<PAGE>

                                                                    EXHIBIT 10.2





                          SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP



                                       OF



                  WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.



<PAGE>


                                TABLE OF CONTENTS

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<Caption>
                                                                                                       Page
                                                                                                       ----
<S>               <C>                                                                                  <C>
ARTICLE I         DEFINED TERMS...........................................................................1
ARTICLE II        PARTNERSHIP FORMATION AND IDENTIFICATION...............................................10
                  2.01 Formation.........................................................................10
                  2.02 Name, Office and Registered Agent.................................................10
                  2.03 Partners..........................................................................10
                  2.04 Term and Dissolution..............................................................10
                  2.05 Filing of Certificate and Perfection of Limited Partnership.......................11
                  2.06 Certificates Describing Partnership Units and Special Partnership Units...........11
ARTICLE III       BUSINESS OF THE PARTNERSHIP............................................................11
ARTICLE IV        CAPITAL CONTRIBUTIONS AND ACCOUNTS.....................................................12
                  4.01 Capital Contributions.............................................................12
                  4.02 Additional Capital Contributions and Issuance of Additional Partnership
                       Interests.........................................................................12
                  4.03 Additional Funding................................................................14
                  4.04 Capital Accounts..................................................................14
                  4.05 Percentage Interests..............................................................14
                  4.06 No Interest on Contributions......................................................15
                  4.07 Return of Capital Contributions...................................................15
                  4.08 No Third Party Beneficiary........................................................15
ARTICLE V         PROFITS AND LOSSES; DISTRIBUTIONS......................................................15
                  5.01 Allocation of Profit and Loss.....................................................15
                  5.02 Distribution of Cash..............................................................17
                  5.03 REIT Distribution Requirements....................................................19
                  5.04 No Right to Distributions In Kind.................................................19
                  5.05 Limitations of Return of Capital Contributions....................................19
                  5.06 Distributions Upon Liquidation....................................................19
                  5.07 Substantial Economic Effect.......................................................19
ARTICLE VI        RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER..................................20
                  6.01 Management of the Partnership.....................................................20
                  6.02 Delegation of Authority...........................................................22
                  6.03 Indemnification and Exculpation of Indemnitees....................................22
                  6.04 Liability of the General Partner..................................................23
                  6.05 Reimbursement of General Partner..................................................24
                  6.06 Outside Activities................................................................24
                  6.07 Employment or Retention of Affiliates.............................................24
                  6.08 General Partner Participation.....................................................25
                  6.09 Title to Partnership Assets.......................................................25
                  6.10 Miscellaneous.....................................................................25
ARTICLE VII       CHANGES IN GENERAL PARTNER.............................................................26
                  7.01 Transfer of the General Partner's Partnership Interest............................26
                  7.02 Admission of a Substitute or Additional General Partner...........................27
                  7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.......28
                  7.04 Removal of a General Partner......................................................28
ARTICLE VIII      RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.........................................29
                  8.01 Management of the Partnership.....................................................29
                  8.02 Power of Attorney.................................................................29
                  8.03 Limitation on Liability of Limited Partners.......................................29
                  8.04 Ownership by Limited Partner of Corporate General Partner or Affiliate............30
                  8.05 Redemption Right..................................................................30
                  8.06 Registration......................................................................32
                  8.07 Redemption of Special Partnership Units...........................................32
ARTICLE IX        TRANSFERS AND REDEMPTIONS OF LIMITED PARTNERSHIP INTERESTS.............................34
</Table>



                                       -i-



<PAGE>


<Table>
<S>               <C>                                                                                  <C>
                  9.01 Purchase for Investment..........................................................34
                  9.02 Restrictions on Transfer of Limited Partnership Interests........................34
                  9.03 Admission of Substitute Limited Partner..........................................35
                  9.04 Rights of Assignees of Partnership Interests.....................................36
                  9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner....36
                  9.06 Joint Ownership of Interests.....................................................36
                  9.07 Redemption of Partnership Units..................................................37
ARTICLE X         BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS............................................37
                  10.01 Books and Records...............................................................37
                  10.02 Custody of Partnership Funds; Bank Accounts.....................................37
                  10.03 Fiscal and Taxable Year.........................................................37
                  10.04 Annual Tax Information and Report...............................................37
                  10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments...................38
                  10.06 Reports to Limited Partners.....................................................38
ARTICLE XI        AMENDMENT OF AGREEMENT; MERGER........................................................38
ARTICLE XII       GENERAL PROVISIONS....................................................................39
                  12.01 Notices.........................................................................39
                  12.02 Survival of Rights..............................................................39
                  12.03 Additional Documents............................................................39
                  12.04 Severability....................................................................39
                  12.05 Entire Agreement................................................................39
                  12.06 Pronouns and Plurals............................................................39
                  12.07 Headings........................................................................39
                  12.08 Counterparts....................................................................40
                  12.09 Governing Law...................................................................40

EXHIBIT A.........ALLOCATION OF PARTNERSHIP UNITS
EXHIBIT B.........NOTICE OF EXERCISE OF REDEMPTION RIGHT
</Table>



                                      -ii-



<PAGE>


                          SECOND AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                  WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.




                                    RECITALS


         Wells Timberland Operating Partnership, L.P., formerly know as Wells
Timber Operating Partnership, L.P. (the "Partnership") was formed as a limited
partnership under the laws of the State of Delaware, pursuant to a Certificate
of Limited Partnership filed with the Office of the Secretary of State of the
State of Delaware effective as of November 9, 2005, and amended on November 16,
2006. The First Amended and Restated Agreement of Limited Partnership was
entered into on the 22nd day of August, 2006 between Wells Timberland REIT,
Inc., a Maryland corporation formerly known as Wells Timber Real Estate
Investment Trust, Inc. (the "General Partner") and the limited partner(s) set
forth on Exhibit A hereto (the "Limited Partners") and superseded and replaced
the Agreement of Limited Partnership executed by the parties hereto as of
November 9, 2005. This Second Amended and Restated Agreement of Limited
Partnership is entered into this 27th day of March 2007 between the General
Partner and the Limited Partners and supersedes and replaces the First Amended
and Restated Agreement of Limited Partnership executed by the parties hereto as
of August 22, 2006.


                                    AGREEMENT


         NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


                                    ARTICLE I


                                  DEFINED TERMS


         The following defined terms used in this Agreement shall have the
meanings specified below:


         "Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time.


         "Additional Funds" has the meaning set forth in Section 4.03 hereof.

         "Additional Securities" means any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to Section 8.05
hereof) or preferred stock or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase REIT
Shares or preferred stock.


         "Administrative Expenses" means (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) those administrative costs
and expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses; provided, however, that
Administrative Expenses shall not include any administrative costs and expenses
incurred by the General Partner that are attributable to Properties or
partnership interests in a Subsidiary Partnership that are owned by the General
Partner directly.


         "Advisor" or "Advisors" means the Persons or Persons, if any,
appointed, employed or contracted with by the General Partner and responsible
for directing or performing the day-to-day business affairs of the General
Partner, including any Person to whom the Advisor subcontracts substantially all
of such functions.



                                      -1-
<PAGE>

         "Advisory Agreement" means the agreement between the Partner, the
General Partner and the Advisor pursuant to which the Advisor will direct or
perform the day-to-day business affairs of the General Partner.


         "Affiliate" means, (i) any Person that, directly or indirectly,
controls or is controlled by or is under common control with such Person, (ii)
any other Person that owns, beneficially, directly or indirectly, 10% or more of
the outstanding capital stock, shares or equity interests of such Person, or
(iii) any officer, director, employee, partner or trustee of such Person or any
Person controlling, controlled by or under common control with such Person
(excluding trustees and persons serving in similar capacities who are not
otherwise an Affiliate of such Person). For the purposes of this definition,
"control" (including the correlative meanings of 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, through the ownership
of voting securities or partnership interests or otherwise.


         "Agreed Value" means the fair market value of a Partner's non-cash
Capital Contribution as of the date of contribution as agreed to by such Partner
and the General Partner. The names and addresses of the Partners, number of
Partnership Units or Special Partnership Units issued to each Partner, and the
Agreed Value of non-cash Capital Contributions as of the date of contribution is
set forth on Exhibit A.


         "Appraised Value" means the fair market value of the assets (excluding
any assets which may be readily marked to market) of the Partnership as
determined by an appraisal made by an Independent Appraiser.


         "Agreement" means this Agreement of Limited Partnership.


         "Articles of Incorporation" means the Articles of Incorporation of the
General Partner filed with the Maryland State Department of Assessments and
Taxation, as amended or restated from time to time.


         "Capital Account" has the meaning provided in Section 4.04 hereof.


         "Capital Contribution" means the total amount of cash, cash
equivalents, and the Agreed Value of any Property or other asset contributed or
agreed to be contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.


         "Cash Amount" means an amount of cash per Partnership Unit equal to the
Value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Redemption.


         "Certificate" means any instrument or document that is required under
the laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.


         "Code" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.


         "Commission" means the U.S. Securities and Exchange Commission.



                                      -2-
<PAGE>


         "Conversion Factor" means 1.0, provided that in the event that the
General Partner (i) declares or pays a dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator of
which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date and, provided further, that in
the event that an entity other than an Affiliate of the General Partner shall
become General Partner pursuant to any merger, consolidation or combination of
the General Partner with or into another entity (the "Successor Entity"), the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by the
number of shares of the Successor Entity into which one REIT Share is converted
pursuant to such merger, consolidation or combination, determined as of the date
of such merger, consolidation or combination. Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; provided, however, that
if the General Partner receives a Notice of Redemption after the record date,
but prior to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Redemption immediately prior to the record date for
such dividend, distribution, subdivision or combination.


          "Event of Bankruptcy" as to any Person means the filing of a petition
for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of
1978 or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debtor
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.


         "General Partner" means Wells Timberland REIT, Inc., a Maryland
corporation, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.


         "General Partnership Interest" means a Partnership Interest held by the
General Partner that is a general partnership interest.


         "Indemnitee" means (i) any Person made a party to a proceeding by
reason of its status as the General Partner, or a director, officer or employee
of the General Partner or the Partnership, and (ii) such other Persons
(including Affiliates of the General Partner or the Partnership) as the General
Partner may designate from time to time, in its sole and absolute discretion.



                                      -3-
<PAGE>


         "Independent Director" means a director of the General Partner who is
not an officer or employee of the General Partner, any Affiliate of an officer
or employee or any Affiliate of (i) any lessee of any property of the General
Partner or any Subsidiary of the General Partner, (ii) any Subsidiary of the
General Partner, or (iii) any partnership that is an Affiliate of the General
Partner.


         "Independent Appraiser" means an appraiser of real estate with no
material current or prior business or personal relationship with the Advisor,
the Partnership, the General Partner or the directors of the General Partner,
that, in the determination of the General Partner, is qualified to appraise real
estate by virtue of being engaged to a substantial extent in the business of
rendering opinions regarding the value of assets of the type held by the
Partnership. Membership in a nationally recognized appraisal society such as the
American Institute of Real Estate Appraisers or the Society of Real Estate
Appraisers shall be conclusive evidence of such qualification.


         "Issue Price" means the per share price at which the applicable REIT
Shares were offered in the General Partner's public offering pursuant to which
they were issued, not reduced by any discounted selling commissions or reduced
fees that the General Partner may pay to its Dealer Manager which may have
applied to the purchase of such REIT Shares.


         "Joint Venture" means any Person named as a Limited Partner on Exhibit
A attached hereto, and any Person who becomes a Substitute Limited Partner, in
such Person's capacity as a Limited Partner in the Partnership.


         "Limited Partner" means any Person named as a Limited Partner on
Exhibit A attached hereto, and any Person who becomes a Substitute or Additional
Limited Partner, in such Person's capacity as a Limited Partner in the
Partnership.


         "Limited Partnership Interest" means the ownership interest of a
Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.


         "Listing" means the approval of the REIT Shares, issued by the General
Partner pursuant to an effective Registration Statement, for trading on a
national securities exchange. Upon such Listing, the shares shall be deemed
"Listed."


                                      -4-
<PAGE>


         "Loss" has the meaning provided in Section 5.01(g) hereof.


         "Minimum Limited Partnership Interest" means the lesser of (i) 1% or
(ii) if the total Capital Contributions to the Partnership exceed $50 million,
1% divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.


         "Mortgages" means, in connection with any mortgage financing provided,
invested in, participated in or purchased by the Partnership, all of the notes,
deeds of trust, mortgages, security interests or other evidences of indebtedness
or obligations, which are secured by or, collateralized by, or applicable to any
Property owned by the borrowers under such notes, deeds of trust, mortgages,
security interests or other evidences of indebtedness or obligations.

          "NASAA Guidelines" means the Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association.

         "Net Assets" means the total assets of the Partnership (other than
intangibles) at cost, before deducting depreciation, reserves for bad debts or
other non-cash reserves, less total liabilities, calculated quarterly by the
Partnership on a basis consistently applied.

         "Net Sales Proceeds" means (i) in the case of a transaction described
in clause (A)(i) of the definition of Sale, the proceeds of any such transaction
less the amount of selling expenses incurred by or on behalf of the Partnership,
including all real estate disposition fees, closings costs and legal fees and
expenses; (A)(ii) in the case of a transaction described in clause (ii) of the
definition of Sale, the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Partnership, including any
legal fees and expenses and other selling expenses incurred in connection with
such transaction; (iii) in the case of a transaction described in clause
(A)(iii) of the definition of Sale, the proceeds of any such transaction
actually distributed to the Partnership from the Joint Venture less the amount
of any selling expenses incurred by or on behalf of the Partnership (other than
those paid by the Joint Venture); (iv) in the case of a transaction described in
clause (A)(iv) of the definition of Sale, the proceeds of any such transaction
(including the aggregate of all payment under a Mortgage on or in satisfaction
thereof other than regularly scheduled interest payments) less the amount of
selling expenses incurred by or on behalf of the Partnership, including all
commissions, closing costs and legal fees and expenses; (v) in the case of a
transaction described in clause (A)(v) of the definition of Sale, the proceeds
of any such transaction less the amount of selling expenses incurred by or on
behalf of the Partnership, including any legal fees and expenses and other
selling expenses incurred in connection with such transaction; and (vi) in the
case of a transaction described in clause (B) of the definition of Sale, the
proceeds of such transaction or series of transactions less all amounts
generated thereby which are reinvested in one or more assets as described in
clause (B) of the definition of Sale within 180 days thereafter and less the
amount of any real estate commissions, closing costs, and legal fees and
expenses and other selling expenses incurred by or allocated to the Partnership
in connection with such transaction or series of transactions. Net Sales
Proceeds



                                      -5-
<PAGE>


shall also include any amounts that the General Partner determines, in its
discretion, to be economically equivalent to the proceeds of a Sale. Net Sales
Proceeds shall not include any reserves established by the Partnership in its
sole discretion.


         "Notice of Redemption" means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit B hereto.


         "Offer" has the meaning set forth in Section 7.01(c) hereof.


         "Offering" means the initial offer and sale by the General Partner and
the purchase by the Dealer Manager (as defined in the Prospectus) of REIT for
sale to the public.


         "OP Unitholders" means all holders of Partnership Interests other than
Special OP Unitholders who do not own Partnership Units in addition to their
Special Partnership Units.


         "Original Limited Partner" means the Limited Partner designated as
"Original Limited Partner" on Exhibit A hereto.


         "Partner" means any General Partner or Limited Partner.


         "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).


         "Partnership" means Wells Timberland Operating Partnership, L.P., a
Delaware limited partnership.


         "Partnership Interest" means an ownership interest in the Partnership
held by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.


         "Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner's share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).


         "Partnership Record Date" means the record date established by the
General Partner for the distribution of cash pursuant to Section 5.02 hereof,
which record date shall be the same as the record date established by the
General Partner for a distribution to its shareholders of some or all of its
portion of such distribution.


         "Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued hereunder excluding the Partnership
Interests represented by Special Partnership Units. The allocation of
Partnership Units among the Partners shall be as set forth on Exhibit A, as may
be amended from time to time.


         "Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
may be amended from time to time.


         "Person" means any individual, partnership, corporation, joint venture,
trust or other entity.



                                      -6-
<PAGE>


         "Profit" has the meaning provided in Section 5.01(g) hereof.


         "Property" means any timberland or related property or other investment
in which the Partnership holds an ownership interest.


         "Prospectus" means the final prospectus delivered to purchasers of REIT
Shares in the Offering.


         "Redemption Amount" means either the Cash Amount or the REIT Shares
Amount, as selected by the General Partner in its sole and absolute discretion
pursuant to Section 8.05(b) hereof.


         "Redemption Right" has the meaning provided in Section 8.05(a) hereof.


         "Redeeming Partner" has the meaning provided in Section 8.05(a) hereof.


         "Regulations" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.


         "REIT" means a real estate investment trust under Sections 856 through
860 of the Code.


         "REIT Expenses" means (i) costs and expenses relating to the formation
and continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included
within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses
relating to any public offering and registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such offering of securities, and any costs and expenses
associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated
with any repurchase of any securities by the General Partner, (iv) costs and
expenses associated with the preparation and filing of any periodic or other
reports and communications by the General Partner under federal, state or local
laws or regulations, including filings with the Commission, (v) costs and
expenses associated with compliance by the General Partner with laws, rules and
regulations promulgated by any regulatory body, including the Commission and any
securities exchange, (vi) costs and expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan providing for compensation for the
employees of the General Partner, (vii) costs and expenses incurred by the
General Partner relating to any issuing or redemption of Partnership Interests,
and (viii) all other operating or administrative costs of the General Partner
incurred in the ordinary course of its business on behalf of or in connection
with the Partnership.


         "REIT Share" means a share of common stock, par value $0.01 per share,
in the General Partner (or successor entity, as the case may be).


         "REIT Shares Amount" means a number of REIT Shares equal to the product
of the number of Partnership Units offered for exchange by a Redeeming Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Redemption Date; provided that in the event the General Partner issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "rights"), and the rights
have



                                      -7-
<PAGE>


not expired at the Specified Redemption Date, then the REIT Shares Amount shall
also include the rights issuable to a holder of the REIT Shares Amount of REIT
Shares on the record date fixed for purposes of determining the holders of REIT
Shares entitled to rights.


         "Sale" means (A) any transaction or series of transactions whereby: (i)
the Partnership directly or indirectly (except as described in other subsections
of this definition) sells, grants, transfers, conveys, or relinquishes its
ownership or any Property or portion thereof, including the lease of any
Property and including any event with respect to any Real Property which gives
rise to a significant amount of insurance proceeds or condemnation awards; (ii)
the Partnership directly or indirectly (except as described in other subsections
of this definition) sells, grants, transfers, conveys, or relinquishes its
ownership of all or substantially all of the interest of the Partnership in any
Joint Venture; (iii) any Joint Venture directly or indirectly (except as
described in other subsections of this definition) in which the Partnership as a
co-venturer or partner sells, grants, transfers, conveys, or relinquishes its
ownership of any Real Property or portion thereof, including any event with
respect to any Real Property which gives rise to insurance claims or
condemnation awards; (iv) the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, conveys, or
relinquishes its interest in any Mortgage or portion thereof (including with
respect to any Mortgage, all payments thereunder or in satisfaction thereof
other than regularly scheduled interest payments) of amounts owed pursuant to
such Mortgage and any event which gives rise to a significant amount of
insurance proceeds or similar awards; or (v) the Partnership directly or
indirectly (except as described in any other subsections of this definition)
sells, grants, transfers, conveys, or relinquishes its ownership of any other
Real Property, Mortgage or other investment owner by the Partnership, directly
or indirectly through one or more of its Affiliates, and any other investment
made, directly or indirectly through one or more of its Affiliates, not
previously described in this definition of any portion thereof, but (B) not
including any transaction or series of transactions specified in clause (A)(i)
through (v) above in which the proceeds of such transaction or series of
transactions are reinvested by the Partnership in one or more such assets within
180 days thereafter.


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


         "Service" means the Internal Revenue Service.


         "Special OP Unitholders" mean the holders of Special Partnership Units.


         "Special Partnership Unit" means a unit of a series of Partnership
Interests, designated as Special Partnership Units, issued pursuant to Section
4.02. The number of Special Partnership Units outstanding and the Special
Percentage Interests in the Partnership represented by such Special Partnership
Units are set forth on Exhibit A, as such Exhibit may be amended from time to
time. A holder of a Special Partnership Unit shall have the same rights and
preferences as a holder of a Partnership Unit under this Agreement that is a
Limited Partner except as set forth in Section 7.01(c), 8.05, 8.06 and 8.07.


         "Special Percentage Interest" shall mean the percentage ownership
interest in the Partnership of each Special OP Unitholder, as determined by
dividing the Special Partnership Units owned by each Special OP Unitholder by
the total number of Special Partnership Units then outstanding. The Special
Percentage Interest of each Partner shall be as set forth on Exhibit A, as such
Exhibit may be amended from time to time.



                                      -8-
<PAGE>


         "Specified Redemption Date" means the first business day of the month
that is at least 60 business days after the receipt by the General Partner of
the Notice of Redemption.


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


         "Subsidiary Partnership" means any partnership of which the partnership
interests therein are owned by the General Partner or a wholly-owned subsidiary
of the General Partner.


         "Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.


         "Successor Entity" has the meaning provided in the definition of
"Conversion Factor" contained herein.


         "Surviving General Partner" has the meaning set forth in Section
7.01(d) hereof.


         "Termination Event" means the termination or non-renewal of the
Advisory Agreement other than for "Cause" as defined in the Advisory Agreement.


         "Transaction" has the meaning set forth in Section 7.01(c) hereof.


         "Transfer" has the meaning set forth in Section 9.02(a) hereof.


         "Value" means with respect to any security, the average of the daily
market price of such security for the ten consecutive trading days immediately
preceding the date of such valuation. The market price for each such trading day
shall be: (i) if the security is Listed, the



                                      -9-
<PAGE>


sale price, regular way, on such day, or if no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, on such day,
(ii) if the security is not Listed, the last reported sale price on such day or,
if no sale takes place on such day, the average of the closing bid and asked
prices on such day, as reported by a reliable quotation source designated by the
General Partner, or (iii) if the security is not Listed and no such last
reported sale price or closing bid and asked prices are available, the average
of the reported high bid and low asked prices on such day, as reported by a
reliable quotation source designated by the General Partner, or if there shall
be no bid and asked prices on such day, the average of the high bid and low
asked prices, as so reported, on the most recent day (not more than ten days
prior to the date in question) for which prices have been so reported; provided
that if there are no bid and asked prices reported during the ten days prior to
the date in question, the value of the security shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the security includes any additional rights, then the value of such rights
shall be determined by the General Partner acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate. When the Value of a security is being determined for
purposes of issuance to an Affiliated Advisor, such Value as determined by the
General Partner is required to be approved by a majority of the General
Partner's "Independent Directors" (as defined in the charter of the General
Partner).


                                   ARTICLE II


                    PARTNERSHIP FORMATION AND IDENTIFICATION


         2.01 Formation. The Partners hereby agree to form the Partnership
pursuant to the Act and upon the terms and conditions set forth in this
Agreement.


         2.02 Name, Office and Registered Agent. The name of the Partnership is
Wells Timberland Operating Partnership, L.P. The specified office and place of
business of the Partnership shall be 6200 The Corners Parkway, Norcross, Georgia
30092-3365. The General Partner may at any time change the location of such
office, provided the General Partner gives notice to the Partners of any such
change. The name and address of the Partnership's registered agent is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801. The sole duty of the registered
agent as such is to forward to the Partnership any notice that is served on him
as registered agent.


         2.03 Partners.


         (a) The General Partner of the Partnership is Wells Timberland REIT,
Inc., a Maryland corporation. Its principal place of business is the same as
that of the Partnership.


         (b) The Limited Partners are those Persons identified as Limited
Partners on Exhibit A hereto, as amended from time to time.


         2.04 Term and Dissolution.


         (a) The term of the Partnership shall continue in full force and effect
until December 31, 2053, except that the Partnership shall be dissolved upon the
first to occur of any of the following events:

                  (i) The occurrence of an Event of Bankruptcy as to a General
         Partner or the dissolution, death, removal or withdrawal of a General
         Partner unless the business of the Partnership is continued pursuant to
         Section 7.03(b) hereof; provided that if a General Partner is on the
         date of such occurrence a partnership, the dissolution of such General



                                      -10-
<PAGE>


         Partner as a result of the dissolution, death, withdrawal, removal or
         Event of Bankruptcy of a partner in such partnership shall not be an
         event of dissolution of the Partnership if the business of such General
         Partner is continued by the remaining partner or partners, either alone
         or with additional partners, and such General Partner and such partners
         comply with any other applicable requirements of this Agreement;

                  (ii) The passage of 90 days after the sale or other
         disposition of all or substantially all of the assets of the
         Partnership (provided that if the Partnership receives an installment
         obligation as consideration for such sale or other disposition, the
         Partnership shall continue, unless sooner dissolved under the
         provisions of this Agreement, until such time as such note or notes are
         paid in full);

                  (iii) The exchange of all Limited Partnership Interests (other
         than any of such interests held by the General Partner or Affiliates of
         the General Partner); or

                  (iv) The election by the General Partner that the Partnership
         should be dissolved.


         (b) Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.

         2.05 Filing of Certificate and Perfection of Limited Partnership. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.


         2.06 Certificates Describing Partnership Units and Special Partnership
Units. At the request of a Limited Partner, the General Partner, at its option,
may issue a certificate summarizing the terms of such Limited Partner's interest
in the Partnership, including the number of Partnership Units and Special
Partnership Units owned and the Percentage Interest and the Special Percentage
Interest represented by such Partnership Units and Special Partnership Units as
of the date of such certificate. Any such certificate (i) shall be in form and
substance as approved by the General Partner, (ii) shall not be negotiable and
(iii) shall bear a legend to the following effect:


         This certificate is not negotiable. The Partnership Units and the
Special Partnership Units represented by this certificate are governed by and
transferable only in accordance with the provisions of the Agreement of Limited
Partnership of Wells Timberland Operating Partnership, L.P., as amended from
time to time.


                                   ARTICLE III


                           BUSINESS OF THE PARTNERSHIP


         The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a



                                      -11-
<PAGE>


manner as to permit the General Partner at all times to qualify as a REIT,
unless the General Partner otherwise ceases to qualify as a REIT, (ii) to enter
into any partnership, joint venture or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged in any
of the foregoing and (iii) to do anything necessary or incidental to the
foregoing. In connection with the foregoing, and without limiting the General
Partner's right in its sole and absolute discretion to cease qualifying as a
REIT, the Partners acknowledge that the General Partner's current status as a
REIT and the avoidance of income and excise taxes on the General Partner inures
to the benefit of all the Partners and not solely to the General Partner.
Notwithstanding the foregoing, the Limited Partners agree that the General
Partner may terminate its status as a REIT under the Code at any time to the
full extent permitted under the Articles of Incorporation. The General Partner
shall also be empowered to do any and all acts and things necessary or prudent
to ensure that the Partnership will not be classified as a "publicly traded
partnership" for purposes of Section 7704 of the Code.


                                   ARTICLE IV


                       CAPITAL CONTRIBUTIONS AND ACCOUNTS


         4.01 Capital Contributions. The General Partner and the Limited Partner
have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as amended
from time to time.


         4.02 Additional Capital Contributions and Issuance of Additional
Partnership Interests. Except as provided in this Section 4.02 or in Section
4.03, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General Partner may
contribute additional capital to the Partnership, from time to time, and receive
additional Partnership Interests in respect thereof, in the manner contemplated
in this Section 4.02.


         (a) Issuances of Additional Partnership Interests.


                  (i) General. The General Partner is hereby authorized to cause
         the Partnership to issue such additional Partnership Interests in the
         form of Partnership Units for any Partnership purpose at any time or
         from time to time, to the Partners (including the General Partner) or
         to other Persons for such consideration and on such terms and
         conditions as shall be established by the General Partner in its sole
         and absolute discretion, all without the approval of any Limited
         Partners. Any additional Partnership Interests issued thereby may be
         issued in one or more classes, or one or more series of any of such
         classes, with such designations, preferences and relative,
         participating, optional or other special rights, powers and duties,
         including rights, powers and duties senior to Limited Partnership
         Interests, all as shall be determined by the General Partner in its
         sole and absolute discretion and without the approval of any Limited
         Partner, subject to Delaware law, including, without limitation, (i)
         the allocations of items of Partnership income, gain, loss, deduction
         and credit to each such class or series of Partnership Interests; (ii)
         the right of each such class or series of Partnership Interests to
         share in Partnership distributions; and (iii) the rights of each such
         class or series of Partnership Interests upon dissolution and
         liquidation of the Partnership; provided, however, that no additional
         Partnership Interests shall be issued to the General Partner unless:


                           (1) (A) the additional Partnership Interests are
                  issued in connection with an issuance of REIT Shares of or
                  other interests in the General Partner, which shares or
                  interests have designations, preferences and other rights, all
                  such that the economic interests are substantially similar to
                  the designations,



                                      -12-
<PAGE>


                  preferences and other rights of the additional Partnership
                  Interests issued to the General Partner by the Partnership in
                  accordance with this Section 4.02 and (B) the General Partner
                  shall make a Capital Contribution to the Partnership in an
                  amount equal to the proceeds raised in connection with the
                  issuance of such shares of stock or other interests in the
                  General Partner;


                           (2) the additional Partnership Interests are issued
                  in exchange for property owned by the General Partner with a
                  fair market value, as determined by the General Partner, in
                  good faith, equal to the value of the Partnership Interests;
                  or


                           (3) the additional Partnership Interests are issued
                  to all Partners in proportion to their respective Percentage
                  Interests.


                  In addition, the General Partner may acquire Partnership
         Interests from other Partners pursuant to this Agreement. In the event
         that the Partnership issues Partnership Interests pursuant to this
         Section 4.02(a), the General Partner shall make such revisions to this
         Agreement (without any requirement of receiving approval of the Limited
         Partners) as it deems necessary to reflect the issuance of such
         additional Partnership Interests and any special rights, powers, and
         duties associated therewith.


                  Without limiting the foregoing, the General Partner is
         expressly authorized to cause the Partnership to issue Partnership
         Units for less than fair market value, so long as the General Partner
         concludes in good faith that such issuance is in the best interests of
         the General Partner and the Partnership.


                  (ii) Upon Issuance of Additional Securities. The General
         Partner shall not issue any Additional Securities other than to all
         holders of REIT Shares, unless (A) the General Partner shall cause the
         Partnership to issue to the General Partner, as the General Partner may
         designate, Partnership Interests or rights, options, warrants or
         convertible or exchangeable securities of the Partnership having
         designations, preferences and other rights, all such that the economic
         interests are substantially similar to those of the Additional
         Securities, and (B) the General Partner contributes the proceeds from
         the issuance of such Additional Securities and from any exercise of
         rights contained in such Additional Securities, directly and through
         the General Partner, to the Partnership; provided, however, that the
         General Partner is allowed to issue Additional Securities in connection
         with an acquisition of a property to be held directly by the General
         Partner, but if and only if, such direct acquisition and issuance of
         Additional Securities have been approved and determined to be in the
         best interests of the General Partner and the Partnership by a majority
         of the Independent Directors (as defined in the General Partner's
         Amended and Restated Articles of Incorporation). Without limiting the
         foregoing, the General Partner is expressly authorized to issue
         Additional Securities for less than fair market value, and to cause the
         Partnership to issue to the General Partner corresponding Partnership
         Interests, so long as (x) the General Partner concludes in good faith
         that such issuance is in the best interests of the General Partner and
         the Partnership, including without limitation, the issuance of REIT
         Shares and corresponding Partnership Units pursuant to an employee
         share purchase plan providing for employee purchases of REIT Shares at
         a discount from fair market value or employee stock options that have
         an exercise price that is less than the fair market value of the REIT
         Shares, either at the time of issuance or at the time of exercise, and
         (y) the General Partner contributes all proceeds from such issuance to
         the Partnership. For example, in the event the General Partner issues
         REIT Shares for a cash purchase price and contributes all of the
         proceeds of such issuance to the Partnership as required hereunder, the
         General Partner shall be issued a



                                      -13-
<PAGE>


         number of additional Partnership Units equal to the product of (A) the
         number of such REIT Shares issued by the General Partner, the proceeds
         of which were so contributed, multiplied by (B) a fraction, the
         numerator of which is 100%, and the denominator of which is the
         Conversion Factor in effect on the date of such contribution.


         (b) Certain Deemed Contributions of Proceeds of Issuance of REIT
Shares. In connection with any and all issuances of REIT Shares, the General
Partner shall make Capital Contributions to the Partnership of the proceeds
therefrom, provided that if the proceeds actually received and contributed by
the General Partner are less than the gross proceeds of such issuance as a
result of any (i) purchase price discount or (ii) selling commissions, dealer
manager fees other expenses paid or incurred in connection with such issuance,
then the General Partner shall be deemed to have made Capital Contributions to
the Partnership in the aggregate amount of the gross proceeds of such issuance
and the Partnership shall be deemed simultaneously to have paid such offering
expenses in accordance with Section 6.05 hereof and in connection with the
required issuance of additional Partnership Units to the General Partner for
such Capital Contributions pursuant to Section 4.02(a) hereof.


         (c) Minimum Limited Partnership Interest. In the event that either an
exchange pursuant to Section 8.05 hereof or additional Capital Contributions by
the General Partner would result in the Limited Partners, in the aggregate,
owning less than the Minimum Limited Partnership Interest, the General Partner
and the Limited Partners shall form another partnership and contribute
sufficient Limited Partnership Interests (other than Special Partnership Units)
together with such other Limited Partners so that the limited partners of such
partnership own at least the Minimum Limited Partnership Interest.


         4.03 Additional Funding. If the General Partner determines that it is
in the best interests of the Partnership to provide for additional Partnership
funds ("Additional Funds") for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise.


         4.04 Capital Accounts. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
an additional Partnership Interest in exchange for more than a de minimis
Capital Contribution, (ii) the Partnership distributes to a Partner more than a
de minimis amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General
Partner, the Capital Accounts of the Partners shall be adjusted in accordance
with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to reflect the manner in which the
unrealized gain or loss inherent in such property (that has not been reflected
in the Capital Accounts previously) would be allocated among the Partners
pursuant to Section 5.01 if there were a taxable disposition of such property
for its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) on the
date of the revaluation.


         4.05 Percentage Interests. If the number of outstanding Partnership
Units increases or decreases during a taxable year, each Partner's Percentage
Interest shall be adjusted by the General Partner effective as of the effective
date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of



                                      -14-
<PAGE>


Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profits and Losses for the taxable year in which the adjustment occurs
shall be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.


         4.06 No Interest on Contributions. No Partner shall be entitled to
interest on its Capital Contribution.


         4.07 Return of Capital Contributions. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.


         4.08 No Third Party Beneficiary. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.


                                    ARTICLE V


                        PROFITS AND LOSSES; DISTRIBUTIONS


         5.01 Allocation of Profit and Loss.


         (a) General. Profits (and items thereof) and Losses (and items thereof)
for each fiscal year or other applicable period shall be allocated among the OP
Unitholders in accordance with their respective Percentage Interests.


         (b) Special Allocation with Respect to Sales. Profits (and items
thereof) and Losses (and items thereof) for each fiscal year or other applicable
period from Sales shall be allocated among the Partners such that the ending
Capital Account of each Partner, immediately after giving effect to such
allocations and giving effect to any distributions to which such Partner is
entitled to pursuant to 5.02(b), is, as nearly as possible, equal to the amount
of the distributions



                                      -15-
<PAGE>


that would be made to such Partner pursuant to Section 5.06 if (i) the
Partnership were dissolved and terminated at the end of the fiscal year or other
applicable period, (ii) its affairs were wound up and each asset on hand at the
end of the fiscal year or other applicable period were sold for cash equal to
its fair market value (as determined by the General Partner, in its sole and
absolute discretion, and taking into account Section 7701(g) of the Code) in
accordance with Regulations Section 1.704-1(b)(2)(iv)(f), (iii) all liabilities
of the Partnership were satisfied (limited with respect to each nonrecourse
liability to the fair market value of the assets securing such liability); and
(iv) the net assets of the Partnership were distributed to the Partners in
accordance with Section 5.06. For purposes of the preceding allocations only, a
Partner holding more than one class or series of Partnership Interests or units
shall be deemed to be a separate Partner with respect to each such class, series
or units.


         (c) Minimum Gain Chargeback. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a "nonrecourse deduction"
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in
accordance with the Partners' respective Percentage Interests, (ii) any expense
of the Partnership that is a "partner nonrecourse deduction" within the meaning
of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that
bears the "economic risk of loss" of such deduction in accordance with
Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2), (3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership
taxable year, then, subject to the exceptions set forth in Regulations Section
1.704(2)(g), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner's "interest in
partnership profits" for purposes of determining its share of the nonrecourse
liabilities of the Partnership within the meaning of Regulations Section
1.752-3(a)(3) shall be such Partner's Percentage Interest.


         (d) Qualified Income Offset. If a Partner receives in any taxable year
an adjustment, allocation, or distribution described in subparagraphs (4), (5),
or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a
deficit balance in such Partner's Capital Account that exceeds the sum of such
Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)
and 1.704-2(i), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount
and manner sufficient to eliminate such deficit Capital Account balance as
quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(d), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.01(d).


         (e) Capital Account Deficits. Loss shall not be allocated to a Limited
Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(e), to the extent permitted by
Regulations Section 1.704-1(b),



                                      -16-
<PAGE>


Profit shall be allocated to such Partner in an amount necessary to offset the
Loss previously allocated to each Partner under this Section 5.01(e).


         (f) Allocations Between Transferor and Transferee. If a Partner
transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated between the transferor and the
transferee Partner either (i) as if the Partnership's fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal
year that each was a Partner without regard to the results of Partnership
activities in the respective portions of such fiscal year in which the
transferor and the transferee were Partners. The General Partner, in its sole
and absolute discretion, shall determine which method shall be used to allocate
the distributive shares of the various items of Profit and Loss between the
transferor and the transferee Partner.


         (g) Definition of Profit and Loss. "Profit" and "Loss" and any items of
income, gain, expense, or loss referred to in this Agreement shall be determined
in accordance with federal income tax accounting principles, as modified by
Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss shall not
include items of income, gain and expense that are specially allocated pursuant
to Sections 5.01(c), 5.01(d), or 5.01(e). All allocations of income, Profit,
gain, Loss, and expense (and all items contained therein) for federal income tax
purposes shall be identical to all allocations of such items set forth in this
Section 5.01, except as otherwise required by Section 704(c) of the Code and
Regulations Section 1.704-1(b)(4). The General Partner shall have the authority
to elect the method to be used by the Partnership for allocating items of
income, gain, and expense as required by Section 704(c) of the Code including a
method that may result in a Partner receiving a disproportionately larger share
of the Partnership tax depreciation deductions, and such election shall be
binding on all Partners.


         5.02 Distribution of Cash.

         (a) The Partnership shall distribute cash on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount determined
by the General Partner in its sole and absolute discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or
existing Partner acquires an additional Partnership Interest in exchange for a
Capital Contribution on any date other than the next day after a Partnership
Record Date, the cash distribution attributable to such additional Partnership
Interest relating to the Partnership Record Date next following the issuance of
such additional Partnership Interest (or relating to the Partnership Record Date
if such Partnership Interest was acquired on a Partnership Record Date) shall be
reduced in the proportion to (i) the number of days that such additional
Partnership Interest is held by such Partner bears to (ii) the number of days
between such Partnership Record Date (including such Partnership Record Date)
and the immediately preceding Partnership Record Date.

         (b) Except for distributions pursuant to Section 5.06 of this Agreement
in connection with the dissolution and liquidation of the Partnership and
subject to the provisions of Section 5.02(c), 5.02(d), 5.03, 5.05, and 8.07(b)
of this Agreement, all distributions of cash other than Net Sales Proceeds shall
be made to the OP Unitholders in accordance with their respective Percentage
Interests on the Partnership Record Date and all distributions of Net Sales
Proceeds shall be made in accordance with the following provisions:

                  (i) (A) first, 100% to the OP Unitholders in accordance with
         their respective Percentage Interests on the Partnership Record Date
         until the OP Unitholders have received cumulative distributions under
         this Section 5.02(b) equal to the aggregate Capital Contributions made
         by the OP Unitholders to the Partnership (less any amounts received in
         redemption of their Partnership Interests) plus a cumulative,
         noncompounded pre-tax rate of return thereon of 7.0% per annum,
         determined by taking into account the dates on which all such Capital
         Contributions, distributions and redemptions were made and (B) second,
         (1) 85% to the OP Unitholders, in accordance with their respective
         Percentage Interests on the Partnership Record Date and (2) 15% to the
         Special OP Unitholders in accordance with their respective Special
         Percentage Interest on the Partnership Record Date.



                                      -17-
<PAGE>

         (c) Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under the Code or any other federal, state or local law including,
without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.
To the extent that the Partnership is required to withhold and pay over to any
taxing authority any amount resulting from the allocation or distribution of
income to the Partner or assignee (including by reason of Section 1446 of the
Code), either (i) if the actual amount to be distributed to the Partner equals
or exceeds the amount required to be withheld by the Partnership, the amount
withheld shall be treated as a distribution of cash in the amount of such
withholding to such Partner, or (ii) if the actual amount to be distributed to
the Partner is less than the amount required to be withheld by the Partnership,
the amount required to be withheld shall be treated as a loan (a "Partnership
Loan") from the Partnership to the Partner on the day the Partnership pays over
such amount to a taxing authority. A Partnership Loan shall be repaid through
withholding by the Partnership with respect to subsequent distributions to the
applicable Partner or assignee. In the event that a Limited Partner (a
"Defaulting Limited Partner") fails to pay any amount owed to the Partnership
with respect to the Partnership Loan within 15 days after demand for payment
thereof is made by the Partnership on the Limited Partner, the General Partner,
in its sole and absolute discretion, may elect to make the payment to the
Partnership on behalf of such Defaulting Limited Partner. In such event, on the
date of payment, the General Partner shall be deemed to have extended a loan (a
"General Partner Loan") to the Defaulting



                                      -18-
<PAGE>


Limited Partner in the amount of the payment made by the General Partner and
shall succeed to all rights and remedies of the Partnership against the
Defaulting Limited Partner as to that amount. Without limitation, the General
Partner shall have the right to receive any distributions that otherwise would
be made by the Partnership to the Defaulting Limited Partner until such time as
the General Partner Loan has been paid in full, and any such distributions so
received by the General Partner shall be treated as having been received by the
Defaulting Limited Partner and immediately paid to the General Partner.


         Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(c) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.


         (d) In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be exchanged.


         5.03 REIT Distribution Requirements. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the General Partner to pay shareholder dividends that will allow the
General Partner to (i) meet its distribution requirement for qualification as a
REIT as set forth in Section 857 of the Code and (ii) avoid any federal income
or excise tax liability imposed by the Code.


         5.04 No Right to Distributions In Kind. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership.


         5.05 Limitations of Return of Capital Contributions. Notwithstanding
any of the provisions of this Article V, no Partner shall have the right to
receive, and the General Partner shall not have the right to make, a
distribution that includes a return of all or part of a Partner's Capital
Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership's assets.


         5.06 Distributions Upon Liquidation. Upon liquidation of the
Partnership, after payment of, or adequate provision for, debts and obligations
of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners in accordance with Section
5.02(b).


         To the extent deemed advisable by the General Partner, appropriate
arrangements (including the use of a liquidating trust) may be made to assure
that adequate funds are available to pay any contingent debts or obligations.


         5.07 Substantial Economic Effect. It is the intent of the Partners that
the allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.



                                      -19-
<PAGE>


                                   ARTICLE VI


              RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER


         6.01 Management of the Partnership.


         (a) Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:

                  (i) to acquire, purchase, own, operate, lease and dispose of
         any real property and any other property or assets including, but not
         limited to notes and mortgages, that the General Partner determines are
         necessary or appropriate or in the best interests of the business of
         the Partnership;

                  (ii) to construct buildings and make other improvements on the
         properties owned or leased by the Partnership;

                  (iii) to authorize, issue, sell, redeem or otherwise purchase
         any Partnership Interests or any securities (including secured and
         unsecured debt obligations of the Partnership, debt obligations of the
         Partnership convertible into any class or series of Partnership
         Interests, or options, rights, warrants or appreciation rights relating
         to any Partnership Interests) of the Partnership;

                  (iv) to borrow or lend money for the Partnership, issue or
         receive evidences of indebtedness in connection therewith, refinance,
         increase the amount of, modify, amend or change the terms of, or extend
         the time for the payment of, any such indebtedness, and secure such
         indebtedness by mortgage, deed of trust, pledge or other lien on the
         Partnership's assets;

                  (v) to pay, either directly or by reimbursement, for all
         operating costs and general administrative expenses of the Partnership
         to third parties or to the General Partner or its Affiliates as set
         forth in this Agreement;

                  (vi) to guarantee or become a co-maker of indebtedness of the
         General Partner or any Subsidiary thereof, refinance, increase the
         amount of, modify, amend or change the terms of, or extend the time for
         the payment of, any such guarantee or indebtedness, and secure such
         guarantee or indebtedness by mortgage, deed of trust, pledge or other
         lien on the Partnership's assets;

                  (vii) to use assets of the Partnership (including, without
         limitation, cash on hand) for any purpose consistent with this
         Agreement, including, without limitation, payment, either directly or
         by reimbursement, of all operating costs and general administrative
         expenses of the General Partner, the Partnership or any Subsidiary of
         either, to third parties or to the General Partner as set forth in this
         Agreement;

                  (viii) to lease all or any portion of any of the Partnership's
         assets, whether or not the terms of such leases extend beyond the
         termination date of the Partnership and whether or not any portion of
         the Partnership's assets so leased are to be occupied by the lessee,
         or, in turn, subleased in whole or in part to others, for such
         consideration and on such terms as the General Partner may determine;



                                      -20-
<PAGE>


                  (ix) to prosecute, defend, arbitrate, or compromise any and
         all claims or liabilities in favor of or against the Partnership, on
         such terms and in such manner as the General Partner may reasonably
         determine, and similarly to prosecute, settle or defend litigation with
         respect to the Partners, the Partnership, or the Partnership's assets;
         provided, however, that the General Partner may not, without the
         consent of all of the Partners, confess a judgment against the
         Partnership that is in excess of $20,000 or is not covered by
         insurance;

                  (x) to file applications, communicate, and otherwise deal with
         any and all governmental agencies having jurisdiction over, or in any
         way affecting, the Partnership's assets or any other aspect of the
         Partnership business;

                  (xi) to make or revoke any election permitted or required of
         the Partnership by any taxing authority;

                  (xii) to maintain such insurance coverage for public
         liability, fire and casualty, and any and all other insurance for the
         protection of the Partnership, for the conservation of Partnership
         assets, or for any other purpose convenient or beneficial to the
         Partnership, in such amounts and such types, as it shall determine from
         time to time;

                  (xiii) to determine whether or not to apply any insurance
         proceeds for any property to the restoration of such property or to
         distribute the same;

                  (xiv) to establish one or more divisions of the Partnership,
         to hire and dismiss employees of the Partnership or any division of the
         Partnership, and to retain legal counsel, accountants, consultants,
         real estate brokers, and such other persons, as the General Partner may
         deem necessary or appropriate in connection with the Partnership
         business and to pay therefore such reasonable remuneration as the
         General Partner may deem reasonable and proper;

                  (xv) to retain other services of any kind or nature in
         connection with the Partnership business, and to pay therefore such
         remuneration as the General Partner may deem reasonable and proper;

                  (xvi) to negotiate and conclude agreements on behalf of the
         Partnership with respect to any of the rights, powers and authority
         conferred upon the General Partner;

                  (xvii) to maintain accurate accounting records and to file
         promptly all federal, state and local income tax returns on behalf of
         the Partnership;

                  (xviii) to distribute Partnership cash or other Partnership
         assets in accordance with this Agreement;

                  (xix) to form or acquire an interest in, and contribute
         property to, any further limited or general partnerships, joint
         ventures or other relationships that it deems desirable (including,
         without limitation, the acquisition of interests in, and the
         contributions of property to, its Subsidiaries and any other Person in
         which it has an equity interest from time to time);

                  (xx) to establish Partnership reserves for working capital,
         capital expenditures, contingent liabilities, or any other valid
         Partnership purpose; and

                  (xxi) to merge, consolidate or combine the Partnership with or
         into another person;



                                      -21-
<PAGE>


                  (xxii) to do any and all acts and things necessary or prudent
         to ensure that the Partnership will not be classified as a "publicly
         traded partnership" for purposes of Section 7704 of the Code; and

                  (xxiii) to take such other action, execute, acknowledge, swear
         to or deliver such other documents and instruments, and perform any and
         all other acts that the General Partner deems necessary or appropriate
         for the formation, continuation and conduct of the business and affairs
         of the Partnership (including, without limitation, all actions
         consistent with allowing the General Partner at all times to qualify as
         a REIT unless the General Partner voluntarily terminates its REIT
         status) and to possess and enjoy all of the rights and powers of a
         general partner as provided by the Act.


       (b) Except as otherwise provided herein, to the extent the duties of
the General Partner require expenditures of funds to be paid to third parties,
the General Partner shall not have any obligations hereunder except to the
extent that partnership funds are reasonably available to it for the performance
of such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual
funds for payment to third parties or to undertake any individual liability or
obligation on behalf of the Partnership.


       6.02 Delegation of Authority. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.


       6.03 Indemnification and Exculpation of Indemnitees.


      (a) Subject to the limitations of Section 6.03(b), to the maximum
extent permitted under the Act in effect from time to time and subject to the
limitations of Section II.G. of the NASAA Guidelines, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
reasonable attorneys' fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative
(collectively, "Claims"), that relate to the operations of the Partnership, the
General Partner or any of the Partnership's Subsidiaries in which such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise; provided, however, that in no event shall this Section 6.03(a)
enlarge the indemnification permitted below under Section 6.03(b).

      (b) Notwithstanding any provision hereof to the contrary:

            (i) the Partnership will not indemnify any Indemnitee unless:

                  (A) the Indemnitee has determined in good faith that the
            course of conduct which caused the loss, liability or expenses was
            in the best interests of the Partnership;

                  (B) the Indemnitee was acting on behalf of the Partnership or
            performing services for the Partnership;

                  (C) Such Claim was not the result of:

                        (1) with respect to the General Partner, the gross
                  negligence, willful misconduct or fraud of the General
                  Partner;

                        (2) with respect to any Limited Partner, the gross
                  negligence, willful misconduct or fraud of the Limited
                  Partner;

                        (3) with respect to (A) the directors, officers and
                  employees of the General Partner, (B) the Advisor and (C) the
                  members, managers and employees of the Advisor, the negligence
                  or misconduct of such Person; or

                        (4) with respect to the Independent Directors (as
                  defined in the Articles of Incorporation), the gross
                  negligence or willful misconduct of such Independent Director;
                  and

                  (D) any indemnification or agreement to hold harmless may be
            paid only out of the Net Assets of the Partnership, and neither the
            General Partner nor any Limited Partner shall have any obligation to
            contribute to the capital of the Partnership, or otherwise provide
            funds, to enable the Partnership to fund its obligations under this
            Section 6.03;

            (ii) notwithstanding anything to the contrary in Section
      6.03(b)(ii), the Partnership will not indemnify any Indemnitee for losses,
      liabilities or expenses arising from or out of an alleged violation of
      federal or state securities laws unless:

                  (A) there has been a successful adjudication on the merits of
            each count involving alleged securities law violations as to the
            particular Indemnitee;

                                      -22-
<PAGE>
                  (B) such claims have been dismissed with prejudice on the
            merits by a court of competent jurisdiction as to the particular
            Indemnitee; or

                  (C) a court of competent jurisdiction approves a settlement of
            the claims against the particular Indemnitee and finds that
            indemnification of the settlement and related costs should be made,
            and the court considering the matter has been advised of the
            position of the Securities Exchange Commission and the published
            position of any state securities regulatory authority in which the
            securities were offered or sold as to indemnification for violations
            of securities laws.

         (c) The indemnification provided by this Section 6.03 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.

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

         (e) For purposes of this Section 6.03, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.

         (f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

         (g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.03 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

         (h) The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

         6.04 Liability of the General Partner.

         (a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the General Partner
acted in good faith. The General Partner shall not be in breach of any duty that
the General Partner may owe to the Limited Partners or the Partnership or any
other Persons under this Agreement or of any duty stated or implied by law or
equity provided the General Partner, acting in good faith, abides by the terms
of this Agreement.

         (b) The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership, itself and its shareholders
collectively, that the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or the tax consequences of same, but not
all, of the Limited Partners) in deciding whether to cause the Partnership to
take (or decline to take) any actions. In the event of a conflict between the
interests of its shareholders on one hand and the Limited Partners on the other,
the General Partner shall endeavor in good faith. to resolve the conflict in a
manner not adverse to either its shareholders or the Limited Partners; provided,
however, that for so long as the General Partner directly owns a controlling
interest in the Partnership, any such conflict that the General Partner, in its
sole and absolute discretion, determines cannot be resolved in a manner not
adverse to either its shareholders or the Limited



                                      -23-
<PAGE>


Partner shall be resolved in favor of the shareholders. The General Partner
shall not be liable for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by Limited Partners in connection with such
decisions, provided that the General Partner has acted in good faith.

         (c) Subject to its obligations and duties as General Partner set forth
in Section 6.01 hereof, the General Partner may exercise any of the powers
granted to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.

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

         (e) Any amendment, modification or repeal of this Section 6.04 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.

         6.05 Reimbursement of General Partner.

         (a) Except as provided in this Section 6.05 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments, and allocations to which it may be entitled), the General Partner
shall not be compensated for its services as general partner of the Partnership.

         (b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all REIT Expenses and Administrative Expenses.

         6.06 Outside Activities. Subject to Section 6.08 hereof, the Articles
of Incorporation and any agreements entered into by the General Partner or its
Affiliates with the Partnership or a Subsidiary, any officer, director,
employee, agent, trustee, Affiliate or shareholder of the General Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities substantially similar or identical to those of the Partnership.
Neither the Partnership nor any of the Limited Partners shall have any rights by
virtue of this Agreement in any such business ventures, interest or activities.
None of the Limited Partners nor any other Person shall have any rights by
virtue of this Agreement or the partnership relationship established hereby in
any such business ventures, interests or activities, and the General Partner
shall have no obligation pursuant to this Agreement to offer any interest in any
such business ventures, interests and activities to the Partnership or any
Limited Partner, even if such opportunity is of a character which, if presented
to the Partnership or any Limited Partner, could be taken by such Person.

         6.07 Employment or Retention of Affiliates.

         (a) Any Affiliate of the General Partner may be employed or retained by
the Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee,



                                      -24-
<PAGE>


manager, furnisher of goods or services, broker, agent, lender or otherwise) and
may receive from the Partnership any compensation, price, or other payment
therefore which the General Partner determines to be fair and reasonable.

         (b) The Partnership may lend or contribute to its Subsidiaries or other
Persons in which it has an equity investment, and such Persons may borrow funds
from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.

         (c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.

         (d) Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.

         6.08 General Partner Participation. The General Partner agrees that all
business activities of the General Partner, including activities pertaining to
the acquisition, development or ownership of office or industrial property or
other property, shall be conducted through the Partnership or one or more
Subsidiary Partnerships; provided, however, that the General Partner is allowed
to make a direct acquisition, but if and only if, such acquisition is made in
connection with the issuance of Additional Securities, which direct acquisition
and issuance have been approved and determined to be in the best interests of
the General Partner and the Partnership by a majority of the Independent
Directors.

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

         6.10 Miscellaneous. In the event the General Partner redeems any REIT
Shares, then the General Partner shall cause the Partnership to purchase from
the General Partner a number of Partnership Units as determined based on the
application of the Conversion Factor on the same terms that the General Partner
exchanged such REIT Shares. Moreover, if the General Partner makes a cash tender
offer or other offer to acquire REIT Shares, then the General Partner shall
cause the Partnership to make a corresponding offer to the General Partner to
acquire an equal number of Partnership Units held by the General Partner. In the
event any REIT Shares are exchanged by the General Partner pursuant to such
offer, the Partnership shall redeem an equivalent number of the General
Partner's Partnership Units for an equivalent purchase price based on the
application of the Conversion Factor.



                                      -25-
<PAGE>


                                   ARTICLE VII


                           CHANGES IN GENERAL PARTNER


         7.01 Transfer of the General Partner's Partnership Interest.

         (a) The General Partner shall not transfer all or any portion of its
General Partnership Interest or withdraw as General Partner except as provided
in or in connection with a transaction contemplated by Section 7.01(c), (d) or
(e).

         (b) The General Partner agrees that the Percentage Interest for it will
at all times be in the aggregate at least .1%.

         (c) Except as otherwise provided in Section 6.04(b) or Section 7.01(d)
or (e) hereof, the General Partner shall not engage in any merger, consolidation
or other combination with or into another Person or sale of all or substantially
all of its assets, (other than in connection with a change in the General
Partner's state of incorporation or organizational form) in each case which
results in a change of control of the General Partner (a "Transaction"), unless:

                  (i) the consent of Limited Partners holding more than 50% of
         the Percentage Interests and more than 50% of the Special Percentage
         Interests of the Limited Partners is obtained;

                  (ii) as a result of such Transaction all Limited Partners will
         receive (A) for each Partnership Unit an amount of cash, securities, or
         other property equal to the product of the Conversion Factor and the
         greatest amount of cash, securities or other property paid in the
         Transaction to a holder of one REIT Share in consideration of one REIT
         Share, provided that if, in connection with the Transaction, a
         purchase, tender or exchange offer ("Offer") shall have been made to
         and accepted by the holders of more than 50% of the outstanding REIT
         Shares, each holder of Partnership Units shall be given the option to
         exchange its Partnership Units for the greatest amount of cash,
         securities, or other property which a Limited Partner would have
         received had it (a) exercised its Redemption Right and (b) sold,
         tendered or exchanged pursuant to the Offer the REIT Shares received
         upon exercise of the Redemption Right immediately prior to the
         expiration of the Offer and (B) for each Special Partnership Unit an
         amount of cash, securities or other property (as applicable based upon
         the type of consideration and the proportions thereof paid to holders
         of REIT Shares in the Transaction) equal to the fair market value of
         such Special Partnership Unit at such time as determined in good faith
         by the General Partner by reference to the value paid for the REIT
         Shares; or

                  (iii) the General Partner is the surviving entity in the
         Transaction and either (a) the holders of REIT Shares do not receive
         cash, securities, or other property in the Transaction or (B) all
         Limited Partners (other than the General Partner or any Subsidiary)
         receive an amount of cash, securities, or other property (expressed as
         an amount per REIT Share) that is no less than the product of the
         Conversion Factor and the greatest amount of cash, securities, or other
         property (expressed as an amount per REIT Share) received in the
         Transaction by any holder of REIT Shares and (2) in exchange for their
         Special Partnership Units, an amount of cash, securities or other
         property (as applicable based upon the type of consideration and
         proportion thereof paid to holders of REIT Shares in the Transaction)
         equal to the fair market value of such special Partnership Units at
         such time as determined in good faith by the General Partner by
         reference to the value paid for the REIT Shares.

         (d) Notwithstanding Section 7.01(c), the General Partner may merge with
or into or consolidate with another entity if immediately after such merger or
consolidation (i) substantially



                                      -26-
<PAGE>


all of the assets of the successor or surviving entity (the "Survivor"), other
than Partnership Units held by the General Partner, are contributed, directly or
indirectly, to the Partnership as a Capital Contribution in exchange for
Partnership Units with a fair market value equal to the value of the assets so
contributed as determined by the Survivor in good faith and (ii) the Survivor
expressly agrees to assume all obligations of the General Partner, as
appropriate, hereunder. Upon such contribution and assumption, the Survivor
shall have the right and duty to amend this Agreement as set forth in this
Section 7.01(d). The Survivor shall in good faith arrive at a new method for the
calculation of the Cash Amount, the REIT Shares Amount and Conversion Factor for
a Partnership Unit after any such merger or consolidation so as to approximate
the existing method for such calculation as closely as reasonably possible. Such
calculation shall take into account, among other things, the kind and amount of
securities, cash and other property that was receivable upon such merger or
consolidation by a holder of REIT Shares or options, warrants or other rights
relating thereto, and to which a holder of Partnership Units could have acquired
had such Partnership Units been exchanged immediately prior to such merger or
consolidation. Such amendment to this Agreement shall provide for adjustment to
such method of calculation, which shall be as nearly equivalent as may be
practicable to the adjustments provided for with respect to the Conversion
Factor. The Survivor also shall in good faith modify the definition of REIT
Shares and make such amendments to Section 8.05 hereof so as to approximate the
existing rights and obligations set forth in Section 8.05 as closely as
reasonably possible. The above provisions of this Section 7.01(d) shall
similarly apply to successive mergers or consolidations permitted hereunder.


         In respect of any transaction described in the preceding Paragraph, the
General Partner is required to use its commercially reasonable efforts to
structure such transaction to avoid causing the Limited Partners to recognize a
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided such efforts are consistent with the
exercise of the Board of Trustees' fiduciary duties to the shareholders of the
General Partner under applicable law.


         (e) Notwithstanding Section 7.01(c),

                  (i) a General Partner may transfer all or any portion of its
         General Partnership Interest to (a) a wholly-owned Subsidiary of such
         General Partner or (b) the owner of all of the ownership interests of
         such General Partner, and following a transfer of all of its General
         Partnership Interest, may withdraw as General Partner; and

                  (ii) the General Partner may engage in a transaction not
         required by law or by the rules of any national securities exchange on
         which the REIT Shares are listed to be submitted to the vote of the
         holders of the REIT Shares.

         7.02 Admission of a Substitute or Additional General Partner. A Person
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:

         (a) the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;



                                      -27-
<PAGE>


         (b) if the Person to be admitted as a substitute or additional General
Partner is a corporation or a partnership it shall have provided the Partnership
with evidence satisfactory to counsel for the Partnership of such Person's
authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and

         (c) counsel for the Partnership shall have rendered an opinion (relying
on such opinions from other counsel and the state or any other jurisdiction as
may be necessary) that the admission of the person to be admitted as a
substitute or additional General Partner is in conformity with the Act, that
none of the actions taken in connection with the admission of such Person as a
substitute or additional General Partner will cause (i) the Partnership to be
classified other than as a partnership for federal income tax purposes, or (ii)
the loss of any Limited Partner's limited liability.


         7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a
General Partner.


         (a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.


         (b) Following the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within 90 days after such occurrence, may elect
to continue the business of the Partnership for the balance of the term
specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof
and any other provisions of this Agreement, a substitute General Partner by
consent of a majority in interest of the Limited Partners. If the Limited
Partners elect to continue the business of the Partnership and admit a
substitute General Partner, the relationship with the Partners and of any Person
who has acquired an interest of a Partner in the Partnership shall be governed
by this Agreement.


         7.04 Removal of a General Partner.


         (a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.

         (b) If a General Partner has been removed pursuant to this Section 7.04
and the Partnership is continued pursuant to Section 7.03 hereof, such General
Partner shall promptly transfer and assign its General Partnership Interest in
the Partnership to the substitute General Partner approved by a majority in
interest of the Limited Partners in accordance with Section



                                      -28-
<PAGE>


7.03(b) hereof and otherwise admitted to the Partnership in accordance with
Section 7.02 hereof. At the time of assignment, the removed General Partner
shall be entitled to receive from the substitute General Partner the fair market
value of the General Partnership Interest of such removed General Partner as
reduced by any damages caused to the Partnership by such General Partner. Such
fair market value shall be determined by an appraiser mutually agreed upon by
the General Partner and a majority in interest of the Limited Partners within 10
days following the removal of the General Partner. In the event that the parties
are unable to agree upon an appraiser, the removed General Partner and a
majority in interest of the Limited Partners each shall select an appraiser.
Each such appraiser shall complete an appraisal of the fair market value of the
removed General Partner's General Partnership Interest within 30 days of the
General Partner's removal, and the fair market value of the removed General
Partner's General Partnership Interest shall be the average of the two
appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner's General Partnership Interest no
later than 60 days after the removal of the General Partner. In such case, the
fair market value of the removed General Partner's General Partnership Interest
shall be the average of the two appraisals closest in value.

         (c) The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section 7.04(b), shall be
converted to that of a special Limited Partner; provided, however, such removed
General Partner shall not have any rights to participate in the management and
affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead, such
removed General Partner shall receive and be entitled only to retain
distributions or allocations of such items that it would have been entitled to
receive in its capacity as General Partner, until the transfer is effective
pursuant to Section 7.04(b).

         (d) All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section.


                                  ARTICLE VIII


                 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS


         8.01 Management of the Partnership. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.


         8.02 Power of Attorney. Each Limited Partner hereby irrevocably
appoints the General Partner its true and lawful attorney-in-fact, who may act
for each Limited Partner and in its name, place and stead, and for its use and
benefit, to sign, acknowledge, swear to, deliver, file or record, at the
appropriate public offices, any and all documents, certificates, and instruments
as may be deemed necessary or desirable by the General Partner to carry out
fully the provisions of this Agreement and the Act in accordance with their
terms, which power of attorney is coupled with an interest and shall survive the
death, dissolution or legal incapacity of the Limited Partner, or the transfer
by the Limited Partner of any part or all of its Partnership Interest.


         8.03 Limitation on Liability of Limited Partners. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due



                                      -29-
<PAGE>


hereunder. After its Capital Contribution is fully paid, no Limited Partner
shall, except as otherwise required by the Act, be required to make any further
Capital Contributions or other payments or lend any funds to the Partnership.


         8.04 Ownership by Limited Partner of Corporate General Partner or
Affiliate. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.


         8.05 Redemption Right.

         (a) Subject to Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the
provisions of any agreements between the Partnership and one or more Limited
Partners with respect to Partnership Units held by them, each Limited Partner,
other than the General Partner, shall have the right (the "Redemption Right") to
require the Partnership to redeem on a Specified Redemption Date all or a
portion of the Partnership Units held by such Limited Partner at an exchange
price equal to and in the form of the Cash Amount to be paid by the Partnership,
provided that such Partnership Units shall have been outstanding for at least
one year. The Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the Partnership (with a copy to the General Partner) by
the Limited Partner requesting redemption (the "Redeeming Partner"); provided,
however, that the Partnership shall not be obligated to satisfy such Redemption
Right if the General Partner elects to purchase the Partnership Units subject to
the Notice of Redemption pursuant to Section 8.05(b); and provided, further,
that no Limited Partner may deliver more than two Notices of Redemption during
each calendar year. A Limited Partner may not exercise the Redemption Right for
less than 1,000 Partnership Units or, if such Limited Partner holds less than
1,000 Partnership Units, all of the Partnership Units held by such Partner. The
Redeeming Partner shall have no right, with respect to any Partnership Units so
exchanged, to receive any distribution paid with respect to Partnership Units if
the record date for such distribution is on or after the Specified Redemption
Date.

         (b) Notwithstanding the provisions of Section 8.05(a), a Limited
Partner that exercises the Redemption Right shall be deemed to have offered to
sell the Partnership Units described in the Notice of Redemption to the General
Partner, and the General Partner may, in its sole and absolute discretion, elect
to purchase directly and acquire such Partnership Units by paying to the
Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected
by the General Partner (in its sole and absolute discretion), on the Specified
Redemption Date, whereupon the General Partner shall acquire the Partnership
Units offered for exchange by the Redeeming Partner and shall be treated for all
purposes of this Agreement as the owner of such Partnership Units. If the
General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.05(b) with respect to a Notice of Redemption, it shall so
notify the Redeeming Partner within five Business Days after the receipt by the
General Partner of such Notice of Redemption. Unless the General Partner (in its
sole and absolute discretion) shall exercise its right to purchase Partnership
Units from the Redeeming Partner pursuant to this Section 8.05(b), the General
Partner shall not have any obligation to the Redeeming Partner or the
Partnership with respect to the Redeeming Partner's exercise of the Redemption
Right. In the event the General Partner shall exercise its right to purchase
Partnership Units with respect to the exercise of a Redemption Right in the
manner described in the first sentence of this Section 8.05(b), the Partnership
shall have no obligation to pay any amount to the Redeeming Partner



                                      -30-
<PAGE>


with respect to such Redeeming Partner's exercise of such Redemption Right, and
each of the Redeeming Partner, the Partnership, and the General Partner, as the
case may be, shall treat the transaction between the General Partner, as the
case may be, and the Redeeming Partner for federal income tax purposes as a sale
of the Redeeming Partner's Partnership Units to the General Partner, as the case
may be. Each Redeeming Partner agrees to execute such documents as the General
Partner may reasonably require in connection with the issuance of REIT Shares
upon exercise of the Redemption Right.

         (c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a
Limited Partner shall not be entitled to exercise the Redemption Right if the
delivery of REIT Shares to such Partner on the Specified Redemption Date by the
General Partner pursuant to Section 8.05(b) (regardless of whether or not the
General Partner would in fact exercise its rights under Section 8.05(b)) would
(i) result in such Partner or any other person owning, directly or indirectly,
REIT Shares in excess of the Ownership Limitation (as defined in the Articles of
Incorporation) and calculated in accordance therewith, except as provided in the
Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than
100 persons (determined without reference to any rules of attribution), except
as provided in the Articles of Incorporation, (iii) result in the General
Partner being "closely held" within the meaning of Section 856(h) of the Code,
(iv) cause the General Partner to own, directly or constructively, 10% or more
of the ownership interests in a tenant of the General Partner's, the
Partnership's, or a Subsidiary Partnership's, real property, within the meaning
of Section 856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares
by such Partner to be "integrated" with any other distribution of REIT Shares
for purposes of complying with the registration provisions of the Securities Act
of 1933, as amended (the "Securities Act"). The General Partner, in its sole and
absolute discretion, may waive the restriction on exchange set forth in this
Section 8.05(c); provided, however, that in the event such restriction is
waived, the Redeeming Partner shall be paid the Cash Amount.

         (d) Any Cash Amount to be paid to an Redeeming Partner pursuant to this
Section 8.05 shall be paid on the Specified Redemption Date; provided, however,
that the General Partner may elect to cause the Specified Redemption Date to be
delayed for up to an additional 180 days to the extent required for the General
Partner to cause additional REIT Shares to be issued to provide financing to be
used to make such payment of the Cash Amount. Notwithstanding the foregoing, the
General Partner agrees to use its best efforts to cause the closing of the
acquisition of exchanged Partnership Units hereunder to occur as quickly as
reasonably possible.

         (e) Notwithstanding any other provision of this Agreement, the General
Partner shall place appropriate restrictions on the ability of the Limited
Partners to exercise their Redemption Rights as and if deemed necessary to
ensure that the Partnership does not constitute a "publicly traded partnership"
under section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt
written notice thereof (a "Restriction Notice") to each of the Limited Partners,
which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership which states that, in the opinion of such counsel, restrictions are
necessary in order to avoid the Partnership being treated as a "publicly traded
partnership" under section 7704 of the Code.

         (f) The receipt of a request for redemption with respect to REIT Shares
held by stockholders of the General Partner (a "REIT Notice") shall be deemed to
be a Notice of Redemption given by the General Partner to the Partnership and an
exercise of the Redemption Right with respect to a number of Partnership Units
equal to the number of REIT Shares identified in the REIT Notice. With respect
to any Redemption Right exercised by the General Partner pursuant to this
Section 8.05(f), the General Partner will elect for payment of the Redemption
Amount by the Partnership to the General Partner to be the Cash Amount.



                                      -31-
<PAGE>


         8.06 Registration. Subject to the terms of any agreement between the
General Partner and one or more Limited Partners with respect to Partnership
Units held by them:

         (a) Shelf Registration of the Common Stock. Within two weeks prior or
subsequent to the first date upon which the Partnership Units owned by any
Limited Partner may be exchanged (or such later date as may be required under
applicable provisions of the Securities Act), the General Partner agrees to file
with the Securities and Exchange Commission (the "Commission"), a shelf
registration statement on Form S-3 (if the General Partner is eligible to use
such form) under Rule 415 of the Securities Act (a "Registration Statement"), or
any similar rule that may be adopted by the Commission, with respect to all of
the shares of Common Stock that may be issued upon exchange of such Partnership
Units pursuant to Section 8.05 hereof ("Exchange Shares"). The General Partner
will use its best efforts to have the Registration Statement declared effective
under the Securities Act. The General Partner need not file a separate
Registration Statement, but may file one Registration Statement covering
Exchange Shares issuable to more than one Limited Partner. The General Partner
further agrees to supplement or make amendments to each Registration Statement,
if required by the rules, regulations or instructions applicable to the
registration form utilized by the General Partner or by the Securities Act or
rules and regulations thereunder for such Registration Statement.

         (b) Resale Registration Statement. If a Registration Statement under
subsection (a) above is not available under the securities laws or the rules of
the Commission, or if required to permit the resale of Exchange Shares by
"Affiliates" (as defined in the Securities Act), upon the written request of any
Limited Partner holding at least 20,000 Partnership Units, the General Partner
agrees to file with the Commission a Registration Statement covering the resale
of Exchange Shares by Affiliates or others whose Exchange Shares are not covered
by a Registration Statement filed pursuant to subsection (a) above. The General
Partner will use its best efforts to have the Registration Statement declared
effective under the Securities Act. The General Partner need not file a separate
Registration Statement, but may file one Registration Statement covering
Exchange Shares issuable to more than one Limited Partner. The General Partner
further agrees to supplement or make amendments to each Registration Statement,
if required by the rules, regulations or instructions applicable to the
registration form utilized by the General Partner or by the Securities Act or
rules and regulations thereunder for such Registration Statement.

         (c) Listing on Securities Exchange. If the General Partner shall cause
the REIT Shares to be Listed, it will at its expense and as necessary to permit
the registration and sale of the Exchange Shares issuable hereunder, list,
maintain and, when necessary, increase such Listing to include such Exchange
Shares.

         (d) Registration Not Required. Notwithstanding the foregoing, the
General Partner shall not be required to file or maintain the effectiveness of a
registration statement relating to Exchange Shares after the first date upon
which, in the opinion of counsel to the General Partner, all of the Exchange
Shares covered thereby could be sold by the holders thereof in any period of
three months pursuant to Rule 144 under the Securities Act, or any successor
rule thereto.


         8.07 Redemption of Special Partnership Units. Upon the earliest to
occur of (a) the termination or nonrenewal of the Advisory Agreement for "cause"
(as defined in the Advisory Agreement), (b) a Termination Event or (c) the
Listing, the Special OP Unitholder shall have the right to require the
Partnership to redeem the Special Partnership Units as provided in this Section
8.07.


         (a) Redemption of Special Partnership Units Upon Termination or
Nonrenewal of Advisory Agreement for Cause. If the Advisory Agreement is
terminated or not renewed by the



                                      -32-
<PAGE>


General Partner for "cause" (as defined in the Advisory Agreement), all of the
Special Partnership Units shall be redeemed by the Partnership for $1, effective
as of the date of the termination or nonrenewal of the Advisory Agreement.


         (b) Redemption of Special Partnership Units Upon a Termination Event.
Upon the occurrence of a Termination Event, the Special Partnership Units shall
be redeemed for an aggregate amount equal to the Net Sales Proceeds that would
have been distributed to the Special OP Unitholders under Section
5.02(b)(i)(B)(2) if all assets of the Partnership had been sold for their
Appraised Value and all liabilities of the Partnership had been satisfied in
full according to their terms. Payment to Special OP Unitholders upon a
Termination Event shall consist of a non-interest bearing promissory note that
will be repaid using the entire net proceeds of each sale of an asset or assets
of the Partnership in connection with or following the occurrence of the
Termination Event. However, payments may not be made under a promissory note
issued in connection with a Termination Event until either (a) the closing of
asset sales that result in aggregate, cumulative distributions to the OP
Unitholders of the Partnership from operating income, sales proceeds and other
sources in an amount equal to their Capital Contributions to the Partnership
(less any amounts received in redemption of their Partnership Interests) plus a
7.0% cumulative non-compounded annual pre-tax return thereon, or (b) a Listing
(each a "Subsequent Liquidity Event.") In addition, the amount of the promissory
note issued in connection with a Termination Event will be subject to reduction
as of the date of the Subsequent Liquidity Event by an amount that will ensure
that, in connection with the Subsequent Liquidity Event, the holder of the
promissory note does not receive in excess of 15.0% of the distributions of Net
Sales Proceeds that are made or are deemed to be made by the Partnership after
the OP Unitholders have received or are deemed to have received aggregate,
cumulative distributions equal to their Capital Contributions to the Partnership
(less any amounts received in redemption of their Partnership Interests) plus a
7.0% cumulative noncompounded annual pre-tax return thereon.

         (c) Redemption of Special Partnership Units Upon Listing. Upon the
occurrence of a Listing, the Special Partnership Units shall be redeemed for an
aggregate amount equal to the Net Sales Proceeds that would have been
distributed to the Special OP Unitholders under Section 5.02(b)(i)(B)(2) if the
Partnership had distributed to the Special OP Unitholders and OP Unitholders
upon liquidation an amount equal to the market value of all of the REIT Shares
outstanding on the date of Listing, calculated based upon the per share value of
a REIT Share (the "Market Value") being deemed equal to the average closing
price, or average of bid and asked prices, as the case may be, during a period
of thirty (30) days during which such shares are traded beginning 150 days after
the Listing. Payment to the Special OP Unitholders upon a Listing (including a
Subsequent Liquidity Event which is a Listing) shall be in the form of REIT
Shares, valued at Market Value.

         (d) Effect and Timing of Redemption of Special Partnership Units. From
and after the date of a Termination Event or a Listing, no distributions, other
than the redemption payments provided for in this Section 8.07, shall be payable
with respect to the Special OP Units.



                                      -33-
<PAGE>


Redemptions under this Section 8.07 shall occur no later than 30 days after the
Termination Event and no later than 240 days after the Listing.


                                   ARTICLE IX


           TRANSFERS AND REDEMPTIONS OF LIMITED PARTNERSHIP INTERESTS


         9.01 Purchase for Investment.

         (a) Each Limited Partner hereby represents and warrants to the General
Partner and to the Partnership that the acquisition of his Partnership Interests
is made as a principal for his account for investment purposes only and not with
a view to the resale or distribution of such Partnership Interest.

         (b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.


         9.02 Restrictions on Transfer of Limited Partnership Interests.

         (a) Subject to the provisions of 9.02(b), (c) and (d), no Limited
Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all
or any portion of his Limited Partnership Interest, or any of such Limited
Partner's economic rights as a Limited Partner, whether voluntarily or by
operation of law or at judicial sale or otherwise (collectively, a "Transfer")
without the consent of the General Partner, which consent may be granted or
withheld in its sole and absolute discretion. Any such purported transfer
undertaken without such consent shall be considered to be null and void ab
initio and shall not be given effect. The General Partner may require, as a
condition of any Transfer to which it consents, that the transferor assume all
costs incurred by the Partnership in connection therewith.

         (b) No Limited Partner may withdraw from the Partnership other than as
a result of a permitted Transfer (i.e., a Transfer consented to as contemplated
by clause (a) above or clause (c) below or a Transfer pursuant to 9.05 below) of
all of his Partnership Units pursuant to this Article IX or pursuant to an
exchange of all of his Partnership Units pursuant to 8.05 or pursuant to
redemption of the Limited Partner's Special Partnership Units pursuant to 8.07.
Upon the permitted Transfer or redemption of all of a Limited Partner's
Partnership Units, such Limited Partner shall cease to be a Limited Partner.

         (c) Subject to 9.02(d), (e) and (f) below, a Limited Partner may
Transfer, with the consent of the General Partner, all or a portion of his
Partnership Units to (i) a parent or parent's spouse, natural or adopted
descendant or descendants, spouse of such descendant, or brother or sister, or a
trust created by such Limited Partner for the benefit of such Limited Partner
and/or any such person(s), of which trust such Limited Partner or any such
person(s) is a trustee, (ii) a corporation controlled by a Person or Persons
named in (i) above, or (iii) if the Limited Partner is an entity, its beneficial
owners.

         (d) No Limited Partner may effect a Transfer of its Limited Partnership
Interest, in whole or in part, if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act of 1933, as amended, or
would otherwise violate any applicable federal or state securities or blue sky
law (including investment suitability standards).



                                      -34-
<PAGE>


         (e) No Transfer by a Limited Partner of its Partnership Units, in whole
or in part, may be made to any Person if (i) in the opinion of legal counsel for
the Partnership, the transfer would result in the Partnership's being treated as
an association taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code), (ii) in the opinion of legal
counsel for the Partnership, it would adversely affect the ability of the
General Partner to continue to qualify as a REIT or subject the General Partner
to any additional taxes under Section 857 or Section 4981 of the Code, or (iii)
such transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code.

         (f) No transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion, provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.

         (g) Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.

         (h) Prior to the consummation of any Transfer under this Article IX,
the transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.


         9.03 Admission of Substitute Limited Partner.


         (a) Subject to the other provisions of this Article IX, an assignee of
the Limited Partnership Interest of a Limited Partner (which shall be understood
to include any purchaser, transferee, donee, or other recipient of any
disposition of such Limited Partnership Interest) shall be deemed admitted as a
Limited Partner of the Partnership only with the consent of the General Partner
and upon the satisfactory completion of the following:

                  (i) The assignee shall have accepted and agreed to be bound by
         the terms and provisions of this Agreement by executing a counterpart
         or an amendment thereof, including a revised Exhibit A, and such other
         documents or instruments as the General Partner may require in order to
         effect the admission of such Person as a Limited Partner.

                  (ii) To the extent required, an amended Certificate evidencing
         the admission of such Person as a Limited Partner shall have been
         signed, acknowledged and filed for record in accordance with the Act.

                  (iii) The assignee shall have delivered a letter containing
         the representation set forth in Section 9.01(a) hereof and the
         agreement set forth in Section 9.01(b) hereof.

                  (iv) If the assignee is a corporation, partnership or trust,
         the assignee shall have provided the General Partner with evidence
         satisfactory to counsel for the Partnership of the assignee's authority
         to become a Limited Partner under the terms and provisions of this
         Agreement.

                  (v) The assignee shall have executed a power of attorney
         containing the terms and provisions set forth in Section 8.02 hereof.



                                      -35-
<PAGE>


                  (vi) The assignee shall have paid all legal fees and other
         expenses of the Partnership and the General Partner and filing and
         publication costs in connection with its substitution as a Limited
         Partner.

                  (vii) The assignee has obtained the prior written consent of
         the General Partner to its admission as a Substitute Limited Partner,
         which consent may be given or denied in the exercise of the General
         Partner's sole and absolute discretion.

         (b) For the purpose of allocating Profits and Losses and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.

         (c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.


         9.04 Rights of Assignees of Partnership Interests.

         (a) Subject to the provisions of Sections 9.01 and 9.02 hereof, except
as required by operation of law, the Partnership shall not be obligated for any
purposes whatsoever to recognize the assignment by any Limited Partner of its
Partnership Interest until the Partnership has received notice thereof.

         (b) Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Limited Partnership
Interest, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of its Limited Partnership Interest.


         9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if he dies, his executor, administrator or trustee,
or, if he is finally adjudicated incompetent, his committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.


         9.06 Joint Ownership of Interests. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
provided that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; provided, however, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership that
the actions of a single joint owner can bind both owners under the applicable
laws of the state of residence of such joint owners. Upon the



                                      -36-
<PAGE>


death of one owner of a Partnership Interest held in a joint tenancy with a
right of survivorship, the Partnership Interest shall become owned solely by the
survivor as a Limited Partner and not as an assignee. The Partnership need not
recognize the death of one of the owners of a jointly-held Partnership Interest
until it shall have received notice of such death. Upon notice to the General
Partner from either owner, the General Partner shall cause the Partnership
Interest to be divided into two equal Partnership Interests, which shall
thereafter be owned separately by each of the former owners.


         9.07 Redemption of Partnership Units. The General Partner will cause
the Partnership to redeem Partnership Units, to the extent it shall have legally
available funds therefor, at any time the General Partner redeems shares of
beneficial interest in itself. The number and class or series of Partnership
Units redeemed and the redemption price shall equal the number (multiplied by
the Conversion Factor) of shares of beneficial interest the General Partner
redeems and the redemption price at which the General Partner redeems such
shares, respectively.


                                    ARTICLE X


                   BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS


         10.01 Books and Records. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports, (d)
copies of the Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or its duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours.


         10.02 Custody of Partnership Funds; Bank Accounts.

         (a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.

         (b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.02(b).


         10.03 Fiscal and Taxable Year. The fiscal and taxable year of the
Partnership shall be the calendar year.


         10.04 Annual Tax Information and Report. Within 75 days after the end
of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.



                                      -37-
<PAGE>


         10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.


         (a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.

         (b) All elections required or permitted to be made by the Partnership
under the Code or any applicable state or local tax law shall be made by the
General Partner in its sole and absolute discretion.

         (c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article V of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.


         10.06 Reports to Limited Partners.

         (a) As soon as practicable after the close of each fiscal quarter
(other than the last quarter of the fiscal year), the General Partner shall
cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General Partner,
for such fiscal quarter, presented in accordance with generally accepted
accounting principles. As soon as practicable after the close of each fiscal
year, the General Partner shall cause to be mailed to each Limited Partner an
annual report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, for such fiscal year, presented in accordance with
generally accepted accounting principles. The annual financial statements shall
be audited by accountants selected by the General Partner.

         (b) Any Partner shall further have the right to a private audit of the
books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.


                                   ARTICLE XI


                         AMENDMENT OF AGREEMENT; MERGER


         The General Partner's consent shall be required for any amendment to
this Agreement. The General Partner, without the consent of the Limited Partner,
may amend this Agreement in any respect or merge or consolidate the Partnership
with or into any other partnership or business entity (as defined in Section
17-211 of the Act) in a transaction pursuant to Section 7.01(c), (d) or (e)
hereof; provided, however, that the following amendments and any other merger or



                                      -38-
<PAGE>


consolidation of the Partnership shall require the consent of Limited Partners
holding more than 50% of the Percentage Interests of the Limited Partner and in
the case of any of the following (b), (c) or (d), the consent of the Limited
Partners holding more than 50% of the Special Percentage Interests of the
Limited Partners.


         (a) any amendment affecting the operation of the Conversion Factor or
the Redemption Right (except as provided in Section 8.05(d) or 7.01(d) hereof)
in a manner adverse to the Limited Partner;


         (b) any amendment that would adversely affect the rights of the Limited
Partner to receive the distributions payable to them hereunder, other than with
respect to the issuance of additional Partnership Units pursuant to Section 4.02
hereof;

         (c) any amendment that would alter the Partnership's allocations of
Profit and Loss to the Limited Partner, other than with respect to the issuance
of additional Partnership Units pursuant to Section 4.02 hereof; or

         (d) any amendment that would impose on the Limited Partner any
obligation to make additional Capital Contributions to the Partnership.


                                   ARTICLE XII


                               GENERAL PROVISIONS


         12.01 Notices. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A attached hereto; provided, however, that any Partner may
specify a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed to
its specified office.


         12.02 Survival of Rights. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.


         12.03 Additional Documents. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents which
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.


         12.04 Severability. If any provision of this Agreement shall be
declared illegal, invalid, or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof.


         12.05 Entire Agreement. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.


         12.06 Pronouns and Plurals. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.


         12.07 Headings. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.



                                      -39-
<PAGE>


         12.08 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.


         12.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.





                      [SIGNATURES APPEAR ON FOLLOWING PAGE]



                                      -40-
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Second Amended and Restated Agreement of Limited Partnership,
all as of the 27th day of March, 2007.




                           GENERAL PARTNER:

                           WELLS TIMBERLAND REIT, INC.


                           By:   /S/ Douglas P. Williams
                              -----------------------------------------
                                 Douglas P. Williams
                                 Executive Vice President



                           ORIGINAL LIMITED PARTNER:

                           WELLS TIMBERLAND MANAGEMENT ORGANIZATION, LLC


                           By:  /s/ Jess E. Jarratt
                              -----------------------------------------
                                 Jess E. Jarratt
                                 President



                                      -41-
<PAGE>


                                    EXHIBIT A

                         ALLOCATION OF PARTNERSHIP UNITS


<Table>
<Caption>
                                                                                                          SPECIAL
                                          AGREED VALUE                    SPECIAL                       PARTNERSHIP
                               CASH        OF CAPITAL    PARTNERSHIP    PARTNERSHIP      PERCENTAGE      PERCENTAGE
        PARTNER            CONTRIBUTION   CONTRIBUTION      UNITS          UNITS          INTEREST       INTEREST
------------------------   ------------   ------------   ------------   ------------    ------------    ------------
<S>                        <C>            <C>            <C>            <C>             <C>             <C>
GENERAL PARTNER:
Wells Timberland REIT, Inc.$    200,000                        20,000              0              99%              0%
6200 The Corners Parkway
Suite 250
Norcross, Georgia 30091
</Table>


<Table>
<Caption>
                                                                                                           SPECIAL
                                          AGREED VALUE                     SPECIAL                        PARTNERSHIP
                               CASH        OF CAPITAL    PARTNERSHIP     PARTNERSHIP      PERCENTAGE      PERCENTAGE
        PARTNER            CONTRIBUTION   CONTRIBUTION      UNITS           UNITS          INTEREST        INTEREST
------------------------   ------------   ------------   ------------    ------------    ------------    ------------
<S>                        <C>            <C>            <C>             <C>             <C>             <C>
ORIGINAL LIMITED PARTNER
Wells Timberland           $      2,000                           200               0               1%
Management Organization,
LLC
6200 The Corners Parkway
Suite 250
Norcross, Georgia 30092
                           $      1,000                             0             100                             100%

TOTAL                      $    203,000                        20,200             100             100%            100%
                           ============                  ============    ============    ============    ============
</Table>



<PAGE>


                                    EXHIBIT B


                     NOTICE OF EXERCISE OF REDEMPTION RIGHT




         In accordance with Section 8.05 of the Second Amended and Restated
Agreement of Limited Partnership (the "Agreement") of Wells Timberland Operating
Partnership, L.P., the undersigned hereby irrevocably (i) presents for
redemption ____________________ Partnership Units in Wells Timberland Operating
Partnership, L.P. in accordance with the terms of the Agreement and the
Redemption Right referred to in Section 8.05 thereof, (ii) surrenders such
Partnership Units and all right, title and interest therein, and (iii) directs
that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as
determined by the General Partner deliverable upon exercise of the Redemption
Right be delivered to the address specified below, and if REIT Shares (as
defined in the Agreement) are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the address(es) specified below.

Dated:                      ,
       ---------------------  ----------

Name of Limited Partner:


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


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

(Signature of Limited Partner)


----------------------------------------
(Mailing Address)


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


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

Signature Guaranteed by:


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



If REIT Shares are to be issued, issue to:

Please insert Social Security or identifying number:

Name
       ---------------------------------