all  Warrants  and to
                        convert or  exchange  any  convertible  or  exchangeable
                        Warrants or Warrant Stock;
                             (xiii) to  exercise  any and all  rights to vote or
                        give  any  consent  or  approval  with  respect  to  any
                        Warrants  or  Warrant  or  Stock,   including,   without
                        limitation,  any vote,  consent or approval with respect
                        to the election of directors, any merger, consolidation,
                        reorganization,   recapitalization,   sale  of   assets,
                        liquidation or dissolution of any issuer of any Warrants
                        or  Warrant  Stock  or  the  amendment,   alteration  or
                        modification of the terms thereof;
                             (xiv)  to  demand  or   request   registration   or
                        qualification  for sale of  Warrants  or  Warrant  Stock
                        under any applicable  Federal or state  securities  laws
                        and  to  execute  in  the  name  and  on  behalf  of the
                        Partnership any registration or qualification  statement
                        or application and any underwriting or similar agreement
                        with respect thereto;
                             (xv) to purchase and cancel or otherwise  retire or
                        dispose  of the  Partnership  Interests  or Units of any
                        Partner or Investor  according to the provisions of this
                        Agreement;
                             (xvi)  to  execute  and   deliver   all   documents
                        necessary  or  appropriate  (a) for the  sale of  Units,
                        including   the   Prospectus   and  filings   under  the
                        Securities  Act of 1933 and any other  federal and state
                        laws relating to the sale of securities  and (b) to file
                        state and local tax returns at the Partnership  level on
                        behalf of the Investors and Partners;
                             (xvii)  to  require  Investors  to  become  Limited
                        Partners (in which case the General  Partner  shall have
                        the power to amend this  Agreement  without the Majority
                        Vote of the  Investors)  and to take such  other  action
                        with  respect to the manner in which  Units are being or
                        may be  transferred  or  traded as may be  necessary  or
                        appropriate   to   preserve   the  tax   status  of  the
                        Partnership  as a  partnership  for  federal  income tax
                        purposes  and  the tax  treatment  of the  Investors  as
                        Partners  (but such  action  shall be taken  only to the
                        minimum  extent  required  by an opinion of Counsel  and
                        only with the Majority  Vote of Investors if the changes
                        would adversely affect the Investors);
                             (xviii) to take such steps (including  amendment of
                        this  Agreement)  as the General  Partner  determines is
                        advisable  or  necessary  and  will  not  result  in any
                        material  adverse  effect on the economic  position of a
                        majority in interest of the  Investors  with  respect to
                        the Partnership in

                                                                      A-19
<PAGE>

                      order to preserve the tax status of the  Partnership  as a
                       partnership  for federal  income tax purposes and the tax
                       treatment  of  the  Investors  as  Partners,   including,
                       without  limitation,   removing  the  Units  from  public
                       trading markets and imposing restrictions on transfers of
                       Units  or  Interests   (provided  such   restrictions  on
                       transfers  do not  cause the  Partnership's  assets to be
                       deemed  "plan  assets"  within the meaning of ERISA) (but
                       such  action  shall be taken only to the  minimum  extent
                       required  by an  opinion  of  Counsel  and only  with the
                       Majority Vote of Investors if the changes would adversely
                       affect the Investors);
                           (xix)  to cause  the  Partnership  to enter  into the
                       Management Agreement with the Manager upon such terms and
                       conditions  as are  deemed  fair  and  reasonable  by the
                       General  Partner  and to be in the best  interest  of the
                       Partnership,  and to pay reasonable compensation for such
                       services;  provided,  however,  that if the  Manager is a
                       Sponsor,  (a) fees for  equipment  management  shall  not
                       exceed  five  percent  (5%)  of the  Partnership's  gross
                       rentals  (other  than  rentals  consisting  of amounts in
                       respect  of taxes and other  costs paid or payable by the
                       lessor for which the lessee is obligated to reimburse the
                       lessor under such lease) under Operating  Leases covering
                       such Equipment, and two percent (2%) of the Partnership's
                       gross rentals  (other than rentals  consisting of amounts
                       in  respect  of taxes and other  costs paid or payable by
                       the lessor for which the lessee is obligated to reimburse
                       the lessor  under such lease)  under Full  Payout  Leases
                       (which  contain  Net  Lease  Provisions)   covering  such
                       Equipment,  in each case to the  extent  received  by the
                       Partnership  during the  immediately  preceding  calendar
                       month  and (b)  fees  for  re-leasing  services  shall be
                       limited to two percent  (2%) of the  Partnership's  gross
                       rentals  (other  than  rentals  consisting  of amounts in
                       respect  of taxes and other  costs paid or payable by the
                       lessor for which the lessee is obligated to reimburse the
                       lessor under the lease) from  re-leased  Equipment to the
                       extent received by the Partnership during the immediately
                       preceding  calendar month,  and (I) shall be payable only
                       to the extent that the amount of the  re-leasing fee does
                       not exceed the competitive  rate for comparable  services
                       for similar  equipment and (II) the  re-leasing fee shall
                       not be paid if the  Equipment  is re-leased to a previous
                       lessee or an Affiliate of such lessee, or the Manager has
                       not   rendered   substantial   re-leasing   services   in
                       connection with such re-lease;
                           (xx) to pay or reimburse any reasonable out-of-pocket
                       expenses incurred by any Affiliate of the General Partner
                       in connection  with any report  pursuant to Section 10.3,
                       provided  that no fee shall be paid to any  Affiliate  in
                       connection with any such report;
                           (xxi) upon the Majority  Vote of the Investors to the
                       matters set forth in Sections 5.4A(xvii),  5.4A(xviii) or
                       5.4A(xix),   to  take  any   actions   which   they  deem
                       appropriate to the extent  authorized by the Investors to
                       facilitate  the  purposes  described  in  such  sections,
                       including,   without   limitation,   amendments  to  this
                       Agreement  to change the dates upon  which  transfers  of
                       Units will be recognized,  and the General  Partner shall
                       give prior  written  notice to the  Investors of any such
                       amendment; and
                           (xxii)  to take  such  steps as the  General  Partner
                       determines are advisable or necessary and will not result
                       in any material  adverse effect on the economic  position
                       of a majority in interest of the  Investors  with respect
                       to the Partnership to restructure the Partnership and its
                       activities to obtain a prohibited  transaction  exemption
                       from  the  Department  of  Labor  or to  comply  with any
                       exemption in final plan asset regulations  adopted by the
                       Department  of  Labor,  including,  but not  limited  to,
                       establishing a fixed  percentage of Units permitted to be
                       held by qualified plans or other tax-exempt  investors or
                       discontinuing  sales to such entities after a given date,
                       in the event that  either  the assets of the  Partnership
                       constitute  "plan  assets"  for  purposes of ERISA or the
                       transactions contemplated hereunder constitute prohibited
                       transactions  under  ERISA or the  Code.  B. The  General
                       Partner may  reinvest in  Additional  Equipment,  as more
                       fully described in the
                  Prospectus,   all  Distributable   Cash  and  Net  Disposition
                  Proceeds  in excess of the amount of such funds  projected  by
                  the  General  Partner to be  necessary  to  distribute  to the
                  Investors  an amount equal to the federal and state income tax
                  liability  of  the  Investors   resulting  from  any  Sale  of
                  Equipment as estimated  by the General  Partner,  after taking
                  into  account the Profit or Loss  otherwise  derived  from the
                  Partnership during the taxable year in which the Sale occurs.

                                                                    A-20

<PAGE>

                         C.  Any  person  dealing  with the  Partnership  or the
                    General  Partner may rely upon a  certificate  signed by the
                    General Partner, as to:
                (i) the identity of the General Partner or any Limited Partner;
                              (ii) the existence or non-existence of any fact or
                         facts that constitute  conditions  precedent to acts by
                         the General  Partner or in any other manner are germane
                         to the affairs of the Partnership;
               (iii) the Persons who are authorized to execute and deliver any 
               instrument or document of the Partnership; or
                              (iv) any act or failure to act by the  Partnership
                         or as to any  other  matter  whatsoever  involving  the
                         Partnership or any Partner.

                    Section 5.3 Authority of Investors
                         A.  By  the  Majority  Vote  of  the   Investors,   the
                    Investors, without the consent of the General Partner, may:
                              (i)  amend  this  Agreement;  provided  that  such
                         amendment  (a)  shall  not  in  any  manner  allow  the
                         Investors   to  take  part  in  the   control   of  the
                         Partnership's  business in a manner which would subject
                         them to liability as general  partners under the Act or
                         any other applicable law, and
                        (b)  shall  not,  without  the  consent  of the  General
                         Partner,   modify  the  compensation,   allocations  or
                         distributions  to which the  General  Partner or any of
                         its  Affiliates  are  entitled  or affect  the  duties,
                         rights  or  powers  of  the  General   Partner  or  the
                         indemnification  to which the  General  Partner and its
                         Affiliates and their officers,  directors and employees
                         are entitled;
                              (ii) dissolve or terminate the  Partnership  prior
                              to the  expiration  of its term;  (iii) remove the
                              General  Partner  and,  pursuant  to Section  6.2,
                              elect a new General Partner,
                         provided  that,  any  portion of any fee payable to the
                         General  Partner  under  this  Agreement  which is then
                         accrued and due, but not yet paid, shall be paid to the
                         General  Partner in cash  within 30 days of the date of
                         its removal;
                              (iv) approve or  disapprove  of the Sale of all or
                              substantially all of the Equipment; or (v) approve
                              or  disapprove   of  a  material   change  in  the
                              Partnership's investment policies
                         objectives as described in the Prospectus.
                         B. Any action  taken  pursuant  to Section  5.3A hereof
                    shall be void ab initio,  if prior to or within fifteen (15)
                    days after such vote either (i) the  Partnership  shall have
                    received an opinion of counsel, which counsel is approved by
                    the Majority Vote of the Investors, that such action may not
                    be effected without subjecting the Investors to liability as
                    general  partners  under  the Act or under  the laws of such
                    other  jurisdiction in which the Partnership owns properties
                    or  is  doing  business,   or  (ii)  a  court  of  competent
                    jurisdiction  shall  have  entered a final  judgment  to the
                    foregoing  effect.  For purposes of this paragraph,  counsel
                    will  be  deemed  approved  by  the  Majority  Vote  of  the
                    Investors   if   proposed   by  the   General   Partner  and
                    affirmatively  approved in writing  within  forty-five  (45)
                    days;  provided,  that if the  holders of 10% or more of the
                    outstanding  Units proposed  counsel for this purpose,  such
                    proposed  counsel,  and not counsel  proposed by the General
                    Partner   shall  be  submitted  for  such  approval  by  the
                    Investors.  The  existence  of such an opinion of counsel or
                    court  judgment  with respect to a  particular  contemplated
                    Partnership  action  shall  not  affect  the  rights  of the
                    Investors to vote on other future  actions or the  existence
                    of such rights.  If the opinion of counsel or court judgment
                    referred  to above  has not  been  obtained  the vote  shall
                    proceed  as  scheduled  and  it  shall  not  be  delayed  or
                    postponed  for any reason  except as otherwise  permitted by
                    the Act.

                    Section 5.4 Restrictions on Authority
                         A. The General Partner and its Affiliates shall have no
                    authority to perform any act in violation of any  applicable
                    laws  or  regulations  thereunder,  nor  shall  the  General
                    Partner as such have any authority:

                                                                       A-21


<PAGE>

                             (i) to purchase or acquire  property  other than as
                             described  in  the   Prospectus;   (ii)  except  as
                             permitted in this Agreement, to do any act required
                             to be approved by the
                        investors under the Act;
                             (iii)   except  for   reinvestments   in  Equipment
                        pursuant to Section 5.2B and  investments  in short-term
                        securities  pursuant to Section  10.2B,  to reinvest any
                        Distributable Cash or Net Disposition Proceeds;
                             (iv) except with respect to the Interim Investments
                        and  Warrants  and  Warrant  Stock,   to  invest  in  or
                        underwrite  securities  of any  type  or  kind  for  any
                        purpose, or make investments other than in Equipment and
                        property related and incidental thereto;
                             (v) to possess  the  Partnership's  Equipment,  the
                        leases related thereto or other Partnership  property or
                        assign  the  rights  of  the   Partnership  in  specific
                        Equipment,  the leases related thereto or other property
                        for other than a Partnership purpose;
                              (vi)  to  sell  all  or  substantially  all of the
                         assets of the  Partnership  without the prior  Majority
                         Vote of the  Investors  as provided in this  Agreement,
                         except in the ordinary course of business of
                          the Partnership or in the orderly winding up of the
                          business of the Partnership in contemplation
                              of its liquidation;
                    (vii) do any act in contravention of this Agreement;
                             (viii) to do any act that would make it impossible
                          to carry on the ordinary business of the Partnership;
                             (ix) to confess a judgment  against the Partnership
                        in connection with any pending or threatened litigation;
                      (x) to offer Interests or Units in exchange for Equipment;
                             (xi)  to  possess  any  property,   or  assign  the
                        Partnership's   rights  in  same,  for  other  than  the
                        exclusive use of the Partnership;
                             (xii)  to  operate  in  such  a  manner  as  to  be
                        classified as an "investment  company" under the meaning
                        of the Investment Company Act of 1940;
                             (xiii)  except as  otherwise  provided  in  Section
                        5.5C,   to   purchase  or  lease   Equipment   from  the
                        Partnership   or  sell  or   lease   Equipment   to  the
                        Partnership  or cause one of its  Affiliates to purchase
                        or lease Equipment from the Partnership or sell or lease
                        Equipment to the Partnership;
                             (xiv)  to  admit a  Person  as a  General  Partner,
                             except as provided in this Agreement; (xv) to admit
                             a Person as an Investor or Limited Partner,  except
                             as provided in this
                        Agreement;
                             (xvi)  to   create  or  suffer  to  exist  a  total
                        indebtedness  incurred by the  Partnership  in excess of
                        50%  of  the  cost  of  all  of  the  Equipment  of  the
                        Partnership; provided, however, that the General Partner
                        shall  have the  authority  to incur  indebtedness  with
                        respect to specific  items of Equipment up to but not in
                        excess  of 75% of the  purchase  price of such  items of
                        Equipment;
                             (xvii)  without the Majority Vote of the Investors,
                        to cause or facilitate  the merger or  consolidation  of
                        the Partnership with other partnerships,  including, but
                        not limited to, mergers or  consolidations  in which the
                        Investors  receive in exchange for their Units interests
                        in the surviving  entity,  with the objective of listing
                        the interests of the  surviving  entity on a national or
                        regional securities exchange or NASDAQ;
                             (xviii)  subject  to  Section  7.2A,   without  the
                        Majority Vote of the  Investors,  to list the Units on a
                        securities  exchange or enable the Units to be traded in
                        the over-the-counter market, or otherwise facilitate the
                        establishment  of a market for the trading of Units,  or
                        (except as set forth in Section 5.2A(xviii)) to withdraw
                        the Units from such listing;

                                                                      A-22
<PAGE>

                            (xix) without the Majority Vote of the Investors, to
                       materially change the Partnership's  investment  policies
                       and objectives as described in the Prospectus;
                            (xx) to  provide  or permit a Sponsor  or any of its
                       Affiliates   to  provide   permanent   financing  to  the
                       Partnership,  which for purposes of this Agreement  means
                       any  financing  with  a  term  in  excess  of 12  months;
                       provided,  however,  that  this  provision  shall  not be
                       construed  to  limit  the  ability  of a  Sponsor  or  an
                       Affiliate  thereof  to  provide  other  financing  to the
                       Partnership  if the interest or other  financing  charges
                       and fees do not exceed the amounts which would be charged
                       by unrelated  lending  institutions  for comparable loans
                       for the same purposes;
                            (xxi) to make  distributions  to  Investors  in kind
                       except upon dissolution and liquidation, and then only to
                       a liquidating  trust which has been  established  for the
                       purpose  of  the   liquidation   of  the  assets  of  the
                       Partnership; or
                            (xxii) to deposit the funds of the  Partnership in a
                       financial institution affiliated with the General Partner
                       or to deposit funds of the Partnership in a "compensating
                       balance"  or similar  arrangement  for the benefit of any
                       entity other than the Partnership. B. The General Partner
                       shall  not  take  any  action  which,   for  federal  tax
                       purposes, shall cause the Partnership to terminate or to
                       be treated as an association taxable as a corporation.
                   C. Investments in limited partnership interests of another 
                    limited partnership shall be prohib-
                   ited;  however,  nothing herein shall preclude the investment
                   in general  partnerships  or  ventures  which own and operate
                   specific  equipment  provided  the  Partnership   acquires  a
                   controlling  interest  in  such  other  ventures  or  general
                   partnerships and the  non-controlling  interest is owned by a
                   non-affiliate.  In such  event,  duplicate  fees shall not be
                   permitted.  In no event will the Partnership invest more than
                   10% of the Gross  Proceeds of the Offering in joint  ventures
                   with either affiliated or unaffiliated third parties.

                   Section 5.5 Authority of Partners and Affiliated Persons to
                    Deal with Partnership
                       A. The General Partner may, for, in the name of, and on
                     behalf of, the Partnership, acquire
                   property  from,  borrow  money from,  enter into  agreements,
                   contracts or the like (in addition to those set forth herein)
                   with,  or reimburse  for  reasonable  out-of-pocket  expenses
                   incurred in connection  with the  preparation  of reports by,
                   any Sponsor in an independent capacity, as distinguished from
                   such capacity (if any) as a Sponsor,  as if such Sponsor were
                   an independent contractor;  provided,  however, that any such
                   agreement  shall be  subject to the  conditions  set forth in
                   Section 5.2A(ii) herein.
                       B. Neither the General Partner nor any Affiliates thereof
                     shall have the authority:
                   (i) to cause the Partnership to invest in any program, 
                         partnership or other venture with a
                       Sponsor  or  any  Affiliates  or  any  other  partnership
                       previously,  currently  or  subsequently  sponsored  by a
                       Sponsor or any Affiliates thereof, unless,
                        (a) the Partnership and such other partnership have 
                         substantially identical investment objectives;
                                 (b) there are no duplicate fees;
                                 (c) the Sponsor (or Affiliate) compensation is
                               substantially identical in the Partnership
                            and such other partnership;
                                 (d)  the  Partnership  has  a  right  of  first
                            refusal to buy if such other partnership  desires to
                            sell equipment held in the joint venture;
                                 (e) the investment of the  Partnership and such
                            other   partnership  in  the  joint  venture  is  on
                            substantially the same terms and conditions;
                                 (f) the joint  venture  is done  either for the
                            purpose of effecting appropriate diversification for
                            the  Partnership or for the purpose of relieving the
                            General  Partner or an  Affiliate  from a commitment
                            entered  into for the  purpose of  facilitating  the
                            purchase of Equipment by the Partnership; and

                                                                     A-23
<PAGE>

                                (g) the Prospectus  discloses the potential risk
                            of impasse on joint venture  decisions since neither
                            partnership  controls  and the  potential  risk that
                            while one partnership may buy the equipment from the
                            other joint  venturer in the event of a sale, it may
                            not have the resources to do so;
                                (h) the investment,  when considered in addition
                            to any other  joint  venture  investments  made with
                            either  affiliated or  unaffiliated  third  parties,
                            does  not  cause  the   aggregate   amount  of  such
                            investments  to exceed 10% of the Gross  Proceeds of
                            the Offering. (ii) to receive any compensation,  fee
                            or expense not otherwise permitted to be paid to it
                       under the terms of this Agreement or the Prospectus;
                            (iii) to  commingle  the  Partnership's  funds  with
                       those  of any  other  Person,  except  that  funds of the
                       Partnership may be temporarily  retained by agents of the
                       Partnership  pursuant to contracts  for the  rendering of
                       services  to the  Partnership  by such  agents or held in
                       accounts  established  and  maintained for the purpose of
                       making  the  Interim   Investments  and/or   computerized
                       disbursements;
                            (iv) to cause the Partnership to lend money or other
                       assets to a Sponsor or any Affiliates thereof;
                            (v) to grant to a Sponsor or any Affiliates thereof
                         an exclusive listing for the Sale of any
                       assets of the Partnership;
                            (vi)  to  receive  any  rebate  or  give-up,  or  to
                       participate in any reciprocal business arrangement with a
                       Sponsor or any Affiliates thereof; or
                            (vii) to cause the  Partnership  to pay  directly or
                       indirectly, a commission or fee (except as provided under
                       Sections   5.2A(viii)   and  9.2A(v))  to  a  Sponsor  in
                       connection  with the reinvest-  ment or  distribution  of
                       Distributable  Cash or Net Disposition  Proceeds.  C. The
                       Partnership  may not  purchase  Equipment  in  which  the
                       General Partner, the Manager or
                   any of their Affiliates  either has or in the past has had an
                   interest,  except for Equipment  acquired on an interim basis
                   (generally  not in excess of six (6)  months  but in no event
                   more  than  one (1)  year)  by a  Sponsor  or any  Affiliates
                   thereof for the purpose of  facilitating  the  acquisition by
                   the  Partnership of the Equipment or obtaining  financing for
                   the  Partnership.   The  Partnership  may  acquire  any  such
                   Equipment  only  if  (i)  such  acquisition  is in  the  best
                   interests  of  the   Partnership,   (ii)  such  Equipment  is
                   purchased by the  Partnership for a price no greater than the
                   cost of such Equipment to the Sponsor or Affiliate,  which is
                   interpreted  to  be  the  reasonable   necessary  and  actual
                   expenses  incurred  by the  Sponsor or  Affiliate  in holding
                   title on a temporary  or interim  basis,  (iii) the  interest
                   terms of the loans secured by such Equipment at the time such
                   Equipment  is  acquired  by  the   Partnership  are  no  less
                   favorable than the interest terms of any loans secured by the
                   Equipment  at the  time the  Equipment  was  acquired  by the
                   Sponsor or Affiliate, and (iv) no other benefit arises out of
                   such  transaction  to the  Sponsor  or  Affiliate  apart from
                   compensation  otherwise  permitted  by  this  Agreement.  The
                   Partnership  shall neither lease  Equipment from nor lease or
                   sell Equipment to a Sponsor or any Affiliates thereof.  There
                   is no assurance that the Partnership will ultimately purchase
                   the Specified Equipment.

                   Section 5.6 Duties and Obligations of the General Partner
                       A. The General  Partner shall take all action that may be
                   necessary  or  appropriate  (i) for the  continuation  of the
                   Partnership's  existence as a limited  partnership  under the
                   Act (and under the laws of each other  jurisdiction  in which
                   such existence is necessary to protect the limited  liability
                   of the  Investors  and the Limited  Partners or to enable the
                   Partnership  to conduct the business in which it is engaged),
                   and (ii) for the acquisition,  maintenance,  preservation and
                   operation of the Equipment in accordance with the Prospectus,
                   the  provisions  of this  Agreement and  applicable  laws and
                   regulations.   The  General   Partner  shall  devote  to  the
                   Partnership  such  time as may be  necessary  for the  proper
                   performance of its duties hereunder,  but neither the General
                   Partner nor any of its Affiliates shall be expected to devote
                   their  full  time  to the  performance  of such  duties.  The
                   General Partner or

                                                                     A-24
<PAGE>
                    its Affiliates  may act as general or managing  partners for
                    other  partnerships  engaged in  businesses  similar to that
                    conducted by the Partnership. Nothing herein shall limit the
                    General  Partner or its Affiliates from engaging in any such
                    business  activities,  or any other  activities which may be
                    competitive with the Partnership.
                         B. The General  Partner  shall at all times conduct its
                    affairs,  the affairs of all its  Affiliates and the affairs
                    of the  Partnership in such a manner that no Limited Partner
                    or Investor  (except a Limited  Partner or  Investor  who is
                    also a General Partner) will have any personal liability for
                    Partnership  debts except as otherwise  set forth herein and
                    in the Prospectus.
                         C. The  General  Partner  shall  prepare or cause to be
                    prepared,  and shall file, on or before the due date (or any
                    extension thereof),  any federal, state or local tax returns
                    required to be filed by the Partnership. The General Partner
                    shall cause the  Partnership to pay any taxes payable by the
                    Partnership  to the extent same are not payable by any other
                    party.
                         D. The General  Partner shall be under a fiduciary duty
                    to  conduct  the  affairs  of the  Partnership  in the  best
                    interests of the Partnership,  including the safekeeping and
                    use of all Partnership  funds and assets,  whether or not in
                    the General  Partner's  possession  or control,  and the use
                    thereof  for the  benefit of the  Partnership.  The  General
                    Partner  shall  not enter  into any  contract  or  agreement
                    relieving  them of their  common  law  fiduciary  duty.  The
                    General  Partner  shall at all times  act in good  faith and
                    exercise  due  diligence in all  activities  relating to the
                    conduct of the  business  of the  Partnership.  The  General
                    Partner  shall treat the  Investors as a group and shall not
                    favor the interests of any particular Investor.
                         E.   Neither  the  General   Partner  nor  any  of  its
                    Affiliates  shall be  obligated  to present  any  particular
                    investment  opportunity  to the  Partnership,  even  if such
                    investment opportunity is of a character which, if presented
                    to the Partnership,  could be made by the  Partnership,  and
                    each  of them  shall  have  the  right  to make  for its own
                    account  (individually  or in a fiduciary or  representative
                    capacity),  or to recommend to others,  any such  particular
                    investment opportunity.
                         F. The General  Partner shall cause the  Partnership to
                    commit a percentage of the Gross Proceeds of the Offering to
                    Investment  in  Equipment  which  is at  least  equal to the
                    greater of: (i) 80% of the Gross  Proceeds  of the  Offering
                    reduced by 0.0625% for each 1% of  indebtedness  encumbering
                    Equipment;  or  (ii)  75%  of  the  Gross  Proceeds  of  the
                    Offering.  Any proceeds of the Offering  which have not been
                    invested or committed for investment in Equipment within two
                    years  of the  effective  date  of the  Prospectus  will  be
                    returned   to   Investors   but  will  be  net  of   Selling
                    Commissions,  Due Diligence Expense  Reimbursement  Fees and
                    Offering and Organization  Expense Fees attributable thereto
                    (subject  at  all  times  to  the  Investment  in  Equipment
                    requirement  set forth in the preceding  sentence).  For the
                    purposes of the preceding sentence,  funds will be deemed to
                    have been  committed  to  investment  to the extent  written
                    agreements  in  principle  or letters of  understanding  are
                    executed and such investments are subsequently consummated.
                         G. The General  Partner shall cause the  Partnership to
                    establish and maintain adequate Working Capital Reserves for
                    contingencies related to ownership of the Equipment and will
                    fund Working Capital Reserves from the Gross Proceeds of the
                    Offering in an amount  equal to 1% of the Gross  Proceeds of
                    the Offering.  Working Capital Reserves may be used whenever
                    deemed  appropriate by the General  Partner to meet the cash
                    obligations of the Partnership or to exercise  Warrants.  If
                    in any fiscal quarter, the General Partner determines in its
                    sole  discretion  that the Working  Capital  Reserves of the
                    Partnership are in excess of the amount deemed sufficient in
                    connection with the ownership of the Equipment and that such
                    Working Capital Reserves may be reduced,  the amount of such
                    reduction may be  distributed  to the Partners and Investors
                    as a portion of the Partnership's  Distributable Cash. If in
                    any fiscal quarter,  the General Partner determines that the
                    Working Capital Reserves are insufficient in connection with
                    the  Partnership's  operations and that such Working Capital
                    Reserves  shall be  increased,  the amount of such  increase
                    shall reduce Distributable Cash.
     H. Except for payment of the Selling  Commissions  and the allowance of the
Due Diligence Expense  Reimbursement Fee, the General Partner shall not directly
or indirectly pay or award any A-25

<PAGE>

                   commission 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.
                       I.  The  General  Partner  shall,   except  as  otherwise
                   provided in this Agreement or by the Act, have all the rights
                   and powers and shall be subject to all the  restrictions of a
                   partner in a partnership without limited partners,  including
                   the fiduciary  responsibility  for the safekeeping and use of
                   all funds and  assets of the  Partnership,  whether or not in
                   its immediate possession or control.

                   Section 5.7 Compensation of the General Partner
                       Except  as  expressly  provided  in  Articles  IV  and IX
                   herein, the General Partner shall receive no fees,  salaries,
                   profits,  distributions,  reimbursement or other compensation
                   for serving as General Partner.


                   Section 5.8 Other Businesses of Partners
                       The Partnership,  any Partner, Investor, the Manager, any
                   shareholder,  officer, director, partner or employee thereof,
                   may engage in or possess an interest in any other business or
                   venture of every  nature and  description  and shall not have
                   any rights or obligations, by virtue of this Agreement, in or
                   to any independent ventures of any nature or description,  or
                   the income or profits derived therefrom, in which any of them
                   may engage,  including,  without  limitation,  the ownership,
                   operation and management of other equipment.

                   Section 5.9  Liability of General  Partner and  Affiliates to
                       Limited Partners or Investors The General Partner and its
                       Affiliates  performing  certain services on behalf of the
                       Partnership
                   shall  not  be  liable,   responsible,   or  accountable,  in
                   liabilities,  damages or otherwise, to any Investor,  Limited
                   Partner or the Partnership for any loss, judgment, liability,
                   expense or amount paid in settlement of any claims  sustained
                   which arise out of any act or omission  performed  or omitted
                   by them within the scope of the  authority  conferred on them
                   by  this   Agreement,   provided  that  the  General  Partner
                   determines,  in good faith,  that such act or omission was in
                   the best  interests  of the  Partnership,  except for acts of
                   negligence  or  misconduct  or for damages  arising  from any
                   misrepresentation   or  breach  of  an  agreement   with  the
                   Partnership. The Partnership shall not incur the cost of that
                   portion of any liability  insurance which insures the General
                   Partner or its  Affiliates  performing  certain  services  on
                   behalf of the  Partnership  against any liability as to which
                   the General  Partner or its Affiliates may not be indemnified
                   under Section 5.10 herein.

                   Section 5.10 Indemnification
                       A. The  General  Partner  and its  Affiliates  performing
                   certain  services  on  behalf  of the  Partnership  shall  be
                   indemnified to the full extent  provided by law for any loss,
                   judgment,  liability, expense or amount paid in settlement of
                   any claims  sustained  by them which  arise out of any act or
                   omission  performed  or omitted by any or all of them  within
                   the  scope  of  the  authority  conferred  on  them  by  this
                   Agreement,  if the General Partner determine,  in good faith,
                   that such act or omission  was in the best  interests  of the
                   Partnership  and that such act or omission did not constitute
                   negligence  or  misconduct  or breach of any other  agreement
                   with the Partnership,  provided that any indemnity under this
                   Section  shall  be  provided  out of and  to  the  extent  of
                   Partnership  assets only, and no Investor or Limited  Partner
                   shall have any personal liability on Account thereof.
                       B. Notwithstanding Section 5.10A, the General Partner and
                   its Affiliates  performing  certain services on behalf of the
                   Partnership  and any Person acting as a  Broker-Dealer  shall
                   not be indemnified by the Partnership for any liability, loss
                   or damage  incurred by any or all of them in connection  with
                   (i) any claim or  settlement  arising  under federal or state
                   securities  laws  unless  (a)  there  has  been a  successful
                   adjudication  on the  merits  of each  count  involving  such
                   securities laws  violations as to the particular  indemnities
                   and the  court  approves  indemnification  of the  litigation
                   costs,  (b) such claims have been dismissed with prejudice on
                   the  merits by a court of  competent  jurisdiction  as to the
                   particular indemnities and the court approves indemnification
                   of  the  litigation  costs,  or  (c)  a  court  of  competent
                   jurisdiction  approves a  settlement  of the claims and funds
                   that indemnification of the

                                                                  A-26

<PAGE>

                   settlement  and  related  costs  should be made,  after being
                   advised as to the  current  position  of the  Securities  and
                   Exchange Commission,  the Massachusetts  Securities Division,
                   the California Commissioner of Corporations, the Pennsylvania
                   Securities  Commission,  the Tennessee Securities Commission,
                   the  Missouri  Securities  Division  (and  such  other  state
                   securities  administrators  as  shall  be  required  by  such
                   court),   regarding   indemnification   for   violations   of
                   securities  law;  or  (ii)  any  liability  imposed  by  law,
                   including liability for negligence or misconduct.


                                   ARTICLE VI
                 TRANSFERABILITY OF A GENERAL PARTNER'S INTEREST
 Section 6.1 Removal, Voluntary Retirement or Withdrawal of a General Partner; 
          Transfer of Interests
          A. A General Partner may be removed in the manner specified in 
               Section 5.3A herein.
          B. No General Partner may voluntarily withdraw or retire from its 
                    position as a General Partner
                   of the Partnership  unless another General Partner (including
                   any Additional or Successor General Partner admitted pursuant
                   to Section  6.2)  remains,  and unless  (i)  counsel  for the
                   Partnership is of the opinion that such voluntary  retirement
                   or  withdrawal  from  the  Partnership  will  not  cause  the
                   Partnership:  (a) to be  dissolved  under the Act;  (b) to be
                   classified other than as a partnership for federal income tax
                   purposes;   or  (c)  to  terminate  for  federal  income  tax
                   purposes;  and (ii) the  approval  of the  remaining  General
                   Partners,  if any, and the Majority  Vote of the Investors to
                   such voluntary retirement or withdrawal is obtained.
                        C. If a General Partner voluntarily retires or withdraws
                   from the  Partnership  in  violation  of this Section 6.1, it
                   shall  be and  remain  liable  to  the  Partnership  and  the
                   Partners  for  damages  resulting  from  its  breach  of this
                   Agreement,   and,   without   limitation  of  remedies,   the
                   Partnership  may offset  such  damages  against  the  amounts
                   otherwise distributable to such General Partner.
                        D. No  General  Partner  shall  have the  right to sell,
                   exchange,  or otherwise  dispose of all or any portion of-its
                   Interest unless the proposed assignee or transferee of all or
                   a portion of the Interest of such General Partner is admitted
                   as  a  Successor  or  Additional   General   Partner  to  the
                   Partnership  pursuant to the  provisions of Section 6.2 prior
                   to any such sale, exchange or other disposition.
                        E. The  voluntary  retirement or withdrawal of a General
                   Partner shall become  effective  only upon (i) receipt by the
                   Partnership of the opinions of counsel referred to in Section
                   6.1(B)(i);  (ii) receipt by the  Partnership  of the approval
                   and consent  referred to in Section  6.1B(ii);  and (iii) the
                   amendment of the  Partnership's  Certificate  to reflect such
                   withdrawal or retirement and its filing for recordation.

                   Section 6.2 Election and Admission of Successor or 
                         Additional General Partners
                        A.  A  General   Partner  may  at  any  time   designate
                   additional  persons to be  Successor  or  Additional  General
                   Partners,  provided  that the  conditions of Section 6.2B are
                   satisfied.
                        B. Except as otherwise  expressly  provided  herein,  no
                   Person shall be admitted as a Successor or Additional General
                   Partner  unless (i)  counsel  for the  Partnership  is of the
                   opinion that the  admission of such  Successor or  Additional
                   General   Partner  will  not  cause  the  Partnership  to  be
                   classified other than as a partnership for federal income tax
                   purposes or cause the  Partnership  to terminate  for federal
                   income tax purposes;  (ii) the consent of the then  remaining
                   General  Partner(s),  if any,  is  obtained;  and  (iii)  the
                   Majority  Vote of the  Investors to such  admission  has been
                   obtained.
                        C. The admission of such Successor or Additional General
                   Partner  shall  become  effective  upon  (i)  receipt  by the
                   Partnership  of the opinion  referred to in Section  6.2B(i);
                   (ii) receipt by the  Partnership of the consents  referred to
                   in Section  6.2B(ii) and (iii), if applicable;  and (iii) the
                   amendment of the  Certificate to reflect the admission of the
                   Successor or  Additional  General  Partner and its filing for
                   recordation.

                                                                     A-27

<PAGE>

                    Section 6.3 Events of Withdrawal of a General Partner
                        A. In addition to a  voluntary  withdrawal  of a General
                    Partner  pursuant to Section 6.lE, the General Partner shall
                    be deemed to withdraw (i) if the General Partner assigns all
                    of its  Interest  in the  Partnership,  (ii) if the  General
                    Partner is removed  pursuant to Section 5.3A;  and (iii) the
                    filing of a certificate of  dissolution,  or its equivalent,
                    for the General Partner or the revocation of its charter. To
                    the  maximum  extent  permitted  by the Act, no other act or
                    event  shall be deemed an event of  withdrawal  of a General
                    Partner or serve to  convert a General  Partner to a Limited
                    Partner.
                        B. In the event of the  withdrawal of a General  Partner
                    and if a Successor or  Additional  General  Partner has been
                    admitted to the  Partnership in accordance with Section 6.2,
                    the remaining General Partner or General Partners, including
                    such  Successor or Additional  General  Partner may elect to
                    continue  the  Partnership,  and if such  election  is made,
                    shall  promptly  give  Notification  of such event and shall
                    make and file  such  amendments  to the  Certificate  as are
                    required by the Act to reflect  the fact that the  withdrawn
                    General  Partner  has ceased to be a General  Partner of the
                    Partnership.
                        C. In the event of the  withdrawal of a General  Partner
                    and no  Successor  or  Additional  General  Partner has been
                    admitted to the Partnership, or such Successor or Additional
                    General Partner does not elect to continue the  Partnership,
                    the   withdrawn   General   Partner,   or  its   successors,
                    representatives  or assigns shall promptly give Notification
                    of such withdrawal to all remaining  Partners and Investors.
                    In such event,  the Partnership  shall be dissolved  unless,
                    within ninety (90) days after the  withdrawal of the General
                    Partner,  the  Investors,   by  the  Majority  Vote  of  the
                    Investors (or such higher percentage vote as may be required
                    by the Act),  agree in writing to continue  the  business of
                    the Partnership and to the appointment,  effective as of the
                    date of  withdrawal of the sole General  Partner,  of one or
                    more Additional General Partners.  If the Investors elect to
                    reconstitute   the   Partnership   and  agree  to  admit  an
                    Additional   General   Partner,   the  relationship  of  the
                    Investors  and  of the  substitute  General  Partner  in the
                    Partnership shall be governed by this Agreement.

                    Section 6.4 Liability of a Withdrawn General Partner
                        A.  Any   General   Partner  who   withdraws   from  the
                    Partnership shall be, and remain, liable for all obligations
                    and  liabilities  incurred by it as General Partner prior to
                    the time such withdrawal becomes effective.  In addition,  a
                    General  Partner who  voluntarily  withdraws in violation of
                    this Agreement  shall be subject to the liability  described
                    in Section 6.1C.
                        B.  Upon  the  withdrawal  of a  General  Partner,  such
                    General  Partner  shall  immediately  cease to be a  General
                    Partner,  and  such  General  Partner's  Interest  shall  be
                    acquired by the Partnership pursuant to Section 6.5.
                        C. The personal  representatives,  heirs,  successors or
                    assigns  of any  General  Partner  who  withdraws  from  the
                    Partnership shall be, and remain, liable for all obligations
                    and liabilities incurred by the General Partner prior to, or
                    in connection with, its withdrawal.

              Section 6.5 Valuation of Partnership Interest of General Partner
                        Upon  the   withdrawal   of  a  General   Partner,   the
                    Partnership  shall purchase the Partnership  Interest of the
                    withdrawn  General  Partner.  The  price  of  the  withdrawn
                    General  Partner's  Interest  shall be determined by two (2)
                    independent  appraisers,   one  selected  by  the  withdrawn
                    General  Partner and one selected by the  remaining  General
                    Partner, or if none is remaining,  by the Investors.  If the
                    two  appraisers  are  unable  to agree  on the  value of the
                    General  Partner's  Interest,  they shall jointly  appoint a
                    third  independent  appraiser whose  determination  shall be
                    final  and  binding.  The  Partnership  shall  then  pay the
                    withdrawn  General  Partner  the price of its  Interest as a
                    General  Partner  as  so  determined.  The  expense  of  the
                    appraisals shall be borne equally by the terminated  General
                    Partner  and  the   Partnership.   If  the   withdrawal   is
                    involuntary,   payment  shall  be  made  by  delivery  of  a
                    promissory  note bearing  interest  equal to the lowest rate
                    permitted  under  the Code that  avoids  the  imputation  of
                    interest income to the withdrawn General Partner,  such note
                    to have a term of five years and  provide  for equal  annual
                    installments of principal and interest. If the withdrawal is
                    voluntary, payment shall be made by delivery of an unsecured
                    promissory note bearing no interest,  with principal payable
                    only from distributions  which the withdrawn General Partner
                    would have

                                                                       A-28


<PAGE>

                   received  under this  Agreement  had the General  Partner not
                   withdrawn. Immediately upon receiving the note, the withdrawn
                   General   Partner   shall  cease  to  be  a  Partner  of  the
                   Partnership  for all  purposes,  except  that  the  withdrawn
                   General  Partner shall  continue to be subject to Section 6.4
                   hereunder.  All amounts received pursuant to this Section 6.5
                   shall constitute  complete and full discharge for all amounts
                   owing to the  withdrawn  General  Partner  on  account of its
                   Interest in the Partnership. Any disputes regarding valuation
                   or payment pursuant to this Section which are not resolved in
                   a binding  manner by the  provisions of this Section shall be
                   resolved by arbitration  in accordance  with the then current
                   rules of the American Arbitration Association. The expense of
                   arbitration shall be borne equally by the terminated  General
                   Partner and the Partnership.


                                   ARTICLE VII
                   ASSIGNMENT OF ASSIGNEE UNITS TO INVESTORS;
             TRANSFERABILITY OF LIMITED PARTNER INTERESTS AND UNITS
                   Section 7.1 Assignment of the Assignee Units to Investors
                       A. Pursuant to Sections 3.2 and 7.1C hereof, the Assignor
                   Limited Partner shall assign to each Investor  Assignee Units
                   equal to the number of Units  purchased  by each  Investor in
                   the Offering.
                       B. Except as provided in Section 7.1A above, the Assignor
                   Limited  Partner  may  not  transfer  a  Limited  Partnership
                   Interest  without  the prior  written  consent of the General
                   Partner.  The Assignor Limited Partner shall have no right to
                   vote or consent  with  respect to Units owned by the Assignor
                   Limited  Partner for its own account and such Units shall not
                   be considered  outstanding  Units for purposes of determining
                   whether the Majority  Vote of the Investors or the Consent of
                   the Investors has occurred.  The Assignor Limited Partner, by
                   the execution of this Agreement, acknowledges and agrees that
                   the Assignor Limited Partner's management will have fiduciary
                   responsibility  for the  safekeeping and use of all funds and
                   assets  of the  Investors,  whether  or  not in the  Assignor
                   Limited  Partner's  management's  possession or control,  and
                   that the management of the Assignor  Limited Partner will not
                   employ,  or permit  another to employ such funds or assets in
                   any manner except for the exclusive  benefit of the Investor.
                   The Assignor  Limited Partner agrees not to contract away the
                   fiduciary duty owed to the Investors by the Assignor  Limited
                   Partner's management under the common law of agency.
                       C.  Except as set forth in  Section  7.lF,  the  Assignor
                   Limited   Partner,   by  the  execution  of  this  Agreement,
                   irrevocably transfers and assigns to the Investors all of the
                   Assignor Limited  Partner's rights and interest in and to the
                   Assigned Limited Partnership  Interests,  as of the time that
                   payment for such Assigned  Limited  Partnership  Interests is
                   received  by  the  Partnership  and  such  Assigned   Limited
                   Partnership  Interests  are credited to the Assignor  Limited
                   Partner  on the books and  records  of the  Partnership.  The
                   rights  and  interest  so  transferred   and  assigned  shall
                   include, without limitation, the following
                  (i) all rights to receive distributions of uninvested Capital 
                         Contributions pursuant to Section 5.6F;
                             (ii)  all  rights  to  receive  cash  distributions
                             pursuant to Article IV; (iii) all rights in respect
                             to  allocations  of  Profit  and Loss  pursuant  to
                             Article  IV;  (iv) all other  rights in  respect of
                             determinations  of  allocations  and  distributions
                             pursuant to
                       Article IV;
                             (v) all  rights  to  consent  to the  admission  of
                       Successor  or  Additional  General  Partners  pursuant to
                       Sections 6.1 and 6.2;
                             (vi) all rights to receive any proceeds of 
                         liquidation of the Partnership pursuant to Section 8.2;
                             (vii) all rights to inspect  books and  records and
to receive reports pursuant to Article X;

                                                                    A-29

<PAGE>

                             (vii) all voting  rights,  rights to attend or call
                             meetings and other such rights; and (ix) all rights
                             which the Limited Partners have, or may have in the
                             future, under the Act.
                        D.  The  General  Partner,  by  the  execution  of  this
                   Agreement,  irrevocably consents to and acknowledges that (i)
                   the foregoing transfer and assignment pursuant to Section 7.1
                   by the  Assignor  Limited  Partner  to the  Investors  of the
                   Assignor  Limited   Partner's  rights  and  interest  in  the
                   Assigned Limited Partnership Interests is effective, and (ii)
                   the  Investors  are  intended  to be and shall be third party
                   beneficiaries  of all rights and  privileges  of the Assignor
                   Limited   Partner  in  respect   of  the   Assigned   Limited
                   Partnership  Interests.  The General  Partner  covenants  and
                   agrees that,  in accordance  with the foregoing  transfer and
                   assignment,  all the Assignor  Limited  Partner's  rights and
                   privileges  in  respect  of  Assigned   Limited   Partnership
                   Interests  may  be  exercised  by  the  Investors  including,
                   without limitation, those cited in Section 7.l.
                        E.  In  accordance  with  the  transfer  and  assignment
                   described  in  Section  7.1,  Investors  shall  have the same
                   rights that the Limited  Partners  have under this  Agreement
                   and under the Act.
                        F.   Notwithstanding  the  assignment  of  the  Assigned
                   Limited  Partnership  Interests  referred to in this  Section
                   7.1, the Assignor Limited Partner shall retain legal title to
                   and be and remain a Limited Partner of the Partnership.

                   Section 7.2 Transferability of Units
                        A. Units are generally transferable,  provided, however,
                   that a transfer  of Units shall be  prohibited  if one of the
                   following restrictions applies:
                             (i) No sale or  exchange of any Units shall be made
                        if the Units sought to be sold or exchanged,  when added
                        to the total of all other Units sold or exchanged within
                        a  period  of  twelve  (12)  consecutive   months  prior
                        thereto,  would,  in the  opinion  of  counsel  for  the
                        Partnership,  result in the Partnership being considered
                        to  have  terminated   within  the  meaning  of  Section
                        708(b)(1)(B) of the Code. The General Partner shall give
                        Notification to all Investors in the event that sales or
                        exchanges  should  be  suspended  for this  reason.  All
                        deferred   sales   or   exchanges   shall  be  made  (in
                        chronological order to the extent practicable) as of the
                        first day of the fiscal year beginning  after the end of
                        any such 12-month  period,  subject to the provisions of
                        this Article VII.
                             (ii) No transfer or assignment of any Unit shall be
                        made if a counsel for the  Partnership is of the opinion
                        that the particular  transfer or assignment  would be in
                        violation  of  any  federal  or  state  securities  laws
                        (including   any   investment   suitability   standards)
                        applicable  to  the   Partnership  or  would  cause  the
                        Partnership to be classified other than as a partnership
                        for federal income tax purposes.
                             (iii) No transfer or  assignment  of any Unit shall
                        be made if in the opinion of counsel to the  Partnership
                        such transfer would cause the  Partnership to be treated
                        as a "publicly traded  partnership"  under Sections 7704
                        and  469(k) of the Code.  Each  Investor  agrees  not to
                        transfer,  and  agrees  that the  Partnership  shall not
                        recognize  for any purpose any  transfer on or through a
                        listing  on  a  securities  exchange,   over-the-counter
                        market or secondary  market or any transfer to or from a
                        dealer in securities or  partnership  interests or other
                        market  maker,  or  any  transfer  arranged  through  or
                        facilitated by means of an interdealer quotation system,
                        information system or other facility that may create the
                        equivalent   of  a  secondary   market  in   partnership
                        interests,  unless counsel to the  Partnership is of the
                        opinion  that  such  transfers  will not  result  in the
                        partnership  becoming  taxable  as  a  corporation  or a
                        publicly traded partnership.
                             (iv) No  transfer or  assignment  of Units shall be
                        made after which any transferor or transferee would hold
                        (a) a number of Units not evenly  divisible by four,  or
                        (b)  less  than  200  Units,   except   for   Individual
                        Retirement  Accounts,  or (c) less  than 80 Units in the
                        case  of  Individual   Retirement  Accounts,   provided,
                        however, that any such transferor or transferee may hold
                        zero Units.

                                                                     A-30

<PAGE>

                             (v) No transfer or  assignment of any Unit shall be
                        made if it would result in the assets of the Partnership
                        being  treated  as  "plan  assets"  or the  transactions
                        contemplated  hereunder  to be  prohibited  transactions
                        under ERISA or the Code.
                             (vi) No transfer or  assignment  of a Unit shall be
                        made to a  foreign  person  under the Code or a minor or
                        incompetent (unless such transfer or assignment shall be
                        made to a legal guardian on such person's behalf). B. In
                        order to record a trade on its books  and  records,  the
                        Partnership may require such evidence
                    of transfer or assignment and authority of the transferor or
                    assignor (including signature  guarantees),  evidence of the
                    transferee's  suitability  under state  securities laws, and
                    the written acceptance and adoption by the transferee of the
                    provisions  of this  Agreement,  as the General  Partner may
                    determine.  The General  Partner  may charge a transfer  fee
                    sufficient to cover all reasonable  expenses  connected with
                    such   transfer   (with  no  profit  to  any  party  in  the
                    transaction).
                        C. In no event shall an Investor be permitted to
                    transfer a fraction of a Unit.
                        D. Any attempted transfer or assignment in violation 
                    of the provisions of Section 7.2A shall be
                    void and shall not bind the Partnership.

                    Section   7.3   Death,   Bankruptcy   or   Adjudication   of
                        Incompetence  of an Investor or a Limited  Partner  Upon
                        the  death of an  Investor  or a  Limited  Partner,  his
                        executor, administrator, or trustee, or, if
                    he is  adjudicated  incompetent  or insane,  his  committee,
                    guardian,  or conservator,  or, if he becomes bankrupt,  the
                    trustee or receiver of his estate, shall have all the rights
                    of an  Investor  or a Limited  Partner  for the  purpose  of
                    settling  or  managing  his estate  and shall have  whatever
                    power  the  deceased  or  incompetent  Investor  or  Limited
                    Partner  possessed to assign all or any part of his Units or
                    Interest.   The   death,   dissolution,    adjudication   of
                    incompetence,  or  bankruptcy  of an  Investor  or a Limited
                    Partner shall not dissolve the Partnership.

                    Section 7.4 Effective Date
                        The Partnership  shall recognize the transferee of Units
                    as an Investor on the Partnership's books and records on the
                    first  business  day of the next  calendar  month  after the
                    month  in  which  the  Partnership  receives  all  necessary
                    documentation  and consents  required to effect the transfer
                    of Units.


                    Section 7.5 Substitute Limited Partners
                        Any Investor  may elect to become a  Substitute  Limited
                    Partner upon (i) signing a counterpart of this Agreement and
                    any other instrument or instruments  deemed necessary by the
                    General  Partner,  including a Power of Attorney in favor of
                    the General  Partner as described in Section  12.1A  hereof,
                    and (ii) paying a fee equal to the actual costs and expenses
                    incurred by the General Partner for legal and administrative
                    costs  and  recording  fees.  Investors  who elect to become
                    Substitute   Limited   Partners  will  receive  one  Limited
                    Partnership Interest for each Unit they convert and will not
                    be able to re-exchange their Limited  Partnership  Interests
                    for  Units.  The  Capital  Account  of the  former  Investor
                    attributable  to transferred  Units shall be credited to the
                    Capital  Account  of the  Substitute  Limited  Partner.  The
                    Partnership's Certificate will be amended no less often than
                    quarterly to reflect the substitution of Limited Partners.

                    Section 7.6 Retirement or Withdrawal of an Investor
                        A. No  Investor  shall  have the  right  to  voluntarily
                    retire or withdraw from the  Partnership  unless the General
                    Partner shall have consented to such voluntary retirement or
                    withdrawal by an Investor. Upon the retirement or withdrawal
                    of an  Investor:  (i)  the  Interest  of  such  retiring  or
                    withdrawing   Investor  shall   thereafter   belong  to  the
                    Partnership;  (ii) such  retiring  or  withdrawing  Investor
                    shall not be entitled to receive  distributions with respect
                    to  any  periods  after  the  time  of  such  retirement  of
                    withdrawal;  and (iii) such retiring or withdrawing Investor
                    shall not be  entitled  to  receive  any amount for the fair
                    value  of his  Units  as of the  date of his  retirement  or
                    withdrawal, other than as agreed to by

                                                                      A-31

<PAGE>

                    the  General  Partner  and  the  withdrawing  Investor.  The
                    General   Partner   shall  not  consent  to  the   voluntary
                    retirement  or  withdrawal  of an  Investor  if the  General
                    Partner  receives  an opinion of counsel to the  Partnership
                    that  such   retirement  or   withdrawal   would  cause  the
                    Partnership to be classified other than as a partnership for
                    federal  income tax purposes,  or cause the  Partnership  to
                    terminate for federal income tax purposes.
                         B.  At any  time  after  the  Termination  Date  of the
                    Offering,  the Partnership may, in its sole  discretion,  in
                    response to the request of an  Investor,  repurchase  any or
                    all of the Units of such Investor  upon  mutually  agreeable
                    terms,  provided that such  repurchase  does not  materially
                    impair the  capital or  operation  of the  Partnership.  The
                    determination  to repurchase  Units will be made in the sole
                    discretion of the General Partner.  The determination of the
                    value of the  repurchased  Units will be based  upon,  among
                    other  factors,   the  current  fair  market  value  of  the
                    Equipment  and  the  assets  of the  Partnership,  less  all
                    Partnership debts and obligations.  The Partnership will not
                    repurchase  Units  prior  to  the  Termination  Date  of the
                    Offering  and is not  obligated to  repurchase  Units at any
                    time.   Units  acquired  by  the  General  Partner  and  its
                    Affiliates  or by the Assignor  Limited  Partner will not be
                    eligible for repurchase by the Partnership.  Units purchased
                    by  the  Partnership   during  any  month  shall  be  deemed
                    cancelled  effective  as of  the  first  day  of  the  month
                    following the effective date of such purchase.


                                  ARTICLE VIII
           DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP
                    Section 8.1 Events Causing Dissolution
                         A. The Partnership shall dissolve and its affairs shall
                    be wound up upon the first to occur of the following events:
                             (i) the expiration of its term;
                             (ii) the  withdrawal of a General  Partner,  unless
                         the Partnership is continued  pursuant to Sections 6.3B
                         or 6.3C;
                             (iii) the Sale of all or  substantially  all of the
                         Partnership's  assets  and the  receipt  in cash of the
                         proceeds  thereof,  except  in  instances  in which and
                         proceeds are to be reinvested  in  accordance  with the
                         provisions of this Agreement;
                             (iv) the election by the General Partner,  with the
                         Majority  Vote  of  the  Investors,   to  dissolve  the
                         Partnership;
                             (v) by the Majority Vote of the Investors pursuant
                          to Section 5.3A to dissolve the Partnership; or
                             (vi) the happening of any other event causing the
                          dissolution of the Partnership under applicable law.
                         B. Dissolution of the Partnership shall be effective 
                    on the day on which the event occurs giving
                    rise to the dissolution. A certificate of cancellation shall
                    be  filed  under  the  Act  upon  the  dissolution  and  the
                    commencement  of  winding up of the  Partnership;  provided,
                    however,  that the Partnership shall not terminate until the
                    assets of the Partnership  has been  distributed as provided
                    in  Section  8.2.  Notwithstanding  the  dissolution  of the
                    Partnership,  prior to the  termination of the  Partnership,
                    the  business  of the  Partnership  and the  affairs  of the
                    Partners,  as such,  shall  continue  to be governed by this
                    Agreement.

                    Section 8.2 Liquidation
                         A. As soon as practical  after the  dissolution  of the
                    Partnership,  the General Partner, or if there is no General
                    Partner,  any  Limited  Partner or the  liquidating  trustee
                    under the Act, as the case may be,  shall give  Notification
                    to all the Limited  Partners and  Investors of such fact and
                    shall  prepare a plan as to whether  and in what  manner the
                    assets  of  the  Partnership  shall  be  liquidated.  By the
                    Majority   Vote  of  the   Investors,   the  assets  of  the
                    Partnership,   subject   to   its   liabilities   (and   the
                    establishment of

                                                                      A-32

<PAGE>

                   reserves,  if  necessary,  for  such  liabilities),   may  be
                   transferred  to a  successor  Entity,  upon  such  terms  and
                   conditions as are then agreed upon.
                        B. Unless the Investors  agree to transfer the assets of
                   the Partnership,  subject to its liabilities,  to a successor
                   Entity  pursuant to Section  8.2A,  upon  dissolution  of the
                   Partnership,  the General Partner, any Limited Partner or the
                   liquidating  trustee under the Act, as the case may be, shall
                   liquidate  the  assets  of the  Partnership,  and  apply  and
                   distribute  the proceeds  thereof in accordance  with Section
                   4.4.
                        C.  Notwithstanding  the  provisions of Section 8.2B, in
                   the event the General Partner or any liquidating  agent under
                   the  Act,  as the  case  may  be,  shall  determine  that  an
                   immediate  Sale  of all or a  portion  of the  assets  of the
                   Partnership  would  cause  undue  loss  to the  Partners  and
                   Investors, the General Partner or liquidating agent under the
                   Act,  as the case may be, in order to avoid such  loss,  may,
                   after  having given  Notification  to all the  Investors  and
                   Limited  Partners,  either defer liquidation of, and withhold
                   from  distribution  for a reasonable  time, any assets of the
                   Partnership,   or   distribute   the  assets  in  kind  to  a
                   liquidating trust to be held for the benefit of the Investors
                   and Partners.


                   Section 8.3 Capital Contribution Upon Dissolution
                        Subject  to  the  provisions  of  Section  5.9  of  this
                   Agreement, each Investor and Partner shall look solely to the
                   assets of the Partnership for all distributions  with respect
                   to the  Partnership  and his Capital  Contribution  and shall
                   have no recourse (upon dissolution or otherwise)  against any
                   Partner  or  Investor;   provided,  however,  that  upon  the
                   dissolution and termination of the  Partnership,  the General
                   Partner and the MNC  Special  Limited  Partner  will make the
                   Capital Contributions  referred to in Sections 3.lA and 3.3B.
                   All amounts so contributed by the General Partner and the MNC
                   Special  Limited  Partner shall be  distributed  first to the
                   Partnership's  creditors entitled thereto, and the balance to
                   the  Investors  and  Partners in  proportion  to the positive
                   balances in their Capital Accounts at the time of dissolution
                   and termination of the Partnership.

                                   ARTICLE IX
             CERTAIN PAYMENTS TO THE GENERAL PARTNER AND AFFILIATES

  Section 9.1 Reimbursement of Certain Costs and Expenses of the General Partner
           and their Affiliates
                        A. Subject to the  provisions  of Article V hereof,  the
                   Partnership  shall be  permitted  to  reimburse  the  General
                   Partner  and the  Manager  for the actual cost to the General
                   Partner,  the  Manager  or any  of  their  Affiliates  of the
                   Partnership's  operating expenses.  In determining the actual
                   cost  to the  General  Partner,  the  Manager  or  Affiliates
                   thereof of goods and materials and  administrative  services,
                   actual cost means the actual cost to the General Partner, the
                   Manager or any of their  Affiliates or of goods and materials
                   used for or by the Partnership and obtained from entities not
                   affiliated with a General Partner or the Manager,  and actual
                   cost of administrative  services,  which are necessary to the
                   prudent operation of the Partnership, means the pro rata cost
                   of personnel  (including an  allocation of overhead  directly
                   attributable  to  such  personnel)  as if such  persons  were
                   employees  of the  Partnership.  The cost for  administrative
                   services to be reimbursed to a General  Partner,  the Manager
                   or an  Affiliate  shall  be  at  the  lower  of  the  General
                   Partner's,  the Manager's or Affiliate's  actual cost of such
                   services or the amount the  Partnership  would be required to
                   pay to  independent  parties  for  comparable  administrative
                   services in the same geographic location. The General Partner
                   shall use its best efforts to cause all of the  Partnership's
                   expenses to be billed directly to and paid by the Partnership
                   to the extent practicable.
                        B. Subject to the foregoing,  the Partnership  shall pay
                   all expenses  (which expenses shall be billed directly to the
                   Partnership) of the Partnership which may include but are not
                   limited  to: (a) all costs of  personnel  (excluding  rent or
                   depreciation,   utilities,   capital  equipment,   and  other
                   administrative  items) employed full-time or part-time by the
                   Partnership  and involved in the business of the  Partnership
                   and  allocated  pro  rata to  their  administrative  services
                   performed on behalf of the

                                                                      A-33

<PAGE>

                   Partnership,  including  Persons  who may also be officers or
                   employees  of the General  Partner or its  Affiliates  (other
                   than Controlling  Persons);  (b) all costs of borrowed money,
                   taxes and assessments on Equipment and other taxes applicable
                   to the Partnership; (c) legal, audit, accounting,  brokerage,
                   approval and other fees;  (d)  printing,  engraving and other
                   expenses and taxes incurred in connection  with the issuance,
                   distribution,   transfer,   registration   and  recording  of
                   documents  evidencing  ownership of an Interest or Unit or in
                   connection with the business of the Partnership; (e) fees and
                   expenses paid to independent contractors,  bankers,  brokers,
                   servicers,  leasing  agents,  equipment  lease  brokers,  and
                   consultants and other agents (other than Controlling  Persons
                   and other officers of the General Partner or its Affiliates);
                   (f) expenses in connection  with the financing,  disposition,
                   replacement,  alteration, repair, sales, leasing, re-leasing,
                   refinancing  and  operating of the Equipment  (including  the
                   costs and  expenses of  appraisals,  foreclosures,  insurance
                   premiums,   brokerage   and   leasing   commissions   and  of
                   maintenance of such  Equipment);  (g) expenses of organizing,
                   revising, amending, converting,  modifying or terminating the
                   Partnership;  (h) the costs of preparation and  dissemination
                   of the informational  material and documentation  relating to
                   potential sale, refinancing,  leasing or other disposition of
                   Equipment; (i) expenses in connection with distributions made
                   by the Partnership to, and communications and bookkeeping and
                   clerical  work  necessary  in   maintaining   relations  with
                   Investors,  including  the costs of  printing  and mailing to
                   such persons  certificates  for Units and reports of meetings
                   of the  Partnership,  and of preparation of proxy  statements
                   and  solicitations  of proxies in connection  therewith;  (j)
                   expenses in connection  with  preparing  and mailing  reports
                   required to be furnished to  Investors  for tax  reporting or
                   other  purposes,  or which reports the General  Partner deems
                   the  furnishing  thereof  to  Investors  to  be in  the  best
                   interests  of the  Partnership;  (k) the costs  and  expenses
                   incurred in qualifying the  Partnership to do business in any
                   jurisdiction,  including  fees and  expenses of any  resident
                   agent appointed by the Partnership; (1) the costs incurred in
                   connection  with any litigation or regulatory  proceedings in
                   which the Partnership is involved;  and (m) computer services
                   including the cost of any computer equipment or services used
                   for  or  by  the  Partnership,  including  establishment  and
                   maintenance   of   investment   records  and   processing  of
                   accounting records related to the Partnership.
                       C. Notwithstanding any other provision of this Agreement,
                   no  reimbursement  shall be permitted to the General  Partner
                   for  services  for which the  General  Partner is entitled to
                   compensation  by way of a separate  fee,  nor to the Manager,
                   except as provided under the Management Agreement.

                   Section 9.2 Fees and Other Payments
                       A. The Partnership shall cause the following payments and
                   fees to be paid to the General Partner, the Manager and their
                   respective Affiliates:
                            (i) to the Selling Agent, the Selling Commissions
                     and the Due Diligence Expense Reimbursement Fee.
                            (ii) to the General Partner or its  Affiliates,  the
                       Offering  and  Organization  Expense  Fee, of which 2.85%
                       shall be paid from Gross  Proceeds of the Offering as the
                       Gross Proceeds of the Offering are raised and 2.80% shall
                       be paid from operating  revenue of the  Partnership  upon
                       the  earlier to occur of (a) the date on which 80% of the
                       Net  Proceeds  of  the  Offering  has  been  invested  in
                       Equipment or (b) December 31, 1990.
                            (iii) to the General  Partner,  the Manager or their
                       Affiliates, in reimbursement of the Acquisition Expenses,
                       if any,  previously  paid by such Person on behalf of the
                       Partnership  in  connection   with  the   acquisition  of
                       Equipment.
                            (iv) to the General  Partner,  an Acquisition Fee in
                       an amount equal to 0.75% Gross  Proceeds of the Offering,
                       payable as Gross Proceeds of the Offering are raised.
                            (v) to the Manager,  an Acquisition Fee in an amount
                       equal  to  1.5%  of the  purchase  price  of any  item of
                       Specified  or  Additional  Equipment  (whether  from  Net
                       Proceeds  of  the  Offering  or  from   reinvestment   of
                       Distributable Cash and Net Disposition Proceeds), payable
                       upon the purchase of such Equipment.

                                                                    A-34

<PAGE>

                            (vi)  to  the  Manager,   the  Equipment  and  Lease
                        Management   Fee,  in  accordance  with  the  terms  and
                        conditions  of the  Management  Agreement and subject to
                        the limitations of Section 5.2A(xix).
                            (vii) to the Manager,  the Equipment Re-Leasing Fee,
                        payable in accordance  with the terms and  conditions of
                        the Management  Agreement and subject to the limitations
                        of Section 5.2A(xix).
                            (viii) to the Manager, the Subordinated  Disposition
                        Fee,  provided  that payment of such fee shall  cumulate
                        and not be payable until Payout occurs.
                            (ix)  to  the  General  Partner,   an  annual  asset
                        management  fee equal to $50,000 for 1990 and increasing
                        in each year  thereafter  by the annual  increase in the
                        Consumer  Price  Index for All Urban  Consumers  for the
                        preceding calendar year; provided that the amount of any
                        such  fee to be  paid in any  calendar  year  shall  not
                        exceed   3%  of  the   amount  of   Distributable   Cash
                        distributed  to the Investors and Partners for such year
                        pursuant  to Section  4.3. B.  Notwithstanding  anything
                        else in this  Agreement to the contrary,  the cumulative
                        total of the
                   fees  payable to the General  Partner,  the Manager and their
                   Affiliates  as described in (i),  (ii),  (iii),  (iv) and (v)
                   above  shall not  exceed the  limitation  on  Front-End  Fees
                   provided under Section 5.6F hereof.
                        C.   Notwithstanding   any  other   provisions  of  this
                   Agreement,  in the event  that the  Management  Agreement  is
                   terminated  and the General  Partner or any of its Affiliates
                   performs  some or all of the services  agreed to be performed
                   by the Manager under the  Management  Agreement,  the General
                   Partner or such  Affiliate  shall be  entitled  to receive as
                   compensation   for  such   services   (it  being  agreed  and
                   understood  that  the  provision  of such  services  does not
                   constitute a part of the duties or obligations of the General
                   Partner as a general partner of the Partnership) the fees and
                   compensation  which would otherwise be payable to the Manager
                   hereunder and under the Management Agreement.


                                    ARTICLE X
                    BOOKS AND RECORDS; BANK ACCOUNTS; REPORTS

                   Section 10.1 Books and Records
                        A.Unless otherwise directed by the General Partner,  the
                   books and records of the  Partnership  shall be maintained by
                   the General Partner at the  Partnership's  principal place of
                   business.  In all  cases,  said  books and  records  shall be
                   available for examination and copying by any Limited Partner,
                   Investor  or his  duly  authorized  representatives,  for any
                   purpose  related  to  the  Limited  Partner's  or  Investor's
                   interest as a Limited Partner or Investor,  at the expense of
                   such Limited  Partner or Investor,  at any and all reasonable
                   times.  The Partnership  shall keep at its principal place of
                   business, without limitation, the following records: true and
                   full  information  regarding  the status of the  business and
                   financial  condition  of  the  Partnership;   promptly  after
                   becoming  available,  a copy  of the  Partnership's  federal,
                   state and local  income tax returns for each year;  a current
                   list of the  names  and last  known  business,  residence  or
                   mailing  addresses  of and the  numbers of Units held by each
                   Partner  and  Investor;  a copy  of  this  Agreement  and the
                   Certificate and all amendments thereto; and other information
                   regarding  the  affairs  of the  Partnership  as is just  and
                   reasonable.  The  current  list of the names  and last  known
                   business,  residence or mailing addresses of each Partner and
                   Investor  shall be mailed to any  Investor  upon payment of a
                   reasonable charge for copy work.
                        B. The  Partnership  shall keep its books and records in
                   accordance  with the  accounting  methods  determined  by the
                   General Partner.  The fiscal year of the Partnership shall be
                   the calendar year.

                   Section 10.2 Bank Accounts
                        A.   The   General    Partner   shall   have   fiduciary
                   responsibility  for the  safekeeping and use of all funds and
                   assets of the Partnership,  whether or not in their immediate
                   possession  or  control.  The General  Partnership  shall not
                   employ,  or permit any other Person to employ,  such funds in
                   any manner except for the benefit of the Partnership.

                                                     A-35

<PAGE>

                        B.  The  bank  accounts  of  the  Partnership  shall  be
                    maintained  in  such  banking  institutions  as the  General
                    Partner shall determine,  and withdrawals shall be made only
                    in  the  regular  course  of  Partnership  business  on  the
                    signature of the General  Partner or such other signature or
                    signatures  as  the  General  Partner  may  determine.   All
                    deposits  and  other  funds  may be  deposited  in  interest
                    bearing  or  non-interest  bearing  accounts  guaranteed  by
                    federal  authorities,  invested in short-term  United States
                    Government  or municipal  obligations,  or deposited  with a
                    banking institution selected by the General Partner.


                    Section 10.3 Reports
                        A. No later than seventy-five (75) days after the end of
                    each calendar  year,  the General  Partner will furnish each
                    Person who was an  Investor  or Limited  Partner at any time
                    during the fiscal year with all tax information  relating to
                    the  Partnership's  performance  for the preceding  calendar
                    year that is required to be set forth in the  Investor's and
                    Limited Partner's federal and state income tax return.
                        B.  Within  sixty (60) days after the end of each of the
                    first  three  fiscal  quarters  of each  fiscal  year of the
                    Partnership, the General Partner will furnish to each Person
                    who was an  Investor  or Limited  Partner at any time during
                    the  fiscal  quarter  then  ended,  a report  setting  forth
                    information   with   respect   to   the   progress   of  the
                    Partnership's business, which report shall include:
                             (i) an unaudited balance sheet of the Partnership;
                             (ii) unaudited  condensed  statements of income for
                        the quarter and year-to-date periods then ended;
                        (iii) an unaudited cash flow statement for the quarter;
                             (iv)  an  unaudited  statement  setting  forth  the
                        services  rendered  to,  and  fees  received  from,  the
                        Partnership by any Sponsor; and
                             (v)  other  pertinent  information  concerning  the
                        Partnership and its  activities,  including any material
                        developments or events  affecting the Partnership or its
                        Equipment  during  the  quarter.   The  various  reports
                        required  pursuant  to this  Section  10.3B  may be sent
                        earlier than or sepa-
                    rately from any of the other  reports  required  pursuant to
                    this  Section  10.3B,  and the  information  required  to be
                    contained  in any of the  reports may be  contained  in more
                    than one report.
                        C. Within one hundred twenty (120) days after the end of
                    each fiscal  year,  the  General  Partner  shall  furnish an
                    annual report to each Person who was a Limited Partner or an
                    Investor as of the last business day of the fiscal year then
                    ended. Such annual report will include:
                             (i)  a   balance   sheet  as  of  the  end  of  the
                        Partnership's   fiscal  year,   statements   of  income,
                        Partners'  equity and cash flow, which shall be prepared
                        in  accordance   with  generally   accepted   accounting
                        principles and  accompanied  by (a) an auditor's  report
                        containing an opinion of an independent certified public
                        accountant  and  (b)  a  reconciliation  to  information
                        furnished to Investors for income tax purposes;
                             (ii) a statement of any transactions with Sponsors,
                        and  any  of  their  respective   Affiliates  and  fees,
                        commissions,  compensation,   reimbursements  and  other
                        benefits  paid or  accrued to the  Sponsors,  and any of
                        their  respective   Affiliates  for  such  fiscal  year,
                        showing the amount paid or accrued to each recipient and
                        the services performed;
                             (iii)  the  breakdown  of  any  Partnership   costs
                             reimbursed  to a Sponsor;  and (iv) a report of the
                             activities  of the  Partnership  during  the fiscal
                             year.
                        Within the scope of the annual audit by the Accountants,
                    the  Accountants  will  verify  that  the  amounts  actually
                    reimbursed  were costs  incurred  in the  management  of the
                    Partnership.   The  methods  of  verification  used  by  the
                    Accountants  will be in accordance  with generally  accepted
                    auditing standards.  Within the scope of the annual audit of
                    the General Partner's financial statements,  the independent
                    certified public  accountants must issue a special report on
                    the allocation of such costs to

                                                                      A-36

<PAGE>

                  the Partnership in accordance with the Partnership Agreement. 
                    The special report shall at minimum provide:
                           (1) A  review  of  the  time  records  of  individual
                       employees,  the cost of whose  services were  reimbursed;
                       and
                           (2) A  review  of the  specific  nature  of the  work
                       performed by each such employee. The special report shall
                       be in accordance with the American Institute of Certified
                       Public
                  Accountants  United  States  Auditing  standards  relating  to
                  special  reports.  The additional costs of such special report
                  will be  itemized  by said  accountants  on a  partnership  by
                  partnership basis and may be reimbursed to the General Partner
                  by the Partnership in accordance with this  subparagraph  only
                  to the extent that such reimbursement,  when added to the cost
                  for  administrative  services  rendered,  does not  exceed the
                  competitive rate for such services as determined above.
                       The annual report shall also set forth  distributions  to
                  the  Investors  for  the  period  covered  thereby  and  shall
                  separately identify  distributions from (a) Distributable Cash
                  during  the  period,  (b)  Distributable  Cash  during a prior
                  period  which had been held as reserves,  (c) Net  Disposition
                  Proceeds, and (d) Working Capital Reserves.
                       For each item of  Equipment  acquired by the  Partnership
                  which   individually   represents   at   least   10%   of  the
                  Partnership's total Investment in Equipment, the annual report
                  shall  include a status  report  which shall  indicate (i) the
                  condition of the  Equipment,  (ii) how the  Equipment is being
                  utilized as of the year end (whether leased,  operated or held
                  for lease,  repair or sale),  (iii) the remaining  term of any
                  lease,  (iv) the  projected  use of the Equipment for the next
                  year (e.g.,  renew the lease,  lease,  retire or sell) and (v)
                  such other information relevant to the value or utilization of
                  the Equipment as the General  Partner deems  appropriate.  The
                  status report shall describe the method used and basis for any
                  valuation.
                       D.  Until  the Net  Proceeds  of the  Offering  are fully
                  invested or returned to the Investors and Limited  Partners as
                  set forth in Section 5.6F of this  Agreement,  the Partnership
                  shall prepare a report of Equipment  acquisitions  made by the
                  Partnership   during  each   quarter.   Such  report  will  be
                  distributed  to the Investors and Limited  Partners  within 60
                  days following the end of each quarter during which  Equipment
                  acquisitions  are made.  Such report shall include,  by way of
                  illustration and not of limitation,  a statement of the actual
                  purchase price of Equipment  acquired during the quarter,  the
                  terms of the purchase and the applicable lease and a statement
                  of the total  amount of cash  expended by the  Partnership  to
                  acquire such Equipment  (including all  commissions,  fees and
                  expenses).
                       E. The General Partner shall prepare and timely file with
                  appropriate  federal  and  state  regulatory  authorities  all
                  reports   required  to  be  filed  with  such  entities  under
                  then-applicable  laws,  rules and  regulations.  Such  reports
                  shall  be  prepared  on  the  accounting  or  reporting  basis
                  required by such regulatory authorities.  Upon request, copies
                  of such  reports  will be furnished to any Investor or Limited
                  Partner for any purpose  reasonably  related to the Investor's
                  or Limited  Partner's  interest  as an  Investor  or a Limited
                  Partner.   In  the  event   that  any   regulatory   authority
                  promulgates  rules or  amendments  thereto that would permit a
                  reduction in any of the  reporting  requirements  to which the
                  Partnership is subject under this Agreement at the time of the
                  execution  hereof,  the  Partnership  may cease to prepare and
                  file  any  such  reports  in  accordance  with  such  rules or
                  amendments.
                       F. The General Partner shall maintain, for a period of at
                  least six (6) years, a record of the  information  obtained to
                  indicate  that an Investor has met the  suitability  standards
                  set forth in the Prospectus.

                  Section 10.4 Federal Tax Elections
                       The  Partnership,  in the sole  discretion of the General
                  Partner,  may make  elections  for  federal  tax  purposes  as
                  follows:
                       (i) In case of a transfer of a Unit, the Partnership,  in
                  the sole discretion of the General  Partner,  may timely elect
                  pursuant  to  Section  754  of  the  Code  (or   corresponding
                  provisions of future law) and

                                                                  A-37

<PAGE>

                    pursuant to similar  provisions of applicable state or local
                    income  tax laws,  to adjust  the basis of the assets of the
                    Partnership.
                         (ii) All other  elections  required or  permitted to be
                    made by the Partnership  under the Code shall be made by the
                    General  Partner in such  manner as will,  in their its sole
                    opinion,   be  most   advantageous  to  a  majority  of  the
                    Investors.


                                                                  ARTICLE XI
                                                        MEETINGS OF INVESTORS
                    Section 11.1 Calling Meetings
                         Meetings of the Investors for any purpose may be called
                    by the  General  Partner  and shall be called by the General
                    Partner  upon  receipt  of a request  in  writing  signed by
                    Investors  having  in the  aggregate  more  than  10% of the
                    outstanding Units. Upon receipt of a written request stating
                    the  purpose(s)  of the meeting,  the General  Partner shall
                    provide all  Investors  within 10 days after receipt of such
                    request  with  notice as  described  in  Section  11.2.  The
                    meeting shall be held at a time and place  convenient to the
                    Investors.

                    Section 11.2 Notice; Procedure
                         If a meeting is called at the request of the Investors,
                    the General  Partner shall provide all Investors with notice
                    of such  meeting  given  either  personally  or by certified
                    mail,  which  notice shall state the purpose  thereof,  such
                    meeting to be held on a date not less than  fifteen (15) nor
                    more than sixty (60) days after the  receipt by the  General
                    Partner of the request for the meeting.  Notice of any other
                    meeting  shall be given  either  personally  or by certified
                    mail,  not 1ess than  fifteen (I 5) days nor more than sixty
                    (60) days before the date of the meeting,  to each  Investor
                    at his  record  mailing  address.  The  notice  shall  be in
                    writing,  and shall state the place, date, hour, and purpose
                    of the meeting,  and shall  indicate that it is being issued
                    at or by the direction of the Partners or Investors  calling
                    the  meeting.  If a meeting is  adjourned to another time or
                    place, and if any announcement of the adjournment of time or
                    place is made at the  meeting,  it shall not be necessary to
                    give notice of the adjourned meeting. The presence in person
                    or by  proxy  of the  holders  of  more  than  50%  of  the`
                    outstanding  Units shall constitute a quorum at all meetings
                    of the  Investors;  provided,  however,  that if there is no
                    quorum  present,  holders of a majority  in  interest of the
                    Investors  present or  represented  may  adjourn the meeting
                    from time to time without  further  notice until a quorum is
                    obtained.  No notice of the time,  place or  purpose  of any
                    meeting  of  Investors  need be  given to any  Investor  who
                    attends  in person or is present  by proxy  (except  when an
                    Investor  attends  a  meeting  for the  express  purpose  of
                    objecting at the beginning of the meeting to the transaction
                    of any  business  on the  ground  that  the  meeting  is not
                    lawfully called or convened), or to any Investor entitled to
                    notice who, in a writing executed and filed with the records
                    of the  meeting,  either  before  or  after  the time of the
                    meeting, waives the notice requirement.

                    Section 11.3 Right to Vote
                         For the purpose of determining  the Investors  entitled
                    to vote  at any  meeting  of the  Partnership,  the  General
                    Partner or the  Investors  requesting  the meeting may fix a
                    date, in advance,  as the record date for the  determination
                    of Investors  entitled to vote.  This date shall be not more
                    than fifty (50) days nor less than ten (10) days  before any
                    meeting.  Units  purchased  by the  General  Partner  or the
                    Affiliates will not possess any voting rights.

                    Section 11.4 Proxies; Rules
                         Each  Investor may  authorize  any person or persons to
                    act for him by proxy in all  matters in which an Investor is
                    entitled to  participate,  whether by waiving  notice of any
                    meeting,  or voting or  participating  at a  meeting.  Every
                    proxy   must   be   signed   by   the    Investor   or   his
                    attorney-in-fact.   No  proxy   shall  be  valid  after  the
                    expiration  of  11  months  from  the  date  thereof  unless
                    otherwise  provided  in the  proxy.  Every  proxy  shall  be
                    recoverable at the pleasure of the Investor executing it. At
                    each

                                                                      A-38

<PAGE>

                  meeting  of  Investors,  the  General  Partner  shall  appoint
                  officers  and  adopt  rules as they deem  appropriate  for the
                  conduct of the meeting.


                                                               ARTICLE XII
                                                         GENERAL PROVISIONS
               Section 12.1 Appointment of General Partner as Attorney-in-Fact
                       A. Each  Limited  Partner and Investor  hereunder  hereby
                  irrevocably  appoints  and  empowers  the General  Partner his
                  attorney-in-fact  to  consent  to or ratify  any act listed in
                  Subsections  5.4A(i)  through  (xxii) and Section 6.3C of this
                  Agreement after the Majority Vote of the Investors thereto has
                  been  obtained,  and to  execute,  acknowledge,  swear  to and
                  deliver all agreements and  instruments and file all documents
                  requisite  to  carrying  out  the   intentions   and  purposes
                  contemplated in this Agreement, including, without limitation,
                  the  execution   and  delivery  of  this   Agreement  and  all
                  amendments hereto, the filing of all business certificates and
                  necessary  certificates of limited  partnership and amendments
                  thereto from time to time in  accordance  with all  applicable
                  laws and any certificates of cancellation.
                       B. The appointment by all Limited  Partners and Investors
                  of the General Partner as attorney-in-fact  shall be deemed to
                  be a power coupled with an interest,  shall not be affected by
                  the  subsequent  disability or incapacity of the principal and
                  shall  survive  the  assignment  by any  Limited  Partners  or
                  Investors  of the whole or any part of his  Interests or Units
                  in the Partnership.
                       C. The power of  attorney  granted by this  Section  12.1
                  shall be governed by the laws of the State of Delaware.

                  Section 12.2 Waiver of Partition
                       Each  Partner and  Investor,  on behalf of  himself,  his
                  successors,  representatives,  heirs and assigns hereby waives
                  any right of  partition  or any right to take any other action
                  which  otherwise  might be available to him for the purpose of
                  severing his relationship with the Partnership or his interest
                  in the assets held by the Partnership from the interest of the
                  other Partners or Investors.

                  Section 12.3 Notification
                       Any Notification, in order to be effective, shall be sent
                  by  registered or certified  mail,  postage  prepaid,  if to a
                  Partner or Investor, to the address of the Partner or Investor
                  set forth in the books and records of the Partnership,  and if
                  to the Partnership,  to the principal place of business of the
                  Partnership set forth in Section 2.2 (unless Notification of a
                  change of the principal office is given), the date of registry
                  thereof or the date of the certification  thereof being deemed
                  the date of receipt of Notification;  provided,  however, that
                  any written  communication sent to a Partner or Investor or to
                  the  Partnership  and  actually  received by such Person shall
                  constitute Notification for all purposes of this Agreement.

                  Section 12.4 Word Meanings
                       In this Agreement,  the singular shall include the plural
                  and the masculine gender shall include the feminine and neuter
                  and vice versa, unless the context otherwise requires.

                  Section 12.5 Binding Provisions
                       The covenants and  agreements  contained  herein shall be
                  binding upon, and inure to the benefit of, the heirs, personal
                  representatives,  successors  and  assigns  of the  respective
                  parties hereto.

                  Section 12.6 Applicable Law
                       This  Agreement   shall  be  construed  and  enforced  in
                  accordance  with the laws of the  State of  Delaware,  without
                  regard to principles of conflict of laws.

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<PAGE>

                    Section 12.7 Counterparts
                        This   Agreement  may  be  executed  in  any  number  of
                    counterparts,  each  of  which  shall  be  deemed  to  be an
                    original  as  against  any  party  whose  signature  appears
                    thereon,  and all of which shall together constitute one and
                    the same  instrument.  This  Agreement  shall become binding
                    upon the date hereof.  Each Additional or Successor  General
                    Partner  shall  become a  signatory  hereof by signing  such
                    number of  counterparts  of this  Agreement  and such  other
                    instrument or instruments, and in such manner as the General
                    Partner shall determine,  and by so signing, shall be deemed
                    to have  adopted  and to have  agreed to be bound by all the
                    provisions of this Agreement.

                    Section 12.8 Separability of Provisions
                        Each  provision of this  Agreement  shall be  considered
                    separable, and if for any reason any provision or provisions
                    hereof  are  determined  to be invalid  or  contrary  to any
                    existing or future law, such invalidly  shall not impair the
                    operation  of or affect  those  portions  of this  Agreement
                    which are valid.

                    Section 12.9 Paragraph Titles
                        Paragraph  titles are for descriptive  purposes only and
                    shall not control or alter the meaning of this  Agreement as
                    set forth in the text.

                    Section 12.10 Entire Agreement
                        This  Agreement and the exhibits and documents  referred
                    to herein constitute the entire  understanding and agreement
                    among the parties  hereto with respect to the subject matter
                    hereof,   and  supersede   all  prior  and   contemporaneous
                    agreements  and  understandings,  inducements or conditions,
                    express  or  implied,  oral or  written,  except  as  herein
                    contained.  This  Agreement  may not be  modified or amended
                    other than by an agreement in writing.

                    Section 12.11 Amendments
                        A. In addition to the  amendments  otherwise  authorized
                    herein,  amendments  may be made to this Agreement from time
                    to time by the General Partner with the Majority Vote of the
                    Investors;  provided,  however,  that without the consent of
                    the Partners or  Investors  to be adversely  affected by the
                    amendment,  except  as  provided  in  Section  12.11B,  this
                    Agreement  may  not  be  amended  so as to  (i)  convert  an
                    Investor's interest into a General Partner's interest;  (ii)
                    modify the limited liability of an Investor; (iii) alter the
                    interest  of a Partner or Investor  in  Distributable  Cash,
                    Profit  or  Loss,  or  Net  Disposition  Proceeds;  or  (iv)
                    increase the amount of the Capital Contributions required to
                    be paid by the Investors.
                        B. In addition to the  amendments  otherwise  authorized
                    herein,  amendments  may be made to this Agreement from time
                    to time by the General  Partner,  without the consent of any
                    of the Investors, (i) to add to the duties or obligations of
                    the General  Partner or surrender any right or power granted
                    to the  General  Partner  herein,  for  the  benefit  of the
                    Investors;  (ii)  to  cure  any  ambiguity,  to  correct  or
                    supplement  any provision  herein which may be  inconsistent
                    with  any  other  provision  herein,  or to make  any  other
                    provisions  with  respect to matters  or  questions  arising
                    under this Agreement which will not be inconsistent with the
                    provisions  of this  Agreement;  (iii) to  delete or add any
                    provision of this Agreement  required to be deleted or added
                    by the Staff of the  Securities  and Exchange  Commission or
                    other federal agency or by a state  securities  commissioner
                    or similar  official and deemed by the  commission,  agency,
                    commissioner,   or   official  to  be  for  the  benefit  or
                    protection of the Investors; (iv) to make such amendments to
                    this  Agreement  which,  in the  opinion  of  counsel to the
                    Partnership,  are  necessary to ensure the  continuation  of
                    partnership   status  for  federal   income  tax   purposes;
                    provided,  however,  that,  in the opinion of counsel to the
                    Partnership,  such amendments do not adversely affect in any
                    way the rights or interests of any of the Investors;  (v) to
                    take any  actions  necessary  to  cause  the  assets  of the
                    Partnership to come within the exclusion from the definition
                    of "plan assets"  contained in Section  2550.40lb-1 of Title
                    29 of the  Code  of  Federal  Regulations  or to  cause  the
                    Partnership to comply with any requirement the Department of
                    Labor may impose as a

                                                                       A-40

<PAGE>
                 condition to granting a prohibited transaction  exemption;  and
                 (vi) to give effect to any action permitted pursuant to Section
                 5.2;  provided,  however,  that no  amendment  shall be adopted
                 pursuant to this  Section  12.2B unless its adoption (1) is not
                 adverse to the  interests of the  Investors;  (2) is consistent
                 with  Section  5.2;  (3) does not  affect the  distribution  of
                 Distributable   Cash  or  Net   Disposition   Proceeds  or  the
                 allocation of Profit or Loss among the Investors as a class and
                 the General Partner, except as provided below; and (4) does not
                 affect the limited  liability of the Investors or the status of
                 the  Partnership  as  a  partnership  for  federal  income  tax
                 purposes.  In addition to the amendments  otherwise  authorized
                 herein,  amendments  may be  made to this  Agreement  to  amend
                 provisions  of Article  IV of this  Agreement  relating  to the
                 allocations  of  Profit  or  Loss  and  to   distributions   of
                 Distributable  Cash  or  Net  Disposition  Proceeds  among  the
                 Partners  and  Investors if the  Partnership  is advised at any
                 time by the  Partnership's  Accountants  and  counsel  that the
                 allocations  provided  in  Article  IV of  this  Agreement  are
                 unlikely to be respected for federal  income tax purposes.  The
                 General  Partner is  empowered  to amend the  distribution  and
                 allocation  provisions  of Article IV pursuant to this  Section
                 12.11B to the minimum extent  necessary in accordance  with the
                 advice of the  Partnership's  Accountants and counsel to effect
                 the  plan  of  distribution  of  Distributable   Cash  and  Net
                 Disposition   Proceeds,   and,   consistent   therewith,    the
                 allocations of Profit and Loss provided in this Agreement.  New
                 allocations  made by the General  Partner in reliance  upon the
                 advice of the  Partnership's  Accountants  and counsel shall be
                 deemed to be made pursuant to the  fiduciary  obligation of the
                 General  Partner to the  Partnership  and the  Investors.  This
                 Section 12.11 shall be subject to the provisions of Section 5.9
                 of this Agreement.
                      C. If this  Agreement  is amended as a result of adding or
                 substituting a Limited  Partner or increasing the investment of
                 a Limited Partner, the amendment shall be signed by the General
                 Partner and by the Person to be  substituted  or added,  or the
                 Limited Partner  increasing his investment in the  Partnership,
                 and,  if a  Limited  Partner  is  to  be  substituted,  by  the
                 assigning  Limited  Partner.  If this  Agreement  is amended to
                 reflect the designation of an Additional  General Partner,  the
                 amendment  shall be  signed  by the other  General  Partner  or
                 General Partner and by the Additional General Partner.  If this
                 Agreement  is amended to reflect  the  withdrawal  of a General
                 Partner  when  the  business  of  the   Partnership   is  being
                 continued,  the  amendment  shall be signed by the  withdrawing
                 General  Partner  and by the  remaining  or  successor  General
                 Partner or General Partners.
                      D. In making any  amendments,  there shall be prepared and
                 filed for  recordation by the General Partner all documents and
                 certificates  required to be  prepared  and filed under the Act
                 and under the laws of the other jurisdictions under the laws of
                 which the Partnership is then formed or qualified.

                                                                 A-41

<PAGE>

                         IN       WITNESS WHEREOF,  parties hereto have executed
                                  this   Agreement  as  of  the  day  of  ,1990,
                                 effective as of the date first above written.
                                   
                                    GENERAL PARTNER
ATTEST:                             REDWOOD LEASING, INC.
                                    By:                     (SEAL)
                                    Name:
                                    Title:


                                    ASSIGNOR LIMITED PARTNER:
ATTEST:                             REDWOOD LEASING HOLDING COMPANY INC.
                                    By:                     (SEAL)
                                    Name:
                                    Title:


                                    MNC SPECIAL LIMITED PARTNER:
ATTEST:                             MARYLAND NATIONAL LEASING
                                    SERVICES CORPORATION
                                    By:                                 (SEAL)
                                    Name:
                                    Title:


                                    ABR SPECIAL LIMITED PARTNER:
ATTEST:                             REALTY ASSOCIATES 1988 LIMITED PARTNERSHIP
                                    By:                                 (SEAL)
                                    Name:
                                    Title:


                                     A-42