<PAGE>

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                           STOCK PURCHASE OPTION AGREEMENT

                                     BY AND AMONG

                               BOYKIN LODGING COMPANY,

                            BOYKIN HOTEL PROPERTIES, L.P.

                                         AND

                                AEW PARTNERS III, L.P.






                             Dated as of February 1, 1999








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<PAGE>

                                  TABLE OF CONTENTS
                                  -----------------
<TABLE>
<CAPTION>
                                                                                 PAGE
                                                                                 ----
<S>   <C>                                                                       <C>
1.    DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
20    OPTION TO PURCHASE PREFERRED STOCK IN EXCHANGE FOR JOINT VENTURE INTEREST. . .9
      2.1   GRANT OF EXCHANGE OPTION . . . . . . . . . . . . . . . . . . . . . . . .9
      2.2   VESTING OF EXCHANGE OPTION . . . . . . . . . . . . . . . . . . . . . . 10
      2.3   DETERMINATION OF SHARES UNDERLYING EXCHANGE OPTION . . . . . . . . . . 10
      2.4   RIGHT OF REIT TO SUBSTITUTE REIT COMMON STOCK IN EXCHANGE OPTION . . . 10
      2.5   PROCEDURE FOR EXERCISING THE EXCHANGE OPTION; CLOSING. . . . . . . . . 11
      2.6   RIGHT OF FIRST OFFER AND BUY/SELL. . . . . . . . . . . . . . . . . . . 12
      2.7   RIGHTS UPON A CHANGE IN CONTROL. . . . . . . . . . . . . . . . . . . . 13
30    WARRANTS TO PURCHASE PREFERRED STOCK WITH UNINVESTED CAPITAL . . . . . . . . 14
      3.1   ISSUANCE AND SALE OF INITIAL WARRANT . . . . . . . . . . . . . . . . . 14
      3.2   EXPANSION CAPITAL WARRANT. . . . . . . . . . . . . . . . . . . . . . . 15
40    RIGHT TO SUBSTITUTE PREFERRED STOCK AS CURRENCY. . . . . . . . . . . . . . . 17
      4.1   RIGHT OF PURCHASER TO REQUIRE PAYMENT IN PREFERRED STOCK . . . . . . . 17
      4.2   RIGHT OF PURCHASER TO PURCHASE PREFERRED STOCK WITH THE RIGHT OF
              FIRST OFFER PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . 20
      4.3   RIGHT OF REIT TO MAKE PAYMENT IN PREFERRED STOCK OR REIT COMMON
              STOCK  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.    RIGHT TO RECEIVE PREFERRED STOCK IN CONNECTION WITH A PUT/SALE
      DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
      5.1   PUT/SALE DISTRIBUTION  . . . . . . . . . . . . . . . . . . . . . . . . 25
      5.2   DETERMINATION OF NUMBER OF SHARES  . . . . . . . . . . . . . . . . . . 25
      5.3   RIGHT OF REIT TO SUBSTITUTE REIT COMMON STOCK  . . . . . . . . . . . . 26
      5.4   CLOSING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.    ADJUSTMENT TO OPTION EXERCISE PRICE, EXPANSION OPTION EXERCISE PRICE AND
      ADDITIONAL OPTION EXERCISE PRICE . . . . . . . . . . . . . . . . . . . . . . 27
      6.1   ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27


                                      (i)

<PAGE>

<CAPTION>
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<S>   <C>                                                                       <C>
      6.2   FURTHER ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 28
      6.3   ADJUSTMENTS FOR CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.  . . . . . 29
      6.4   OTHER DILUTIVE EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . 30
      6.5   WHEN ADJUSTMENTS SHALL BE MADE . . . . . . . . . . . . . . . . . . . . 30
      6.6   WHEN ADJUSTMENT NOT REQUIRED . . . . . . . . . . . . . . . . . . . . . 30
      6.7   WHEN ADJUSTMENTS CARRIED FORWARD . . . . . . . . . . . . . . . . . . . 31
      6.8   NOTICE OF ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 31
7.    CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
      7.1   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AT A 
            CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
            (ai   REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 31
            (bi   PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
            (ci   CLOSING CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 32
            (di   OPINION OF COUNSEL . . . . . . . . . . . . . . . . . . . . . . . 32
            (ei   INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . 32
            (fi   LEGAL INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . 32
            (gi   PROCEEDINGS AND DOCUMENTS. . . . . . . . . . . . . . . . . . . . 32
            (hi   REGISTRATION RIGHTS AGREEMENT. . . . . . . . . . . . . . . . . . 32
            (ii   MANAGEMENT RIGHTS LETTER . . . . . . . . . . . . . . . . . . . . 32
            (ji   TAX REPRESENTATION LETTER. . . . . . . . . . . . . . . . . . . . 33
            (ki   OWNERSHIP WAIVER LETTER. . . . . . . . . . . . . . . . . . . . . 33
            (li   RELATED MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 33
            (mi   NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION. . . . . . . . . 33
            (ni   GOVERNMENTAL AND THIRD PARTY PERMITS, CONSENTS, ETC. . . . . . . 33


                                      (ii)

<PAGE>

<CAPTION>
                                                                                 PAGE
                                                                                 ----
<S>   <C>                                                                       <C>
            (oi   HSR ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
            (pi   NEW YORK STOCK EXCHANGE LISTING. . . . . . . . . . . . . . . . . 34
            (qi   ADDITIONAL CERTIFICATES. . . . . . . . . . . . . . . . . . . . . 34
      7.2   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE REIT AT THE CLOSING . . . . 34
            (ai   REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 34
            (bi   PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
            (ci   CLOSING CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . 35
            (di   NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION. . . . . . . . . 35
            (ei   GOVERNMENTAL AND THIRD PARTY PERMITS, CONSENTS, ETC. . . . . . . 35
            (fi   HSR ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
            (gi   PROCEEDINGS AND DOCUMENTS. . . . . . . . . . . . . . . . . . . . 35
      7.3   INABILITY OF REIT TO SATISFY CONDITIONS PRECEDENT TO CLOSING . . . . . 35
8.    REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF EACH OF THE REIT AND
      THE OPERATING PARTNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . 36
      8.1   ORGANIZATION AND QUALIFICATION; AUTHORITY. . . . . . . . . . . . . . . 36
      8.2   LICENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
      8.3   CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION . . . . . . 37
      8.4   VALIDITY AND BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . 38
      8.5   CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
      8.6   LITIGATION; DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . 38
      8.7   PUBLIC REPORTS; NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . 39
      8.8   PRIVATE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
      8.9   BROKER'S OR FINDER'S COMMISSIONS . . . . . . . . . . . . . . . . . . . 40
      8.10  INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY; U.S. 
              ENTITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40


                                     (iii)

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<CAPTION>
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<S>   <C>                                                                       <C>
      8.11  ERISA REQUIREMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . 40
      8.12  CREATION OF PREFERRED STOCK AND PREFERRED UNITS. . . . . . . . . . . . 41
      8.13  OWNERSHIP LIMIT WAIVER.. . . . . . . . . . . . . . . . . . . . . . . . 42
9.    REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF THE PURCHASER . . . . . . 42
      9.1   PURCHASE FOR INVESTMENT; SOURCE OF FUNDS . . . . . . . . . . . . . . . 42
      9.2   VALIDITY AND BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . 42
      9.3   CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION . . . . . . 43
      9.4   LITIGATION; DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.   ADDITIONAL COVENANTS OF THE REIT . . . . . . . . . . . . . . . . . . . . . . 43
      10.1  DELIVERY OF INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 43
      10.2  NO IMPAIRMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
      10.3  RESERVATION OF SHARES OF PREFERRED STOCK AND REIT COMMON STOCK . . . . 44
      10.4  COMPLIANCE WITH LAWS UPON ISSUANCE . . . . . . . . . . . . . . . . . . 45
      10.5  HART-SCOTT-RODINO ACT COMPLIANCE . . . . . . . . . . . . . . . . . . . 45
      10.6  PREFERRED STOCK OR REIT COMMON STOCK TO BE DULY AUTHORIZED AND
              ISSUED, FULLY PAID AND NON-ASSESSABLE. . . . . . . . . . . . . . . . 45
      10.7  TRANSFER TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
      10.8  SHAREHOLDER RIGHTS PLAN. . . . . . . . . . . . . . . . . . . . . . . . 46
      10.9  BUSINESS COMBINATION STATUTE, CONTROL SHARE STATUTE. . . . . . . . . . 46
      10.10 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.   RESTRICTIONS ON TRANSFER.. . . . . . . . . . . . . . . . . . . . . . . . . . 46
      11.1  RESTRICTIVE LEGENDS. . . . . . . . . . . . . . . . . . . . . . . . . . 46
      11.2  NOTICE OF TRANSFER; OPINIONS OF COUNSEL. . . . . . . . . . . . . . . . 47
      11.3  NO RESTRICTIVE LEGENDS.. . . . . . . . . . . . . . . . . . . . . . . . 48
12.   MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
      12.1  INDEMNIFICATION; EXPENSES, ETC.. . . . . . . . . . . . . . . . . . . . 48
      12.2  ASSIGNABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
      12.3  SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . 50
      12.4  USE OF DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . 50
      12.5  TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 50
      12.6  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SEVERABILITY . . . . . . . 50
      12.7  NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
      12.8  NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.9  AMENDMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.10 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.11 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.12 DESCRIPTIVE HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.13 GENDER, NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.14 SATISFACTION REQUIREMENT . . . . . . . . . . . . . . . . . . . . . . . 52
      12.15 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
      12.16 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53


                                      (iv)

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<CAPTION>
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<S>   <C>                                                                       <C>
      12.17 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
      12.18 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . . . . . . . . 53
</TABLE>










                                      (v)

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                                      (vi)

<PAGE>

                                       EXHIBITS

EXHIBIT A   --    Form of Initial Warrant
EXHIBIT B   --    Form of Opinion of REIT Counsel 
EXHIBIT C   --    Form of Registration Rights Agreement
EXHIBIT D   --    Form of Management Rights Letter
EXHIBIT E   --    Form of Tax Representation Letter
EXHIBIT F   --    Ownership Waiver Letter
EXHIBIT G   --    Certificate of Amendment to the Amended and Restated Articles
                  of Incorporation relating to creation of Series A Cumulative
                  Preferred Shares, Series 1999-A
EXHIBIT H   --    Amendment to Amended and Restated Agreement of Limited
                       Partnership of Boykin Hotel Properties, L.P.

                                      SCHEDULES

                  Boykin Disclosure Letter





                                     (vii)


<PAGE>

                           STOCK PURCHASE OPTION AGREEMENT


      STOCK PURCHASE OPTION AGREEMENT dated as of February 1, 1999 by and 
among Boykin Lodging Company, an Ohio corporation ( the "REIT"), Boykin Hotel 
Properties, L.P., an Ohio limited partnership (the "Operating Partnership"), 
and AEW Partners III, L.P., a Delaware limited partnership (the "Purchaser"). 
Unless otherwise defined, capitalized terms used in this Agreement are 
defined in Section 1; references to an "Exhibit" are, unless otherwise 
specified, to an Exhibit attached to this Agreement; references to a 
"Section" are, unless otherwise specified, to a section of this Agreement.

      WHEREAS, the Operating Partnership and the Purchaser have formed, and 
are the sole members of, Boykin/AEW LLC, a Delaware limited liability company 
(the "Joint Venture");

      WHEREAS, concurrently herewith, the Operating Partnership and the 
Purchaser have entered into that certain Limited Liability Company Agreement 
of the Joint Venture (the "Joint Venture Agreement") for the purpose of 
setting forth their respective rights, obligations and duties regarding the 
Joint Venture;

      WHEREAS, the REIT's general partnership interest in the Operating 
Partnership constitutes substantially all of the REIT's assets and the REIT 
conducts substantially all of its business through the Operating Partnership;

      WHEREAS, the REIT desires to provide the Purchaser with certain options 
to purchase Capital Stock in the REIT and with the right to receive Capital 
Stock in the REIT in lieu of cash owed to it by the Operating Partnership 
pursuant to certain rights set forth in the Joint Venture Agreement; and

      WHEREAS, the Purchaser desires to grant the REIT and the Operating 
Partnership the right to substitute Capital Stock in the REIT for cash owed 
to the Purchaser by the Operating Partnership in certain circumstances.

      In consideration of the mutual covenants and agreements set forth 
herein and for other good and valuable consideration, the receipt and 
sufficiency of which are hereby acknowledged, the REIT, the Operating 
Partnership and the Purchaser hereby agree with each other as follows:

      1.    DEFINITIONS

            In addition to any terms defined elsewhere herein, as used in 
this Agreement, the following terms have the respective meanings set forth 
below:

      "Accountants" shall have the meaning ascribed thereto in the Joint 
Venture Agreement.

<PAGE>

      "Additional Capital" means the aggregate amount (expressed in dollars) 
of all Contributions by the Purchaser to the Joint Venture of Preservation 
Capital and all Contributions by the Purchaser to the Joint Venture effected 
pursuant to Section 3.7(b) of the Joint Venture Agreement which exceed the 
sum of (i) $50,000,000 and, (ii) if the Operating Partnership has approved an 
increase in the Capital Contribution Cap under Section 3.7(a) of the Joint 
Venture Agreement, an amount equal to the Expansion Capital.

      "Additional Option Exercise Price" means the number (expressed in 
dollars per share) equal to the quotient determined by dividing (a) 
Additional Capital, by (b) the sum of the quotients determined by dividing 
(i) the amount of each Contribution of Additional Capital that has occurred 
by (ii) the amount (expressed in dollars per share) equal to 120% of the 
average last sale price per share of the REIT Common Stock on the NYSE over 
the thirty (30) days on which the NYSE is open and for which trades in the 
REIT Common Stock are reported immediately preceding the date that such 
portion of Additional Capital was contributed to the Joint Venture. The 
Additional Option Exercise Price shall be subject to adjustment from time to 
time as provided in Section 6 hereof.  In the event that the REIT Common 
Stock is no longer trading on the NYSE then the Additional Option Exercise 
Price shall be determined using the prices reported on the exchange or 
automated quotation system on which the REIT Common Stock then trades.

      "Affiliate" means, with respect to any Person, any other Person 
directly or indirectly controlling or controlled by or under common control 
with such first Person or any of its Subsidiaries, PROVIDED that, for 
purposes of this definition, "control" (including, with correlative meanings, 
the terms "controlled by" and "under common control with"), as used with 
respect to any Person, shall mean the possession, directly or indirectly, of 
the power to direct or cause the direction of the management and policies of 
such Person, whether through the ownership of voting securities or by 
agreement or otherwise.

      "Aggregate Trading Value" has the meaning ascribed thereto in Section 
6.2 hereof.

      "Agreement" means this Agreement, as amended, modified or supplemented 
from time to time, together with any exhibits, schedules, appendices or other 
attachments thereto.

      "Approvals" has the meaning ascribed thereto in Section 7.1(m) hereof.

      "Articles of Incorporation" means the Amended and Restated Articles of 
Incorporation of the REIT, as amended to date and presently in effect.

      "Buy/Sell" means the right set forth in Section 8.4 of the Joint 
Venture Agreement.

      "Capital Contribution Cap" has the meaning ascribed thereto in the 
Joint Venture Agreement.

      "Capital Proceeds" has the meaning ascribed thereto in the Joint Venture
Agreement.

                                      2

<PAGE>

      "Capital Stock" means, with respect to any Person, any and all shares, 
interests, participation rights in or other equivalents (however designated) 
of such Person's capital stock, and any rights (other than debt securities 
convertible into capital stock), warrants or options exchangeable for or 
convertible into such capital stock.

      "Cash Flow" shall have the meaning ascribed thereto in the Joint 
Venture Agreement.

      "Certificate of Amendment" means the Certificate of Amendment of the 
REIT's Articles of Incorporation relating to the creation of the Preferred 
Stock attached as EXHIBIT G hereto and filed with the Ohio Secretary of State 
on February 1, 1999.

      "Change in Control" means the occurrence of one or more of the 
following events (whether or not approved by the Board of Directors of the 
REIT): (i) if any "person" or "group" as such terms are used in Sections 
13(d) and 14(d) of the Exchange Act), is or becomes the "beneficial owner," 
directly or indirectly, of more than 50% of the total voting power of the 
Capital Stock of the REIT (treating as "beneficially owned" all shares of 
Capital Stock of the REIT that such "person" or "group" may receive upon 
exchange of units of limited partnership interest in the Operating 
Partnership held by such "person" or "group"); (ii) the direct or indirect 
sale, lease, exchange or other transfer of all or substantially all of the 
assets of the REIT in one transaction or a series of transactions to any 
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange 
Act) or group of related persons for purposes of Section 13(d) of the 
Exchange Act (a "Group of Persons"); (iii) the REIT consolidates with or 
merges with or into another Person or any Person consolidates with, or merges 
with or into, the REIT (in each case, whether or not in compliance with the 
terms of this Agreement), in any such event pursuant to a transaction in 
which immediately after the consummation thereof the stockholders of the REIT 
immediately prior to the consummation of the transaction shall cease to have 
the power, directly or indirectly (including by way of a general partnership 
interest), to vote or direct the voting of securities having in the aggregate 
at least a majority of the ordinary voting power for the election of the 
directors of the REIT or its successor; or (iv) the adoption of any plan of 
liquidation or dissolution of the REIT.  For purposes of the foregoing, the 
transfer (by lease, assignment, sale or otherwise, in a single transaction or 
series of transactions) of all or substantially all of the properties or 
assets of the Operating Partnership (or any other Subsidiary of the REIT, the 
REIT's interest in which constitutes all or substantially all of the assets 
of the REIT), shall be deemed to be the transfer of all or substantially all 
of the assets of the REIT.

      "Charter Documents" means, with respect to any Person, the certificates 
or articles of incorporation, by-laws, code of regulations, or other 
equivalent organizational documents, each as amended and/or restated to date 
and presently in effect for such Person.

      "Closing" shall have the meaning ascribed thereto in Section 7.1 hereof.

      "Commission" means the United States Securities and Exchange Commission 
or any other federal agency at the time administering the Securities Act.

      "Contributions" has the meaning ascribed thereto in the Joint Venture 
Agreement.

                                      3

<PAGE>

      "Conversion Multiple" has the meaning ascribed thereto in the 
Certificate of Amendment, subject to adjustment as provided from time to time 
following the date hereof, as provided therein.

      "Depositary Agreement" means the Depositary Agreement dated February 1, 
1999 between the REIT and National City Bank.  

      "Depositary Share" means a fractional interest of one one-hundredth 
(1/100) of one share of Preferred Stock, as more fully described, and having 
the rights and privileges and being subject to the limitations set forth, in 
the Depositary Agreement.  

      "Disclosure Letter" has the meaning ascribed thereto in Section 8 
hereof.

      "ERISA" means the Employee Retirement Income Security Act of 1974, and 
the rules and regulations thereunder, as amended from time to time.

      "Exchange Act," means the Securities Exchange Act of 1934, and the 
rules and regulations of the Commission promulgated thereunder, as from time 
to time amended.

      "Exchange Option" has the meaning ascribed thereto in Section 2.1 
hereof.

      "Expansion Capital" means the amount (expressed in dollars) equal to 
the Purchaser's share of any increase in the Capital Contribution Cap that 
has been approved by the Operating Partnership under Section 3.7(a) of the 
Joint Venture Agreement.

      "Expansion Capital Warrant" has the meaning ascribed thereto in Section 
3.2(a) hereof.

      "Expansion Option Exercise Price" means the dollar amount equal to 120% 
of the average last sale price per share of the REIT Common Stock on the NYSE 
over the thirty (30) days on which the NYSE is open and for which trades in 
the REIT Common Stock are reported immediately preceding the date that the 
Operating Partnership approved an increase in the Capital Contribution Cap 
pursuant to Section 3.7(a) of the Joint Venture Agreement, such price being 
subject to adjustment from time to time as provided in Section 6 hereof.  In 
the event that the REIT Common Stock is no longer trading on the NYSE then 
the Expansion Option Exercise Price shall be determined using the prices 
reported on the exchange or automated quotation system on which the REIT 
Common Stock then trades.

      "Expansion Warrant Amount" has the meaning ascribed thereto in Section 
3.2(c) hereof.

      "Expansion Warrant Exercise Price" has the meaning ascribed thereto in 
Section 3.2(c) hereof.

                                      4

<PAGE>

      "General Partner's Certificate" means a certificate executed on behalf 
of the Operating Partnership or the Purchaser by their respective general 
partners.

      "Governmental Authority" means any governmental or quasi-governmental 
authority including, without limitation, any federal, state, territorial, 
county, municipal or other governmental or quasi-governmental agency, board, 
branch, bureau, commission, court, department or other instrumentality or 
political unit or subdivision, whether domestic or foreign.

      "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 
1976, as the same may be amended from time to time.

      "HSR Act Filing Request" has the meaning ascribed thereto in Section 
10.5 hereof.

      "Illegal Transfer Notice" has the meaning ascribed thereto in Section 
11.2 hereof.

      "Indemnified Party" means either a REIT Indemnified Party or a 
Purchaser Indemnified Party, as the context requires.

      "Indemnifying Party" has the meaning ascribed thereto in Section 
12.1(c) hereof.

      "Initial Warrant" has the meaning ascribed thereto in Section 3.1 
hereof.

      "Investment Period" has the meaning ascribed thereto in Section 10.2 of 
the Joint Venture Agreement.

      "Joint Venture" has the meaning ascribed thereto in the introduction 
hereof.

      "Joint Venture Agreement" has the meaning ascribed thereto in the 
introduction hereof.

      "License" or Licenses" has the meaning ascribed thereto in Section 8.2 
hereof.

      "Lien" means any mortgage, lien (statutory or otherwise), charge, 
pledge, hypothecation, conditional sales agreement, adverse claim, title 
retention agreement or other security interest, encumbrance or other title 
defect in or on any interest or title of any vendor, lessor, lender or other 
secured party to or of such Person under any conditional sale, trust receipt 
or other title retention agreement with respect to any Property or asset of 
such Person.

      "Losses" has the meaning ascribed thereto in Section 12.1(a) hereof.

      "Management Rights Letter" mean the Management Rights Letter by and 
between the Purchaser and the REIT.

      "Material Adverse Effect" has the meaning ascribed thereto in Section
8.1(a) hereof.

                                      5

<PAGE>

      "NYSE" means the New York Stock Exchange, Inc.

      "Officer's Certificate" means a certificate executed on behalf of the 
REIT by the President or Chief Executive Officer of the REIT.

      "Operating Partnership" has the meaning ascribed thereto in the 
introduction hereof and shall include the Operating Partnership's successors 
by merger, acquisition, reorganization or otherwise, subject to Section 12.2 
hereof.

      "Option Exercise Price" means initially $16.48, subject to adjustment 
from time to time as provided in Section 6 hereof.  

      "Partnership Documents" means partnership, limited partnership, limited 
liability company and operating agreements with respect to a Person, each as 
amended and restated to date and presently in effect, and certificates 
required to be filed in such Person's state of organization or formation.

      "Partnership Interests" means, with respect to any Person, any and all 
shares, units, interests, participation rights in or other equivalents of 
such person's interest in the Operating Partnership or any of the Operating 
Partnership's or the REIT's subsidiary partnerships, limited partnerships or 
limited liability companies.

      "Person" means any individual, corporation, limited or general 
partnership, limited liability company, joint venture, association, joint 
stock company, trust, unincorporated organization, or government or any 
agency or political subdivision thereof.

      "Plan Assets Regulation" has the meaning ascribed thereto in Section 
8.11 hereof.

      "Preferred Stock" means the Class A Cumulative Preferred Stock, Series 
1999-A, without par value, of the REIT, the terms of which are set forth in 
the Certificate of Amendment.

      "Property" means any interest in any kind of property or asset, whether 
real, personal or mixed, or tangible or intangible.

      "Purchaser" has the meaning ascribed thereto in the introduction hereof 
and shall include the Purchaser's successors by assignment, transfer, merger, 
acquisition, reorganization or otherwise, subject to Section 12.2 hereof.

      "Purchaser's Counsel" means Goodwin, Procter & Hoar LLP or such other 
nationally-recognized counsel as may be selected by Purchaser in its 
discretion.

      "Purchaser Indemnified Party" or "Purchaser Indemnified Parties" has 
the meaning ascribed thereto in Section 12.1(a) hereof. 

                                      6
<PAGE>

      "Put/Sale Distribution" means any distribution of Capital Proceeds to 
the Purchaser from the Joint Venture arising out of the disposition of an 
asset pursuant to Section 6.4.4 of the Joint Venture Agreement.

      "Registration Rights Agreement" means the registration rights agreement 
by and between the REIT and the Purchaser in substantially the form attached 
as EXHIBIT C, as amended or supplemented from time to time in accordance with 
the terms thereof.

      "REIT" has the meaning ascribed thereto in the introduction hereof and 
shall include the REIT's successors by merger, acquisition, reorganization or 
otherwise, subject to Section 12.2 hereof.

      "REIT Common Stock" means the common stock, no par value, of the REIT.

      "REIT Counsel" means Baker and Hostetler LLP, or such other 
nationally-recognized counsel as may be selected by the REIT in its 
discretion.

      "REIT Indemnified Party" has the meaning ascribed thereto in Section 
12.1(b) hereof.

      "Related Party" has the meaning ascribed thereto in the Joint Venture 
Agreement. 

      "Restricted Security" has the meaning ascribed thereto in Section 11.2 
hereof.

      "Return of Capital" means the amount, if any, by which (i) all 
distributions to the Purchaser by the Joint Venture of Capital Proceeds 
pursuant to Section 5.3 of the Joint Venture Agreement (other than Put/Sale 
Distributions), EXCEEDS (ii) the aggregate amount of all distributions of 
Cash Flow and Capital Proceeds (other than Put/Sale Distributions) necessary 
to provide the Purchaser with a cumulative annual return on (as opposed to 
"of") its aggregate Contributions of fifteen percent (15.0%) (determined as 
if compounded monthly); PROVIDED, HOWEVER, that in no event will the 
Purchaser be deemed to have received Return of Capital with respect to 
distributions of Capital Proceeds arising with respect to any particular 
Property greater than the Contribution made by the Purchaser with respect to 
such Property; PROVIDED FURTHER that in no event may Return of Capital be 
less than zero.

      "Return of Expansion Capital" means the amount, if any, by which (i) 
all distributions to the Purchaser by the Joint Venture of Capital Proceeds 
pursuant to Section 5.3 of the Joint Venture Agreement (other than Put/Sale 
Distributions) after such time as the Purchaser's Unrecouped Capital shall 
equal zero, EXCEEDS (ii) the aggregate amount of all distributions of Cash 
Flow and Capital Proceeds (other than Put/Sale Distributions) necessary to 
provide the Purchaser with a cumulative annual return on (as opposed to "of") 
its aggregate Contributions of fifteen percent (15.0%) (determined as if 
compounded monthly); PROVIDED, HOWEVER, that in no event will the Purchaser 
be deemed to have received Return of Expansion Capital with respect to 
distributions of Capital Proceeds arising with respect to any particular 
Property greater than the Contribution made by the Purchaser with respect to 
such Property; PROVIDED FURTHER that in no event may Return of Expansion 
Capital be less than zero.


                                      7

<PAGE>

      "Return of Additional Capital" means the amount, if any, by which (i) 
all distributions to the Purchaser by the Joint Venture of Capital Proceeds 
pursuant to Section 5.3 of the Joint Venture Agreement (other than Put/Sale 
Distributions) after such time as both Unrecouped Capital and Unrecouped 
Expansion Capital shall equal zero, EXCEEDS (ii) the aggregate amount of all 
distributions of Cash Flow and Capital Proceeds (other than Put/Sale 
Distributions) necessary to provide the Purchaser with a cumulative annual 
return on (as opposed to "of") its aggregate Contributions of fifteen percent 
(15.0%) (determined as if compounded monthly); PROVIDED, HOWEVER, that in no 
event will the Purchaser be deemed to have received Return of Additional 
Capital with respect to distributions of Capital Proceeds arising with 
respect to any particular Property greater than the Contribution made by the 
Purchaser with respect to such Property; PROVIDED FURTHER that in no event 
may Return of Additional Capital be less than zero.

      "Right of First Offer" means the right set forth in Section 8.2 of the 
Joint Venture Agreement.

      "Right of First Offer Proceeds" means the amount of Capital Proceeds 
distributed to the Purchaser from the Joint Venture arising out of the 
consummation of a Right of First Offer in which the Target Asset consisted of 
all or substantially all of the properties then owned by the Joint Venture.

      "Rule 144" means Rule 144 as promulgated by the Commission under the 
Securities Act, and any successor rule or regulation thereto.

      "Rule 144A" means Rule 144A as promulgated by the Commission under the 
Securities Act, and any successor rule or regulation thereto.

      "SEC Filings" means official filings of the REIT filed with the 
Commission in accordance with the Securities Act and the Exchange Act with 
respect to events occurring, or periods ending on or after December 31, 1997.

      "Securities Act" means the Securities Act of 1933, and the rules and 
regulations of the Commission promulgated thereunder, as from time to time 
amended.

      "Senior Preferred Stock" has the meaning ascribed thereto in Section 
8.12 hereof.

      "Subsidiary" and "Subsidiaries" means subsidiary corporations, 
partnerships, limited partnerships, joint ventures and limited liability 
companies which are directly or indirectly and wholly or majority owned by 
the REIT, including, unless the context requires otherwise, the Operating 
Partnership.

      "Target Asset" has the meaning ascribed thereto in the Joint Venture 
Agreement.
      "Transaction Documents" means, collectively, this Agreement, the 
Registration Rights Agreement, the Management Rights Letter, the Certificate 
of Amendment, the Depositary Agreement, the Tax Representation Letter, the 
Initial Warrant, the Expansion Capital Warrant,


                                      8

<PAGE>

the Amendment to the Amended and Restated Agreement of Limited Partnership of 
the Operating Partnership attached as EXHIBIT H and any and all agreements, 
certificates, instruments and other documents contemplated hereby, thereby or 
executed and delivered in connection herewith or therewith.

      "Unrecouped Capital" means the aggregate amount of all Contributions 
made by the Purchaser to the Joint Venture LESS (i) any Expansion Capital 
that has been contributed, LESS (ii) any Additional Capital, LESS (iii) any 
Return of Capital, and LESS (iv) the amount of any Put/Sale Distribution 
arising out of the disposition of a Property originally purchased with 
Contributions other than Expansion Capital or Additional Capital; PROVIDED, 
HOWEVER, that in no event may Unrecouped Capital be less than zero.

      "Unrecouped Expansion Capital" means the aggregate amount of all 
Contributions made by the Purchaser to the Joint Venture LESS (i) 
$50,000,000, LESS (ii) any  Additional Capital, LESS (iii) any Return of 
Expansion Capital, and LESS (iv) the amount of any Put/Sale Distribution 
arising out of the disposition of a Property originally purchased with 
Contributions of Expansion Capital; PROVIDED, HOWEVER, that in no event may 
Unrecouped Expansion Capital be less than zero.

      "Unrecouped Additional Capital" means the aggregate amount of all 
Additional Capital contributed by the Purchaser to the Joint Venture LESS (i) 
any Return of Additional Capital and LESS (ii) the amount of any Put/Sale 
Distribution arising out of the disposition of a Property originally 
purchased with Contributions of Additional Capital; PROVIDED, HOWEVER, that 
in no event may Unrecouped Additional Capital be less than zero.

      The definitions set forth above, including but not limited to 
"Unrecouped Capital," "Return of Capital," "Unrecouped Expansion Capital," 
"Return of Expansion Capital, "Unrecouped Additional Capital," and "Return of 
Additional Capital" are intended to grant certain rights relating to shares 
of Capital Stock in the REIT under the circumstances described in this 
Agreement and are not to be applied in any manner to (i) impact the book or 
tax capital account balances of the Operating Partnership or the Purchaser in 
the Joint Venture, or (ii) impact the distributions upon liquidation of the 
Joint Venture, which the parties agree shall be PARI PASSU in accordance with 
their positive capital account balances.

      20    OPTION TO PURCHASE PREFERRED STOCK IN EXCHANGE FOR JOINT VENTURE
INTEREST

            2.1   GRANT OF EXCHANGE OPTION.  The REIT, in consideration of 
Ten Dollars ($10.00) paid to it by the Purchaser and other good and valuable 
consideration, hereby grants to the Purchaser the option to purchase, subject 
to the provisions of this Agreement, that number of fully paid and 
nonassessable shares of Preferred Stock determined in accordance with Section 
2.3 below in exchange for the entire amount of the limited liability company 
interests in the Joint Venture then held by the Purchaser (this option being 
hereinafter referred to as the "Exchange Option").


                                      9

<PAGE>

            2.2   VESTING OF EXCHANGE OPTION.  Subject to Section 2.6(b) 
below, the Exchange Option may be exercised by the Purchaser:

                  (a)   at any time on or after the later to occur of either 
(i) the expiration or termination of the Investment Period, or (ii) the first 
anniversary of the date hereof;

                  (b)   following the initiation by the Operating Partnership 
of the Right of First Offer if the Target Asset offered thereby consists of 
75% or more of the properties then owned by the Joint Venture (determined by 
number of properties) or the initiation by the Operating Partnership of the 
Buy/Sell; or

                  (c)   immediately preceding the consummation or occurrence 
of a Change in Control of the REIT.

            2.3   DETERMINATION OF SHARES UNDERLYING EXCHANGE OPTION.  Upon 
exercise of the Exchange Option, the Purchaser shall be entitled to receive 
that number of shares of Preferred Stock determined by DIVIDING (a) the sum 
of (x) the quotient obtained by dividing (i) Unrecouped Capital, by (ii) the 
Option Exercise Price AND (y) if the Operating Partnership has approved an 
increase in the Capital Contribution Cap under Section 3.7(a) of the Joint 
Venture Agreement, the quotient obtained by dividing (i) Unrecouped Expansion 
Capital, by (ii) the Expansion Option Exercise Price AND (z) if any 
Additional Capital has been contributed, the quotient obtained by dividing 
(i) Unrecouped Additional Capital, by (ii) the Additional Option Exercise 
Price, BY (b) the Conversion Multiple, and, if necessary, rounding the 
resulting number of shares to the next highest one one-hundredth (1/100) of a 
share.

            2.4   RIGHT OF REIT TO SUBSTITUTE REIT COMMON STOCK IN EXCHANGE 
OPTION.  In lieu of delivering shares of Preferred Stock upon exercise of the 
Exchange Option, the REIT may elect, at its sole option, to satisfy its 
obligations under the Exchange Option by delivering to the Purchaser either:

                  (a)   that number of shares of REIT Common Stock determined 
by MULTIPLYING (i) the number of shares of Preferred Stock determined 
pursuant to Section 2.3 above to which the Purchaser would be otherwise 
entitled BY (ii) the Conversion Multiple, and, if necessary, rounding the 
resulting number of shares to the next highest whole number; or

                  (b)   a combination of shares of REIT Common Stock and 
Preferred Stock determined as follows: (x) shares of REIT Common Stock up to 
that number of shares that, upon delivery, would result in the Purchaser 
beneficially owning nine percent (9.0%) of the total number of outstanding 
shares of REIT Common Stock (determined pursuant to Section 13(d) of the 
Exchange Act or Division C of Article Fourth of the Articles of 
Incorporation, whichever is more restrictive), and (y) a number of shares of 
Preferred Stock equal to the quotient obtained by DIVIDING (A) the amount, if 
any, by which the aggregate number of shares of REIT Common Stock determined 
in accordance with Section 2.4(a) above exceeds the number of shares of REIT 
Common Stock determined by clause (x) above BY (B)


                                      10

<PAGE>

the Conversion Multiple and, if necessary, rounding the resulting number of 
shares to the next highest one one-hundredth (1/100) of a share.

Notwithstanding anything in this Agreement to the contrary, the REIT may not 
make an election to deliver any shares of REIT Common Stock in lieu of 
Preferred Stock pursuant to this Section 2.4  if such election would cause 
the REIT to be unable to satisfy the conditions set forth in Section 7.1 
hereof in a timely manner.

            2.5   PROCEDURE FOR EXERCISING THE EXCHANGE OPTION; CLOSING.

                  (a)   In order to exercise the Exchange Option, the 
Purchaser shall deliver to the REIT a written notice of exercise, duly 
executed by the Purchaser, which notice shall (i) indicate that the Purchaser 
is exercising the Exchange Option and (ii) specify the number of shares of 
Preferred Stock to be issued pursuant to such exercise.  Within ten (10) 
business days of receiving such notice of election, the REIT shall notify the 
Purchaser if it disagrees with the Purchaser's determination of the number of 
shares of Preferred Stock to be issued pursuant to the exercise of the 
Exchange Option and/or if it is electing to deliver any shares of REIT Common 
Stock in lieu of Preferred Stock, in which case, the REIT's notice shall 
specify the number of shares of REIT Common Stock and/or Preferred Stock to 
be issued pursuant to this Section.  In the event that the parties disagree 
as to the correct number of shares of Preferred Stock and/or REIT Common 
Stock, as applicable, to be delivered pursuant to this Section 2, the parties 
agree to cooperate in good faith and use their respective best efforts to 
resolve the correct determination under Section 2.3 or Section 2.4 hereof, as 
applicable, as promptly as possible.  If the parties cannot reach agreement 
by the sixteenth (16th) business day following the REIT's receipt of the 
notice of exercise, the determination will be referred to the Accountants (or 
such other Person unaffiliated with either party as the parties mutually 
agree) and the parties agree to be bound by such Person's determination.

                  (b)   Subject to the satisfaction of the conditions set 
forth in Section 7 hereof, the exercise of the Exchange Option shall be 
consummated at a Closing to be held at the offices of Purchaser's Counsel, or 
at such other place as may be mutually acceptable to the parties, on the 
later of the tenth (10th) business day following the REIT's receipt of the 
notice of exercise or the earliest date upon which all of the applicable 
conditions to Closing set forth in Section 7 hereof have been satisfied but 
in no event later than the sixtieth (60th) day following the REIT's receipt 
of the notice of exercise.  At the Closing, the REIT will execute or cause to 
be executed and deliver or cause to be delivered to the Purchaser a 
certificate or certificates representing the shares of Preferred Stock and/or 
REIT Common Stock, as applicable, to be sold and purchased in accordance with 
Section 2.3 or Section 2.4, as applicable, against delivery of the entire 
amount of limited liability company interests in the Joint Venture then held 
by the Purchaser.  The certificate or certificates so delivered shall be, to 
the extent possible, in such denomination or denominations as the Purchaser 
shall request in the notice of exercise and shall be registered in the name 
of the Purchaser or such other name as shall be designated in the notice of 
exercise.  The shares of Preferred Stock and/or REIT Common Stock, as 
applicable, represented by such certificate or certificates shall be
deemed to be issued, and the Purchaser (or any other Person designated as the 
registered holder) shall be


                                      11

<PAGE>

deemed to have become a holder of record of such shares of Preferred Stock 
and/or REIT Common Stock, as applicable, for all purposes, as of the Closing. 
The issuance of certificates for shares of Preferred Stock and/or REIT 
Common Stock, as applicable, shall be made without charge to the Purchaser 
for any issuance tax in respect thereof or other cost incurred by the REIT or 
the Operating Partnership in connection with such exercise and the related 
issuance of the shares of Preferred Stock and/or REIT Common Stock, as 
applicable.  Unless otherwise provided in this Agreement, all other costs 
incurred in connection with the consummation of the exercise of the Exchange 
Option  shall be borne by the party that actually incurred such costs.

                  (c)   In addition to the satisfaction of the conditions to 
Closing set forth in Section 7 hereof, the Operating Partnership, in its 
capacity as a member of the Joint Venture, agrees to (i) deliver to the 
Purchaser at or prior to the Closing contemplated in Section 2.5(b) above its 
consent, in writing, to the transfer of the Purchaser's limited liability 
company interests to the REIT pursuant to the exercise of the Exchange Option 
in accordance with Section 8.1 of the Joint Venture Agreement and to take all 
further action necessary to effectuate the transfer and the Purchaser's 
simultaneous withdrawal from the Joint Venture, and (ii) obtain for the 
benefit of the Purchaser releases from any and all monetary or other 
guaranties (including, without limitation, hazardous substances indemnities 
and the like) given by the Purchaser to third party lenders; PROVIDED, 
HOWEVER, that, if following the exercise of commercially reasonable efforts 
the Operating Partnership is unable to obtain releases from all such 
guaranties, then the Operating Partnership shall provide to the Purchaser 
indemnities reasonably satisfactory to the Purchaser to address the 
contingent liability contained in such unreleased guaranties.

            2.6   RIGHT OF FIRST OFFER AND BUY/SELL.

                  (a)   In the event that the Purchaser has exercised the 
Exchange Option and, prior to such exercise, either member of the Joint 
Venture has duly initiated (i) the Right of First Offer (unless the 
non-initiating member has declined to purchase the Target Asset so offered, 
in which event Section 2.6(b) below shall apply), or (ii) the Buy/Sell, then 
such Right of First Offer or Buy/Sell, as applicable, shall be deemed 
terminated immediately upon the REIT's receipt of the Purchaser's notice of 
exercise relating to the Exchange Option and the parties shall take no 
further actions in connection with the procedures under the Joint Venture 
Agreement for effectuating such Right of First Offer or Buy/Sell, as 
applicable.  The parties further agree not to initiate the Right of First 
Offer or the Buy/Sell subsequent to the Purchaser's exercise of the Exchange 
Option.

                  (b)   In the event that the Purchaser has exercised the 
Exchange Option and, prior to such exercise, either member of the Joint 
Venture has initiated the Right of First Offer and the non-initiating party 
has declined to purchase the Target Asset so offered, then the initiating 
party may continue its efforts to sell such Target Asset on the offered 
terms; PROVIDED, HOWEVER, that the parties shall prevent the Joint Venture 
from distributing any Capital Proceeds arising with respect to the sale of 
such Target Asset until the Purchaser's exercise of the Exchange Option has 
been consummated. Notwithstanding the foregoing, if (i)


                                      12

<PAGE>

the Purchaser is the initiating party under the Right of First Offer, (ii) 
the Target Asset consists of 75% or more of the properties then owned by the 
Joint Venture (determined by number of properties), and (iii) the Joint 
Venture has entered into a contract with a third party for the sale of such 
Target Asset, then the Purchaser may not exercise the Exchange Option until 
the earlier of the termination of the contract relating to the sale of the 
Target Asset or the consummation of the sale thereunder and the distribution 
of the Capital Proceeds therefrom.

            2.7   RIGHTS UPON A CHANGE IN CONTROL.  If, prior to the 
expiration or termination of the Investment Period, the REIT enters into an 
agreement that contemplates a Change in Control of the REIT or a Change in 
Control of the REIT otherwise occurs, then the Purchaser shall have the right 
to purchase up to that number of fully paid and nonassessable shares of 
Preferred Stock determined below for cash prior to the consummation or 
occurrence of such Change in Control. This right shall be in addition to, and 
not in limitation of, or otherwise dependent on, any other rights of the 
Purchaser under this Agreement.

      The Purchaser shall have the right to purchase up to that number of 
shares of Preferred Stock equal to the sum of (a) the quotient obtained by 
DIVIDING (i) the amount, if any, by which $30,000,000 exceeds the aggregate 
amount of all Contributions made by the Purchaser to the Joint Venture, BY 
(ii) the product of the Option Exercise Price multiplied by the Conversion 
Multiple, and (b) if the Operating Partnership has approved an increase in 
the Capital Contribution Cap under Section 3.7(a) of the Joint Venture 
Agreement, the quotient obtained by DIVIDING (i) the amount, if any, by which 
sixty percent (60%) of the Expansion Capital exceeds the aggregate amount of 
all Contributions of Expansion Capital made by the Purchaser to the Joint 
Venture, BY (ii) the product of the Expansion Option Exercise Price 
multiplied by the Conversion Multiple and, if necessary, rounding the 
resulting number of shares to the next highest one one-hundredth (1/100) of a 
share.  The per share exercise price payable by the Purchaser in order to 
exercise this right shall be (x) with respect to the purchase of shares 
determined pursuant to clause (a) above, the Option Exercise Price multiplied 
by the Conversion Multiple and (y) with respect to the purchase of shares 
determined pursuant to clause (b) above, the Expansion Option Exercise Price 
multiplied by the Conversion Multiple.

      In connection with the right to purchase shares of Preferred Stock 
under this Section 2.7, the REIT shall have the same rights with respect to 
the delivering of REIT Common Stock or a combination of REIT Common Stock and 
Preferred Stock as set forth in Section 2.4.  The REIT shall deliver to the 
Purchaser a notice of a proposed Change in Control promptly after the 
execution of a definitive agreement with respect to such Change in Control, 
or if there is no such definitive agreement, promptly after approval by the 
REIT's Board of Directors or other similar official corporate action but in 
no event less than ten (10) business days prior to the consummation or 
occurrence of such Change in Control.  The Purchaser shall deliver notice of 
its intent to exercise this right within ten (10) business days following the 
receipt of such notice from the REIT.  Any notice of the Purchaser's intent 
to exercise this right shall be deemed null and void AB INITIO in the event 
that the contemplated Change in Control is not consummated or does not 
otherwise occur or the final terms of such Change in Control materially 
differ from those set forth in the REIT's notice to the Purchaser.  In the 
event that the terms of such Change in Control are materially amended or 
altered prior to the


                                      13

<PAGE>

consummation or occurrence thereof, the REIT shall provide notice to the 
Purchaser promptly following such amendment or alteration and the Purchaser 
may elect, within five (5) business days, to rescind its notice of election 
or to exercise its rights under this Section with respect to the Change in 
Control as so amended or altered.  The procedures for consummating an 
exercise of this right shall otherwise be substantially similar to the 
procedures set forth in Sections 2.5 with respect to an exercise of the 
Exchange Option.  Notwithstanding anything in this Agreement to the contrary, 
the Purchaser's ability to exercise this right shall terminate immediately 
following the consummation or occurrence of a Change in Control.

      30    WARRANTS TO PURCHASE PREFERRED STOCK WITH UNINVESTED CAPITAL

            3.1   ISSUANCE AND SALE OF INITIAL WARRANT.

                  (a)   The REIT has authorized the issuance and sale of a 
warrant to purchase 12,136 shares of Preferred Stock, subject to adjustment 
in accordance with the terms of such warrant (the "Initial Warrant"). The 
Initial Warrant shall be in the form attached hereto as EXHIBIT A.  Subject 
to the terms and conditions of this Agreement and in reliance upon the 
representations and warranties contained herein, the REIT agrees to issue and 
sell to the Purchaser, and the Purchaser agrees to purchase from the REIT, 
the Initial Warrant as of the date hereof for a purchase price of $500,000 
payable in cash by wire transfer of immediately available funds.

                  (b)   Subject to the satisfaction of the conditions set 
forth in Section 7 hereof, the consummation of the purchase and sale of the 
Initial Warrant shall take place at the offices of Purchaser's Counsel 
concurrently with the execution of this Agreement.  At such Closing, the REIT 
shall execute, or cause to be executed, and deliver, or cause to be 
delivered, to the Purchaser the Initial Warrant, dated as of the date hereof 
and registered in the Purchaser's name, against payment of the purchase price 
therefor. The Initial Warrant shall be deemed to be issued, and the Purchaser 
shall be deemed to have become a holder of record of such Initial Warrant for 
all purposes, as of the Closing contemplated in this Section 3.1(b).  The 
issuance of the Initial Warrant shall be made without charge to the Purchaser 
for any issuance tax in respect thereof or other cost incurred by the REIT or 
the Operating Partnership in connection with the issuance thereof.  Unless 
otherwise provided in this Agreement, all other costs incurred in connection 
with the issuance and sale of the Initial Warrant shall be borne by the party 
that actually incurred such costs.

                  (c)   In addition to any other conditions to issuing 
Capital Stock of the REIT pursuant to an exercise of the Initial Warrant, the 
conditions set forth in Section 7.1 hereof shall be required to be satisfied 
prior to such issuance of Capital Stock so long as the Initial Warrant is 
held by, and exercised by, the Purchaser under this Agreement; it being 
understood that the provisions of this Agreement shall not apply to any 
exercise of the Initial Warrant by any transferee of all or a portion of the 
Initial Warrant unless such transferee is a permitted transferee of, and has 
succeeded to, the Purchaser's rights and obligations under this Agreement in 
accordance with Section 12.2 hereof.


                                      14

<PAGE>

            3.2   EXPANSION CAPITAL WARRANT.

                  (a)   Subject to Section 3.2(b), the REIT has authorized 
the issuance and sale of a warrant to purchase an aggregate number of shares 
of Preferred Stock determined in accordance with Section 3.2(c) (the 
"Expansion Capital Warrant"). The Expansion Capital Warrant shall be 
substantially in the form attached hereto as EXHIBIT A, with such changes as 
are necessary to effectuate this Section 3.2 or as may agreed upon by the 
parties.  Subject to Section 3.2(b) and the other terms and conditions of 
this Agreement and in reliance upon the representations and warranties 
contained herein, the REIT agrees to issue and sell to the Purchaser, and the 
Purchaser has the right to purchase from the REIT, the Expansion Capital 
Warrant at the closing date set forth in Section 3.2(e) for a purchase price 
payable in cash by wire transfer of immediately available funds.

                  (b)   Notwithstanding anything in this Agreement to the 
contrary, the REIT shall have no obligation to issue or sell, and the 
Purchaser shall have no right to purchase, the Expansion Capital Warrant 
until such time, if ever, as the Operating Partnership has approved a 
proposed increase in the Capital Contribution Cap pursuant to Section 3.7(a) 
of the Joint Venture Agreement.

                  (c)   The Expansion Capital Warrant will be exercisable at 
the Purchaser's option for that number of shares of Preferred Stock 
determined by DIVIDING (a) an amount (expressed in dollars) equal to forty 
percent (40%) of the Expansion Capital (the "Expansion Warrant Amount"), BY 
(b) the Expansion Option Exercise Price multiplied by the Conversion Multiple 
(the "Expansion Warrant Exercise Price"), and, if necessary, rounding the 
quotient to the next highest one one-hundredth (1/100) of a share.  The per 
share exercise price payable by the Purchaser upon any exercise of the 
Expansion Capital Warrant shall be equal to the Expansion Warrant Exercise 
Price, subject to adjustment as provided in the Warrant.

                  (d)   The parties agree further that the Expansion Capital 
Warrant will provide for an adjustment to the number of shares of Preferred 
Stock underlying the Expansion Capital Warrant following Contributions of 
Expansion Capital prior to the expiration of the Investment Period, 
substantially similar to the adjustment provisions contained in Section 7.1 
of the Initial Warrant.  Following such adjustment, the maximum number of 
shares of Preferred Stock issuable pursuant to the Expansion Capital Warrant 
shall be determined by MULTIPLYING (a) the quotient obtained by dividing the 
Expansion Warrant Amount by the Expansion Warrant Exercise Price, BY (b) a 
fraction, (i) the numerator of which is the Expansion Warrant Amount less the 
amount, if any, by which all Contributions made by the Purchaser to the Joint 
Venture pursuant to Expansion Capital exceeds sixty percent (60%) of the 
Expansion Capital, and (ii) the denominator of which is the Expansion Warrant 
Amount.  In addition, the Expansion Capital Warrant shall provide that the 
REIT shall pay to the Purchaser an adjustment rebate, similar to that 
provided for in Section 7.3 of the Initial Warrant, if, prior to the 
expiration of the Investment Period, the amount of all Contributions made by 
the Purchaser to the Joint Venture pursuant to Expansion Capital exceeds 
sixty percent (60%) of the Expansion Capital.


                                      15

<PAGE>

                  (e)   Subject to the satisfaction of the conditions set 
forth in Section 7 hereof, the consummation of the purchase and sale of the 
Expansion Capital Warrant shall take place at the offices of Purchaser's 
Counsel on a date mutually agreed upon by the parties, but in no event later 
than the tenth (10th) business day following the Operating Partnership's 
approval of an increase in the Capital Contribution Cap in accordance with 
Section 3.7(a) of the Joint Venture Agreement.  At such Closing, the REIT 
shall execute, or cause to be executed, and deliver, or cause to be 
delivered, to the Purchaser the Expansion Capital Warrant, dated as of the 
date of the Closing and registered in the Purchaser's name (or such other 
name as the Purchaser shall designate), against payment of the purchase price 
therefor. The purchase price for the Expansion Capital Warrant shall be 
$500,000; PROVIDED, HOWEVER, that the purchase price shall be reduced 
proportionately to the extent that the Expansion Warrant Amount is less than 
$20,000,000.  The Expansion Capital Warrant shall be deemed to be issued, and 
the Purchaser (or any other person designated as the registered holder) shall 
be deemed to have become a holder of record of such Expansion Capital Warrant 
for all purposes, as of the Closing contemplated in this Section 3.2(e).  The 
issuance of the Expansion Capital Warrant shall be made without charge to the 
Purchaser for any issuance tax in respect thereof or other cost incurred by 
the REIT or the Operating Partnership in connection the issuance thereof.  
Unless otherwise provided in this Agreement, all other costs incurred in 
connection with the issuance and sale of the Expansion Capital Warrant shall 
be borne by the party that actually incurred such costs.

                  (f)   In addition to any other conditions to issuing 
Capital Stock of the REIT pursuant to an exercise of the Expansion Capital 
Warrant, the conditions set forth in Section 7.1 hereof shall be required to 
be satisfied prior to such issuance of Capital Stock so long as the Expansion 
Capital Warrant is held by, and exercised by, the Purchaser under this 
Agreement; it being understood that the provisions of this Agreement shall 
not apply to any exercise of the Expansion Capital Warrant by any transferee 
of all or a portion of the Expansion Capital Warrant unless such transferee 
is a permitted transferee of, and has succeeded to, the Purchaser's rights 
and obligations under this Agreement in accordance with Section 12.2 hereof. 


                                      16

<PAGE>

      40    RIGHT TO SUBSTITUTE PREFERRED STOCK AS CURRENCY

            4.1   RIGHT OF PURCHASER TO REQUIRE PAYMENT IN PREFERRED STOCK.  
In the event that, pursuant to the Buy/Sell or otherwise, the Operating 
Partnership at any time becomes the buyer of all or substantially all of the 
Purchaser's limited liability company interest in the Joint Venture, the 
Purchaser shall have the right, in its sole discretion, to require the REIT 
to assume the Operating Partnership's obligations as buyer and to receive the 
consideration due to the Purchaser in a combination of cash and Preferred 
Stock determined as follows.  First, the Purchaser shall determine the 
portion of the purchase price ("P") to be received by it in cash ("C").  The 
REIT shall pay such amount C in cash in accordance with the terms of the 
Joint Venture Agreement.  Second, the Purchaser shall calculate the remaining 
portion of the purchase price P ("PCP"). PCP shall equal the remainder of P 
MINUS C, subject to the limitation described in (a) below, if applicable.  
Third, the Purchaser shall determine the method of calculating the number of 
shares of Preferred Stock ("S") to be received by it with respect to the PCP. 
 The Purchaser may, in its sole discretion, choose EITHER (a) or (b) below as 
the method to make such calculation.

                  (a)   The Purchaser may elect to receive a number of shares 
S determined by the following formula (and, if necessary, rounding the 
resulting number to the next highest one one-hundredth (1/100) of a share):

                  S = (PCP DIVIDED BY Effective Exercise Price) DIVIDED BY 
Conversion Multiple

                  For the purposes of this Section 4.1(a), "EFFECTIVE 
EXERCISE PRICE" means the amount (expressed in dollars) determined by the 
following formula:

                  (Unrecouped Capital + Unrecouped Expansion Capital +
                  Unrecouped Additional Capital) DIVIDED BY [(Unrecouped Capital
                  DIVIDED BY Option Exercise Price) + (Unrecouped Expansion
                  Capital DIVIDED BY Expansion Option Exercise Price) +
                  (Unrecouped Additional Capital DIVIDED BY Additional Option
                  Exercise Price)]

                  Notwithstanding the foregoing, however, in the event the 
Purchaser elects the method set forth in this subsection (a) to calculate S, 
PCP may not exceed the aggregate amount (expressed in dollars) of the sum of 
(i) Unrecouped Capital, (ii) Unrecouped Expansion Capital and (iii) 
Unrecouped Additional Capital.  The number of shares S to which the Purchaser 
is entitled pursuant to this Section 4.1(a) shall be determined immediately 
prior to the sale of all or substantially all of the Purchaser's limited 
liability company interests pursuant to the Buy/Sell or otherwise, without 
taking into account the effect of such sale on the calculation hereunder.


                                      17

<PAGE>

                  (b)    The Purchaser may elect to receive a number of 
shares S determined by the following formula (and, if necessary, rounding the 
resulting number to the next highest one one-hundredth (1/100) of a share):

                  S = (PCP DIVIDED BY Adjusted Stock Price) DIVIDED BY 
Conversion Multiple

                  For the purposes of this Section 4.1(b), "ADJUSTED STOCK 
PRICE" means a dollar amount equal to 97% of the average last sale price per 
share of the REIT Common Stock on the NYSE over the twenty-one (21) days on 
which the NYSE is open and for which trades in the REIT Common Stock are 
reported immediately preceding the date that the Purchaser delivers notice of 
its election to receive Preferred Stock (adjusted to take into account any 
splits, combinations, reclassifications, or other changes in the REIT's 
capitalization that occur during such period).  In the event that the REIT 
Common Stock is no longer trading on the NYSE then the Adjusted Stock Price 
shall be determined using the prices reported on the exchange or automated 
quotation system on which the REIT Common Stock then trades.

                  (c)   In lieu of delivering shares of Preferred Stock upon 
the Purchaser's election under this Section 4.1, the REIT may elect, at its 
sole option, to satisfy its obligations under this Section 4.1 by delivering 
to the Purchaser either:

                        (i)   that number of shares of REIT Common Stock 
determined by MULTIPLYING (i) the number of shares of Preferred Stock 
determined pursuant to Section 4.1(a) or (b), as applicable, to which the 
Purchaser would be otherwise entitled BY (ii) the Conversion Multiple, and, 
if necessary, rounding the resulting number of shares to the next highest 
whole number; or

                        (ii)  a combination of shares of REIT Common Stock 
and Preferred Stock determined as follows: (x) shares of REIT Common Stock up 
to that number of shares that, upon delivery, would result in the Purchaser 
beneficially owning nine percent (9.0%) of the total number of outstanding 
shares of REIT Common Stock (determined pursuant to Section 13(d) of the 
Exchange Act or Division C of Article Fourth of the Articles of 
Incorporation, whichever is more restrictive), and (y) a number of shares of 
Preferred Stock equal to the quotient obtained by DIVIDING (A) the amount, if 
any, by which the aggregate number of shares of REIT Common Stock determined 
in accordance with Section 4.1(c)(i) above exceeds the number of shares of 
REIT Common Stock determined by clause (x) above BY (B) the Conversion 
Multiple and, if necessary, rounding the resulting number to the next highest 
one one-hundredth (1/100) of a share.

Notwithstanding anything in this Agreement to the contrary, the REIT may not 
make an election to deliver any shares of REIT Common Stock in lieu of 
Preferred Stock pursuant to this Section 4.1(c)  if such election would cause 
the REIT to be unable to satisfy the conditions set forth in Section 7.1 
hereof in a timely manner.


                                      18

<PAGE>

                  (d)   In order to receive Preferred Stock or REIT Common 
Stock, as applicable, under this Section 4.1, the Purchaser shall deliver to 
the REIT and the Operating Partnership a written notice of election, duly 
executed by the Purchaser, within ten (10) business days following the 
determination that the REIT or the Operating Partnership will be the 
purchaser of all or substantially all of the Purchaser's limited liability 
company interest in the Joint Venture under the Buy/Sell or otherwise.  Such 
notice shall (i) indicate that it is exercising its rights under this Section 
4.1 and (ii) specify the number of shares of Preferred Stock to be issued and 
the related calculation under Section 4.1(a) or (b), whichever is elected by 
the Purchaser in such notice.  Within ten (10) business days of receiving 
such notice of election, the REIT shall notify the Purchaser if it disagrees 
with the Purchaser's determination of the number of shares of Preferred Stock 
to be issued pursuant to the exercise of the Purchaser's rights under this 
Section 4.1 and/or if it is electing to deliver any shares of REIT Common 
Stock in lieu of Preferred Stock, in which case, the REIT's notice shall 
specify the number of shares of REIT Common Stock and/or Preferred Stock to 
be issued pursuant to Section 4.1(c).  In the event that the parties disagree 
as to the correct number of shares of Preferred Stock and/or REIT Common 
Stock, as applicable, to be delivered pursuant to this Section 4.1, the 
parties agree to cooperate in good faith and use their respective best 
efforts to resolve the appropriate determination under Section 4.1(a), (b) or 
(c) as applicable as promptly as possible.  If the parties cannot reach 
agreement by the sixth (6th) business day following the REIT's receipt of the 
notice of election, the determination will be referred to the Accountants (or 
such other Person unaffiliated with either party as the parties mutually 
agree) and the parties agree to be bound by such Person's determination.

                  (e)   The shares of Preferred Stock and/or REIT Common 
Stock, as applicable, will be issued at the Closing to be held in accordance 
with the provisions of the Buy/Sell, or such other procedures as may be 
agreed upon by the parties; PROVIDED, HOWEVER, that, in addition to any 
conditions in the Joint Venture Agreement, the conditions set forth in 
Section 7 hereof shall be required to be satisfied prior to such Closing.  At 
the Closing, the REIT will execute or cause to be executed and deliver or 
cause to be delivered to the Purchaser a certificate or certificates 
representing the shares of Preferred Stock and/or REIT Common Stock, as 
applicable, to be sold and purchased in accordance with Section 4.1(a), (b) 
or (c), as applicable, against delivery of the consideration to be paid by 
the Purchaser pursuant to the terms of the Joint Venture Agreement.  The 
certificate or certificates so delivered shall be, to the extent possible, in 
such denomination or denominations as the Purchaser shall request in the 
notice and shall be registered in the name of the Purchaser or such other 
name as shall be designated in the notice.  The shares of Preferred Stock 
and/or REIT Common Stock, as applicable, represented by such certificate or 
certificates shall be deemed to be issued, and the Purchaser (or any other 
person designated as the registered holder) shall be deemed to have become a 
holder of record of such shares of Preferred Stock and/or REIT Common Stock, 
as applicable, for all purposes, as of the Closing.  The issuance of 
certificates for shares of Preferred Stock and/or REIT Common Stock, as 
applicable, shall be made without charge to the Purchaser for any issuance 
tax in respect thereof or other cost incurred by the REIT or the Operating 
Partnership in connection with such exercise and the related issuance of the 
shares of Preferred Stock and/or REIT Common Stock, as applicable.  Unless 
otherwise provided in this Agreement or the Joint Venture Agreement, all 
other costs incurred


                                      19

<PAGE>

in connection with the issuance of the Preferred Stock and/or REIT Common 
Stock, as applicable, pursuant to this Section 4.1 shall be borne by the 
party that actually incurred such costs.

            4.2   RIGHT OF PURCHASER TO PURCHASE PREFERRED STOCK WITH THE 
RIGHT OF FIRST OFFER PROCEEDS.  In the event that, pursuant to the Right of 
First Offer, the Operating Partnership at any time becomes the buyer of all 
or substantially all of the properties then owned by the Joint Venture, the 
Purchaser shall have the right to elect to purchase from the REIT a number of 
shares of Preferred Stock (as determined below) for cash in accordance with 
the terms of this Section 4.2.  The distribution of the Right of First Offer 
Proceeds and the consummation of such purchase of shares of Preferred Stock 
shall occur concurrently with the consummation of the sale of the Target 
Asset pursuant to the Right of First Offer held in accordance with the terms 
of the Joint Venture Agreement.  Upon an election pursuant to this Section 
4.2, the Purchaser shall first determine the portion of the Right of First 
Offer Proceeds that it desires to apply toward the purchase of shares of 
Preferred Stock ("PCP"), subject to the limitation described in (a) below, if 
applicable.  The Purchaser shall be entitled to receive the remainder of the 
Right of First Offer Proceeds in accordance with the terms of the Joint 
Venture Agreement.  Second, the Purchaser shall determine the method of 
calculating the number of shares of Preferred Stock ("S") to be received by 
it with respect to the PCP.  The Purchaser may, in its sole discretion, 
choose EITHER (a) or (b) below as the method to make such calculation.

                  (a)   The Purchaser may elect to receive a number of shares 
S determined by the following formula (and, if necessary, rounding the 
resulting number to the next highest one one-hundredth (1/100) of a share):

                  S = (PCP DIVIDED BY Effective Exercise Price) DIVIDED BY 
Conversion Multiple

                  For the purposes of this Section 4.2(a), "EFFECTIVE 
EXERCISE PRICE" means the amount (expressed in dollars) determined by the 
following formula:

                  (Unrecouped Capital + Unrecouped Expansion Capital +
                  Unrecouped Additional Capital) DIVIDED BY [(Unrecouped Capital
                  DIVIDED BY Option Exercise Price) + (Unrecouped Expansion
                  Capital DIVIDED BY Expansion Option Exercise Price) +
                  (Unrecouped Additional Capital DIVIDED BY Additional Option
                  Exercise Price)]

                  Notwithstanding the foregoing, however, in the event the 
Purchaser elects the method set forth in this subsection (a) to calculate S, 
PCP may not exceed the aggregate amount (expressed in dollars) of the sum of 
(i) Unrecouped Capital, (ii) Unrecouped Expansion Capital and (iii) 
Unrecouped Additional Capital.  The number of shares S to which the Purchaser 
is entitled pursuant to this Section 4.2(a) shall be determined immediately 
prior to the distribution of the Right of First Offer Proceeds, without 
taking into account the effect of such distribution on the calculation 
hereunder.


                                      20

<PAGE>

                  (b)    The Purchaser may elect to receive a number of 
shares S determined by the following formula (and, if necessary, rounding the 
resulting number to the next highest one one-hundredth (1/100) of a share):

                  S = (PCP DIVIDED BY Adjusted Stock Price) DIVIDED BY 
                      Conversion Multiple

                  For the purposes of this Section 4.2(b), "ADJUSTED STOCK 
PRICE" means a dollar amount equal to 97% of the average last sale price per 
share of the REIT Common Stock on the NYSE over the twenty-one (21) days on 
which the NYSE is open and for which trades in the REIT Common Stock are 
reported immediately preceding the date that the Purchaser delivers notice of 
its election to receive Preferred Stock (adjusted to take into account any 
splits, combinations, reclassifications, or other changes in the REIT's 
capitalization that occur during such period).  In the event that the REIT 
Common Stock is no longer trading on the NYSE then the Adjusted Stock Price 
shall be determined using the prices reported on the exchange or automated 
quotation system on which the REIT Common Stock then trades.

                  (c)   In lieu of delivering shares of Preferred Stock upon 
the Purchaser's election under this Section 4.2, the REIT may elect, at its 
sole option, to satisfy its obligations under this Section 4.2 by delivering 
to the Purchaser either:

                        (i)   that number of shares of REIT Common Stock 
determined by MULTIPLYING (i) the number of shares of Preferred Stock 
determined pursuant to Section 4.2(a) or (b), as applicable, to which the 
Purchaser would be otherwise entitled BY (ii) the Conversion Multiple, and, 
if necessary, rounding the resulting number of shares to the next highest 
whole number; or

                        (ii)  a combination of shares of REIT Common Stock 
and Preferred Stock determined as follows: (x) shares of REIT Common Stock up 
to that number of shares that, upon delivery, would result in the Purchaser 
beneficially owning nine percent (9.0%) of the total number of outstanding 
shares of REIT Common Stock (determined pursuant to Section 13(d) of the 
Exchange Act or Division C of Article Fourth of the Articles of 
Incorporation, whichever is more restrictive), and (y) a number of shares of 
Preferred Stock equal to the quotient obtained by DIVIDING (A) the amount, if 
any, by which the aggregate number of shares of REIT Common Stock determined 
in accordance with Section 4.2(c)(i) above exceeds the number of shares of 
REIT Common Stock determined by clause (x) above BY (B) the Conversion 
Multiple and, if necessary, rounding the resulting number to the next highest 
one one-hundredth (1/100) of a share.

Notwithstanding anything in this Agreement to the contrary, the REIT may not
make an election to deliver any shares of REIT Common Stock in lieu of Preferred
Stock pursuant to this Section 4.2(c)  if such election would cause the REIT to
be unable to satisfy the conditions set forth in Section 7.1 hereof in a timely
manner.

                                     21

<PAGE>

                  (d)   In order to receive Preferred Stock and/or REIT 
Common Stock, as applicable, under this Section 4.2, the Purchaser shall 
deliver to the REIT and the Operating Partnership a written notice of 
election, duly executed by the Purchaser, within ten (10) business days 
following the determination that the Operating Partnerships will be the 
purchaser under the Right of First Offer of all or substantially all of the 
properties then owned by the Joint Venture. Such notice shall (i) indicate 
that it is exercising its rights under this Section 4.2 and (ii) specify the 
number of shares of Preferred Stock to be issued and the related calculation 
under Section 4.2(a) or (b), whichever is elected by the Purchaser in such 
notice.  Within ten (10) business days of receiving such notice of election, 
the REIT shall notify the Purchaser if it disagrees with the Purchaser's 
determination of the number of shares of Preferred Stock to be issued 
pursuant to the exercise of the Purchaser's rights under this Section 4.2 
and/or if it is electing to deliver any shares of REIT Common Stock in lieu 
of Preferred Stock, in which case, the REIT's notice shall specify the number 
of shares of REIT Common Stock and/or Preferred Stock to be issued pursuant 
to Section 4.2(c).  In the event that the parties disagree as to the correct 
number of shares of Preferred Stock and/or REIT Common Stock, as applicable, 
to be delivered pursuant to this Section 4.2, the parties agree to cooperate 
in good faith and use their respective best efforts to resolve the 
appropriate determination under Section 4.2(a), (b) or (c) as applicable as 
promptly as possible.  If the parties cannot reach agreement by the sixth 
(6th) business day following the REIT's receipt of the notice of election, 
the determination will be referred to the Accountants (or such other Person 
unaffiliated with either party as the parties mutually agree) and the parties 
agree to be bound by such Person's determination.

                  (e)    The shares of Preferred Stock and/or REIT Common 
Stock, as applicable, will be issued at the Closing to be held with respect 
to the consummation of the Right of First Offer; PROVIDED, HOWEVER, that, in 
addition to any conditions in the Joint Venture Agreement, the conditions set 
forth in Section 7 hereof shall be required to be satisfied prior to such 
Closing and the parties agree to cause the Joint Venture to distribute the 
Right of First Offer Proceeds concurrently with the consummation of the Right 
of First Offer.  At the Closing, the REIT will execute or cause to be 
executed and deliver or cause to be delivered to the Purchaser a certificate 
or certificates representing the shares of Preferred Stock and/or REIT Common 
Stock, as applicable, to be sold and purchased in accordance with Section 
4.2(a), (b) or (c), as applicable, against delivery of the purchase price 
therefor.  The certificate or certificates so delivered shall be, to the 
extent possible, in such denomination or denominations as the Purchaser shall 
request in the notice and shall be registered in the name of the Purchaser or 
such other name as shall be designated in the notice.  The shares of 
Preferred Stock and/or REIT Common Stock, as applicable, represented by such 
certificate or certificates shall be deemed to be issued, and the Purchaser 
(or any other person designated as the registered holder) shall be deemed to 
have become a holder of record of such shares of Preferred Stock and/or REIT 
Common Stock, as applicable, for all purposes, as of the Closing.  The 
issuance of certificates for shares of Preferred Stock and/or REIT Common 
Stock, as applicable, shall be made without charge to the Purchaser for any 
issuance tax in respect thereof or other cost incurred by the REIT or the 
Operating Partnership in connection with such exercise and the related 
issuance of the shares of Preferred Stock and/or REIT Common Stock, as 
applicable.  Unless otherwise provided in this Agreement or the Joint

                                     22

<PAGE>

Venture Agreement, all other costs incurred in connection with the issuance 
of the Preferred Stock and/or REIT Common Stock, as applicable, pursuant to 
this Section 4.2 shall be borne by the party that actually incurred such 
costs.

            4.3   RIGHT OF REIT TO MAKE PAYMENT IN PREFERRED STOCK OR REIT 
COMMON STOCK.  In the event that (i) the Purchaser initiated the Buy/Sell, 
(ii) the Operating Partnership becomes the buyer pursuant to such exercise of 
the Buy/Sell, and (iii) as of the date thereof, the REIT Common Stock is 
listed and publicly traded on a national stock exchange, the REIT shall have 
the right to assume the obligations of the Operating Partnership as buyer and 
to elect to pay that portion of the consideration payable to the Purchaser in 
cash after giving effect to any election under Section 4.1 ("Q") in a 
combination of cash and Preferred Stock determined as follows.  First, the 
REIT shall determine the portion of the amount Q to be paid by it in cash 
("C").  The REIT shall pay such amount C in cash in accordance with the terms 
of the Joint Venture Agreement. Second, the REIT shall calculate the 
remaining portion of the amount Q ("QCP"). QCP shall equal the remainder of Q 
MINUS C.  Third, the REIT shall calculate the number of shares of Preferred 
Stock ("S") to be paid by it with respect to the QCP in accordance with 
Section 4.3(a) below.

                  (a)   The REIT will cause to be issued to the Purchaser a 
number of shares S determined by the following formula (and, if necessary, 
rounding the resulting number to the next highest one one-hundredth (1/100) 
of a share):

                  S = (QCP DIVIDED BY Adjusted Stock Price) DIVIDED BY 
                      Conversion Multiple

                  (b)   For the purposes of this Section 4.3, "ADJUSTED STOCK 
PRICE" means a dollar amount equal to 90% of the average last sale price per 
share of the REIT Common Stock on the NYSE over the twenty-one (21) days on 
which the NYSE is open and for which trades in the REIT Common Stock are 
reported immediately preceding the date that it is determined that the 
Operating Partnership will be the buyer pursuant to the Buy/Sell (adjusted to 
take into account any splits, combinations, reclassifications or other 
changes in the REIT's capitalization that occur during such period); 
PROVIDED, HOWEVER, that, if, prior to the Operating Partnership's delivery of 
the responsive notice contemplated in Section 8.4.3 of the Joint Venture 
Agreement, the REIT and/or the Operating Partnership publicly announces or 
publicly discloses the fact that the Purchaser has initiated the Buy/Sell, 
then, at Purchaser's election, the Adjusted Stock Price may be determined 
based on the twenty-one (21) days on which the NYSE is open and for which 
trades in the REIT Common Stock are reported immediately preceding the date 
of such public announcement.  In the event that the REIT Common Stock is no 
longer trading on the NYSE then the Adjusted Stock Price shall be determined 
using the prices reported on the exchange or automated quotation system on 
which the REIT Common Stock then trades.

                  (c)   In lieu of delivering shares of Preferred Stock upon 
the Purchaser's election under this Section 4.3, the REIT may elect, at its 
sole option, to satisfy its obligations under this Section 4.3 by delivering 
to the Purchaser either:

                                     23

<PAGE>

                        (i)   that number of shares of REIT Common Stock 
determined by MULTIPLYING (i) the number of shares of Preferred Stock 
determined pursuant to Section 4.3(a) above to which the Purchaser would be 
otherwise entitled BY (ii) the Conversion Multiple, and, if necessary, 
rounding the resulting number of shares to the next highest whole number; or

                        (ii)  a combination of shares of REIT Common Stock 
and Preferred Stock determined as follows: (x) shares of REIT Common Stock up 
to that number of shares that, upon delivery, would result in the Purchaser 
beneficially owning nine percent (9.0%) of the total number of outstanding 
shares of REIT Common Stock (determined pursuant to Section 13(d) of the 
Exchange Act or Division C of Article Fourth of the Articles of 
Incorporation, whichever is more restrictive), and (y) a number of shares of 
Preferred Stock equal to the quotient obtained by DIVIDING (A) the amount, if 
any, by which the aggregate number of shares of REIT Common Stock determined 
in accordance with Section 4.3(c)(i) above exceeds the number of shares of 
REIT Common Stock determined by clause (x) above BY (B) the Conversion 
Multiple and, if necessary, rounding the resulting number to the next highest 
one one-hundredth (1/100) of a share.

Notwithstanding anything in this Agreement to the contrary, the REIT may not 
make an election to deliver any shares of REIT Common Stock in lieu of 
Preferred Stock pursuant to this Section 4.3(c)  if such election would cause 
the REIT to be unable to satisfy the conditions set forth in Section 7.1 
hereof in a timely manner.

                  (d)   In order to elect to make payment in Preferred Stock 
and/or REIT Common Stock under this Section 4.3, the REIT shall deliver to 
the Purchaser a written notice of election, duly executed by the REIT, within 
fifteen (15) business days following the earlier of the REIT's receipt of the 
Purchaser's written notice of election to receive all or a portion of the 
consideration due to it under Section 4.1 in Preferred Stock or the 
expiration of the time period in which the Purchaser may make such election 
under Section 4.1 hereof.  Such notice shall (i) indicate that the REIT is 
exercising its rights under this Section 4.3, (ii) whether the REIT will be 
issuing Preferred Stock, REIT Common Stock or a combination thereof under 
this Section 4.3, and (iii) specify the number of shares of Preferred Stock 
and/or REIT Common Stock, as applicable, to be issued and the related 
calculation under Section 4.3(a) and/or (c), as applicable.  Within two (2) 
business days of receiving such notice of election, the Purchaser shall 
notify the REIT if it disagrees with the REIT's determination of the number 
of shares of Preferred Stock and/or REIT Common Stock, as applicable, to be 
issued pursuant to the exercise of the REIT's rights under this Section 4.3 
and the parties agree to cooperate in good faith and use their respective 
best efforts to resolve the appropriate determination under this Section 4.3 
as promptly as possible.  If the parties cannot reach agreement by the sixth 
(6th) business day following the Purchaser's receipt of the REIT's notice of 
election hereunder, the determination will be referred to the Accountants (or 
such other Person unaffiliated with either party as the parties mutually 
agree) and the parties agree to be bound by such Person's determination.

                                     24

<PAGE>

                  (e)    The shares of Preferred Stock and/or REIT Common 
Stock, as applicable, will be issued at the Closing to be held in accordance 
with the provisions of the Buy/Sell; PROVIDED, HOWEVER, that, in addition to 
any conditions in the Joint Venture Agreement, the conditions set forth in 
Section 7 hereof shall be required to be satisfied prior to such Closing.  At 
the Closing, the REIT will execute or cause to be executed and deliver or 
cause to be delivered to the Purchaser a certificate or certificates 
representing the shares of Preferred Stock and/or REIT Common Stock, as 
applicable, to be sold and purchased in accordance with Section 4.3(a) and/or 
(c), as applicable, against delivery of the consideration to be paid by the 
Purchaser under the Joint Venture Agreement.  The certificate or certificates 
so delivered shall be, to the extent possible, in such denomination or 
denominations as the Purchaser shall request in the notice and shall be 
registered in the name of the Purchaser or such other name as shall be 
designated in the notice.  The shares of Preferred Stock and/or REIT Common 
Stock, as applicable, represented by such certificate or certificates shall 
be deemed to be issued, and the Purchaser (or any other person designated as 
the registered holder) shall be deemed to have become a holder of record of 
such shares of Preferred Stock and/or REIT Common Stock, as applicable, for 
all purposes, as of the Closing.  The issuance of certificates for shares of 
Preferred Stock and/or REIT Common Stock, as applicable, shall be made 
without charge to the Purchaser for any issuance tax in respect thereof or 
other cost incurred by the REIT or the Operating Partnership in connection 
with the issuance of the shares of Preferred Stock and/or REIT Common Stock, 
as applicable.  Unless otherwise provided in this Agreement or the Joint 
Venture Agreement, all other costs incurred in connection with the issuance 
of the Preferred  Stock and/or REIT Common Stock, as applicable, pursuant to 
this Section 4.3 shall be borne by the party that actually incurred such 
costs.

      5.    RIGHT TO RECEIVE PREFERRED STOCK IN CONNECTION WITH A PUT/SALE 
DISTRIBUTION

            5.1   PUT/SALE DISTRIBUTION.  Upon each occurrence of a Put/Sale 
Distribution, the Purchaser shall have the obligation to purchase from the 
REIT, and the REIT shall have the obligation to issue and sell to the 
Purchaser, that number of fully paid and nonassessable shares of Preferred 
Stock determined in accordance with Section 5.2 below in exchange for cash in 
an amount equal to the Put/Sale Distribution.

            5.2   DETERMINATION OF NUMBER OF SHARES.  Pursuant to Section 5.1 
above, the Purchaser is entitled to receive, and the REIT is obligated to 
issue, that number of shares of Preferred Stock determined by DIVIDING (a) 
the quotient obtained by dividing (i) the applicable Put/Sale Distribution by 
(ii)(x) the Option Exercise Price, if the asset giving rise to the Put/Sale 
Distribution was originally purchased by the Joint Venture with Contributions 
other than Expansion Capital or Additional Capital, (y) the Expansion Option 
Exercise Price, if the asset giving rise to the Put/Sale Distribution was 
originally purchased by the Joint Venture with Contributions of Expansion 
Capital, or (z) the Additional Option Exercise Price if the asset giving rise 
to the Put/Sale Distribution was originally purchased with Contributions of 
Additional Capital BY (b) the Conversion Multiple, and, if necessary, 
rounding the resulting number to the next highest one one-hundredth (1/100) 
of a share.

                                     25

<PAGE>

            5.3   RIGHT OF REIT TO SUBSTITUTE REIT COMMON STOCK. In lieu of 
delivering shares of Preferred Stock under this Section 5 following a 
Put/Sale Distribution, the REIT may elect, at its sole option, to satisfy its 
obligations under this Section 5 by delivering to the Purchaser either:

                  (a)   that number of shares of REIT Common Stock determined 
by MULTIPLYING (i) the number of shares of Preferred Stock determined 
pursuant to Section 5.2 above to which the Purchaser would be otherwise 
entitled BY (ii) the Conversion Multiple, and, if necessary, rounding the 
resulting number of shares to the next highest whole number; or

                  (b)    a combination of shares of REIT Common Stock and 
Preferred Stock determined as follows: (x) shares of REIT Common Stock up to 
that number of shares that, upon delivery, would result in the Purchaser 
beneficially owning nine percent (9.0%) of the total number of outstanding 
shares of REIT Common Stock (determined pursuant to Section 13(d) of the 
Exchange Act or Division C of Article Fourth of the Articles of 
Incorporation, whichever is more restrictive), and (y) a number of shares of 
Preferred Stock equal to the quotient obtained by DIVIDING (A) the amount, if 
any, by which the aggregate number of shares of REIT Common Stock determined 
in accordance with Section 5.4(a) above exceeds the number of shares of REIT 
Common Stock determined in clause (x) above BY (B) the Conversion Multiple 
and, if necessary, rounding the resulting number to the next highest one 
one-hundredth (1/100) of a share.

Notwithstanding anything in this Agreement to the contrary, the REIT may not 
make an election to deliver any shares of REIT Common Stock in lieu of 
Preferred Stock pursuant to this Section 5  if such election would cause the 
REIT to be unable to satisfy the conditions set forth in Section 7.1 hereof 
in a timely manner.

            5.4   CLOSING.  Subject to the satisfaction of the conditions set 
forth in Section 7 hereof, the purchase and sale contemplated in Section 5.1 
above shall be consummated at a Closing to be held at the offices of 
Purchaser's Counsel, or at such other place as may be mutually acceptable to 
the parties, on the later of the tenth (10th) business day following any 
Put/Sale Distribution or the earliest date upon which all of the applicable 
conditions to Closing have been satisfied but in no event later than the 
sixtieth (60th) day following such Put/Sale Distribution.  Within five (5) 
business days following any Put/Sale Distribution, the REIT shall deliver to 
the Purchaser notice of its intent to issue Preferred Stock, REIT Common 
Stock or a combination thereof pursuant to Section 5.3 hereof.  At the 
Closing, the REIT will execute or cause to be executed and deliver or cause 
to be delivered to the Purchaser a certificate or certificates representing 
the shares of Preferred Stock and/or REIT Common Stock, as applicable, to be 
sold and purchased in accordance with Section 5.2 or 5.3, as applicable, 
against payment of the purchase price therefor.  The certificate or 
certificates so delivered shall be, to the extent possible, in such 
denomination or denominations as the Purchaser shall request and shall be 
registered in the name of the Purchaser or such other name as shall be 
designated by the Purchaser.  The shares of Preferred Stock and/or REIT 
Common Stock, as applicable, represented by such certificate or certificates 
shall be deemed to be issued, and the Purchaser (or any other Person 
designated as the registered holder) shall be

                                     26

<PAGE>

deemed to have become a holder or record of such shares of Preferred Stock 
and/or REIT Common Stock, as applicable, for all purposes, as of the Closing. 
The issuance of certificates for shares of Preferred Stock and/or REIT 
Common Stock, as applicable, shall be made without charge to the Purchaser 
for any issuance tax in respect thereof or other cost incurred by the REIT or 
the Operating Partnership in connection with the issuance of the shares of 
Preferred Stock and/or REIT Common Stock, as applicable.  Unless otherwise 
provided in the Agreement, all other costs incurred in connection with the 
issuance of Peferred Stock and/or REIT Common Stock, as applicable, shall be 
borne by the party that actually incurred such costs.
            
      6.    ADJUSTMENT TO OPTION EXERCISE PRICE, EXPANSION OPTION EXERCISE 
PRICE AND ADDITIONAL OPTION EXERCISE PRICE

            6.1   ADJUSTMENTS.  In the event that the REIT shall at any time:

                  (a)    issue additional shares of REIT Common Stock as a 
dividend or other distribution on outstanding shares of REIT Common Stock;

                  (b)    issue additional shares of REIT Common Stock pursuant 
to a reclassification of shares of REIT Common Stock;

                  (c)    subdivide the outstanding shares of REIT Common Stock 
into a greater number of shares of REIT Common Stock; or

                  (d)    combine the outstanding shares of REIT Common Stock 
into a smaller number of shares of REIT Common Stock;

then in each such case (i) the Option Exercise Price shall, simultaneously 
with the happening of such dividend, subdivision or combination, be adjusted 
by multiplying the then effective Option Exercise Price by a fraction, the 
numerator of which shall be the number of shares of REIT Common Stock 
outstanding immediately prior to such event and the denominator of which 
shall be the number of shares of REIT Common Stock outstanding immediately 
after such event, (ii) the Expansion Option Exercise Price shall, 
simultaneously with the happening of such dividend, subdivision or 
combination, be adjusted by multiplying the then effective Expansion Option 
Exercise Price by a fraction, the numerator of which shall be the number of 
shares of REIT Common Stock outstanding immediately prior to such event and 
the denominator of which shall be the number of shares of REIT Common Stock 
outstanding immediately after such event, and (iii) the Additional Option 
Exercise Price shall, simultaneously with the happening of such dividend, 
subdivision or combination, be adjusted by multiplying the then effective 
Additional Option Exercise Price by a fraction, the numerator of which shall 
be the number of shares of REIT Common Stock outstanding immediately prior to 
such event and the denominator of which shall be the number of shares of REIT 
Common Stock outstanding immediately after such event.

                                     27
<PAGE>

            6.2   FURTHER ADJUSTMENTS.  In the event that the REIT shall at 
any time take a record of the holders of the REIT Common Stock for the 
purpose of entitling them to receive any dividend or other distribution 
(including without limitation any distribution by way of spin-off, 
reclassification, recapitalization or similar corporate rearrangement or 
otherwise) of:

                  (a)    cash (other than regular quarterly dividends payable 
out of earnings or earned surplus (plus depreciation and amortization) 
legally available for the payment of dividends under the laws of the 
jurisdiction of the REIT, and any special additional dividends made for the 
purposes of distributing 100% of the REIT's real estate investment trust 
taxable income);

                  (b)    any evidences of its indebtedness, any shares of its 
stock or any other securities or property of any nature whatsoever; or

                  (c)    any securities convertible into, or warrants or 
other rights to subscribe for or purchase any evidence of its indebtedness, 
any shares of its capital stock or any other securities or property of any 
nature, whether or not the rights to exchange or convert thereunder are 
immediately exercisable;

then in each such case (i) the Option Exercise Price shall, simultaneously 
with the happening of such event, be adjusted by multiplying the then 
effective Option Exercise Price by a fraction, the numerator of which shall 
be the Aggregate Trading Value of the REIT Common Stock at the time of such 
event less the then fair market value of the cash or other assets, rights, 
warrants, evidence of indebtedness or other securities so distributed and the 
denominator of which shall be the Aggregate Trading Value of the REIT Common 
Stock at the time of such event, (ii) the Expansion Option Exercise Price 
shall, simultaneously with the happening of such event, be adjusted by 
multiplying the then effective Expansion Option Exercise Price by a fraction, 
the numerator of which shall be the Aggregate Trading Value of the REIT 
Common Stock at the time of such event less the then fair market value of the 
cash or other assets, rights, warrants, evidence of indebtedness or other 
securities so distributed and the denominator of which shall be the Aggregate 
Trading Value of the REIT Common Stock at the time of such event, and (iii) 
the Additional Option Exercise Price shall, simultaneously with the happening 
of such event, be adjusted by multiplying the then effective Additional 
Option Exercise Price by a fraction, the numerator of which shall be the 
Aggregate Trading Value of the REIT Common Stock at the time of such event 
less the then fair market value of the cash or other assets, rights, 
warrants, evidence of indebtedness or other securities so distributed and the 
denominator of which shall be the Aggregate Trading Value of the REIT Common 
Stock at the time of such event. The fair market value of the cash 
distributed will be equal to the amount of cash distributed and the fair 
market value of any other assets, rights, warrants, evidence of indebtedness 
or other securities distributed will be determined in good faith by the Board 
of Directors of the REIT.

      For the purposes of this Section 6.2, "Aggregate Trading Value" of the 
REIT Common Stock shall mean the product obtained by MULTIPLYING (A) the 
average of the last reported sale price per share of REIT Common Stock on the 
NYSE over the twenty-one (21)


                                      28

<PAGE>

days on which the NYSE is open and for which trades in the REIT Common Stock 
are reported immediately preceding the "ex" date with respect to the dividend 
or distribution requiring such computation (adjusted to take into account any 
splits, combinations, reclassifications, or other changes in the REIT's 
capitalization that occur during such period) BY (B) the total number of 
shares of REIT Common Stock then outstanding.  In the event that the REIT 
Common Stock is no longer trading on the NYSE then the Aggregate Trading 
Value shall be determined using the prices reported on the exchange or 
automated quotation system on which the REIT Common Stock then trades.  The 
term "'ex' date," when used with respect to this Section 6.2, means the 
business day immediately following the date the REIT takes a record of the 
holders of the REIT Common Stock for the purpose of entitling them to receive 
the dividend or distribution set forth in this Section 6.2.  In the event 
that, at any time, the REIT Common Stock is not then traded on an exchange or 
automated quotation system then "Aggregate Trading Value" shall be determined 
using the fair market value of a share of REIT Common Stock agreed upon in 
good faith by the parties.

      Notwithstanding anything in this Section 6.2 to the contrary, the 
occurrence of a distribution of rights to subscribe for or purchase shares of 
the REIT's Capital Stock in connection with the adoption of what is commonly 
referred to as a "shareholder rights plan" by the REIT ("Rights") shall be 
deemed not to be a distribution of securities, warrants or rights for the 
purposes of Section 6.2(c) or otherwise give rise to any adjustment of the 
Option Exercise Price, the Expansion Option Exercise Price or the Additional 
Option Exercise Price pursuant to this Section 6; PROVIDED, HOWEVER, that in 
lieu of any adjustment as a result of any such distribution, the REIT shall 
make sufficient provisions in the shareholder rights agreement to ensure 
that, in connection with the issuance of any shares of REIT Common Stock 
pursuant to this Agreement or upon conversion of the Preferred Stock, the 
Purchaser will be entitled to simultaneously receive Rights in the same 
amount and manner in which Rights would be received on any new issuance by 
the REIT at that time of an equal amount of REIT Common Stock.

            6.3   ADJUSTMENTS FOR CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. 
In case the REIT after the date hereof (a) shall consolidate with or merge 
into any other Person and shall not be the continuing or surviving 
corporation of such consolidation or merger, or (b) shall permit any other 
Person to consolidate with or merge into the REIT and the REIT shall be the 
continuing or surviving Person but, in connection with such consolidation or 
merger, the REIT Common Stock and/or the Preferred Stock, shall be changed 
into or exchanged for stock or other securities of any other Person or cash 
or any other property, or (c) shall transfer directly or indirectly all or 
substantially all of its properties or assets to any other Person in one 
transaction or a series of transactions, or (d) shall effect a capital 
reorganization or reclassification of the REIT Common Stock and/or the 
Preferred Stock, then, and in the case of each such transaction, proper 
provision shall be made so that, upon such time, if ever, that the Purchaser 
would be entitled to receive shares of Preferred Stock and/or REIT Common 
Stock under the terms of this Agreement after the consummation of such 
transaction, the Purchaser shall be entitled to receive, in lieu of the 
Preferred Stock and/or REIT Common Stock issuable under the terms of this 
Agreement, the greatest amount of securities, cash or other property to which 
the Purchaser would actually have been entitled as a shareholder upon


                                      29

<PAGE>

such consummation if the Purchaser had received shares of Preferred Stock 
and/or REIT Common Stock pursuant to this Agreement immediately prior 
thereto, subject to adjustments (subsequent to such consummation) as nearly 
equivalent as possible to the adjustments provided for in this Section 6; 
PROVIDED, HOWEVER, that if (i) a purchase, tender or exchange offer shall 
have been made to and accepted by more than fifty percent (50%) of the 
outstanding shares of REIT Common Stock prior to the consummation of a 
transaction described above and that transaction is consummated, (ii) such 
purchase, tender or exchange offer shall have been approved by the REIT's 
Board of Directors, and (iii) the purchaser so designates in a notice given 
to the REIT on or before the date immediately preceding the final deadline 
for acceptance of the terms of such purchase, tender or exchange offer, then 
the Purchaser shall be entitled to receive upon such exercise the greatest 
amount of securities, cash or other property to which the Purchaser would 
actually have been entitled as a shareholder if the Purchaser had exercised 
such rights prior to the expiration of such purchase, tender or exchange 
offer and accepted such offer, subject to adjustments (from and after the 
consummation of such purchase, tender or exchange offer) as nearly equivalent 
as possible to the adjustments provided for in this Section 6.

            6.4   OTHER DILUTIVE EVENTS.  In case any event shall occur as to 
which the provisions of this Section 6 hereof are not strictly applicable but 
the failure to make any adjustment would not fairly protect the rights to 
receive Preferred Stock and/or REIT Common Stock contained in this Agreement 
in accordance with the essential intent and principles of such Section, then, 
in each such case, at the request of the Purchaser, the REIT shall appoint a 
firm of independent investment bankers of recognized national standing (which 
shall be completely independent of both the REIT and the Purchaser and shall 
be reasonably satisfactory to the Purchaser), which shall give their opinion 
upon the adjustment, if any, on a basis consistent with the essential intent 
and principles established in this Section 6, necessary to preserve, without 
dilution, the rights to receive Preferred Stock and/or REIT Common Stock 
contained in this Agreement.  Upon receipt of such opinion, the REIT will 
promptly mail a copy thereof to the Purchaser and shall make the adjustments 
described therein.

            6.5   WHEN ADJUSTMENTS SHALL BE MADE.  The adjustments required 
by this Section 6 shall be made whenever and as often as any specified event 
requiring an adjustment shall occur.  An adjustment made pursuant to this 
paragraph shall be given effect, upon payment of such a dividend or 
distribution, as of the record date for the determination of stockholders 
entitled to receive such dividend or distribution (on a retroactive basis) 
and in the case of a reclassification, subdivision or combination, shall 
become effective immediately as of the effective date thereof.  All 
adjustments pursuant to this Section 6 affecting the number of shares of REIT 
Common Stock that the Purchaser may receive pursuant to the terms of this 
Agreement shall be made without duplication of the provisions for adjustment 
to the conversion rights of the Preferred Stock contained in the Certificate 
of Amendment attached as EXHIBIT G hereto with respect to the same 
transaction.

            6.6   WHEN ADJUSTMENT NOT REQUIRED.  If the REIT shall take a 
record of the holders of the shares of REIT Common Stock for the purpose of 
entitling them to receive a dividend or distribution of additional shares of 
REIT Common Stock or other cash or property


                                      30

<PAGE>

and shall, thereafter and before such distribution, legally abandon its plan 
to pay or deliver such dividend or distribution, then thereafter no 
adjustment shall be required by reason of the taking of such record and any 
such adjustment previously made in respect thereof shall be rescinded and 
annulled.

            6.7   WHEN ADJUSTMENTS CARRIED FORWARD.  No adjustment in the 
Option Exercise Price, the Expansion Option Exercise Price or the Additional 
Option Exercise Price in accordance with the provisions of this Section 6 
need be made unless such adjustment would amount to a change of at least 1% 
therein; PROVIDED, HOWEVER, that the amount by which any adjustment is not 
made by reason of the provisions of this Section 6.7 shall be carried forward 
and taken into account in determining whether this Section 6.7 is applicable 
to any subsequent potential adjustment in the Option Exercise Price, the 
Expansion Option Exercise Price or the Additional Option Exercise Price.

            6.8   NOTICE OF ADJUSTMENTS.  Whenever any adjustment is to be 
made pursuant to this Section 6, the REIT shall prepare and deliver to the 
Purchaser a notice, executed by the Chief Financial Officer of the REIT, at 
least fifteen (15) days prior thereto, such notice to include in reasonable 
detail (i) the events precipitating the adjustment, (ii) the computation of 
any adjustments, and (iii) the Option Exercise Price, the Expansion Option 
Exercise Price and the Additional Option Exercise Price immediately before 
and immediately after the adjustment.

      7.    CONDITIONS TO CLOSING

            7.1   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AT A 
CLOSING.  The Purchaser's obligation to purchase and pay for the Initial 
Warrant, the Expansion Capital Warrant or shares of Preferred Stock and/or 
REIT Common Stock, as applicable, to be issued to it at any closing held for 
the purpose of consummating (i) the exercise of the Exchange Option, (ii) an 
exercise of the Initial Warrant or the Expansion Capital Warrant, (iii) a 
transfer pursuant to the Buy/Sell or otherwise with respect to which either 
party has made an election pursuant to Section 4.1 or 4.3 hereof, (iv) any 
purchase or sale in connection with a distribution of Right of First Offer 
Proceeds with respect to which the Purchaser has made an election pursuant to 
Section 4.2 hereof, or (v) any purchase or sale in connection with a Put/Sale 
Distribution pursuant to Section 5 hereof (each, a "Closing") is subject to 
the fulfillment prior to or at the Closing of the following conditions, any 
or all of which may be waived in writing at the option of the Purchaser:

                  (a)    REPRESENTATIONS AND WARRANTIES.  The representations 
and warranties of the REIT and the Operating Partnership contained in Section 
8 hereof shall be true and correct when made and at the time of the Closing, 
after giving effect to the sale of the Initial Warrant, Expansion Capital 
Warrant or the shares of Preferred Stock or REIT Common Stock, as applicable, 
to be issued and the other transactions contemplated to be consummated at the 
Closing by this Agreement and the other Transaction Documents, except that 
any representations and warranties that relate to a particular date or period 
shall be true and correct as of such date or period.

                                      31

<PAGE>

                  (b)    PERFORMANCE.  The REIT and the Operating Partnership 
shall have performed and complied in all material respects with all 
agreements and conditions contained in this Agreement required to be 
performed or complied with by it prior to or at the Closing.

                  (c)    CLOSING CERTIFICATES.  The REIT and the Operating 
Partnership shall have delivered to the Purchaser an Officer's Certificate or 
General Partner's Certificate, as applicable, each dated as of the Closing, 
certifying that the conditions specified in Sections 7.1(a) and (b) have been 
fulfilled.

                  (d)    OPINION OF COUNSEL.  The Purchaser shall have 
received from REIT Counsel their favorable opinion substantially in the form 
set forth in EXHIBIT B, addressed to the Purchaser, dated as of the Closing 
and otherwise satisfactory in substance and form to the Purchaser.

                  (e)    INTENTIONALLY OMITTED.

                  (f)    LEGAL INVESTMENT.  As of the date of the Closing, 
the Purchaser's purchase of the Initial Warrant, the Expansion Capital 
Warrant, or the shares of Preferred Stock and/or REIT Common Stock, as 
applicable, shall be permitted by the laws and regulations of the 
jurisdiction to which the Purchaser is subject (including, without 
limitation, Section 5 of the Securities Act) and shall not be enjoined 
(temporarily or permanently) under, prohibited by or contrary to any 
injunction, order or decree applicable to the Purchaser.

                  (g)    PROCEEDINGS AND DOCUMENTS.  All corporate, 
partnership and other proceedings contemplated by this Agreement and the 
other Transaction Documents shall be satisfactory to the Purchaser and the 
Purchaser's Counsel, and the Purchaser and the Purchaser's Counsel shall have 
received all such counterpart originals or certified or other copies of such 
documents as the Purchaser or the Purchaser's Counsel may reasonably request.

                  (h)    REGISTRATION RIGHTS AGREEMENT.  Simultaneously with 
the execution of this Agreement but in any event prior to the issuance and 
sale to the Purchaser of the shares of Preferred Stock and/or REIT Common 
Stock, as applicable, to be purchased by the Purchaser at any Closing, the 
REIT and the Purchaser shall have duly entered into the Registration Rights 
Agreement in the form of EXHIBIT C, the Purchaser shall have received a 
fully-executed counterpart of the Registration Rights Agreement, such 
agreement shall be in full force and effect and no term or condition thereof 
shall have been amended, modified or waived.

                  (i)    MANAGEMENT RIGHTS LETTER.  Simultaneously with or 
prior to the issuance and sale to the Purchaser of any shares of Preferred 
Stock or REIT Common Stock hereunder at the Closing, the REIT and the 
Purchaser shall have duly entered into the Management Rights Letter 
substantially in the form of EXHIBIT D, the Purchaser shall have received a 
fully-executed counterpart of the Management Rights Letter, such agreement 
shall

                                      32

<PAGE>

be in full force and effect and no term or condition thereof shall have been 
amended, modified or waived.

                  (j)    TAX REPRESENTATION LETTER.  Simultaneously with or 
prior to the issuance and sale to the Purchaser of any shares of Preferred 
Stock and/or REIT Common Stock hereunder at the Closing, the REIT, the 
Operating Partnership and the Purchaser shall have duly entered into the Tax 
Representation Letter substantially in the form of EXHIBIT E, the Purchaser 
shall have received a fully-executed counterpart of the Tax Representation 
Letter, such agreement shall be in full force and effect and no term or 
condition thereof shall have been amended, modified or waived.

                  (k)    OWNERSHIP WAIVER LETTER.  Simultaneously with, but 
in any event prior to, the issuance and sale to the Purchaser of any shares 
of Preferred Stock and/or REIT Common Stock hereunder at the Closing, the 
REIT shall have duly entered into the Ownership Waiver Letter substantially 
in the form of EXHIBIT F, the Purchaser shall have received a fully-executed 
counterpart of the Ownership Waiver Letter, such agreement shall be in full 
force and effect and no term or condition thereof shall have been amended, 
modified or waived.

                  (l)    RELATED MATTERS.  As of the Closing, each of (i) the 
REIT's Charter Documents and (ii) the Operating Partnership's Partnership 
Documents shall not have been modified or amended since the date such 
documents were last delivered to the Purchaser by the REIT and Operating 
Partnership, which delivery may be made at any time prior to or at such 
Closing.

                  (m)    NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION.  No 
legislation, order, rule, ruling or regulation shall have been enacted or 
made after the date hereof by or on behalf of any Governmental Authority, nor 
shall any decision of any court of competent jurisdiction within the United 
States have been rendered after the date hereof which, in the Purchaser's 
reasonable judgment, could materially and adversely affect the shares of 
Preferred Stock and/or REIT Common Stock to be issued, or the shares of REIT 
Common Stock issuable upon conversion of the Preferred Stock, or any part 
thereof as an investment.  There shall be no action, suit, investigation or 
proceeding pending or threatened, against or affecting the Purchaser, any of 
its properties or rights, or any of its Affiliates, associates, officers or 
directors, before any Governmental Authority which (i) seeks to restrain, 
enjoin, prevent the consummation of or otherwise affect the transactions 
contemplated by this Agreement and the other Transaction Documents, or (ii) 
questions the validity or legality of any such transactions or seeks to 
recover damages or to obtain other relief in connection with any such 
transactions, and there shall be no valid basis for any such action, 
proceeding or investigation.

                  (n)    GOVERNMENTAL AND THIRD PARTY PERMITS, CONSENTS, ETC. 
The REIT, the Operating Partnership and the Subsidiaries shall have duly 
applied for and obtained all approvals, orders, licenses, consents and other 
authorizations (collectively, the "Approvals") from each Governmental 
Authority, department or body, or pursuant to any agreement to which the 
REIT, the Operating Partnership and the Subsidiaries is a party or to

                                      33

<PAGE>

which it or any of its assets is subject, which may be required in connection 
with this Agreement and the other Transaction Documents.

                  (o)    HSR ACT.  The waiting period (and any extension 
thereof) under the HSR Act applicable to the issuance of any shares of 
Preferred Stock and/or REIT Common Stock pursuant to this Agreement shall 
have expired or been terminated.

                  (p)    NEW YORK STOCK EXCHANGE LISTING.  As of the Closing, 
the listing of REIT Common Stock on the NYSE shall not have been terminated, 
nor shall the REIT have been notified that such listing may be terminated or 
that a termination is contemplated.  As of the Closing, the listing of those 
shares of REIT Common Stock to be issued, or into which the shares of 
Preferred Stock to issued will be convertible, shall have been approved by 
the NYSE.

                  (q)    ADDITIONAL CERTIFICATES.  The Purchaser shall have 
received a certificate, dated as of the Closing, from each of the Secretary 
(or Assistant Secretary) of the REIT and the general partner of the Operating 
Partnership, (i) certifying as true, complete and correct their Charter 
Documents and Partnership Documents (as appropriate) and resolutions relating 
to the transactions contemplated hereby attached thereto, (ii) as to the 
absence of proceedings or other action for dissolution, liquidation or 
reorganization of any of the REIT, the Operating Partnership or the 
Subsidiaries, (iii) as to the incumbency and specimen signatures of officers 
who shall have executed instruments, agreements and other documents in 
connection with the transactions contemplated hereby, (iv) as to the effect 
that certain agreements, instruments and other documents are in the form 
approved in the resolutions referred to in clause (i) above, and (v) as to 
certain tax matters regarding each of the REIT and the Operating Partnership.

            7.2   CONDITIONS PRECEDENT TO OBLIGATIONS OF THE REIT AT THE 
CLOSING.  The REIT's obligation to issue the Initial Warrant, the Expansion 
Capital Warrant or shares of Preferred Stock and/or REIT Common Stock, as 
applicable, at any Closing is subject to the fulfillment prior to or at the 
Closing of the following conditions, any or all of which may be waived in 
writing at the option of the REIT:

                  (a)    REPRESENTATIONS AND WARRANTIES.  The representations 
and warranties of the Purchaser in Section 9 hereof shall be true and correct 
when made and, without regard to Section 9.4, at the time of the Closing, 
after giving effect to the purchase of the Initial Warrant, the Expansion 
Capital Warrant or the shares of Preferred Stock and/or REIT Common Stock, as 
applicable, to be issued and the other transactions contemplated to be 
consummated at the Closing by this Agreement, except that any representations 
and warranties that relate to a particular date or period shall be true and 
correct as of such date or period.

                  (b)    PERFORMANCE.  The Purchaser shall have performed and 
complied in all material respects with all agreements and conditions 
contained in this Agreement required to be performed or complied with prior 
to or at the Closing.

                                      34

         
<PAGE>

                  (c)    CLOSING CERTIFICATE.  The Purchaser shall have 
delivered to the REIT a General Partner's Certificate, dated as of the 
Closing, certifying that the conditions specified in Sections 7.2(a) and (b) 
have been fulfilled.

                  (d)    NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION.  No 
legislation, order, rule, ruling or regulation shall have been enacted or 
made after the date hereof by or on behalf of any Governmental Authority, nor 
shall any decision of any court of competent jurisdiction within the United 
States have been rendered after the date hereof which, in the REIT's 
reasonable judgment, could materially and adversely affect the REIT as a 
result of the sale and issuance of the shares of Preferred Stock and/or REIT 
Common Stock to be issued, or the shares of REIT Common Stock issuable upon 
conversion of the Preferred Stock, or any part thereof.  There shall be no 
action, suit, investigation or proceeding pending or threatened, against or 
affecting the REIT, any of its properties or rights, or any of its 
Affiliates, associates, officers or directors, before any Governmental 
Authority which (i) seeks to restrain, enjoin, prevent the consummation of or 
otherwise affect the transactions contemplated by this Agreement, or (ii) 
questions the validity or legality of any such transactions or seeks to 
recover damages or to obtain other relief in connection with any such 
transactions, and there shall be no valid basis for any such action, 
proceeding or investigation.

                  (e)    GOVERNMENTAL AND THIRD PARTY PERMITS, CONSENTS, ETC. 
The Purchaser shall have duly applied for and obtained all Approvals, from 
each Governmental Authority, or pursuant to any agreement to which the 
Purchaser is a party or to which it or any of its assets is subject, which 
may be required in connection with this Agreement and the other Transaction 
Documents.

                  (f)    HSR ACT.  The waiting period (and any extension 
thereof) under the HSR Act applicable to the issuance of any shares of 
Preferred Stock and/or REIT Common Stock pursuant to this Agreement shall 
have expired or been terminated.

                  (g)    PROCEEDINGS AND DOCUMENTS.  All corporate, 
partnership and other proceedings contemplated by this Agreement and the 
other Transaction Documents shall be satisfactory to the REIT and the REIT 
Counsel, and the REIT and the REIT Counsel shall have received all such 
counterpart originals or certified or other copies of such documents as the 
REIT or the REIT Counsel may reasonably request.

            7.3   INABILITY OF REIT TO SATISFY CONDITIONS PRECEDENT TO 
CLOSING. In the event that (a) the REIT fails to satisfy the conditions set 
forth in Section 7.1 hereof for any reason (i) within sixty (60) days 
following (x) the REIT's receipt of a notice of exercise under the Exchange 
Option, (y) the exercise of the Initial Warrant or the Expansion Capital 
Warrant by the Purchaser, or (z) the occurrence of any Put/Sale Distribution, 
or (ii) by the date scheduled for consummating a transfer pursuant to the 
Right of First Offer or the Buy/Sell or otherwise with respect to which 
either party has made an election under Section 4 hereof, and (b) the 
Purchaser has satisfied its obligations in Section 10.10 hereof, then, in 
addition to any other remedies it may have, the Purchaser shall be entitled 
to receive at the applicable Closing an amount in cash in immediately 
available funds determined by MULTIPLYING (x) the product of the Conversion 
Multiple multiplied by the number of shares of Preferred Stock to which the


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<PAGE>

Purchaser would otherwise be entitled (assuming for these purposes that the 
REIT has elected to deliver Preferred Stock and has not elected to deliver 
REIT Common Stock or a combination of Preferred Stock and REIT Common Stock) 
BY (y) the average last sale price per share of the REIT Common Stock on the 
NYSE over the twenty-one (21) days on which the NYSE is open and for which 
trades in the REIT Common Stock are reported immediately preceding the date 
that the Purchaser delivered notice of its exercise of the Exchange Option, 
the Initial Warrant or the Expansion Capital Warrant or notice of its 
election to receive Preferred Stock under Section 4.1 or to purchase 
Preferred Stock under Section 4.2 or, if no such election was made, the date 
that the REIT delivered notice of its election to make payment in Preferred 
Stock and/or REIT Common Stock under Section 4.3 or the date upon which any 
Put/Sale distribution occurred, as applicable (adjusted to take into account 
any splits, combinations, reclassifications or other changes in the REIT's 
capitalization that occur during such period).  In the event that the REIT 
Common Stock is no longer trading on the NYSE then the average price shall be 
determined using the prices reported on the exchange or automated quotation 
system on which the REIT Common Stock then trades.  Without limiting the 
foregoing, if the REIT can satisfy the conditions set forth in Section 7.1 
with respect to a portion, but not all, of the shares of Preferred Stock 
and/or REIT Common Stock to which the Purchaser is otherwise entitled then 
the REIT shall be obligated to issue as many shares of Preferred Stock and/or 
REIT Common Stock, as applicable, as possible while still satisfying the 
conditions set forth in Section 7.1 and to deliver the remaining portion of 
consideration in cash in accordance with this Section 7.3.

      8.    REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF EACH OF THE 
REIT AND THE OPERATING PARTNERSHIP.  In order to induce the Purchaser to 
enter into this Agreement, the REIT and the Operating Partnership each hereby 
jointly and severally represents and warrants and covenants that, with such 
exceptions as are specifically set forth in a letter delivered by the REIT to 
the Purchaser prior to the execution of this Agreement (the "Disclosure 
Letter," which Disclosure Letter shall be appended to and shall be deemed to 
be part of this Agreement):

            8.1   ORGANIZATION AND QUALIFICATION; AUTHORITY.  Each of the 
REIT, the Operating Partnership and the other Subsidiaries, whether wholly or 
indirectly owned, is a corporation duly incorporated or partnership, limited 
partnership or limited liability company duly formed and is validly existing 
and, if applicable, in good standing under the laws of the jurisdiction of 
its incorporation or formation, has full corporate, partnership or limited 
liability company power and authority to own and lease its respective 
properties and carry on its respective business as presently conducted, is 
duly qualified, registered or licensed as a foreign corporation, partnership, 
limited partnership or limited liability company to do business and is in 
good standing in each jurisdiction in which the ownership or leasing of its 
respective properties or the character of its present operations makes such 
qualification, registration or licensing necessary, except where the failure 
so to qualify or be in good standing would not have a material adverse effect 
on the condition (financial or otherwise), assets, business or results of 
operations of (a "Material Adverse Effect") the REIT and the Subsidiaries on 
a consolidated basis.  The REIT has heretofore made available to Purchaser's 
Counsel complete


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<PAGE>

and correct copies of the REIT's Charter Documents and the Operating 
Partnership's Partnership Documents, each as amended and restated to date and 
as presently in effect.

            8.2   LICENSES.  Each of the REIT, the Operating Partnership and 
the Subsidiaries holds all licenses, franchises, permits, consents, 
registrations, certificates and other approvals (individually, a "License" 
and collectively, "Licenses") required for the conduct of its business as now 
being conducted, and operates in substantial compliance therewith, except 
where the failure to hold any such License or to operate in compliance 
therewith would not have a Material Adverse Effect on the REIT, the Operating 
Partnership and the Subsidiaries on a consolidated basis.  The REIT, the 
Operating Partnership and each of the Subsidiaries are in compliance with all 
laws, regulations, orders and decrees applicable to them, except in each case 
where the failure so to comply would not have a Material Adverse Effect on 
the REIT, the Operating Partnership and the Subsidiaries on a consolidated 
basis, or a Material Adverse Effect on the ability of the REIT, the Operating 
Partnership or any of the Subsidiaries to perform on a timely basis any 
obligation that they have or will have under any Transaction Document to 
which they are a party.

            8.3   CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION. 
The execution, delivery and performance by the REIT, the Operating 
Partnership and the Subsidiaries of the Transaction Documents to which they 
are a party and all other instruments or agreements to be executed in 
connection herewith or therewith and, with respect to the REIT, the issuance 
and sale to (and the purchase hereunder by) the Purchaser of the Initial 
Warrant, the Expansion Capital Warrant or the Preferred Stock and/or REIT 
Common Stock pursuant to this Agreement (a) are within the REIT's, the 
Operating Partnership's and the Subsidiaries' respective corporate, 
partnership or limited liability company powers; (b) have been duly 
authorized by all necessary corporate, partnership or limited liability 
company action on the part of the REIT, the Operating Partnership and each 
such Subsidiary; (c) do not require any License or Approval (except such as 
have been obtained); (d) do not contravene or constitute a default under or 
violation of (i) any provision of applicable law or regulation of any 
Governmental Authority, (ii) the Charter Documents or Partnership Documents 
of the REIT, the Operating Partnership or any of the Subsidiaries, (iii) any 
agreement (or require the consent of any Person under any agreement that has 
not been made or obtained) to which the REIT, the Operating Partnership or 
any of the Subsidiaries are a party, or (iv) any judgment, injunction, order, 
decree or other instrument binding upon the REIT, the Operating Partnership, 
any of the Subsidiaries or any of their respective properties, except where 
such contravention, default or violation would not have a Material Adverse 
Effect on the REIT, the Operating Partnership and the Subsidiaries on a 
consolidated basis; and (e) do not and will not result in the creation or 
imposition of any Lien on any asset of the REIT, the Operating Partnership or 
any of the Subsidiaries, except where the creation or imposition of such Lien 
would not have a Material Adverse Effect on the REIT, the Operating 
Partnership and the Subsidiaries on a consolidated basis.  The shares of 
Preferred Stock or REIT Common Stock to be issued at a Closing and the shares 
of REIT Common Stock issuable upon conversion of the Common Stock have been 
duly and validly authorized and, when issued and delivered against payment 
therefor as provided herein, will be duly and validly issued, free and clear 
of all liens, encumbrances, equities or claims of any nature whatsoever.


                                      37

<PAGE>

            8.4   VALIDITY AND BINDING EFFECT.  Each of the Transaction 
Documents has been duly executed and delivered by each of the REIT, the 
Operating Partnership and any Subsidiary which is a party thereto and is a 
valid and binding agreement of the REIT, the Operating Partnership and any 
such Subsidiary, as applicable, enforceable against the REIT, the Operating 
Partnership and any such Subsidiary, as applicable, in accordance with its 
terms.

            8.5   CAPITALIZATION.

                  (a)    As of December 31, 1998, the REIT had 17,044,361 
shares of REIT Common Stock and no shares of any other class or series of 
capital stock issued and outstanding.  As of the Closing, upon the issuance 
to the Purchaser of shares of Preferred Stock or REIT Common Stock, as 
applicable, in connection with the Exchange Option, any Put/Sale Distribution 
or an election by either party under Section 4 hereof, such shares of 
Preferred Stock or REIT Common Stock, as applicable, will be validly issued, 
fully paid and non-assessable and free of any preemptive or similar rights.

                  (b)    As of December 31, 1998, the Operating Partnership 
had 16,335,475 partnership units of limited and general partnership interest 
issued and outstanding and no partnership units of any other class or series 
issued and outstanding.

                  (c)    Except as disclosed in the SEC Filings or the 
Operating Partnership's Partnership Documents as provided to the Purchaser, 
as of the Closing, there are no outstanding subscriptions, options, warrants, 
rights, convertible or exchangeable securities or other agreements or 
commitments of any character obligating the REIT, the Operating Partnership 
or the Subsidiaries to issue any securities.  As of the Closing, there are no 
voting trusts or other agreements or understandings to which the REIT, the 
Operating Partnership or the Subsidiaries are a party with respect to the 
voting of the Capital Stock or Partnership Interests of the REIT, the 
Operating Partnership or the Subsidiaries, as the case may be.  Except as 
contemplated by the Registration Rights Agreement, neither the REIT, the 
Operating Partnership nor any of the Subsidiaries has entered into any 
agreement to register their equity or debt securities under the Securities 
Act.
            8.6   LITIGATION; DEFAULTS.  There is (a) no action, suit, or 
proceeding pending or, to the knowledge of the REIT or the Operating 
Partnership, threatened against or affecting the REIT, the Operating 
Partnership, any of the Subsidiaries, or any properties of any of the 
foregoing, or (b) to the knowledge of the REIT or the Operating Partnership, 
no investigation pending against or affecting the REIT, the Operating 
Partnership, any of the Subsidiaries, or any properties of any of the 
foregoing before or by any Governmental Authority which (individually or in 
the aggregate) could reasonably be expected to (i) have a Material Adverse 
Effect on the REIT, the Operating Partnership and the Subsidiaries on a 
consolidated basis, or (ii) impair the ability of the REIT, the Operating 
Partnership or any Subsidiary to perform fully on a timely basis any material 
obligation which the REIT, the Operating Partnership or any such Subsidiary 
has or will have under any Transaction Document to which the REIT, the 
Operating Partnership or any Subsidiary is a party.  Neither the REIT, the 
Operating Partnership nor any Subsidiary is in violation of, or in default 
under (and there does not exist


                                      38

<PAGE>

any event or condition which, after notice or lapse of time or both, would 
constitute such a default under), any term of its Charter Documents or 
Partnership Documents or of any term of any agreement, instrument, judgment, 
decree, order, statute, injunction, governmental regulation, rule or 
ordinance (including without limitation, those relating to zoning, city 
planning or similar matters) applicable to the REIT, the Operating 
Partnership or any Subsidiary or to which the REIT, the Operating Partnership 
or any Subsidiary is bound, or to any properties of the REIT, the Operating 
Partnership or any Subsidiary, except in each case to the extent that such 
violations or defaults, individually or in the aggregate, would not (a) 
affect the validity of any Transaction Document, (b) have a Material Adverse 
Effect on the REIT, the Operating Partnership and the Subsidiaries on a 
consolidated basis, or (c) impair the ability of the REIT, the Operating 
Partnership or any Subsidiary to perform fully on a timely basis any material 
obligation which the REIT, the Operating Partnership or any Subsidiary has or 
will have under any Transaction Document to which the REIT, the Operating 
Partnership or any Subsidiary is a party.

            8.7   PUBLIC REPORTS; NO MATERIAL ADVERSE CHANGE.  As of the date 
of this Agreement each SEC Filing filed since December 31, 1997 complied in 
all material respects with the requirements of the Securities Act and the 
Exchange Act and did not when filed contain an untrue statement of a material 
fact or omit to state a material fact required to be stated therein or 
necessary to make the statements therein not misleading.  Except as disclosed 
in the SEC Filings, there has been since September 30, 1998 (i) no adverse 
change in the condition (financial or other), assets, business, results of 
operations or prospects of the REIT, the Operating Partnership or any of the 
Subsidiaries which could have a Material Adverse Effect on the REIT, the 
Operating Partnership and the Subsidiaries on a consolidated basis, (ii) no 
obligation or liability (contingent or otherwise) incurred by the REIT, the 
Operating Partnership or any of the Subsidiaries, other than obligations and 
liabilities which would not have a Material Adverse Effect on the REIT, the 
Operating Partnership or on any of the Subsidiaries on a consolidated basis 
and no mortgage, encumbrance or Lien placed on any of the properties of the 
REIT, the Operating Partnership or any of the Subsidiaries which remains in 
existence on the date hereof other than mortgages, encumbrances and Liens 
incurred in the ordinary course of business, and (iii) no acquisition or 
disposition of any material assets by the REIT, the Operating Partnership or 
any of the Subsidiaries (or any contract or arrangement therefor), or any 
other material transaction, otherwise than for fair value in the ordinary 
course of business.  There is no material fact known to the REIT or the 
Operating Partnership which the REIT or the Operating Partnership have not 
disclosed in the SEC Filings which have or, insofar as the REIT or the 
Operating Partnership can reasonably foresee, may have or will have a 
Material Adverse Effect on the REIT, the Operating Partnership or the 
Subsidiaries on a consolidated basis or a Material Adverse Effect on the 
ability of the REIT or the Operating Partnership to perform their respective 
obligations under any of the Transaction Documents to which they are a party 
or any document contemplated hereby or thereby.

            8.8   PRIVATE OFFERING.  No form of general solicitation or 
general advertising, including, but not limited to, advertisements, articles, 
notices or other communications, published in any newspaper, magazine or 
similar medium or broadcast over television or radio, or any seminar or 
meeting whose attendees have been invited by any general solicitation


                                      39

<PAGE>

or general advertising, was used by the REIT, the Operating Partnership or 
any of the Subsidiaries or any of the REIT's, Operating Partnership's or such 
Subsidiary's representatives, or, to the knowledge of the REIT or the 
Operating Partnership, any other Person acting on behalf of the REIT, the 
Operating Partnership or any of the Subsidiaries, in connection with the 
offering of any shares of Preferred Stock or REIT Common Stock being 
purchased under this Agreement or under any other Transaction Document.  The 
REIT and the Operating Partnership further represent to the Purchaser that, 
assuming the accuracy of the representations of, and compliance with the 
covenants of, the Purchaser as set forth in Section 10 hereof, neither the 
REIT, the Operating Partnership or any of the Subsidiaries nor any Person 
acting on the REIT's, the Operating Partnership's, or such Subsidiary's 
behalf has taken or will take any action which would subject the issue and 
sale of such shares of the Preferred Stock or REIT Common Stock to the 
provisions of Section 5 of the Securities Act, except as contemplated by the 
Registration Rights Agreement.

            8.9   BROKER'S OR FINDER'S COMMISSIONS.  In addition to and not 
in limitation of any other rights hereunder, the REIT and the Operating 
Partnership agree that they will jointly and severally indemnify and hold 
harmless the Purchaser from and against any and all claims, demands or 
liabilities for broker's, finder's, placement agent's or other similar fees 
or commissions arising from the transactions contemplated hereby, except for 
fees or commissions contemplated by, and specifically addressed in, the Joint 
Venture Agreement.

            8.10  INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY; 
U.S. ENTITY.  Neither the REIT nor the Operating Partnership (i) is or, for 
so long as the Purchaser has the right to receive, or obligation to accept, 
Preferred Common Stock under this Agreement, will become an "investment 
company" within the meaning of the Investment Company Act of 1940, as amended 
(the "1940 Act"), (ii) is or, for so long as the Purchaser has the right to 
receive, or obligation to accept, Preferred  Common Stock under this 
Agreement, will become an "investment company" for purposes of Section 
12(d)(1) of the 1940 Act, (iii) is or, for so long as the Purchaser has the 
right to receive, or obligation to accept, Preferred  Common Stock under this 
Agreement, will become a "holding company" or a "subsidiary company" within 
the meaning of the Public Utility Holding Company Act of 1935, as amended, 
(iv) is or, for so long as the Purchaser has the right to receive, or 
obligation to accept, Preferred Stock or REIT Common Stock under this 
Agreement, will be headquartered or organized in any jurisdiction outside the 
United States of America or (v) directly or indirectly conducts or, for so 
long as the Purchaser has the right to receive, or obligation to accept, 
Preferred Stock or REIT Common Stock under this Agreement, will conduct 
activities or owns or will own assets in any foreign jurisdiction.

            8.11  ERISA REQUIREMENTS. At or before the Closing and annually 
thereafter, the REIT and the Operating Partnership shall provide to the 
Purchaser any information or documents that the Purchaser may reasonably 
request in order for the Purchaser to be able to make a determination as to 
whether the REIT is a "real estate operating company" within the meaning of 
29 C.F.R. Section 2510.3-101(e) (the "Plan Assets Regulation").  Any such 
information or documents provided under this Section 8.11 on an annual basis 
shall be provided no later than 30 days after the expiration of each "annual 
valuation period" (as that


                                      40

<PAGE>

term is defined in the Plan Assets Regulation) which ends on or after any 
purchase of securities contemplated herein.  For the purposes of this Section 
8.11, the REIT's annual valuation period shall be the 90-day period 
commencing on each December 31.

            8.12  CREATION OF PREFERRED STOCK AND PREFERRED UNITS.

                  (a)   As of the date hereof, the REIT shall have taken all 
actions necessary to duly authorize and establish the Preferred Stock, 
including without limitation, filing EXHIBIT G and any other necessary 
documents with the appropriate state authorities.  So long as the Purchaser 
has the right to receive, or obligation to accept, Preferred Stock under this 
Agreement, the REIT shall not (i) amend, repeal or otherwise alter in any 
manner the rights, preferences, privileges, voting power or other terms of 
the Preferred Stock, or (ii) authorize or create or increase the authorized 
amount of any shares of any class or series, or any security convertible into 
any shares of any class or series, ranking senior to the Preferred Stock in 
the distribution of assets on any liquidation, dissolution or winding up of 
the REIT and/or in the payment of dividends ("Senior Preferred Stock"); 
PROVIDED, HOWEVER, that, without the consent of the Purchaser, the REIT may 
issue up to an aggregate of $50,000,000 of Senior Preferred Stock following 
the date hereof to any Person other than a Related Party of the REIT so long 
as the terms of any such class or series of Senior Preferred Stock, if sold 
in a transaction that has not been registered pursuant to Section 5 of the 
Securities Act, (i) do not provide the holders thereof with the right to 
receive a dividend with an effective yield in excess of fifteen percent (15%) 
(subject to the provisions below) and (ii) if such class or series has 
conversion rights, the conversion price of such Senior Preferred Stock, or 
such other price used in determining the conversion rights thereof, shall not 
be less than the Option Exercise Price.  If the terms of the Senior Preferred 
Stock provide the holders thereof with the right to receive a dividend with 
an effective yield in excess of fifteen percent (15%), then the REIT will not 
issue or sell any shares of such Senior Preferred Stock unless it has first 
offered to the Purchaser, for a minimum period of at least fifteen (15) 
business days, the right to purchase all, but not a portion, of the shares of 
Senior Preferred Stock at the same price proposed for such issuance or sale. 
If the Purchaser declines to purchase the Senior Preferred Stock so offered, 
then the REIT may issue and sell Senior Preferred Stock with terms providing 
the holders thereof with the right to receive a dividend with an effective 
yield up to, but not in excess of, twenty percent (20%) without the consent 
of the Purchaser at any time within the six (6) months following the date the 
Purchaser elected not to purchase such Senior Preferred Stock.

                  (b)   As of the date hereof, the REIT and the Operating 
Partnership shall have taken all actions necessary to adopt an amendment to 
the Operating Partnership's Partnership Documents in the form of EXHIBIT H 
attached hereto in order to provide for the issuance of a class of units of 
limited partnership interests in the Operating Partnership to the REIT with 
designations, preferences and other rights such that the economic interests 
attributable to such new class of units are substantially similar to the 
designations, preferences and other rights of the Preferred Stock (such 
units, the "Preferred Units").  So long as the Purchaser has the right to 
receive, or obligation to accept, Preferred Stock under this Agreement, 
neither the REIT nor the Operating Partnership shall take any action to amend,


                                      41

<PAGE>

repeal or otherwise alter in any manner the rights, preferences, privileges 
or other terms of such class of preferred units (it being understood that 
this sentence does not prohibit the REIT from issuing any shares of another 
series of preferred stock or prohibit the Operating Partnership from issuing 
any units ranking on a parity with the units outstanding as of the date 
immediately preceding the date hereof or the issuance of any units with 
substantially the same economic rights and preferences as another series of 
preferred stock issued by the REIT).

            8.13  OWNERSHIP LIMIT WAIVER.  As of the date hereof, the REIT 
has duly entered into the Ownership Waiver Letter substantially in the form 
of EXHIBIT F hereto and, so long as the Purchaser has the right to receive, 
or obligation to accept, Preferred Stock and/or REIT Common Stock under this 
Agreement, the Initial Warrant or the Expansion Capital Warrant, or owns any 
shares of Preferred Stock or REIT Common Stock purchased or acquired pursuant 
to this Agreement or the Warrants, the REIT shall take no action to amend, 
repeal or otherwise alter in any manner such Ownership Waiver Letter.  In 
addition, so long as the Ownership Waiver Letter is in effect, the REIT shall 
not grant any other Person a waiver from the operation of Division C of its 
Articles of Incorporation that would permit such Person to own, for the 
purposes of Division C of the Articles of Incorporation, in excess of nine 
percent (9.0%) of the outstanding shares of REIT Common Stock and of any 
other class of equity security with substantially comparable voting rights 
unless the Board of Directors of the REIT, after consultation with and based 
upon the advice of REIT Counsel, determines in good faith that such waiver is 
necessary for the Board of Directors of the REIT to comply with its fiduciary 
duties to its stockholders under applicable law.

      9.    REPRESENTATIONS AND WARRANTIES, COVENANTS, ETC. OF THE PURCHASER. 
In order to induce each of the REIT and the Operating Partnership to enter 
into this Agreement, the Purchaser hereby represents and warrants and 
covenants that:

            9.1   PURCHASE FOR INVESTMENT; SOURCE OF FUNDS.  The Purchaser is 
an accredited investor as defined in Regulation D under the Securities Act 
and intends to purchase the Preferred Stock and/or REIT Common Stock, as 
applicable, for its own account or for one or more separate accounts 
maintained by it or for the account of one or more institutional investors on 
whose behalf the Purchaser has authority to make this representation for 
investment and not with a view to the distribution thereof or with any 
present intention of distributing or selling any of the Preferred Stock 
and/or REIT Common Stock, as applicable, except in compliance with the 
Securities Act, provided that subject to that compliance the disposition of 
the Purchaser's Property shall at all times be within its control.  The 
Purchaser understands and agrees that, unless a registration statement 
covering the issuance thereof is in effect, the shares of Preferred Stock 
and/or REIT Common Stock have not been registered under the Securities Act 
and may be resold only if registered pursuant to the provisions thereunder or 
if an exemption from registration is available.

            9.2   VALIDITY AND BINDING EFFECT.  The Purchaser has full power 
and authority and has taken all action necessary to authorize it to enter 
into and perform its obligations under the Transaction Documents and all 
other documents or instruments contemplated hereby.  Each of the Transaction 
Documents has been duly executed and delivered by the Purchaser and


                                      42

<PAGE>

is the legal, valid and binding obligation of the Purchaser, enforceable 
against the Purchaser in accordance with its terms.

            9.3   CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION. 
The execution, delivery and performance by the Purchaser of the Transaction 
Documents and all other instruments or agreements to be executed in 
connection herewith and the purchase hereunder by the Purchaser of the 
Initial Warrant, the Expansion Capital Warrant or the Preferred Stock and/or 
REIT Common Stock, as applicable, pursuant to this Agreement (a) are within 
the Purchaser's partnership powers; (b) have been duly authorized by all 
necessary partnership action on the part of the Purchaser; (c) do not require 
any License or Approval (except such as have been obtained); (d) do not 
contravene or constitute a default under or violation of (i) any provision of 
applicable law or regulation of any Governmental Authority, (ii) the 
Partnership Documents of the Purchaser; (iii) any agreement (or require the 
consent of any Person under any agreement that has not been made or obtained) 
to which the Purchaser is a party, or (iv) any judgment, injunction, order, 
decree or other instrument binding upon the Purchaser except where such 
contravention, default or violation would not have a Material Adverse Effect 
on the Purchaser's ability to purchase the shares of Preferred Stock and/or 
REIT Common Stock, as applicable, hereunder.

            9.4   LITIGATION; DEFAULTS.  As of the date of this Agreement, 
there is (a) no action, suit, or proceeding, pending or, to the knowledge of 
the Purchaser, threatened against or affecting the Purchaser, or (b) to the 
knowledge of the Purchaser, no investigation pending against or affecting the 
Purchaser before or by any Governmental Authority which (individually or in 
the aggregate) could reasonably be expected to (i) have a Material Adverse 
Effect on the Purchaser's ability to purchase the shares of Preferred Stock 
or REIT Common Stock, as applicable, hereunder, or (ii) impair the ability of 
the Purchaser to perform fully on a timely basis any material obligation 
which the Purchaser has or will have under any Transaction Document to which 
the Purchaser is a party. The Purchaser is not in violation of, or in default 
under (and there does not exist any event or condition which, after notice or 
lapse of time or both, would constitute such a default under), any term of 
its Partnership Documents or of any term of any agreement, instrument, 
judgment, decree, order, statute, injunction, governmental regulation, rule 
or ordinance (including without limitation, those relating to zoning, city 
planning or similar matters) applicable to the Purchaser or to which the 
Purchaser is bound, except in each case to the extent that such violations or 
defaults, individually or in the aggregate, would not (a) affect the validity 
of any Transaction Document, (b) have a Material Adverse Effect on the 
Purchaser's ability to purchase the shares of Preferred Stock or REIT Common 
Stock, as applicable, hereunder, or (c) impair the ability of the Purchaser 
to perform fully on a timely basis any material obligation which the 
Purchaser has or will have under any Transaction Document to which the 
Purchaser is a party.

      10.   ADDITIONAL COVENANTS OF THE REIT.  So long as this Agreement 
remains in effect, the REIT hereby covenants and agrees as follows:

            10.1  DELIVERY OF INFORMATION.  The REIT will furnish to the 
Purchaser copies of its SEC Filings promptly after filing such documents with 
the Commission and copies of all


                                      43

<PAGE>

materials distributed to its stockholders concurrently with such 
distribution, including all quarterly and annual reports to stockholders and 
any materials distributed in connection with the solicitation of stockholder 
votes.

            10.2  NO IMPAIRMENT.  The REIT shall not by any action, 
including, without limitation, by amendment of its Charter Documents or 
through any reorganization, transfer of assets, consolidation, merger, 
dissolution, issue or sale of securities or any other voluntary action, avoid 
or seek to avoid the observance or performance of any of the terms to be 
observed or performed hereunder by the REIT but shall at all times in good 
faith assist in the carrying out of all the provisions of this Agreement and 
in the taking of all such action as may be necessary or appropriate in order 
to protect the rights of the Purchaser against impairment.

            10.3  RESERVATION OF SHARES OF PREFERRED STOCK AND REIT COMMON 
STOCK.

                  (a)   The REIT shall at all times reserve and keep 
available out of its authorized and unissued Preferred Stock, solely for 
issuance pursuant to the terms of this Agreement or the other Transaction 
Documents, free from any preemptive rights or other obligations, a good faith 
estimate of the maximum number of shares of Preferred Stock that may from 
time to time be issuable under the terms of this Agreement, which shall not 
be less than that number of shares of Preferred Stock equal to the product of 
(x) three (3) and (y) the quotient obtained by DIVIDING (i) the quotient 
obtained by dividing $50,000,000 by the Option Exercise Price BY (ii) the 
Conversion Multiple; PROVIDED, HOWEVER, that, if the Operating Partnership 
has approved an increase to the Capital Contribution Cap under Section 3.7(a) 
of the Joint Venture Agreement, then the REIT shall increase the number of 
shares reserved by at least that number equal to the product of (x) 3 and (y) 
the quotient obtained by DIVIDING (i) the quotient obtained by dividing 
Expansion Capital by the Expansion Option Exercise Price BY (ii) the 
Conversion Multiple, and, if any Additional Capital has been contributed, 
then the REIT shall increase the number of shares reserved by at least that 
number equal to the product of (x) 3 and (y) the quotient obtained by 
DIVIDING (i) the quotient obtained by dividing Additional Capital by the 
Additional Option Exercise Price BY (ii) the Conversion Multiple.

                  (b)   In addition, the REIT shall at all times reserve and 
keep available out of its authorized and unissued REIT Common Stock, solely 
for issuance pursuant to the terms of this Agreement or the other Transaction 
Documents, free from any preemptive rights or other obligations, a good faith 
estimate of the maximum number of shares of REIT Common Stock that may from 
time to time be issuable under the terms of this Agreement, which shall not 
be less than the number resulting from MULTIPLYING (i) that number of shares 
of Preferred Stock reserved for issuance at any time in accordance with 
Section 10.3(a) above, BY (ii) the Conversion Multiple.

                  (c)   The REIT shall prepare and shall use its best efforts 
to obtain and keep in force such governmental or regulatory permits or other 
authorizations as may be required by law, excluding permits or authorizations 
relating to registration under federal or state securities laws, in order to 
enable the REIT lawfully to issue and deliver to the Purchaser


                                      44

<PAGE>

such number of shares of Preferred Stock and/or REIT Common Stock as shall 
from time to time be sufficient to effect the issuance of Preferred Stock 
and/or REIT Common Stock hereunder or the issuance of REIT Common Stock upon 
conversion of the Preferred Stock.  The REIT shall from time to time take all 
action which may be necessary or appropriate so that the shares of REIT 
Common Stock issuable hereunder or issuable upon the conversion of Preferred 
Stock, immediately following their issuance, will be listed or quoted, as the 
case may be, on the principal securities exchanges or markets within the 
United States of America, if any, on which other shares of REIT Common Stock 
are then listed or quoted.

                  (d)   The REIT agrees not to (i) issue additional shares of 
Preferred Stock as a dividend or other distribution on outstanding shares of 
Preferred Stock; (ii) issue additional shares of Preferred Stock pursuant to 
a reclassification of shares of Preferred Stock; (iii) subdivide the 
outstanding shares of Preferred Stock into a greater number of shares of 
Preferred Stock; (iv) combine the outstanding shares of Preferred Stock into 
a smaller number of shares of Preferred Stock; or (v) to otherwise issue any 
shares of Preferred Stock other than pursuant to the terms of this Agreement, 
the Initial Capital Warrant or the Expansion Capital Warrant.

            10.4  COMPLIANCE WITH LAWS UPON ISSUANCE.  The REIT shall use all 
commercially reasonable efforts to ensure that the issuance of shares of 
Preferred Stock or REIT Common Stock pursuant to this Agreement will not 
violate, or require any consent or approval not already obtained under, any 
federal or state statute, rule or regulation, any contract or other 
agreement, or the rules and requirements of any stock exchange or any other 
self regulatory organization on which the REIT Common Stock is quoted or 
listed, including without limiting the generality of the foregoing, 
maintaining sufficient issued and outstanding shares of REIT Common Stock so 
that stockholder approval is not required prior to the issuance of Preferred 
Stock and/or REIT Common Stock under the terms of this Agreement.

            10.5  HART-SCOTT-RODINO ACT COMPLIANCE.  Prior to issuing any 
shares of REIT Common Stock and/or Preferred Stock hereunder, the REIT shall, 
upon the request of the Purchaser (an "HSR Act Filing Request"), as promptly 
as possible (i) make all filings required, and take all such other action 
that may be required or desirable, under or in connection with the HSR Act, 
(ii) use all commercially reasonable efforts to cause the expiration or 
termination of any waiting period under the HSR Act to occur as promptly as 
possible, and (iii) use all commercially reasonable efforts to cause any 
other Person (other than the Purchaser) who may be required to make any 
filing, or to take any other action, under or in connection with the HSR Act 
to do so as promptly as possible.  The parties agree that each of the REIT 
and the Purchaser shall be responsible for one-half of the aggregate filing 
fee in connection with any filing required under the HSR Act.

            10.6  PREFERRED STOCK OR REIT COMMON STOCK TO BE DULY AUTHORIZED 
AND ISSUED, FULLY PAID AND NON-ASSESSABLE.  The REIT will take all such 
action as may be necessary to ensure that all shares of Preferred Stock 
and/or REIT Common Stock issued hereunder shall, at the time of delivery of 
the certificates for such shares, be duly and validly


                                      45

<PAGE>

authorized and issued and fully paid and non-assessable shares and free from 
all liens and charges with respect to the issuance thereof.

            10.7  TRANSFER TAXES.  The REIT will pay when due and payable any 
and all federal and state transfer taxes and charges (but not income taxes) 
which may be payable in respect of the issuance or delivery of any shares of 
Preferred Stock and/or REIT Common Stock issued under the terms of this 
Agreement.

            10.8  SHAREHOLDER RIGHTS PLAN.  So long as this Agreement is in 
effect, the REIT shall not adopt what is commonly referred to as a 
"shareholder rights plan," or issue any convertible securities, the 
conversion rights of which would be triggered, accelerated or otherwise 
altered by the issuance of shares of Preferred Stock and/or REIT Common Stock 
under this Agreement or the issuance of shares of REIT Common Stock upon 
conversion of the Preferred Stock unless the exercise of the Purchaser's 
rights hereunder and under the Initial Warrant and the Expansion Capital 
Warrant are specifically exempted from the application of such shareholder 
rights plan or convertible securities.  For the purposes of this section, the 
REIT shall be deemed to have adopted a shareholder rights plan or issued a 
convertible security if it merges with or into, consolidates with or 
transfers all or substantially all of its assets to a Person that has such a 
plan in effect or that has an outstanding class or series of convertible 
securities.

            10.9  BUSINESS COMBINATION STATUTE, CONTROL SHARE STATUTE.  The 
REIT shall use all commercially reasonable efforts to ensure that the 
issuance of any shares of Preferred Stock or REIT Common Stock hereunder is 
exempted from the application of Chapter 1704 of the Ohio Revised Code and 
1701.831 of the Ohio General Corporation Law.
            10.10 FURTHER ASSURANCES.  Following the exercise of the Exchange 
Option, any exercise of the Initial Warrant or the Expansion Capital Warrant, 
an election by the Purchaser or the REIT under Section 4 hereof or the 
occurrence of a Put/Sale Distribution, each of the REIT, the Operating 
Partnership and the Purchaser shall use all commercially reasonable efforts 
to perform and fulfill all conditions and obligations on their parts to be 
performed and fulfilled under this Agreement and to cause the conditions in 
Section 7 hereof to be satisfied in a timely manner prior to any Closing.

      11.   RESTRICTIONS ON TRANSFER.

            11.1  RESTRICTIVE LEGENDS.  Except as otherwise permitted by this 
Section 11, each share of Preferred Stock or REIT Common Stock issued 
pursuant to this Agreement shall be stamped or otherwise imprinted with a 
legend in substantially the following form:

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
            BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED, NOR PURSUANT TO THE SECURITIES OR "BLUE SKY"
            LAWS OF ANY STATE.  SUCH SECURITIES MAY NOT BE
            TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN


                                      46

<PAGE>

            ACCORDANCE WITH APPLICABLE "BLUE SKY" LAWS AND PURSUANT
            TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
            SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE
            144 OR RULE 144A UNDER SUCH ACT, OR (iii) ANY OTHER
            EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO
            SUCH TRANSFER.

      The REIT shall maintain a copy of this Agreement and any amendments 
thereto on file in its principal office, and will make such copy available 
during normal business hours for inspection to any party thereto or will 
provide such copy to the Purchaser or any transferee upon its or their 
request.

      Whenever the legend requirements imposed by this Section 11.1 shall 
terminate, as provided in Section 11.2, the respective holders of shares of 
Preferred Stock or REIT Common Stock for which such legend requirements have 
terminated shall be entitled to receive from the REIT, at the REIT's expense, 
shares of Preferred Stock or REIT Common Stock, as applicable, without such 
legend.

            11.2  NOTICE OF TRANSFER; OPINIONS OF COUNSEL.  The holder of 
each of the shares of Preferred Stock or REIT Common Stock bearing the 
restrictive legend set forth in Section 11.1 above (a "Restricted Security"), 
agrees with respect to any transfer of such Restricted Security to give to 
the REIT, (a) written notice describing the transferee and the circumstances, 
if any, necessary to establish the availability of an exemption from the 
registration requirements of the Securities Act and any state law and (b) 
upon reasonable request by the REIT, to such transferring holder, an opinion 
of counsel (at the expense of such holder), which is knowledgeable in 
securities law matters (including in-house counsel or regular counsel to the 
Purchaser or its investment adviser), in form and substance reasonably 
satisfactory to the REIT, to the effect that the proposed transfer of such 
Restricted Security may be effected without registration of such Restricted 
Security under the Securities Act or any state law.  If for any reason the 
REIT, (after having been furnished with the opinion required to be furnished 
pursuant to this Section 11.2) shall fail to notify such holder within ten 
(10) business days after such holder shall have delivered such notice or 
opinion to the REIT, that, in its or its counsel's opinion, the transfer may 
not be legally effective (the "Illegal Transfer Notice"), such holders shall 
thereupon be entitled to transfer the Restricted Security as proposed. If the 
holder of the Restricted Security delivers to the REIT, an opinion of counsel 
(including in-house counsel or regular counsel to the Purchaser or its 
investment adviser) in form and substance reasonably satisfactory to the 
REIT, that subsequent transfers of such Restricted Security will not require 
registration under the Securities Act or any state law, the REIT will 
promptly after such contemplated transfer deliver new certificates for such 
Restricted Security which do not bear the Securities Act legend set forth in 
Section 11.1 above.  The restrictions imposed by this Section 11 upon the 
transferability of any particular Restricted Security shall cease and 
terminate when such Restricted Security has been sold pursuant to an 
effective registration statement under the Securities Act or at such time as 
the shares are eligible to be transferred pursuant to Rule 144(k) promulgated 
under the Securities


                                      47

<PAGE>

Act.  The holder of any Restricted Security as to which such restrictions 
shall have terminated shall be entitled to receive from the REIT, a new 
security of the same type but not bearing the restrictive Securities Act 
legend set forth in Section 11.1 and not containing any other reference to 
the restrictions imposed by this Section 11.  Notwithstanding any of the 
foregoing, no opinion of counsel will be required to be rendered pursuant to 
this Section 11.2 with respect to the transfer of any securities on which the 
restrictive legend has been removed in accordance with this Section 11.2.  As 
used in this Section 11.2, the term "transfer" encompasses any sale, transfer 
or other disposition of any securities referred to herein.

            11.3  NO RESTRICTIVE LEGENDS.  Notwithstanding Section 11.1 
hereof, shares of Preferred Stock or REIT Common Stock issued under the terms 
of this Agreement will not contain any restrictive legend similar to that 
provided for in Section 11.1 above in the event that the issuance of such 
shares is covered by an effective registration statement filed with the 
Commission.

      12.   MISCELLANEOUS

            12.1  INDEMNIFICATION; EXPENSES, ETC.

                  (a)   In addition to any and all obligations of the REIT 
and the Operating Partnership to indemnify the Purchaser hereunder the REIT 
and the Operating Partnership agree, without limitation as to time, to 
jointly and severally indemnify and hold harmless the Purchaser, its 
Affiliates, and the employees, officers, directors, trustees, direct and 
indirect partners, members, agents and investment advisors of the Purchaser 
and such Affiliates (individually, a "Purchaser Indemnified Party" and, 
collectively the "Purchaser Indemnified Parties") from and against any and 
all losses, claims, damages, liabilities, costs (including the costs of 
preparation and reasonable attorneys' fees) and reasonable expenses 
(including expenses of investigation) (collectively, "Losses") incurred or 
suffered by a Purchaser Indemnified Party in connection with or arising out 
of any material breach by the REIT or the Operating Partnership of any 
warranty or representation or covenant made by the REIT or the Operating 
Partnership in this Agreement; PROVIDED, HOWEVER, that neither the REIT nor 
the Operating Partnership shall be liable for any losses resulting from 
action on the part of any Purchaser Indemnified Party which is finally 
determined in such proceeding to be wrongful or which is an act of gross 
negligence, recklessness, or willful misconduct by such Purchaser Indemnified 
Party.  Each of the REIT and the Operating Partnership agree promptly to 
reimburse any Purchaser Indemnified Party for all such Losses as they are 
incurred or suffered by such Purchaser Indemnified Party.

            Except as otherwise provided herein, each of the REIT and the 
Operating Partnership agree (for the benefit of the Purchaser) to pay, and to 
hold the Purchaser harmless from and against, all costs and expenses 
(including, without limitation, attorneys' fees, expenses and disbursements), 
if any, in connection with the enforcement against the REIT or the 
Subsidiaries of this Agreement or any other Transaction Document or any other 
agreement or instrument furnished pursuant hereto or in connection herewith 
in any action in which the


                                      48

<PAGE>

Purchaser attempts to enforce any of the foregoing, PROVIDED, that the 
Purchaser shall prevail in such action.

                  (b)   In addition to any and all obligations of the Purchaser
to indemnify the REIT and the Subsidiaries hereunder, the Purchaser agrees,
without limitation as to time, to indemnify and hold harmless the REIT, the
Subsidiaries, their Affiliates, and the employees, officers, directors,
trustees, direct and indirect partners, members and agents of the REIT, the
Subsidiaries and their Affiliates (individually, a "REIT Indemnified Party" and,
collectively the "REIT Indemnified Parties") from and against any and all
Losses, incurred or suffered by a REIT Indemnified Party in connection with or
arising out of any material breach by the Purchaser of any warranty or
representation or covenant made by the Purchaser in this Agreement; PROVIDED,
HOWEVER, that the Purchaser shall not be liable for any losses resulting from
action on the part of any REIT Indemnified Party which is finally determined in
such proceeding to be wrongful or which is an act of gross negligence,
recklessness, or willful misconduct by such REIT Indemnified Party.  The
Purchaser agrees promptly to reimburse any REIT Indemnified Party for all such
Losses as they are incurred or suffered by such REIT Indemnified Party.

            Except as otherwise provided herein, the Purchaser agrees (for the
benefit of the REIT) to pay, and to hold the REIT harmless from and against, all
costs and expenses (including, without limitation, attorneys' fees, expenses and
disbursements), if any, in connection with the enforcement against the Purchaser
of this Agreement or any other Transaction Document or any other agreement or
instrument furnished pursuant hereto or in connection herewith in any action in
which the REIT attempts to enforce any of the foregoing, PROVIDED, that the REIT
shall prevail in such action.
 
                  (c)   If any Indemnified Party is entitled to indemnification
hereunder, such Indemnified Party or its representative shall give prompt notice
to the REIT or the Purchaser, as the case may be (each, for purposes of this
Section 12.1(c), an "Indemnifying Party" to the extent the context so requires)
of any claim or of the commencement of any proceeding against such Indemnified
Party brought by any third party with respect to which such Indemnified Party
seeks indemnification pursuant hereto; PROVIDED, HOWEVER, that the failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
obligation or liability except to the extent the Indemnifying Party is
prejudiced by such failure.  The Indemnifying Party shall have the right,
exercisable by giving written notice to an Indemnified Party promptly after the
receipt of written notice from such Indemnified Party of such claim or
proceeding, to assume, at the expense of the Indemnifying Party, the defense of
any such claim or proceeding with counsel reasonably satisfactory to such
Indemnified Party.  The Indemnified Party or Parties will not be subject to any
liability for any settlement made without its or their consent (but such consent
will not be unreasonably withheld).  The Indemnifying Party shall not consent to
entry of any judgment or enter into any settlement in connection with any matter
for which the Indemnified Party is entitled to indemnification hereunder, which
does not include as an unconditional term thereof the giving by claimant or
plaintiff to such Indemnified Party or Parties of a release, in form and
substance satisfactory

                                     49

<PAGE>

to the Indemnified Party or Parties, from all liability in respect of such 
claim, litigation or proceeding.

            12.2  ASSIGNABILITY.  No party may directly or indirectly assign or
otherwise transfer any of its respective rights or obligations under this
Agreement without the prior written consent of the other parties hereto;
PROVIDED, HOWEVER, that the Purchaser may transfer its rights and obligations
hereunder in connection with a concurrent transfer of all or substantially all
of its limited liability company interest in the Joint Venture permitted
pursuant to Section 8.1 of the Joint Venture Agreement to the transferee of its
limited liability company interest in the Joint Venture.  Notwithstanding any
other provision in this Agreement to the contrary, in the event that the
Purchaser transfers all or substantially all of its limited liability company
interests in the Joint Venture in any transaction other than one permitted
pursuant to Section 8.1.3(a) of the Joint Venture Agreement, the provisions of
Sections 2, 3.2, 4.1 and 4.2 shall be deemed terminated immediately upon the
consummation of such transfer, and the parties and their assignees or
transferees shall have no further rights or obligations with respect to such
sections.

            12.3  SUCCESSORS AND ASSIGNS.  Subject to Section 12.2, whenever in
this Agreement any of the parties hereto are referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the respective parties
which are contained in this Agreement shall bind and inure to the benefit of the
successors and assigns of all other parties.  Except as otherwise provided
herein or in any other Transaction Document, the terms and provisions of this
Agreement and the other Transaction Documents shall inure to the benefit of and
shall be binding upon any assignee or transferee of the Purchaser, and in the
event of such transfer or assignment, the rights and privileges herein conferred
upon the Purchaser shall automatically extend to and be vested in, and become an
obligation of, such transferee or assignee, all subject to the terms and
conditions hereof.

            12.4  USE OF DEPOSITARY SHARES.  The parties agree that, at any time
at which shares of Preferred Stock are to be issued pursuant to this Agreement,
the REIT may in lieu thereof issue Depositary Shares, in each case at a ratio of
100 Depositary Shares for each share of Preferred Stock, and the Transaction
Documents shall be deemed simultaneously amended in all respects necessary to
adjust the rights, terms and provisions hereunder as appropriate to reflect such
issuance.  Each Depositary Share will have, proportionately, the same rights,
privileges, duties and limitations as the share of Preferred Stock in which that
Depositary Share evidences an interest.

            12.5  TERMINATION OF AGREEMENT.  Notwithstanding anything in this
Agreement to the contrary, this Agreement shall be deemed terminated as of the
dissolution of the Joint Venture and the liquidation of the assets in connection
therewith and the distribution to the members thereof of all funds held by the
Joint Venture.

            12.6  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SEVERABILITY.  All
representations and warranties contained in this Agreement or the Transaction
Documents or 

                                     50

<PAGE>

made in writing by or on behalf of the REIT, the Operating Partnership or the 
Purchaser in connection with the transactions contemplated by this Agreement 
or the Transaction Documents shall survive, for the duration of any statutes 
of limitation applicable thereto, the execution and delivery of this 
Agreement, any investigation at any time made by the REIT, the Operating 
Partnership, the Purchaser or on such party's behalf, the purchase of any 
shares of Preferred Stock or REIT Common Stock by the Purchaser under this 
Agreement and any disposition of or payment on such shares of Preferred Stock 
or REIT Common Stock.  All statements contained in any certificate or other 
instrument delivered to the Purchaser by or on behalf of the REIT or 
delivered to the REIT by or on behalf of the Purchaser pursuant to this 
Agreement or the other Transaction Documents shall be deemed representations 
and warranties of the REIT or the Purchaser, as applicable, under this 
Agreement.  Any provision of this Agreement that is prohibited or 
unenforceable in any jurisdiction shall, as to such jurisdiction, be 
ineffective to the extent of such prohibition or unenforceability without 
invalidating the remaining provisions hereof or affecting the validity or 
enforceability of such provisions in any other jurisdiction.  

            12.7  NOTICES.  All notices required or permitted to be given 
under this Agreement shall be in writing and shall be either personally 
delivered or sent by registered or certified mail, return receipt requested, 
to the addresses set forth below, as they may be changed from time to time by 
the addressee party by written notice to the other parties.

      If to the REIT or the        Boykin Lodging Company
      Operating Partnership:       Guildhall Building
                                   45 West Prospect Avenue, Suite 1500
                                   Cleveland, Ohio 44115
                                   Attn: Robert W. Boykin, Chief Executive 
                                   Officer

      with copies to:              Robert A. Weible, Esq.
                                   Baker and Hostetler LLP
                                   3200 National City Center
                                   1900 E. 9th Street
                                   Cleveland, Ohio  44114
                                   Tel:  (216) 861-7553
                                   Fax:  (216) 696-0740

      If to the Purchaser:         AEW Partners III, L.P.
                                   225 Franklin Street, 25th Floor
                                   Boston, Massachusetts  02109
                                   Attn: J. Grant Monahon, Esq.
                                   Tel: 617-261-9000
                                   Fax: 617-261-9555

                                     51

<PAGE>

      with copies to:              Michael H. Glazer, P.C.
                                   Goodwin, Procter & Hoar  LLP
                                   Exchange Place
                                   Boston, Massachusetts 02109
                                   Tel: 617-570-1420
                                   Fax: 617-523-1231

            12.8  NO WAIVER.  No waiver or consent shall be effective under 
this Agreement unless it is in writing and executed by the party against 
which enforcement thereof is sought.  Unless otherwise provided herein, the 
giving of any consent with respect to this Agreement shall be in the sole 
discretion of the party giving such consent.  A waiver or consent shall be 
effective only with respect to the specific event or circumstances for which 
it is given and not any subsequent occurrence, unless otherwise expressly 
stated therein.

            12.9  AMENDMENTS.  No alteration, modification or amendment of 
the terms and provisions of this Agreement shall be binding unless in writing 
and consented to by the parties hereto.

            12.10 FURTHER ASSURANCES.  In connection with this Agreement, as 
well as all transactions contemplated by this Agreement, each party agrees to 
execute and deliver all such additional documents and instruments and to 
perform such additional acts as may be necessary or appropriate to effectuate 
and perform all of the terms, provisions and conditions of this Agreement and 
all such transactions.

             12.11 ENTIRE AGREEMENT.  The Joint Venture Agreement, this 
Agreement, the Registration Rights Agreement, the Initial Warrant, the 
Expansion Capital Warrant and any other instruments to be executed and 
delivered pursuant thereto, constitute the entire agreement between the 
parties and supersede all prior understandings and writings, and may be 
changed only by a writing signed by the parties thereto.

            12.12 DESCRIPTIVE HEADINGS.  The headings in this Agreement are 
for purposes of reference only and shall not limit or otherwise affect the 
meaning hereof.

            12.13 GENDER, NUMBER.  All pronouns and any variations thereof 
shall be deemed to refer to the masculine, feminine, neuter, singular or 
plural, as the identity of the person or persons may require.

            12.14 SATISFACTION REQUIREMENT.  If any agreement, certificate or 
other writing, or any action taken or to be taken, is by the terms of this 
Agreement required to be satisfactory to a particular party, the 
determination of such satisfaction shall be made by such party, as the case 
may be, in the sole and exclusive judgment (exercised in good faith) of the 
Person or Persons making such determination.

            12.15 GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED AND 
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES

                                     52

<PAGE>

SHALL BE GOVERNED BY, THE LAW OF THE STATE OF OHIO WITHOUT REGARD TO 
PRINCIPLES OF CONFLICT OF LAW.

            12.16 EXPENSES.  The Joint Venture will pay at any Closing (or on 
such later date as one or more invoices may be submitted to the Joint 
Venture) the legal fees of Purchaser's Counsel incurred in connection with 
this Agreement and consummation of the transactions contemplated hereby.

            12.17 COUNTERPARTS.  This Agreement may be executed 
simultaneously in two or more counterparts, each of which shall be deemed an 
original, binding on all parties hereto, and it shall not be necessary in 
making proof of this Agreement to produce or account for more than one such 
counterpart.

            12.18 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.  This 
Agreement may not be used to interpret another agreement, indenture, loan or 
debt agreement of the REIT or any Subsidiary.  Any such agreement, indenture, 
loan or debt agreement may not be used to interpret this Agreement.

                  [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




                                     53

<PAGE>






                           STOCK PURCHASE OPTION AGREEMENT


      If this Agreement is satisfactory, please so indicate by signing the 
applicable attached signature page of this Agreement and delivering such 
counterpart to the Purchaser, whereupon this Agreement will become binding 
among the parties hereto in accordance with its terms.

                                       BOYKIN LODGING COMPANY, an Ohio 
                                       corporation


                                       By:  /s/ Paul A. O'Neil
                                          --------------------------------
                                          Name: Paul A. O'Neil
                                          Title: Chief Financial Officer


                                        BOYKIN HOTEL PROPERTIES, L.P.
                                        an Ohio limited partnership


                                        By:  Boykin Lodging Company,
                                             its General Partner


                                        By:  /s/ Richard C. Conti
                                           -------------------------------
                                           Name: Richard C. Conti
                                           Title: Chief Operating Officer

                                    S-1

<PAGE>






                           STOCK PURCHASE OPTION AGREEMENT
                               PURCHASER SIGNATURE PAGE

Accepted and agreed as of the date first written above:


                                       AEW PARTNERS III, L.P.

                                       By: AEW III, L.L.C.,
                                           its General Partner

                                       By: AEW Partners III, Inc.,
                                           its Managing Member

                                       By: /s/ James J. Finnegan
                                          --------------------------------
                                          Name: James J. Finnegan
                                          Title: Vice President


                                    S-2