Document:

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                                                                    Exhibit 10.1

                     LIMITED LIABILITY PARTNERSHIP AGREEMENT

         THIS LIMITED LIABILITY PARTNERSHIP AGREEMENT ("THIS AGREEMENT") of
KPJV, LLP, a Delaware limited liability partnership ("THE PARTNERSHIP") is
entered into as of the 14th day of February, 2003 ("THE INITIAL FUNDING DATE"),
but is intended to be effective between the parties as of the Formation Date (as
defined below), by and between Keystone KPJV, LP, a Delaware limited partnership
("SPONSOR PARTNER"), and BIT Investment Twenty Limited Partnership, a Maryland
limited partnership ("BIT PARTNER").

                                    RECITALS

         R-1. Mercantile-Safe Deposit and Trust Company, a Maryland corporation
("TRUSTEE"), in its capacity as Trustee of the AFL-CIO Building Investment Trust
("THE TRUST"), and not in its corporate capacity, and Sponsor Operating
Partnership (as defined below) entered into that certain Investment Agreement,
dated as of even date herewith, but also intended to be effective between the
parties as of the Formation Date ("THE INITIAL PORTFOLIO INVESTMENT AGREEMENT"),
pursuant to which (i) Sponsor Operating Partnership agreed to cause Sponsor
Partner to form the Partnership, to make a capital contribution to the
Partnership, to cause the Partnership to form the Subsidiary General Partner (as
defined below) and the Subsidiaries (as defined below), and to cause the
transfer of the Initial Portfolio (as defined in the Initial Portfolio
Investment Agreement) to the Subsidiaries, in consideration for the issuance to
Sponsor Partner of a partnership interest in the Partnership, and (ii) Trustee
agreed to form BIT Partner and to cause BIT Partner to make a capital
contribution in cash to the Partnership in consideration for the issuance to BIT
Partner of a partnership interest in the Partnership.

         R-2. On February 6, 2003 ("THE FORMATION DATE"), Sponsor Partner caused
the Partnership to be formed under the Delaware Revised Uniform Partnership Act
("THE ACT") by the execution and filing of a statement of partnership existence
and statement of qualification as a limited liability partnership (collectively,
"THE CERTIFICATE OF LIMITED LIABILITY PARTNERSHIP") with the Delaware Secretary
of State.

         R-3. As of even date with this Agreement, Sponsor Partner has caused
the transfer to the Subsidiaries of the Initial Portfolio.

         R-4. The parties hereto now desire to enter into this Agreement to
govern the affairs and conduct of the business of the Partnership.

         NOW, THEREFORE, in consideration of the foregoing and of the covenants
and conditions herein contained, each of the parties hereto agrees as follows:
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                                   ARTICLE 1
                                  DEFINITIONS

         Section 1.1. Definitions. Certain terms when used in this Agreement
shall have the meanings set forth in the text hereof. The following terms when
used in this Agreement shall have the meanings set forth below:

                  "ACCOUNTANT" means KPMG or another nationally recognized
certified public accounting firm Approved by the Partners.

                  "ACT" is defined in the recitals of this Agreement.

                  "ADDITIONAL CAPITAL CONTRIBUTION PARTICIPATION PERCENTAGE"
means, with respect to each Partner, the following percentages: (a) for BIT
Partner, eighty percent (80%), and (b) for Sponsor Partner, twenty percent
(20%).

                  "ADDITIONAL CAPITAL CONTRIBUTIONS" means any additional
contributions of the Partners to the capital of the Partnership pursuant to
Section 3.3 or otherwise as provided herein.

                  "ADDITIONAL PORTFOLIO INVESTMENT AGREEMENT" means each
investment agreement that may be entered into by and among Sponsor Partner and
BIT Partner with respect to any Property or Properties acquired or to be
acquired by the Partnership (through additional Subsidiaries) in addition to
those in the Initial Portfolio.

                  "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to any
Partner, the deficit balance, if any, in the Partner's Capital Account as of the
end of the relevant taxable year, after giving effect to the following
adjustments: (i) the deficit shall be decreased by the amounts which the Partner
is obligated to restore pursuant to any provision of this Agreement or is deemed
obligated to restore pursuant to Treasury Regulations Sections
1.704-1(b)(2)(ii)(c), 1.704-2(g) and 1.704-2(i); and (ii) the deficit shall be
increased by the items described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4),(5), and (6).

                  "AFFILIATE" means, when used with reference to a specified
Person, (i) any Person that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with the
specified Person or (ii) any Person which is an officer, general partner or
trustee of, or serves in a similar capacity with respect to the specified Person
or of which the specified Person is an officer, general partner or trustee, or
with respect to which the specified Person serves in a similar capacity. For the
purpose of this definition, "CONTROLS," "IS CONTROLLED BY," and "UNDER COMMON
CONTROL WITH" means the possession of the power to direct or cause the direction
of the management and policies of a Person, whether through ownership of voting
securities, by contract, or otherwise, which shall conclusively be deemed to
exist where one Person directly or indirectly is the beneficial owner of
twenty-five percent (25%) or more of any class of voting equity securities or
other voting ownership interests of another Person; provided, however, in no
event shall BIT Partner or Trustee

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be deemed to be an Affiliate of Sponsor, Sponsor Operating Partnership or
Sponsor Partner, nor shall Sponsor, Sponsor Operating Partnership or Sponsor
Partner be deemed to be an Affiliate of Trustee or BIT Partner.

                  "ANNUAL BUDGET" means, subject to modification in accordance
with the provisions of Section 6.3 hereof, (i) the initial Annual Budget
attached hereto as EXHIBIT A, and (ii) the annual budget described in Section
6.3(c) as Approved by the Partners for any period of time following the period
covered by the initial Annual Budget.

                  "ANNUAL PERIOD" means any full calendar year commencing on
January 1 and ending on the next succeeding December 31, unless another annual
period commencing and ending on different dates is Approved by the Partners;
provided, however, the first Annual Period shall commence on the date of this
Agreement and end on December 31, 2003.

                  "APPRAISED GROSS FAIR MARKET VALUE" means, in connection with
Article 8 of this Agreement, the price at which a Property would be transferred
by a willing seller to a willing buyer (each having access to all relevant
facts, acting freely, and equal bargaining power) in an arm's length
transaction, assuming that no liabilities pertaining to or secured by such
Property would pass to such buyer.

                  "APPROVED BY THE PARTNERS" means any action of the Partnership
or any Partner which is approved in writing by both Sponsor Partner and BIT
Partner.

                  "ASSET ACQUISITION FEE" means a fee, payable to Sponsor
Partner by the Partnership, equal to one percent (1%) of the Gross Fair Market
Value of each Property acquired from a third party (i.e., from a Person other
than either Partner or any Affiliate of either Partner) in accordance with an
Additional Portfolio Investment Agreement.

                  "ASSET DISPOSITION FEE" means a fee, payable to Sponsor
Partner by the Partnership in an amount approved in advance in writing by BIT
Partner (provided, however, that BIT Partner shall not unreasonably withhold or
delay its consent to a fee that is consistent with rates for similar services in
the market area of the applicable Property), for services in connection with the
transfer of any Property to a third party (i.e., to a Person other than either
Partner or any Affiliate of either Partner).

                  "ASSET MANAGEMENT FEE" means a fee payable to the Managing
Partner (or its designated Affiliate) in accordance with Section 4.1 of this
Agreement in the amount of one-half of one percent (0.5%) of the aggregate Gross
Fair Market Value of all assets of the Partnership (whether owned directly by
the Partnership or through the Subsidiaries).

                  "BIT" means (i) Mercantile-Safe Deposit and Trust Company, in
its capacity as the Trustee of the AFL-CIO Building Investment Trust, and not in
its corporate capacity, or (ii) the AFL-CIO Building Investment Trust, as the
context may require.

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                  "BIT PARTNER INITIAL CAPITAL CONTRIBUTION" and "BIT PARTNER
INITIAL CAPITAL CONTRIBUTION AMOUNT" are defined in Section 3.2 of this
Agreement.

                  "BUSINESS DAY" means a day other than a Saturday, Sunday or
legal holiday in the State of Delaware, the State of Maryland, the Commonwealth
of Pennsylvania, or a State in which any of the Land is located.

                  "CAPITAL ACCOUNT" means the "Capital Account" of a Partner, as
described in Section 3.1 of this Agreement.

                  "CAPITAL CONTRIBUTIONS" means the capital contributions made
by the Partners to the Partnership as provided in Article 3 of this Agreement.

                  "CAPITAL RESERVE ACCOUNT" means that certain account to be
established by the Partnership pursuant to Section 4.3(a)(v) of this Agreement.
Such account shall be funded out of available Net Cash Flow on a monthly basis
as stated in (and only to the extent required under) the Annual Budget, subject
to adjustment as Approved by the Partners in connection with (i) the acquisition
(directly or through one or more Subsidiaries) of any additional Property, or
(ii) the disposition (directly or through one or more Subsidiaries) of any
Property. The Capital Reserve Account shall be administered by the Managing
Partner and held in an interest bearing account with all interest being added to
the principal of such Capital Reserve Account and may be utilized for the
payment of capital replacements and improvements to any Property (but
specifically excluding normal operating repairs to any Property) in accordance
with the approved Annual Budget or otherwise as Approved by the Partners
(provided, however, that disbursements from the Capital Reserve Account shall
not be made more frequently than monthly, unless for an Emergency Expenditure).
The Capital Reserve Account shall be allocated among the Properties as stated in
the Annual Budget, subject to reallocation as Approved by the Partners in
connection with (i) the acquisition (directly or through one or more
Subsidiaries) of any additional Property, (ii) the disposition (directly or
through one or more Subsidiaries) of any Property, or (iii) capital expenditures
for any Property Approved by the Partners in addition to those permitted under
the Annual Budget. As funds are utilized, the Capital Reserve Account shall be
replenished by continuing the monthly funding out of available Net Cash Flow as
provided hereinabove (or as otherwise Approved by the Partners). If BIT Partner
has approved the Capital Reserve Account amount for a Property under an Annual
Budget (in accordance with paragraph 6.3(c) of this Agreement) for the next
Annual Period (or as otherwise Approved by the Partners), any amounts held in
the Capital Reserve Account for such Property shall not be retained at the end
of such Annual Period, but rather shall be distributed as Net Cash Flow in
accordance with Section 5.1 of this Agreement. If BIT Partner has not approved
the Capital Reserve Account amount for a Property under an Annual Budget (in
accordance with paragraph 6.3(c) of this Agreement) for the next Annual Period
(or as otherwise Approved by the Partners), any amounts held in the Capital
Reserve Account for such Property shall be retained in the Capital Reserve
Account for the next Annual Period (or until such other amount is Approved by
the Partners for the applicable Property). Upon the sale of all of the

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Property, any funds remaining in the Capital Reserve Account shall be added to
and disbursed as Net Capital Proceeds.

                  "CERTIFICATE OF LIMITED LIABILITY PARTNERSHIP" is defined in
the recitals of this Agreement.

                  "CODE" means the Internal Revenue Code of 1986, as amended,
and all revisions thereof and successors thereto.

                  "DEFAULT LOAN" means any Default Loan made by a Partner
pursuant to Section 3.3 of this Agreement.

                  "DEFAULT RATE" means a fixed annual rate of interest equal to
the lesser of (i) the maximum annual rate of interest allowed by applicable law
to be charged, to the extent such default rate is regulated by applicable law or
(ii) five percent (5%) per annum in excess of the then-applicable prime rate of
interest (as published by the Wall Street Journal, or if such prime rate is no
longer published by the Wall Street Journal, the prime rate of interest shall be
the annual rate of interest then in effect at Mercantile-Safe Deposit and Trust
Company, or its successors, as its "prime rate").

                  "DEPRECIATION" means, for each taxable year, an amount equal
to the depreciation, amortization or other cost recovery deduction allowable
with respect to an asset for such taxable year, except that if the Gross Asset
Value of an asset of the Partnership differs from its adjusted basis for federal
income tax purposes at the beginning of such taxable year, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such taxable year bears to such beginning adjusted tax basis; provided, that
if the adjusted basis for federal income tax purposes of an asset of the
Partnership at the beginning of such taxable year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Managing Partner.

                  "EMERGENCY EXPENDITURES" means expenditures required to be
made to address an imminent danger of physical injury to persons or property, to
comply with law, or to maintain the delivery of necessary services to the
Property.

                  "EMERGENCY LOAN" is defined in Section 3.4 of this Agreement.

                  "ENVIRONMENTAL LAWS" means each Federal, State, or local
statute, law, ordinance, code, rule, regulation, permit, agreement, order, or
decree regulating or relating to protection of human health or the environment,
or regulating or imposing liability or standards of conduct concerning the use,
storage, treatment, transportation, manufacture, refinement, handling,
production, release or disposal of any regulated hazardous, toxic, or dangerous
waste, substance, element, compound, mixture or material, including petroleum
and derivatives thereof, including, without limitation, the Federal
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Sections 9601 et seq., the Superfund Amendments and
Reauthorization

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Act, 42 U.S.C. Sections 9601 et seq., the Federal Oil Pollution Act of 1990, 15
U.S.C. Sections 2701 et seq., the Federal Toxic Substances Control Act, 15
U.S.C. Sections 2601 et seq., the Federal Resource Conservation and Recovery Act
as amended, 42 U.S.C. Sections 6901 et seq., the Federal Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq., the Federal Clean Air Act
42 U.S.C. Section 7401 et seq., the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq., the River and Harbors Act of 1899, 33 U.S.C.
Sections 401 et seq., analogous laws of the applicable State or other
jurisdiction in which the applicable Land is located, and all rules and
regulations of the United States Environmental Protection Agency, or any other
State or federal department, board, or agency, or any other agency or
governmental board or entity having jurisdiction over the applicable Property.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended, and the rules and
regulations of any Governmental Authority, as from time to time in effect,
promulgated thereunder.

                  "EVENT OF DEFAULT" is defined in Section 11.1 of this
Agreement.

                  "EXECUTIVE COMMITTEE" is defined in Section 4.8 of this
Agreement.

                  "EXISTING LEASE" means any Lease existing at the time the
Partnership (or the applicable Subsidiary) acquires title to such Property.

                  "FORMATION DATE" is defined in the recitals to this Agreement.

                  "FRACTIONS RULE" is defined in Section 5.6 of this Agreement.

                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity or person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government having jurisdiction over the applicable Property, the
applicable Subsidiary, the Partnership, BIT Partner, Trustee, Sponsor, or
Sponsor Partner.

                  "GROSS ASSET VALUE" means, with respect to any asset of the
Partnership (whether held directly or through a Subsidiary), such asset's
adjusted basis for federal income tax purposes, except that the initial Gross
Asset Value of any asset contributed by a Partner to the Partnership shall be
the gross fair market value as determined by the Partners; the Gross Asset Value
of any asset of the Partnership distributed to any Partner shall be adjusted to
equal the gross fair market value of such asset on the date of distribution as
determined by the Partners, and the Gross Asset Values of assets of the
Partnership shall be increased (or decreased) to the extent the Partners
determine that such adjustment is necessary or appropriate to comply with the
requirements of Treasury Regulation Section 1.704-1(b)(2)(iv).

                  "GROSS FAIR MARKET VALUE" means, with respect to any asset of
the Partnership (whether held directly or through a Subsidiary), the price at
which such asset would be transferred by a willing seller to a willing buyer
(each having access to

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all relevant facts, acting freely, and equal bargaining power) in an arm's
length transaction, assuming that no liabilities pertaining to or secured by
such asset would pass to such buyer. Gross Fair Market Value shall be determined
quarterly by BIT Partner, in accordance with the valuation procedures adopted by
BIT for BIT Partner. Sponsor Partner shall not have any approval rights with
respect to the valuation methodology and procedures adopted by BIT, provided
that BIT Partner conducts the process in a commercially reasonable manner in
accordance with the following general terms: (i) the Partnership shall deliver
to BIT Partner annual appraisals of each Property by a third-party,
nationally-recognized appraisal firm or firms with significant experience within
the industrial property sector in the market in which each Property is located,
and (ii) BIT Partner's quarterly evaluations shall be in accordance with the
most recent annual appraisal unless BIT Partner determines, in BIT Partner's
reasonable judgment, that a material event has negatively affected a Property's
Gross Fair Market Value since such appraisal. If BIT Partner determines that a
material event has negatively affected the Gross Fair Market Value of a
Property, BIT Partner shall promptly provide a written notice to Sponsor Partner
of such determination, which notice shall reasonably identify the event and such
event's negative effects. Including the costs of the annual appraisals (unless
such costs are to be paid by the Partnership or Sponsor Partner in accordance
with Section 6.8 below), all costs relating to determining Gross Fair Market
Value for purposes of calculating the Asset Management Fee shall be borne by BIT
Partner.

                  "IMPROVEMENTS" means the buildings and other structures
located on the Land.

                  "INITIAL CAPITAL CONTRIBUTIONS" means the initial Capital
Contributions of each of the Partners, as described in Section 3.2 of this
Agreement.

                  "INITIAL FUNDING DATE" is defined in the recitals to this
Agreement.

                  "INITIAL PORTFOLIO" is defined in the Initial Portfolio
Investment Agreement.

                  "INITIAL PORTFOLIO ACQUISITION BUDGET" is defined in the
Initial Portfolio Investment Agreement.

                  "INITIAL PORTFOLIO INVESTMENT AGREEMENT" is defined in the
recitals to this Agreement.

                  "INVESTMENT AGREEMENT" means the Initial Portfolio Investment
Agreement and each Additional Portfolio Investment Agreement, if any.

                  "LABOR COVENANT" is defined in Section 4.11 of this Agreement.

                  "LAND" means each of those separate tracts of land identified
on SCHEDULE 1 attached hereto and described on the attachments thereto, as the
same may be supplemented or otherwise modified from time to time in accordance
with the terms of this Agreement and any Additional Portfolio Investment
Agreement.

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                  "LANDLORD-CONTROLLED TI CONTRACT" means any contract or series
of contracts with any contractor or subcontractor in connection with any on-site
construction at any Property (or in connection with any off-site fabrication of
any components for any construction of exterior or structural portions of the
Improvements at such Property) for any improvements required or permitted to be
performed by or on behalf of a specific tenant under the current term of such
tenant's current Lease, to the extent such contract is controlled and directly
funded by the Partnership or a Subsidiary.

                  "LEASE" means any lease, sublease, license agreement,
concession, tenancy, or other use or occupancy agreements (whether oral or
written), or any part thereof, now or hereafter existing, covering or affecting
any of the Land or the Improvements, all extensions and renewals thereof, and
all modifications, amendments and guaranties thereof.

                  "LEASING AGREEMENT" means (i) the initial form of Exclusive
Brokerage Agreement attached hereto as EXHIBIT B and (ii) the form of any
Exclusive Brokerage Agreement hereafter Approved by the Partners.

                  "LEASING GUIDELINES" means (i) the initial leasing guidelines
attached hereto as EXHIBIT C and (ii) the leasing guidelines hereafter Approved
by the Partners pursuant to Section 4.9 of this Agreement.

                  "LEVERAGE RATIO" means the ratio, expressed as a percentage,
of (i) the aggregate total indebtedness of the Partnership, Subsidiary General
Partner, and Subsidiaries, including any Make-Whole Loans, but excluding trade
debt incurred in accordance with this Agreement, over (ii) the aggregate Gross
Fair Market Value of all assets of the Partnership, Subsidiary General Partner,
and Subsidiaries (without valuing either (x) the Partnership's interest in the
Subsidiary General Partner or (y) the Partnership and Subsidiary General
Partner's respective interests in the Partnership).

                  "LIQUIDATION" means (i) when used with reference to the
Partnership, the earlier of (A) the date upon which the Partnership is
terminated under Code Section 708(b)(1) or (B) the date upon which the
Partnership ceases to be a going concern, and (ii) when used with reference to
any Partner, the earlier of (A) the date upon which there is a Liquidation of
the Partnership or (B) the date upon which such Partner's entire interest in the
Partnership is terminated other than pursuant to a transfer of such interest to
a Person other than the Partnership.

                  "MAJOR DECISIONS" is defined in Section 4.2 of this Agreement.

                  "MAKE-WHOLE LOAN" is defined in Section 4.2(e) hereof.

                  "MAKE-WHOLE PAYMENT" is defined in Section 4.2(e) hereof.

                  "MANAGING PARTNER" means the Person designated as such herein
or pursuant to the terms hereof.

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                  "MINIMUM GAIN" has the meaning set forth in Treasury
Regulations Section 1.704-2(d). Minimum Gain shall be computed separately for
each Partner in a manner consistent with the Regulations under Code Section
704(b).

                  "NET CAPITAL PROCEEDS" means the proceeds received by the
Partnership upon (i) any refinancing of the Property or any part thereof net of
actual costs and expenses incident to such refinancing and satisfaction of any
indebtedness being refinanced and any right of any other creditor of the
Partnership to receive such proceeds (including any Make-Whole Loans), and (ii)
the sale or other disposition of any Partnership asset (including condemnation
and property insurance proceeds which are not applied to restoration or repair
of the Property and any balance in the Capital Reserve Account allocated to the
disposed Property or Properties (unless reallocated to another Property or
Properties as Approved by the Partners) and any other Partnership reserves and
excluding disposition of assets in the nature of personal property and equipment
in the ordinary course of business) net of actual costs and expenses incident to
such sale or disposition (including, if applicable, the Asset Disposition Fee),
and also net of (A) expenses of the Partnership in accordance with this
Agreement which are due and payable on the date of any such sale and/or
refinancing, including but not limited to, any Property Management Fee due and
payable, (B) the payment of any Partnership indebtedness secured by or related
to such asset (including any Make-Whole Loans), (C) satisfaction of any right of
any creditor of the Partnership (other than a Partner) to receive such proceeds,
and (D) any reserves Approved by the Partners to provide for contingent or
unforeseen liabilities or obligations of the Partnership.

                  "NET CASH FLOW" means, with respect to the period for which
such determination is being made, the amount by which (i) the amount of all cash
funds received by the Partnership from all sources during such period, including
all funds drawn from the Capital Reserve Account, other than Net Capital
Proceeds and Capital Contributions, exceeds (ii) the sum of the following (to
the extent not deducted in determining Net Capital Proceeds for such period):
(a) all principal and interest payments on any Partnership indebtedness
(including payments of any Make-Whole Loans); (b) all cash expenditures
(including expenditures for capital improvements and the payment of any Property
Management Fee or Asset Management Fee) incident to the operation of the
Partnership; (c) all cash reserved in accordance with the Annual Budget (by a
Property Manager pursuant to a Property Management Agreement) or otherwise
Approved by the Partners for currently due and maturing obligations and
liabilities and expenses of the Partnership or obligations secured by
Partnership assets; and (d) an amount equal to the contributions made out of
available cash flow to the Capital Reserve Account in accordance with the Annual
Budget. Net Cash Flow shall include the amount released from the Capital Reserve
Account, if any, at the end of each Annual Period.

                  "NET INCOME OR LOSS" means, with respect to any fiscal period,
the taxable income or loss of the Partnership as determined in accordance with
Code Section 703(a), with the following adjustments: (i) all items of income,
gain, loss, deduction, or credit required to be stated separately pursuant to
Code Section 703(a)(1)

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shall be included in computing taxable income or loss; (ii) any tax-exempt
income of the Partnership, not otherwise taken into account in computing taxable
income or loss, shall be included in computing Net Income or Loss; (iii) any
expenditures of the Partnership described in Code Section 705(a)(2)(B) (or
treated as such pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing taxable income or loss shall
be subtracted from Net Income or Loss; (iv) gain or loss resulting from any
taxable disposition of a Partnership asset shall be computed by reference to the
Gross Asset Value of the asset disposed of, notwithstanding the fact that the
Gross Asset Value differs from the adjusted basis of the asset for federal
income tax purposes; (v) in lieu of the depreciation, amortization or cost
recovery deductions allowable in computing taxable income or loss, there shall
be taken into account the Depreciation for such fiscal year; (vi) to the extent
an adjustment to the adjusted tax basis of the Partnership pursuant to Code
Section 734(b) is required pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts
as a result of a distribution other than in Liquidation of a Partner's interest
in the Partnership, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the Partnership asset) or loss
(if the adjustment decreases the basis of the Partnership asset) from the
disposition of the Partnership property and shall be taken into account for
purposes of computing Net Income or Loss; and (vii) notwithstanding any other
provision of this definition, any items which are specially allocated pursuant
to the provisions of Section 5.5 hereof shall not be taken into account in
computing Net Income or Loss.

                  "NEW LEASE" means any Lease of all or any portion of a
Property other than an Existing Lease.

                  "NON-CONTROLLABLE EXPENSES" means all costs and expenses of
the Partnership, the Subsidiary General Partner and the Subsidiaries incurred in
connection with the payment of (i) fees for utility services or insurance
coverage for the Partnership, the Subsidiary General Partner and the
Subsidiaries, (ii) real estate taxes and similar charges and assessments, (iii)
the Property Management Fee payable pursuant to a Property Management Agreement
Approved by the Partners, (iv) the Asset Management Fee payable to Sponsor
Partner in accordance with this Agreement, and (v) all federal, state and local
taxes, license fees, qualification fees, filing fees, and other similar fees and
expenses required by law.

                  "PARTICIPATING PLANS" means the plans participating in the
Trust, a list of which, as of the Initial Funding Date, is attached hereto as
SCHEDULE 3.

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                  "PARTICIPATION PERCENTAGE" means, with respect to each
Partner, those certain percentages as set forth below; provided, however, that
such Participation Percentages may be adjusted, from time to time, pursuant to
the terms of this Agreement:

<TABLE>
<CAPTION>
                         NET CASH FLOW           NET CAPITAL PROCEEDS
                         PARTICIPATION              PARTICIPATION
    PARTNER               PERCENTAGE                  PERCENTAGE
    -------               ----------                  ----------
<S>                      <C>                     <C>
Sponsor Partner               40%                        40%

  BIT Partner                 60%                        60%
</TABLE>

Such Participation Percentages do not include the Additional Capital
Contribution Participation Percentages.

                  "PARTNER" means either Sponsor Partner or BIT Partner;
together referred to as "THE PARTNERS."

                  "PERMITTED EXPENSES" means all costs and expenses of the
Partnership, the Subsidiary General Partner and the Subsidiaries (excluding any
capital expenditures except to the extent expressly included herein) which (a)
are incurred in connection with the affairs of the Partnership, the Subsidiary
General Partner or any Subsidiary, and (b)(i) are Non-Controllable Expenses, or
(ii) are Emergency Expenditures.

                  "PERSON" or "PERSON" means any individual, corporation,
partnership, joint venture, limited partnership, limited liability partnership,
joint venture, limited liability company, trust, governmental entity or other
form of business organization or association.

                  "PLAN ASSETS" means "plan assets" as defined in the Plan
Assets Regulations.

                  "PLAN ASSETS REGULATIONS" means the regulations issued by the
United States Department of Labor, as amended from time to time, regarding the
definition of "plan assets," and currently listed under 29 CFR Section
2510.3-101.

                  "PREFERRED AMOUNT" means, for any Partner and as of any date,
the amount, if any, that would be required to be distributed on such date so
that the aggregate distributions to such Partner pursuant to Sections
5.1(a)(iii) and 5.2(a)(iii) provide an internal rate of return at the Preferred
Return Rate (with any portion of such Preferred Amount which is not distributed
currently in any quarter to be compounded quarterly) on such Partner's
Unreturned Capital Contributions to the Partnership. A Partner's Preferred
Amount shall be calculated on the basis of the actual number of days elapsed
from and including the date on which each Capital Contribution is

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contributed to the Partnership to, but not including, the date that
distributions constituting a return of such Capital Contributions were made.

                  "PREFERRED RETURN RATE" means ten percent (10%) per annum.

                  "PROPERTY" means each of those separate properties identified
on SCHEDULE 1 attached hereto, as the same may be supplemented or otherwise
modified from time to time in accordance with the terms of this Agreement and
any Additional Portfolio Investment Agreement; together referred to as "THE
PROPERTIES." Each Property includes the applicable Land, Improvements, and other
assets of the Partnership (whether title thereto is held directly or through one
or more Subsidiaries).

                  "PROPERTY MANAGEMENT AGREEMENT" is defined in Section 4.5.

                  "PROPERTY MANAGEMENT FEE" is defined in Section 4.5.

                  "PROPERTY MANAGEMENT TERMINATION DEFAULT" means an Event of
Default under this Agreement for which a Partner is responsible, but which
arises from the acts or omissions of a Property Manager who is an Affiliate of
such Partner and such acts consist of (a) fraud or misapplication of funds by
such Property Manager, (b) a default (other than as described in clause (a)
above) under the applicable Property Management Agreement which is (i) knowingly
and intentionally committed by such Property Manager, and (ii) materially and
adversely affects the Partnership or the other Partner, or (c) a breach of the
Labor Covenant, which, in each case, is not remedied after the giving of any
required notice and expiration of any applicable cure period under the
applicable Property Management Agreement.

                  "PROPERTY MANAGER" is defined in Section 4.5.

                  "REPURCHASE AGREEMENT" means an agreement to sell securities
evidencing direct obligations of, or obligations guaranteed by, the United
States of America or its agencies, and then repurchase such securities for a
fixed price on a fixed date not more than thirty (30) days after the sale of
such securities.

                  "SECURITIES LAWS" means the Securities Act of 1933, the
Securities Exchange Act of 1934 and applicable state securities laws and the
regulations promulgated under such federal and state laws.

                  "SERVICE CONTRACT" means any contract for services for
operation and maintenance of any Property (including equipment leases) that is
to be performed for the Partnership, the Subsidiary General Partner, or any
Subsidiary.

                  "SPECIAL MAJOR DECISION" means a decision to take or approve
an action that is (A) described in clauses (i), (ii), (iii), (iv), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xiii), (xiv), (xvii), (xviii), (xxi), (xxv), or
(xxx) of Section 4.2(a), (B) described in Section 4.2(c), or (C) a decision to
take or approve any of the actions included in the foregoing clause (A) or (B)
with respect to the Subsidiary General Partner or any Subsidiary;

                                       12
<PAGE>
provided, however, that a decision to take or approve any action as described in
clause (ix) or (x) of Section 4.2(a) shall not be a "Special Major Decision" if
the applicable property management agreement or leasing agent agreement is
terminable without cost upon thirty (30) days' prior written notice or upon
dissolution of the Partnership.

                  "SPONSOR" means Keystone Property Trust, a Maryland statutory
real estate investment trust.

                  "SPONSOR OPERATING PARTNERSHIP" means Keystone Operating
Partnership, L.P., a Delaware limited partnership.

                  "SPONSOR OPERATING PARTNERSHIP GUARANTY" means the Guaranty
Agreement of even date herewith by Sponsor Operating Partnership to and for the
benefit of BIT Partner, guaranteeing the obligations of Sponsor Partner to BIT
Partner under this Agreement.

                  "SPONSOR PARTNER" means the person designated as such herein.

                  "SPONSOR PARTNER INITIAL CAPITAL CONTRIBUTION" and "SPONSOR
PARTNER INITIAL CAPITAL CONTRIBUTION AMOUNT" are defined in Section 3.2.

                  "SUBSIDIARY" means each of those limited partnerships owning a
Property and identified on SCHEDULE 1 attached hereto (in which Subsidiary
General Partner is the sole general partner and the Partnership is the sole
limited partner), as the same may be supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement and any Additional
Portfolio Investment Agreement.

                  "SUBSIDIARY GENERAL PARTNER" means KPJV GenPar, LLC, a
Delaware limited liability company, which is wholly owned by the Partnership and
is the sole general partner in each Subsidiary.

                  "TARGET LEVERAGE RATIO" means a Leverage Ratio of forty
percent (40%).

                  "TENANT-CONTROLLED TI CONTRACT" means any contract or series
of contracts with any contractor or subcontractor in connection with any on-site
construction at any Property (or in connection with any off-site fabrication of
any components for any construction of exterior or structural portions of the
Improvements at such Property) for any structural improvements (i.e., excluding
equipment, removable personal property, and racking not owned or leased by the
Partnership, BIT Partner, Trustee, the Trust, any Affiliate of BIT Partner,
Sponsor Partner, Sponsor Operating Partnership, Sponsor, any Affiliate of
Sponsor Partner, Subsidiary General Partner, any Subsidiary, or any Property
Manager) that are required or permitted to be performed by or on behalf of a
specific tenant under the current term of such tenant's current Lease, to the
extent such contract is controlled and directly funded by such tenant.

                                       13
<PAGE>
                  "TENANT-OBLIGATION SERVICE CONTRACT" means any Service
Contract for which either (i) a tenant under a Lease is obligated to reimburse
the Partnership (or the Subsidiary General Partner, applicable Subsidiary, or
Property Manager) for the payments made to the service provider thereunder, or
(ii) the obligations under such contract are directly controlled and funded by a
tenant under a Lease.

                  "TERMINATION DEFAULT" means an Event of Default which consists
of (a) fraud or misapplication of funds by a Partner, (b) an Event of Default
(other than as described in clause (a) above) which is (i) knowingly and
intentionally committed by a Partner, and (ii) materially and adversely affects
the Partnership or the other Partner, (c) a breach of the Labor Covenant which
is not remedied after notice and within the cure period set forth in Section
11.1 hereof, or (d) a Property Management Termination Default.

                  "TREASURY REGULATIONS" means the Federal Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time.

                  "TRUST" is defined in the recitals to this Agreement.

                  "UBTI" means "unrelated business taxable income" as defined in
Code Section 512.

                  "UBTI LEVERAGE EXEMPTION CONDITIONS" means the leverage
exemption conditions of Code Section 514(c)(9)(B), including the prohibition
against participating debt or purchasing a property from, or leasing a property
to, a disqualified person under Code Section 4975(e)(2).

                  "UNALLOCATED PREFERRED RETURN" means, with respect to any
Partner, the excess, if any, of (A) the Preferred Amount with respect to such
Partner over (B) the excess of aggregate Net Income previously allocated to such
Partner pursuant to Sections 5.3(a)(ii) over the aggregate Net Losses previously
allocated to such Partner pursuant to Sections 5.3(b)(ii).

                  "UNRETURNED CAPITAL CONTRIBUTIONS" means, for each Partner,
the aggregate amount of all Capital Contributions made by such Partner less all
amounts distributed to such Partner as a return of Capital Contributions.

         Section 1.2. Additional Defined Terms. Each other capitalized term used
in this Agreement and not defined herein, but which is defined in an Investment
Agreement, is intended to have the same meaning when used in this Agreement as
is set forth in such Investment Agreement, unless the context clearly indicates
otherwise.

         Section 1.3. Construction; Incorporation of Recitals.

                         (a) All references made (i) in the neuter, masculine or
feminine gender shall be deemed to have been made in all such genders, (ii) in
the singular or plural number shall be deemed to have been made, respectively,
in the plural or

                                       14
<PAGE>
singular number as well. The terms "agree" and "agreements" contained herein are
intended to include and mean "covenant" and "covenants." The term "including"
shall mean "including, but not limited to." As used in this Agreement, the word
"knowingly" (or any similar words or phrases) shall mean an action based on the
actual knowledge of the Person or Persons designated to act for such party,
without inquiry or investigation.

                         (b) The Recitals set forth hereinabove are hereby
incorporated as a substantive part of this Agreement.

         Section 1.4. Interpretation. In interpreting this Agreement, the
provisions shall not be construed for or against either Partner based upon who
drafted the document.

                                   ARTICLE 2
                               GENERAL PROVISIONS

         Section 2.1. Formation of the Partnership. The Partnership has been
formed under the Act as a limited liability partnership, effective upon the
filing of the Certificate of Limited Liability Partnership, as required under
the Act. The name of the Partnership shall be "KPJV, LLP." As of the Formation
Date and the Initial Funding Date, the sole Partners shall be Sponsor Partner
and BIT Partner. The addresses of the Partners are set forth in Article 14. The
Partners agree to execute such certificates or documents and undertake such
filings and recordings and all other acts, including registration as a foreign
limited liability partnership in the appropriate office in the State in which
the Land is located, as may be required to comply with all applicable laws. This
Agreement supersedes and replaces any prior partnership agreement of the
Partnership in its entirety, and no prior partnership agreement of the
Partnership shall hereafter have any force or effect.

         Section 2.2. Term. The term of the Partnership began on the Formation
Date, and shall continue until December 31, 2023, unless sooner terminated in
accordance with the terms of this Agreement.

         Section 2.3. Purpose.

                  2.3.1. The purpose and character of the business of the
Partnership (which business may be conducted by the Partnership either directly
or through one or more of the Subsidiaries) shall be to (i) own, operate and
maintain the Properties and lease space in the Improvements to others, (ii)
finance and refinance all or any of the Properties or parts thereof, (iii)
acquire additional industrial properties in Indiana, Ohio, Pennsylvania, New
Jersey, and such other jurisdictions as Approved by the Partners, in accordance
with the terms set forth on EXHIBIT G attached hereto or such other terms
Approved by the Partners, (iv) hold for investment and eventually sell,
transfer, exchange or otherwise dispose any of the Property or part thereof, and
(v) do all things necessary or appropriate to effect the foregoing or as
otherwise permitted under the Act. The Partnership shall not engage in any other
activity unless Approved by the

                                       15
<PAGE>
Partners. The Partners agree that the Partnership shall be operated as a "real
estate operating company" as defined in the Plan Assets Regulations.

                  2.3.2. Notwithstanding anything else contained herein, the
Partnership shall always be motivated to act to produce the most attractive
risk-adjusted economic returns for its Partners consistent with the following
objectives:

                           (a) To achieve the investment goals set forth on
EXHIBIT G attached hereto;

                           (b) To satisfy Trustee's fiduciary obligations under
the governing instruments of the Trust and associated documents;

                           (c) To meet Trustee's objectives to (i) avoid UBTI,
(ii) maintain qualification of the Partnership as a "real estate operating
company" within the meaning of the Plan Assets Regulations, and (iii) comply
with the prohibition against engaging in a non-exempt prohibited transaction;

                           (d) To comply with all applicable laws, including,
but not limited to, ERISA; and

                           (e) To maintain Sponsor's status as a real estate
investment trust under the Code.

Each Partner hereby acknowledges and agrees that the objectives established in
paragraphs (a), (b), (c) and (e) of this subsection shall be deemed to have been
achieved to such Partner's satisfaction if the other Partner takes only such
actions on behalf of the Partnership as are within such Partner's express
authority as either set forth in this Agreement or Approved by the Partners in a
separate written agreement.

BIT Partner further acknowledges and agrees that, for purposes of this
Agreement, compliance with Section 4.11 below (in and of itself) shall not
constitute a violation of ERISA.

                  2.3.3. The Partners hereby acknowledge that, notwithstanding
any provision of this Agreement to the contrary, Sponsor's joint venture
agreement with CalEast Industrial Investors, LLC ("CALEAST") provides that,
through and including February 2003, any property identified as a potential
acquisition in New Jersey from a third party is subject to CalEast's right of
first offer.

                  2.3.4. The Partners hereby acknowledge that the targeted
combined total of all Capital Contributions is an amount up to $208,300,000
(assuming a maximum Leverage Ratio equal to the Target Leverage Ratio).

         Section 2.4. Place of Business; Registered Office and Agent. The
Partnership's registered office in Delaware initially shall be located at 2711
Centerville Rd., Suite 400, Wilmington, Delaware. The registered agent of the
Partnership in Delaware shall be Corporation Service Company, whose address is
the registered office of the

                                       16
<PAGE>
Partnership. If under any applicable law the Partnership must qualify to
transact business in any State in which the Land is located, the Managing
Partner shall appoint a registered agent and designate a registered office in
such State. The principal office of the Partnership shall be located at c/o
Keystone Property Trust, 200 Four Falls Corporate Center, Suite 208, West
Conshohocken, Pennsylvania 19428. The Managing Partner may, from time to time,
change the location of the principal office or registered office or agent of the
Partnership after (i) at least ten (10) Business Days prior notice to BIT
Partner, and (ii) if required under the Act or other applicable law, by filing
of appropriate amendments or other documents with appropriate governmental
offices or agencies. The Partnership may designate such other or additional
places of business within or without the State of Delaware as the Managing
Partner may from time to time deem necessary to comply with law or otherwise
appropriate in the best interest of the Partnership, as Approved by the
Partners.

         Section 2.5. Nature of Partners' Interests. The Partnership is an
entity separate and distinct from the Partners. The interests of the Partners in
the Partnership shall be personal property for all purposes, except for the
purposes of Code Section 514, Code Sections 856-860, and the Plan Assets
Regulations to the extent provided otherwise therein. The interests of the
Partners in the Partnership shall not be evidenced by any certificate,
instrument or document other than this Agreement, unless otherwise Approved by
the Partners. All property owned by the Partnership, whether through one or more
Subsidiaries and whether real or personal, tangible or intangible, including the
Land and the Improvements, shall be owned by the Partnership as an entity, and
no Partner individually shall have any ownership of such property.

         Section 2.6. Title to Partnership Property. Legal title to each
Property, or the interest of the Partnership therein, shall be taken and held in
the name of the Partnership or a Subsidiary at all times during which the
Partnership is in existence.

         Section 2.7. Representations and Warranties.

                  2.7.1. Sponsor Partner. Sponsor Partner, on its own behalf and
on behalf of Sponsor and Sponsor Operating Partnership, hereby makes, ratifies
and confirms to BIT Partner, as of the Formation Date and the Initial Funding
Date, all the representations and warranties made by Sponsor Operating
Partnership in the Initial Portfolio Investment Agreement (and also, as
applicable, as of such other date(s) on which the representations and warranties
are stated as being true and accurate as required under the Initial Portfolio
Investment Agreement or this Agreement) .

                  2.7.2. BIT Partner. BIT Partner, on its own behalf and on
behalf of BIT, hereby makes, ratifies and confirms to Sponsor Partner, as of the
Formation Date and the Initial Funding Date, all the representations and
warranties made by BIT in the Initial Portfolio Investment Agreement (and also,
as applicable, as of such other date(s) on which the representations and
warranties are stated as being true and accurate as required under the Initial
Portfolio Investment Agreement or this Agreement).

                                       17
<PAGE>
                                   ARTICLE 3
                          CAPITAL CONTRIBUTIONS; LOANS

         Section 3.1. Capital Accounts.

                           (a) The Partnership will maintain for each Partner an
account to be designated its "CAPITAL ACCOUNT," to which shall be added (i) the
Partner's Initial Capital Contributions and all Additional Capital
Contributions, (ii) the amount of any Partnership liabilities assumed by the
Partner (or which are secured by Partnership property distributed to the
Partner), (iii) the fair market value of any asset (as agreed by the Partners)
actually contributed by the Partner to the Partnership (to the extent not
otherwise included in clause (i) above), (iv) the Partner's distributive share
of the Net Income (or items thereof), and (v) the Partner's share of any item in
the nature of income or gain specially allocated to the Partner pursuant to the
provisions of Article 5 (other than Section 5.4).

                           (b) A Partner's Capital Account shall be reduced by
(i) the amount of cash distributed to the Partner by the Partnership, (ii) the
amount of any liabilities of the Partner assumed by the Partnership or any
Subsidiary (or which are secured by property contributed by the Partner to the
Partnership or any Subsidiary), (iii) the fair market value of any property (as
agreed by the Partners) distributed to the Partner by the Partnership, (iv)
allocations of Net Loss (or items thereof), and (v) the Partner's share of any
item in the nature of loss or deduction specially allocated to the Partner
pursuant to the provisions of Article 5 hereof (other than Section 5.4).

                           (c) The Capital Accounts shall be further increased
or decreased as may be required by Treasury Regulations Section
1.704-1(b)(2)(iv) as in effect from time to time. Each Partner shall have a
single Capital Account which shall reflect all of its interests in the
Partnership. If any Partner transfers its interest in the Partnership pursuant
to the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent the Capital Account is attributable to
the transferred interest.

                           (d) It is intended that the Capital Accounts will be
maintained in accordance with Code Section 704(b) and the Treasury Regulations
thereunder. To the extent Treasury Regulations under Code Section 704(b) dealing
with the maintenance of partner capital accounts are revised and this Agreement
is subject to such revised Treasury Regulations, Capital Accounts will be
maintained in accordance with such revised Treasury Regulations.

                           (e) Except as expressly provided otherwise in this
Agreement, (i) no Partner shall have the right to withdraw its Capital
Contributions or to demand and receive property other than cash from the
Partnership in return for its Capital Contributions; (ii) no Partner shall have
priority over any other Partner as to the return of its Capital Contributions or
as to compensation by way of income; and (iii) any return of Capital
Contributions to the Partners shall be solely from Partnership assets, and no
other Partner shall be personally liable for any such return.

                                       18
<PAGE>
         Section 3.2. Initial Capital Contributions.

                           (a) Sponsor Partner. On the Initial Funding Date
(which may not occur prior to the date on which the Partnership makes its first
investment, other than short-term investments pending long-term commitment,
consistent with the Partnership's operation as a real estate operating company),
Sponsor Partner shall have credited as its Initial Capital Contribution ("THE
SPONSOR PARTNER INITIAL CAPITAL CONTRIBUTION") to the Partnership (to the extent
not credited upon formation of the Partnership) the amount set forth on SCHEDULE
4 ("THE SPONSOR PARTNER INITIAL CAPITAL CONTRIBUTION AMOUNT"). If applicable
(and for the Partnership's internal accounting purposes only), Sponsor Partner's
Initial Capital Contribution Amount shall be allocated among the Subsidiaries
(and their respective Properties) in accordance with the Initial Portfolio
Investment Agreement and the Initial Portfolio Acquisition Budget.

                           (b) BIT Partner. On the Initial Funding Date (which
may not occur prior to the date on which the Partnership makes its first
investment, other than short-term investments pending long-term commitment,
consistent with the Partnership's operation as a real estate operating company),
BIT Partner shall have credited as its initial Capital Contribution ("THE BIT
PARTNER INITIAL CAPITAL CONTRIBUTION") to the Partnership the amount set forth
on SCHEDULE 4 ("THE BIT PARTNER INITIAL CAPITAL CONTRIBUTION AMOUNT"). If
applicable (and for the Partnership's internal accounting purposes only), BIT
Partner's Initial Capital Contribution Amount shall be allocated among the
Subsidiaries (and their respective Properties) in accordance with the Initial
Portfolio Investment Agreement and the Initial Portfolio Acquisition Budget.

                           (c) No Further Initial Capital Contributions. No
Partner shall be required to make any further Initial Capital Contributions to
the Partnership.

         Section 3.3. Additional Capital Contributions.

                           (a) Additional Portfolio Investment Agreements. Upon
Approval by the Partners, Sponsor Partner and BIT Partner shall fund, as
Additional Capital Contributions, the respective amounts of capital called for
pursuant to any Additional Portfolio Investment Agreement.

                           (b) Capital Call Notices. If, as, and when Approved
by the Partners as a Major Decision, the Managing Partner may from time to time,
by written notice (a "CAPITAL CALL NOTICE") to the Partners, call for an
Additional Capital Contribution to the Partnership to fund (i) costs and
expenses of the Partnership pursuant to the applicable Annual Budget, (ii) any
Emergency Expenditures pursuant to this Agreement, or (iii) any other cost,
expense or other liability of the Partnership which the Partnership does not
then have the resources to fund. A Capital Call Notice delivered hereunder shall
set forth (x) the date upon which such Additional Capital Contribution is due,
which date shall not be less than three (3) Business Days after the date of
delivery of such Capital Call Notice, and (y) in reasonable detail, the purpose
and proposed uses for such Additional Capital Contribution. If Additional
Capital

                                       19
<PAGE>
Contributions are required after the funding of the Initial Capital
Contributions, such Additional Capital Contributions shall be funded by the
Partners in proportion to the amounts of their respective Additional Capital
Contribution Participation Percentages. Notwithstanding anything contained
herein to the contrary, the Managing Partner will keep the other Partner
informed as to the possibility of additional capital calls by the Partnership
under this Section 3.3(b) as soon as possible after the Managing Partner has
determined that it wishes to request that any such additional capital be
Approved by the Partners as a Major Decision.

                           (c) Failure to Make an Additional Capital
Contribution. If a Partner ("THE NONPAYING PARTNER") does not provide its full
share of any additional funds pursuant to Sections 3.3(a) or (b) on the terms
and within the period set forth therefor (such event being called a
"NONPAYMENT"), then the other Partner ("THE PAYING PARTNER"), without limiting
or waiving any other rights that it may have hereunder or otherwise, at law or
in equity, shall have the right, but shall not be obligated, to (i) withhold or
withdraw all or any part of its Additional Capital Contribution, or (ii) make
its required Additional Capital Contribution and also provide to the Partnership
all or any portion of the Nonpayment on the same terms as such funds were
requested from the Nonpaying Partner. Upon the providing of such Nonpayment by
the Paying Partner and notice thereof to the Nonpaying Partner, and the failure
of the Nonpaying Partner to fully reimburse the Paying Partner for such
Nonpayment, together with interest on the amount thereof at the Default Rate,
within ten (10) days after the date of such notice, then (A) each of the
Participation Percentages (as set forth in the definition in Section 1.1, but,
as stated in such definition, not including the Additional Capital Contribution
Participation Percentage) of the Nonpaying Partner shall be reduced by a
percentage of such Participation Percentage based upon a ratio equal to (x) one
and one-quarter (1.25) times the Nonpayment amount to (y) the total amount of
Capital Contributions previously made or required to have been made by the
Nonpaying Partner (including the Nonpaying Partner's Initial Capital
Contribution and all other Capital Contributions previously made, plus the
Nonpayment amount, but excluding any prior Nonpayment amounts with respect to
which a reduction has previously been made to the Nonpaying Partner's
Participation Percentages); (B) each of the Participation Percentages of the
Paying Partner shall be adjusted to an amount equal to the excess of one hundred
percent (100%) less the Participation Percentages of the Nonpaying Partner, as
adjusted pursuant to clause (A) above, (C) this Agreement shall be automatically
amended to reflect any such adjustments without any further action of the
Partners, (D) the Nonpaying Partner shall pay all reasonable out-of-pocket costs
incurred by the Partnership and the Paying Partner as a result of the
Nonpayment, and (E) the Additional Capital Contribution of the Nonpaying Partner
shall be reduced by the amount of such Nonpayment. By way of example, but
without limiting the foregoing provisions of this Agreement, if the Nonpaying
Partner's Participation Percentages were both fifty percent (50%), the
Nonpayment amount were $100,000, and the total amount of Capital Contributions
previously made or required to have been made by the Nonpaying Partner
(including the current Nonpayment) were $1,000,000, then the Participation
Percentages of the Nonpaying Partner would be reduced by twelve and one-half
percent (12.5%) of fifty percent (50%) (i.e., to forty-three and three-quarters

                                       20
<PAGE>
percent [43.75%]) and the Participation Percentages of the Paying Partner would
be increased by six and one-quarter percent (6.25%) (i.e., to fifty-six and
one-quarter percent [56.25%]). The Partners acknowledge and agree that,
notwithstanding anything to the contrary herein, the Paying Partner shall not be
held accountable or liable under any provision of this Agreement for any
violations of the Fractions Rule that may arise from a reduction in the
Nonpaying Partner's Participation Percentages as the result of this Section
3.3(c).

                           (d) Default Loans. In the event of a Nonpayment under
this Section 3.3, the Paying Partner, in its sole discretion, may, in lieu of
the procedure provided in paragraph (c) above, and without limiting or waiving
any other rights that it may have hereunder or otherwise, at law or in equity,
(i) withhold or withdraw all or any part of its Additional Capital Contribution
and make a loan to the Partnership in an amount up to the aggregate amount of
the Additional Capital Contributions required of both Partners, such loan to be
secured by a mortgage on the Properties (to the extent allowed under any other
mortgages or security instruments then encumbering the Properties), or (ii)
without withholding or withdrawing all of any part of its Additional Capital
Contribution, make a recourse loan to the Nonpaying Partner (which loan
repayment obligation shall survive liquidation of the Partnership) without the
approval of the Nonpaying Partner by advancing for the benefit of (and as an
Additional Capital Contribution by) the Nonpaying Partner directly to the
Partnership all or any part of the amount of the Additional Capital Contribution
that the Nonpaying Partner is required to make hereunder. Any such loan made by
a Paying Partner in accordance with the provisions of this paragraph (d) shall
be referred to hereinafter as a "DEFAULT LOAN." Such Default Loans shall accrue
interest, which shall be compounded monthly, at a per annum rate equal to the
Default Rate. The principal balance of the Default Loan plus the accrued and
unpaid interest thereon shall be due and payable as set forth in Article 5
hereof. Notwithstanding anything contained herein to the contrary, if a Default
Loan is made directly to the Partnership as provided in clause (i) above, then
the Nonpaying Partner may cure its default hereunder only by remitting to the
Partnership, as an Additional Capital Contribution, an amount equal to the
amount necessary to discharge the Default Loan in full (including, without
limitation, the remaining outstanding principal of, and all interest accrued on,
such Default Loan), in which case such amount remitted will be immediately paid
to the Paying Partner as a full repayment of the Default Loan. If a Default Loan
is made to a Partner, then (A) the Default Loan (both principal and interest)
shall be immediately due and payable from the Nonpaying Partner to the Paying
Partner upon demand by the Paying Partner, (B) the Paying Partner shall have and
is hereby granted a first and prior lien and security interest upon the
Nonpaying Partner's interest in the Partnership and all amounts, payments and
proceeds becoming distributable or payable to the Nonpaying Partner to secure
repayment of the Default Loan, (C) all Net Cash Flow and all Net Capital
Proceeds otherwise distributable to a Nonpaying Partner on account of whose
Nonpayment a Default Loan has been made shall be treated as having been
distributed to such Nonpaying Partner, but shall be paid directly over (in the
case of a Default Loan to the Nonpaying Partner) to the Partner to whom the
Default Loan(s) are owed until such Default Loan(s) are paid in full, and (D)
the Nonpaying Partner shall pay all costs of

                                       21
<PAGE>
collection on any applicable Default Loans, including attorneys' fees,
out-of-pocket costs and court costs.

                           (e) No Further Additional Capital Contributions.
Other than as expressly set forth in this Agreement, no Partner shall be
required to make any Additional Capital Contributions to the Partnership.

         Section 3.4. Emergency Loans. Notwithstanding anything contained in
this Agreement to the contrary, (a) the Managing Partner shall have the power
and the authority at any time, and from time to time, to make Emergency
Expenditures on behalf of the Partnership and to treat any such Emergency
Expenditures as an unsecured loan (an "EMERGENCY LOAN") to the Partnership, and
(b) the other Partner shall have the right to make Emergency Expenditures on
behalf of the Partnership and to treat any such Emergency Expenditures as an
Emergency Loan, provided that in the case of this clause (b) only, (i) such
Partner has first given written notice to the Managing Partner of such Partner's
intention to make such Emergency Loan, which notice shall contain a description
of the purpose of the Emergency Loan and the date on which such Emergency Loan
is intended to be made, and which notice shall be given at least two (2)
Business Days prior to the date that such Partner intends to make such Emergency
Loan, and (ii) the Managing Partner has failed to make an Emergency Loan for
such purpose before the date such Partner stated in its notice to the Managing
Partner. All Emergency Loans shall bear interest at a rate equal to the
Preferred Return Rate, with interest to accrue from the date such expenditure is
made until the date repaid. The principal balance of each Emergency Loan plus
the accrued and unpaid interest thereon shall be due and payable as set forth in
Article 5 hereof.

         Section 3.5. Publicity.

                  3.5.1. Sponsor Partner shall cooperate with BIT Partner (and
Trustee and its advisors and consultants) with respect to any publicity relating
to the acquisition of the Initial Portfolio and shall not schedule any publicity
events relating thereto without notification to BIT Partner (it being
acknowledged that the foregoing does not include any public reporting by Sponsor
or Sponsor Partner in reports required under the Securities Laws as determined
in Sponsor Partner's sole discretion). BIT Partner and Trustee shall have the
right to participate in any such publicity events. Upon reasonable prior notice
to Sponsor Partner, BIT Partner shall also have the right to obtain reasonable
publicity on behalf of the Trust in connection with the acquisition of the
Initial Portfolio through press releases and participating in such events as
opening ceremonies; provided, however, that BIT Partner shall not publicize the
investment if, within three (3) Business Days after BIT Partner's foregoing
notice to Sponsor Partner, Sponsor Partner notifies BIT Partner that such
publicity would cause Sponsor, Sponsor Operating Partnership, Sponsor Partner or
the Partnership to violate the Securities Laws (which notice to BIT Partner
shall specify, in reasonable detail, the basis for such potential violation).
The Initial Portfolio Acquisition Budget shall include Five Thousand Dollars
($5,000) for the costs of a public relations consultant and publicity activities
in connection with the Trust's investment in the Initial Portfolio, including
without limitation,

                                       22
<PAGE>
a reasonable selection of professional publication-quality photographs and
artist's renderings of the Improvements on each of the Properties in the Initial
Portfolio.

                  3.5.2. Regardless of whether expressly stated in any
Additional Portfolio Investment Agreement, the provisions of subsection 3.5.1
shall also apply to each additional Property acquired by the Partnership
(whether directly or through one or more Subsidiaries), and the acquisition
budget in connection with each Additional Portfolio Investment Agreement shall
also include an amount equal to at least Five Thousand Dollars ($5,000) for the
purposes provided in subsection 3.5.1 above.

                                   ARTICLE 4
                          MANAGEMENT OF THE PARTNERSHIP

         Section 4.1. General.

                           (a) Sponsor Partner shall be the Managing Partner of
the Partnership. The overall day-to-day management and control of the business
and affairs of the Partnership shall be vested in the Managing Partner. Pursuant
thereto, the Managing Partner shall also manage and control the business and
affairs of the Subsidiary General Partner and the Subsidiaries; provided,
however, that all of the provisions of this Agreement regarding the operation of
the Partnership shall apply to all actions taken by the Subsidiary General
Partner or any of the Subsidiaries. Except where expressly provided in this
Agreement to the contrary, all decisions with respect to the management and
control of the Partnership which are approved by the Managing Partner shall be
binding on the Partnership and all the Partners. The Managing Partner shall have
the right, power, authority, obligation and responsibility for conducting the
ordinary and usual business and affairs of the Partnership as more fully set
forth in, and as limited by, this Agreement. Except as expressly provided below
in paragraph (d), the Managing Partner shall receive no compensation for its
services as the Managing Partner. In addition to the terms of Section 15.12 of
this Agreement, each Partner acknowledges and agrees that the other Partner and
its Affiliates may own, operate and/or manage other properties in the markets in
which the Properties are located, which other properties may be in direct
competition with one or more of the Properties (each such other property, a
"COMPETITIVE PROPERTY," and, collectively, the "COMPETITIVE PROPERTIES"). Each
Partner shall (i) provide a quarterly report to the other Partner of the
location, size, occupancy rate, and rental rate of each Competitive Property
(except to the extent such information is subject any confidentiality obligation
or agreement), and (ii) in such quarterly report, notify the other Partner of
each new lease (and the size of, and rental rate for, the demised premises under
such lease) at each Competitive Property (except to the extent such information
is subject any confidentiality obligation or agreement). So long as the Managing
Partner complies with the foregoing and devotes so much of its attentions and
loyalties as shall be necessary for the efficient and effective management of
the Partnership (as reasonably determined by the Managing Partner in good
faith), then the Managing Partner shall have satisfied its duty of loyalty to
the other Partner and the Partnership.

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<PAGE>
                           (b) Notwithstanding anything to the contrary in this
Agreement, all modifications of, or changes to, the requirements for (i) Initial
Capital Contributions or Additional Capital Contributions pursuant to Article 3
hereof, and (ii) determinations of distributions of Net Cash Flow and Net
Capital Proceeds and allocations of Net Income and Loss pursuant to Article 5
hereof, shall be Approved by the Partners as a condition to the effectiveness
thereof, and where applicable or appropriate, shall be subject to audit in
accordance with Article 6 hereof.

                           (c) Notwithstanding anything to the contrary in this
Agreement:

                                    (i) all actions taken by the Partnership
between the Formation Date and the Initial Funding Date (whether or not any such
action constitutes a Major Decision, but excluding ministerial acts relating to
the formation of the Partnership, the Subsidiary General Partner, and the
Subsidiaries) shall be required to be expressly approved or ratified in writing
by BIT Partner, which written approval or ratification shall be required to be
requested by Sponsor Partner from BIT Partner and, if such action is
satisfactory to BIT Partner, the approval or ratification obtained, on or before
the Initial Funding Date;

                                    (ii) Sponsor Partner represents and warrants
that the Partnership has not taken any action, conducted any business, or
otherwise engaged in any activity from and including the Formation Date through
and including the Initial Funding Date unless such action, conduct or activity
has been approved or ratified by BIT Partner in writing, as provided above; and

                                    (iii) in addition to, and not in limitation
of or substitution for, any other indemnification obligation by Sponsor or
Sponsor Partner under this Agreement or the Initial Portfolio Investment
Agreement, Sponsor Partner shall indemnify BIT Partner against and hold BIT
Partner harmless from, all loss, claim or liability arising from a breach of the
representation and warranty set forth in clause (ii) of this paragraph 4.1(c).

                           (d) The Managing Partner shall be paid the Asset
Management Fee as follows:

                                    (i) The Partnership shall pay the Managing
Partner the Asset Management Fee within thirty (30) days after the end of each
fiscal quarter, provided, however, that

                                             (A) the Partnership shall withhold
from such payment the lesser of (1) one-half (1/2) of the Asset Management Fee
for such quarter, or (2) an amount equal to (x) the amount necessary to provide
an eight and five-eighths percent (8.625%) quarterly return on the Partners'
Capital Contributions, less (y) the actual return on the Partners' Capital
Contributions for such quarter; provided, however, that the withheld amount
shall not be less than zero (0); and

                                       24
<PAGE>
                                             (B) the Partnership shall also
withhold from such payment an amount equal to forty percent (40%) of the portion
in excess of Two Thousand Five Hundred Dollars ($2,500), if any, of each
Construction Management Fee paid to any Affiliate of Sponsor Partner under any
Property Management Agreement for any project completed during such quarter;
provided, however, that the withheld amount shall not be less than zero (0); and

provided, further, however, that the total amount withheld under this clause (i)
shall not exceed one-half (1/2) of the Asset Management Fee for such quarter.

                                    (ii) Within ninety (90) days after the end
of each Annual Period, the Managing Partner shall determine the difference ("THE
ANNUAL ASSET MANAGEMENT FEE RECONCILIATION AMOUNT") between (x) the Annual Asset
Management Fee Corrected Amount (as defined below), and (y) the Actual Annual
Asset Management Fee Holdback Amount (as defined below).

                                             (A) As used in this clause
4.1(d)(ii), "THE ANNUAL ASSET MANAGEMENT FEE CORRECTED AMOUNT" means the sum of
(1) the Annual Return Shortfall Amount (as defined below) plus (2) the aggregate
amount equal to forty percent (40%) of the portion in excess of Two Thousand
Five Hundred Dollars ($2,500), if any, of each Construction Management Fee paid
to any Affiliate of Sponsor Partner under any Property Management Agreement for
any project completed during such Annual Period.

                                             (B) As used in this clause
4.1(d)(ii), "THE ANNUAL RETURN SHORTFALL AMOUNT" means the difference between
(1) the amount necessary to provide an eight and five-eighths percent (8.625%)
annual return on the Partners' Capital Contributions for such applicable Annual
Period, and (2) the actual return on the Partners' Capital Contributions for
such applicable Annual Period.

                                             (C) As used in this clause
4.1(d)(ii), "THE ACTUAL ANNUAL ASSET MANAGEMENT FEE HOLDBACK AMOUNT" means the
sum of all amounts actually withheld on a quarterly basis with respect to the
applicable Annual Period in accordance with clause 4.1(d)(i) above.

If the Annual Asset Management Fee Corrected Amount is greater than the Actual
Annual Asset Management Fee Holdback Amount, the Managing Partner shall, within
thirty (30) days after such annual recalculation, refund the Annual Asset
Management Fee Reconciliation Amount to the Partnership as a refund of excess
payments; provided, however, that the Managing Partner shall not be obligated to
pay any amount which, in the aggregate with the Actual Annual Asset Management
Fee Holdback Amount, is in excess of one-half (1/2) of the aggregate amount of
the Asset Management Fee for such Annual Period. If the Annual Asset Management
Fee Corrected Amount is less than the Actual Annual Asset Management Fee
Holdback Amount, the Partnership shall, within thirty (30) days after such
annual recalculation, pay Annual Asset Management Fee Reconciliation Amount to
the Managing Partner.

                                       25
<PAGE>
         Section 4.2. Major Decisions.

                           (a) Major Decisions. Notwithstanding any provision of
this Agreement to the contrary, no act shall be taken or sum expended or
obligation incurred by the Partnership, any representative of the Partnership,
the Managing Partner, the Subsidiary General Partner, or any Subsidiary with
respect to any matter within the scope of the Major Decisions affecting the
Partnership, the Subsidiary General Partner, or any Subsidiary unless such Major
Decisions have been Approved by the Partners in writing. Without limiting the
generality of the other provisions of this Section 4.2, if a request for
approval of a Major Decision is made, and such Major Decision, if Approved by
the Partners, would result in a transaction that would produce Net Capital
Proceeds, then such request shall include a proposed budget in reasonable detail
for the cost and expenses to be borne by the Partnership, the Subsidiary General
Partner, or any Subsidiary in connection with the transaction which is the
subject of such Major Decision. The following are the "MAJOR DECISIONS"
requiring Approval by the Partners:

                                    (i) To sell, exchange, lease, mortgage, or
otherwise transfer of all or any part of any Property or any interest in any
Property, including any development rights, except for (A) the execution of
Leases for the occupancy of space in any Property in compliance with the Leasing
Guidelines, (B) the disposition of obsolete furniture and equipment or other
personal property in the ordinary course of the operation of any Property
(provided the personal property so disposed of is, to the extent necessary or
appropriate, replaced by property of at least equal value and quality), and (C)
the granting of easements for providing utility services to the applicable
Property (provided that such easements are granted in the required or standard
form prepared by the applicable utility provider and notice thereof is provided
simultaneously to each Partner);

                                    (ii) To purchase or otherwise acquire any
real or personal property except (A) such personal property as shall be approved
in the then-current Annual Budget or incidental to the maintenance and repair of
a Property in a manner consistent with the Annual Budget then in effect, and (B)
in connection with Permitted Expenses;

                                    (iii) To incur any indebtedness (either
secured or unsecured) on behalf of the Partnership, the Subsidiary General
Partner, or any Subsidiary except (A) short-term trade debt consistent with the
then-current Annual Budget, (B) Emergency Loans, and (C) Default Loans;

                                    (iv) To prepay, recast, extend, amend,
modify, consolidate, increase, or refinance any mortgage or other loan affecting
a Property, the Partnership, the Subsidiary General Partner, or any Subsidiary,
except such amendments and other modifications as may be necessary to evidence
any ministerial changes [e.g., changes of addresses] to the documents evidencing
or securing such a loan;

                                       26
<PAGE>
                                    (v) To issue guaranties or become liable as
a surety, accommodation party or otherwise in respect of the indebtedness or
obligations of another person (other than in connection with the indebtedness
and obligations of the Subsidiary General Partner and the Subsidiaries as
Approved by the Partners);

                                    (vi) To enter into or amend any contract, or
any series of similar contracts (including construction contracts, contracts for
repairs and alterations and employment agreements) (A) for amounts or purposes
not consistent with the then-current Annual Budget (except for Permitted
Expenses), (B) the term of which shall exceed one year, or (C) with respect to
Service Contracts, which shall not be terminable, without cause, by the
Partnership upon thirty (30) days' written notice;

                                    (vii) To make any capital expenditures
during any fiscal year in excess of the expenditures provided for in the Annual
Budget for such year, except for Permitted Expenses;

                                    (viii) To acquire stock, partnership
interests or other beneficial interests in any person, or make any other
investment in, or loans or advances to, any person, except for investments in
(A) the Subsidiary General Partner and the Subsidiaries, (B) direct obligations
of the United States of America or its agencies, (C) obligations guaranteed by
the United States of America or its agencies, or (D) certificates of deposit
issued by a commercial bank having a net worth in excess of Five Hundred Million
Dollars ($500,000,000) or such other net worth as is Approved by the Partners
and chartered under the laws of the United States or one of the States thereof,
or (E) Repurchase Agreements; provided that in each case such obligations or
certificates of deposit shall have remaining maturities of not more than one
year; provided, however, that the foregoing shall not limit the Managing
Partner's authority to deposit funds pursuant to the provisions of Sections 6.2
and 6.9 below regarding Partnership accounts;

                                    (ix) To enter into or amend any property
management agreement or agreement with a leasing agent for any part of any
Property, or to permit the replacement of any property manager retained by the
Partnership or a Subsidiary for a Property;

                                    (x) To authorize or permit any change in the
terms (including compensation) of any property management agreement or
terminate, renew or extend the same other than in accordance with its terms;

                                    (xi) Under any property management
agreement, (A) to approve the initiation, or the direction of the prosecution
of, any lawsuit by the property manager against a tenant, (B) to request that a
property manager obtain an inspection of a Property to determine compliance with
applicable laws outside the normal course of business, or (C) to approve a
modification to the insurance that a property manager is required to carry;

                                       27
<PAGE>
                                    (xii) To settle any claim in excess of Fifty
Thousand Dollars ($50,000) against an insurer in respect of property or casualty
insurance or liability insurance;

                                    (xiii) To accept the surrender or
cancellation of any Lease for occupancy of space in any Property prior to the
expiration of the stated term thereof (except that the non-managing Partner's
consent shall not be required with respect to accepting the surrender or
cancellation of any Lease of 10,000 square feet or less, provided that
cumulatively the surrender or cancellations of such Leases shall not constitute
more than ten percent (10%) of the square footage of the respective Property
within any twelve (12) month period);

                                    (xiv) To agree to the modification of the
terms of any Lease for occupancy of space in any Property, except in accordance
with the Leasing Guidelines;

                                    (xv) To approve plans and specifications,
and material modifications thereof, for the construction of improvements or
alterations, except (A) in accordance with the Annual Budget then in effect, or
(B) for any Permitted Expenses;

                                    (xvi) To change the name of a Property or
any portion thereof;

                                    (xvii) To confess judgment against the
Partnership, any assets of the Partnership, or any material component thereof
(including the Subsidiary General Partner or any Subsidiary);

                                    (xviii) To conduct, settle or compromise any
litigation involving a claim against the Partnership, the Subsidiary General
Partner, or any Subsidiary in connection with any Property in excess of Fifty
Thousand Dollars ($50,000), which claim is not covered by insurance;

                                    (xix) To commence any litigation on behalf
of the Partnership, the Subsidiary General Partner, or any Subsidiary other than
litigation (A) to enforce Leases and Service Contracts affecting a Property, or
(B) for amounts not greater than Fifty Thousand Dollars ($50,000);

                                    (xx) To approve any Annual Budget, Leasing
Guidelines, or standard form lease;

                                    (xxi) To consent to or acquiesce in any
change to the zoning or other land use status of any Property;

                                    (xxii) To consent to or acquiesce in any
change in the real property tax status of any Property;

                                    (xxiii) To engage or employ accountants
(other than the Person identified as the Accountant in Section 1.1 above) or
engage or employ

                                       28
<PAGE>
attorneys, except in connection with normal and customary matters relating to
the management and operation of a Property (including in connection with the
enforcement of Leases and Service Contracts) in accordance with the then-current
Annual Budget or Permitted Expenses (at the election of the Managing Partner,
the proposed Annual Budget may include a list of proposed professionals to be
engaged for such tasks);

                                    (xxiv) To establish reserves for capital
replacements, working capital or any other item in any year in excess of those
provided in the Annual Budget for such year;

                                    (xxv) To require any capital contributions
other than in accordance with the terms of this Agreement;

                                    (xxvi) To impose a condominium declaration
or other common ownership regime upon any Property or convert any Property from
a rental property to a unit-sale property;

                                    (xxvii) To apply condemnation awards or
insurance proceeds in excess of Fifty Thousand Dollars ($50,000) to the
restoration or repair of any Property unless required by the terms of any loan
documents evidencing and/or securing any financing of the Partnership that has
been Approved by the Partners;

                                    (xxviii) To take any other action expressly
required under this Agreement to be approved by BIT Partner or Approved by all
Partners (except for any Permitted Expenses);

                                    (xxix) To take or approve any of the
foregoing actions with respect to the Subsidiary General Partner or any
Subsidiary; or

                                    (xxx) To convey, encumber, exchange, or
otherwise transfer of all or any part of the ownership interests in the
Subsidiary General Partner.

                           (b) Notwithstanding anything herein to the contrary,
a decision on any matter or action of the Partnership (other than an action or
matter specifically identified in an Annual Budget Approved by the Partners)
shall be a Major Decision and shall require the prior written consent of BIT
Partner (and, absent such prior written consent, the Managing Partner and the
Partnership shall have no authority to take, or to omit from taking, any such
action) if, in the reasonable determination of BIT Partner, it could (i) have an
adverse effect on the tax exempt status of BIT, (ii) create a reasonable
possibility that any non-de minimis income of the Partnership allocated to BIT
Partner will be taxed as UBTI, or (iii) result in a non-exempt "prohibited
transaction" under ERISA or the Code. The Managing Partner shall take all
actions (or omit to take actions) as may be reasonably necessary to avoid the
occurrence of any of the aforesaid consequences.

                           (c) Notwithstanding anything herein to the contrary a
decision on any matter or action of the Partnership shall be a Major Decision
and shall require

                                       29
<PAGE>
the prior written consent of Sponsor Partner if, in the reasonable determination
of Sponsor Partner, it could have an adverse effect on Sponsor's status as a
"real estate investment trust" under Code Sections 856 through 860.

                           (d) If the Managing Partner shall request in writing
the consent of the other Partner to any Major Decision, the proposed Major
Decision shall be deemed approved unless, within ten (10) Business Days
following the other Partner's receipt of the Managing Partner's request for
approval, the other Partner, by written notice to the Managing Partner, either
(i) conditionally consents and specifies conditions which must be satisfied in
order for such consent to be effective, (ii) objects to the proposed Major
Decision and specifies the basis for such objection(s), or (iii) requests
additional information which the other Partner requires the Managing Partner to
provide with respect to the proposed Major Decision; PROVIDED, HOWEVER, THAT
SUCH DEEMED APPROVAL BY THE OTHER PARTNER SHALL NOT APPLY UNLESS THE NOTICE BY
THE MANAGING PARTNER TO THE OTHER PARTNER REQUESTING APPROVAL OF SUCH MAJOR
DECISION EXPRESSLY RECITES SUCH DEEMED APPROVAL PERIOD. If the Managing
Partner's original notice of the proposed Major Decision expressly recites such
deemed approval period and the other Partner requests additional information
pursuant to the clause (iii) of the foregoing sentence, the proposed Major
Decision shall be deemed approved unless, within five (5) Business Days
following the receipt of such requested additional information by the other
Partner, the other Partner, by written notice to the Managing Partner, either
(A) conditionally consents and specifies conditions which must be satisfied in
order for such consent to be effective, or (B) objects to the proposed Major
Decision and specifies the basis for such objection(s).

                           (e) If the Partnership, the Subsidiary General
Partner, or a Subsidiary (as applicable) is not authorized to execute a lease
with a prospective tenant that otherwise complies with the Leasing Guidelines
because such lease would create UBTI for BIT Partner or the Trust under the UBTI
Leverage Exemption Conditions, and the Partnership thereby suffers an adverse
economic effect in the reasonable determination of Sponsor Partner, then BIT
Partner shall make the Partnership (or Sponsor Partner) "whole" by (at BIT
Partner's option) either:

                                    (i) Retiring and refinancing the outstanding
principal amount of the existing indebtedness secured by the applicable Property
through a new loan by BIT, BIT Partner, or an Affiliate of BIT to such
Subsidiary (a "MAKE-WHOLE LOAN") on commercially reasonable terms and on terms
at least as favorable as the debt being retired (and BIT Partner shall pay all
costs and fees in connection with the retirement of the existing indebtedness),
and permitting the Managing Partner to cause the Partnership, the Subsidiary
General Partner, or the applicable Subsidiary (as applicable) to enter into such
lease with such prospective tenant; or

                                    (ii) Directing the Partnership to make
distributions of Net Cash Flow to Sponsor Partner from amounts of Net Cash Flow
otherwise distributable to BIT Partner, but for such direction by BIT Partner)
in an amount equal to the Net Cash Flow that would have been distributed to
Sponsor Partner by the Partnership on a pro forma basis assuming such potential
lease had been executed by the prospective

                                       30
<PAGE>
tenant (a "MAKE-WHOLE PAYMENT"), and not permitting the Partnership, the
Subsidiary General Partner, or the applicable Subsidiary (as applicable) to
enter into such lease with such prospective tenant.

         Section 4.3. Duties and Responsibilities of the Managing Partner.

                           (a) The Managing Partner, in the exercise of its
rights and discharge of its responsibilities to the other Partner and the
Partnership under this Agreement, shall (i) act in a commercially reasonable
manner, and (ii) observe duties of good faith, due care, fair dealing, and
candor. On behalf of the Partnership, the Managing Partner shall (x) use
commercially reasonable efforts to implement or cause to be implemented all
Major Decisions after they are Approved by the Partners, (y) if and when
authorized to do so hereunder, or after approval of a Major Decision has taken
place, execute documents and agreements on behalf of the Partnership, and (z)
use commercially reasonable efforts to conduct or cause to be conducted the
ordinary and usual business and affairs of the Partnership in accordance with
and as limited by this Agreement, and shall have such powers, duties, authority
and responsibilities as are reasonably necessary in connection therewith (but
subject to the other terms of this Agreement), including, without limitation,
exercising its authority and using diligent efforts (without being required to
expend its own funds and subject to the limitations on the Managing Partner's
authority set forth herein) to do the following:

                                    (i) Cause the Partnership to enforce the
obligations of each Partner with respect to each Capital Contribution as
required by this Agreement;

                                    (ii) Protect and preserve the titles and
interests of the Partnership (or the applicable Subsidiary) with respect to each
Property and any other assets owned by the Partnership and, should any claims,
demands, suits or legal proceedings be made or instituted against the
Partnership (or the Subsidiary General Partner or any Subsidiary) by other
parties, the Managing Partner shall promptly give to BIT Partner all information
relevant thereto which is within the Managing Partner's possession or control;

                                    (iii) Cause the Partnership to pay, before
delinquency and prior to the addition thereto of interest or penalties, all
insurance premiums, taxes, assessments, water and sewer bills, vault fees, rents
and other impositions applicable to any Property or other assets owned by the
Partnership (or any Subsidiary) and undertake, when Approved by the Partners,
any action or proceedings seeking to reduce such taxes, assessments, rents or
other impositions, and, to the extent the Managing Partner reasonably foresees
any such delinquencies, the Managing Partner shall advise the other Partner in
writing, not less than thirty (30) days prior to the delinquency date of any
such taxes, assessments, water and sewer bills and vault fees, or the due date
of rents or other impositions for which the Managing Partner does not hold
sufficient funds of the Partnership to pay;

                                    (iv) Cause the Partnership (either directly
or acting through one or more Subsidiaries) to effect (A) normal operating
repairs, replacements

                                       31
<PAGE>
or improvements to each Property as needed, (B) any such work required by a
tenant of a Property in connection with the leasing or releasing of space in
such Property in the ordinary course of business pursuant to a Lease in
accordance with the Leasing Guidelines or otherwise Approved by the Partners,
and (C) any such work in connection with any Emergency Expenditures;

                                    (v) Cause the Partnership to establish the
Capital Reserve Account (to the extent required under the then-current Annual
Budget or as otherwise Approved by the Partners), which shall be funded and
managed in accordance with this Agreement and the Annual Budget (or as otherwise
Approved by the Partners);

                                    (vi) Cause the Partnership (or the
applicable Subsidiary) to enter into Leases for the occupancy by tenants of
space in each Property in accordance with the Leasing Guidelines or otherwise
Approved by the Partners;

                                    (vii) Cause the Partnership to collect all
rents and keep all books of account and other records required by the
Partnership, keep vouchers, statements, receipted bills, invoices and all other
records, covering all collections, disbursements and other data in connection
with each Property in accordance with the requirements of the Property
Management Agreement; and, upon reasonable prior notice to the Managing Partner,
permit BIT Partner or any person designated by any Partner, at any reasonable
time, at its or their own expense, to audit the books, records, and accounts of
the Managing Partner relating to each Property, and the Managing Partner will
exhibit such books, records and accounts to any person designated by the other
Partner for that purpose, which books, records and accounts relating to each
Property, including all correspondence and Leases, shall be the property of the
Partnership and, upon termination of the appointment of the Managing Partner
shall be surrendered to the Partnership without charge therefor;

                                    (viii) Cause the Partnership (directly or
through one or more Subsidiaries) to operate, maintain, repair and otherwise
manage each Property;

                                    (ix) Cause the Partnership (directly or
through one or more Subsidiaries) to keep each Property in good and marketable
condition (excepting reasonable wear and tear and damage due to casualty, to the
extent insurance against such casualty is not required to be maintained under
the terms of this Agreement);

                                    (x) Cause the Partnership, the Subsidiary
General Partner, and each Subsidiary to use commercially reasonable efforts to
(A) enforce any obligation of any third party (including, without limitation,
each tenant and service provider) to comply with all Environmental Laws in
relationship to its use of, or activities at, a Property, to the extent the
Managing Partner has knowledge of such use or activity, and (B) keep the
Properties free of, or cause the removal of, any liens arising under the
Environmental Laws as a result of a violation thereof;

                                       32
<PAGE>
                                    (xi) Cause the Partnership (directly or
through one or more Subsidiaries) to require that any contractor performing work
on any Property (A) maintain insurance in accordance with this Agreement and
otherwise satisfactory to the Managing Partner and any mortgagee of such
Property, including, but not limited to, worker's compensation insurance,
employer's liability insurance and insurance against liability for injury to
persons and property arising out of all of such contractor's operations, and the
use of owned, non-owned, or hired automotive equipment in the pursuit of all
such operations, and (B) to the extent permitted under the laws of the
applicable State and in accordance with local custom and practice, waive
mechanic's lien or construction lien rights, if any, which may arise as a result
of such work by contractors and materialmen;

                                    (xii) Cause to be prepared and distributed,
the statements and reports described in Article 6 hereof;

                                    (xiii) Cause the Partnership (directly or
through one or more Subsidiaries) to enter into arrangements with third-party
cooperating brokers to assist in the leasing of space in each Property to
tenants (in substantial accordance with the terms of the form Leasing Agreement
then in effect, subject to modification of the terms thereof as permitted under
paragraph 4.9(c) below), if, in the reasonable judgment of the Managing Partner,
such arrangements are necessary, prudent and consistent with existing standards
for such arrangements in the metropolitan area in which each such Property is
located, and cause the Partnership (directly or through one or more
Subsidiaries) to pay any such leasing or brokerage commissions incident thereto
as a Partnership expense;

                                    (xiv) Cause the Partnership (directly or
through one or more Subsidiaries) to purchase and maintain fire and extended
coverage, liability, workmen's compensation, rental, business interruption and
other insurance with respect to each Property and other property of the
Partnership, the Subsidiary General Partner and the Subsidiaries, all in
accordance with the provisions of Article 9 hereof;

                                    (xv) Cause the Partnership (directly,
through the Subsidiary General Partner, or through one or more Subsidiaries) to
make (prior to any delinquency) all required payments of principal and interest
with respect to any indebtedness of the Partnership, the Subsidiary General
Partner, or any Subsidiary;

                                    (xvi) Cause the Partnership (directly or
through one or more Subsidiaries) to employ and dismiss from employment any and
all employees and agents, and obtain all management, legal, leasing, accounting,
and other services necessary in connection with the operation or management of
each Property or other property of the Partnership, the Subsidiary General
Partner, or any Subsidiary;

                                    (xvii) Cause (and shall have all authority
to take any action to cause) the Partnership to meet at all times the
requirements for a "real estate operating company" within the meaning of the
Plan Assets Regulations or otherwise comply with the Plan Assets Regulations so
that the underlying assets of the

                                       33
<PAGE>
Partnership (whether title thereto is held directly or through one or more
Subsidiaries) are not deemed to be assets of BIT or BIT Partner under ERISA;

                                    (xviii) Provide for and oversee the property
management services to be performed by the Property Manager, for the operation
of each Property, under the conditions, on the terms and provisions set forth in
the Property Management Agreement, or employ others to provide all or any part
of such services; and if a Property Management Agreement shall terminate, the
Managing Partner shall cause the Partnership (directly, through the Subsidiary
General Partner, or through one or more Subsidiaries) to employ others to
provide all or any part of such services on commercially reasonable terms for
the metropolitan area in which such Property is located;

                                    (xix) Cause the Partnership, the Subsidiary
General Partner, and the Subsidiaries to maintain all funds of the Partnership,
the Subsidiary General Partner, and the Subsidiaries (except funds maintained as
set forth in the Property Management Agreement or as required by any lender, if
applicable) in an account or accounts and in a bank or banks Approved by the
Partners;

                                    (xx) Make distributions from the funds of
the Partnership periodically to the Partners in accordance with the provisions
of this Agreement;

                                    (xxi) Use commercially reasonable efforts to
insert, into any contract, Lease or other instrument entered into on behalf of
the Partnership, the Subsidiary General Partner, or any Subsidiary, a provision
that limits the liability of the Partners to the assets and property of the
Partnership, the Subsidiary General Partner, or such Subsidiary, as the case may
be;

                                    (xxii) Generally, and except as expressly
prohibited herein, do all things in connection with any of the foregoing,
generally manage and administer the day-to-day business and affairs of the
Partnership, the Subsidiary General Partner, and the Subsidiaries, execute all
documents on behalf of the Partnership, the Subsidiary General Partner, and the
Subsidiaries in connection therewith, and, in accordance with and subject to the
terms of this Agreement, pay as a Partnership expense all costs or expenses
connected with the operation or management of the Partnership, the Subsidiary
General Partner, each Subsidiary, and each Property (except as otherwise
provided herein), and sign or accept all checks, notes and drafts on the
Partnership's behalf (or on behalf of the Subsidiary General Partner or a
Subsidiary, as the case may be), it being understood and agreed that no
delegation of duties or responsibilities by the Managing Partner shall relieve,
impair or diminish the liability and obligation of the Managing Partner to
perform the foregoing duties and responsibilities or impose any liability or
obligation on the other Partner; and

                                    (xxiii) Cause the Partnership to effectuate
the purpose of the Partnership as described in Section 2.3 of this Agreement.

                                       34
<PAGE>
                  (b) During the term of this Agreement, the Managing Partner
shall not knowingly cause the Partnership, the Subsidiary General Partner, or
any Subsidiary to fail to comply in all material respects with all present and
future laws, ordinances, orders, rules, regulations and requirements of all
federal, state and municipal governments, courts, departments, commissions,
boards, and officers, any national or local Board of Fire Underwriters, or any
other body exercising functions similar to those of any of the foregoing, which
may be applicable to the Partnership or any Property or the operation or
management thereof (including, without limitation, all applicable Environmental
Laws and all laws, ordinances, orders, rules, regulations and requirements
relating to restraint of trade, accessibility for disabled individuals,
occupational health and safety matters, and discrimination whether on the basis
of race, creed, color, national origin, age, sex, marital status or otherwise),
and when the Managing Partner deems appropriate, the Managing Partner shall
contest the validity or application of any such law, ordinance, order, rule,
regulation or requirement.

                  (c) The Managing Partner shall have the authority to make
expenditures and satisfy obligations in accordance with the Annual Budget
Approved by the Partners for the subject Annual Period. Except as provided in
this paragraph, the Managing Partner shall not have any authority to make any
other expenditure or satisfy any other obligation on behalf of the Partnership.
No reallocation of line items within the Annual Budget Approved by the Partners
for a particular Annual Period shall be made without being Approved by the
Partners; provided, however, that any Permitted Expenses shall be payable by the
Managing Partner despite the line item limitations imposed under any Annual
Budget, and any such payment shall not be deemed to be an excess expenditure for
purposes of the immediately preceding sentence or a Major Decision for the
purposes of Section 4.2. The Managing Partner agrees that any damages recovered
by the Partnership after pursuing any remedies available to it shall,
notwithstanding any other provision in this Agreement to the contrary, be
forthwith, upon receipt thereof, utilized to pay the costs and expenses of the
Partnership incurred as a result of recovering such damages. The Managing
Partner shall use reasonable commercial efforts to not expend more than the fair
and reasonable market value at the time and place of delivery or performance for
any goods purchased or services engaged on behalf of the Partnership.
Notwithstanding the foregoing provisions of this paragraph (c), the Managing
Partner shall have the power and the authority at any time or from time to make
Permitted Expenses.

                  (d) Notwithstanding any other provision of this Agreement, the
Managing Partner shall have no authority, without the prior written consent of
the other Partner, to (i) do any act in contravention of this Agreement or the
articles of organization of the Partnership; (ii) do or omit to do any act the
doing of or failure to do which would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided herein and
provided that adequate financial resources are available to the Partnership;
(iii) possess Partnership property, or assign its rights in specific Partnership
property, for other than a Partnership purpose; or (iv) admit any Person as a
Partner.

                                       35
<PAGE>
                  (e) While conducting the business of the Partnership, the
Managing Partner shall not knowingly act or fail to act in any manner which the
Managing Partner knows would (i) cause the Partnership to be treated for federal
income tax purposes other than as a partnership, (ii) cause the Partnership to
fail to qualify as a limited liability partnership under the Act, (iii) cause
either Partner to be liable for Partnership obligations in excess of any due and
unpaid Capital Contributions or be liable for the return of any Partnership
distribution, or (iv) cause Sponsor to fail to qualify as a real estate
investment trust.

                  (f) The Managing Partner shall exercise good faith in all
activities relating to the conduct of the business of the Partnership, including
the ownership, operation and maintenance of the Property, and shall take no
action in its capacity as the Managing Partner with respect to the business and
property of the Partnership which is not reasonably related to the achievement
of the purpose of the Partnership, as set forth in Section 2.3.

      Section 4.4. Rights Not Assignable. The rights of Sponsor Partner, as the
Managing Partner, shall not be assignable by Sponsor Partner voluntarily or by
operation of law, except as otherwise expressly provided herein. The duties of
the Managing Partner shall not be delegated, voluntarily or otherwise, except as
expressly provided herein or pursuant to a Property Management Agreement or a
Leasing Brokerage Agreement Approved by the Partners. This Agreement shall not
be assignable by Sponsor Partner, except as otherwise expressly provided herein.

      Section 4.5. Property Management Agreement. The Partnership shall enter
into a property management agreement (each a "PROPERTY MANAGEMENT AGREEMENT")
with a third-party property management company (which may be an Affiliate of
Sponsor Partner) (each a "PROPERTY MANAGER") with respect to each Property. The
Property Manager shall be either (i) Keystone Realty Services, Inc. (or another
Affiliate of Sponsor Partner operating under the same performance standards as
are in effect for Keystone Realty Services, Inc. from time to time, provided,
however, that no Affiliate of Sponsor Partner may become a Property Manager at
any time after the occurrence of a Termination Default), or (ii) another
third-party property management company Approved by the Partners. Each Property
Management Agreement shall be in the form attached hereto as EXHIBIT E. In any
event, each Property Management Agreement shall conform with the requirements
necessary for the Partnership to qualify as a "real estate operating company,"
as provided above. Unless otherwise Approved by the Partners, the property
management fees (collectively, "THE PROPERTY MANAGEMENT FEE") payable to the
Property Manager under any Property Management Agreement (a) shall be payable in
monthly installments; and (b) shall be three percent (3%) of collected gross
revenues of the operation of the applicable Property. Sponsor Partner
acknowledges and agrees that, notwithstanding anything to the contrary contained
herein, any consent or approval of the Partnership relating to the Property
Management Agreement which is not within the Managing Partner's authority under
this Article 4 shall be subject to being Approved by the Partners.
Notwithstanding any provision of this Agreement to the contrary, BIT Partner
shall have the right, exercisable by written

                                       36
<PAGE>
notice to the Managing Partner, to require the Managing Partner to terminate any
Property Management Agreement:

                        (i) immediately upon the occurrence of a Property
Management Termination Default;

                        (ii) at any time when the removal of Sponsor Partner as
the Managing Partner in accordance with Article 11 hereof is pending; or

                        (iii) immediately prior to the conveyance of a Property
to BIT Partner or its designee pursuant to Article 8 or Article 12 hereof.

      Section 4.6. Concerning the Non-Managing Partner. For so long as BIT
Partner is not the Managing Partner, BIT Partner shall not take part in the
management or control of the business of the Partnership, except with respect to
the approval rights and other rights expressly provided for herein, and shall
not have any authority to bind the Partnership except as expressly provided in
this Agreement. A Partner who is not the Managing Partner, in the exercise of
its rights and discharge of its responsibilities to any other Partner and the
Partnership under this Agreement, shall act in a commercially reasonable manner
and in good faith.

      Section 4.7. Authority. To the extent that the Managing Partner is
authorized to act for the Partnership in accordance with this Agreement, the
Managing Partner shall be authorized, with its signature alone, to bind the
Partnership under, and to execute and deliver on behalf of the Partnership, such
documents and instruments as may be necessary and appropriate to carry out the
decisions made by the Managing Partner or Approved by the Partners. In dealing
with the Managing Partner, no Person shall be required to inquire into the
Managing Partner's authority to bind the Partnership.

      Section 4.8. Designated Representatives; Executive Committee.

            4.8.1. Each Partner shall designate in writing to the other Partner
one or more representatives who each shall be authorized to act under this
Agreement for and on behalf of such Partner. Any act, approval, consent or vote
of any one (1) representative of a Partner so designated shall be deemed to be
the act, approval, consent or vote of said Partner, and no Person (including the
Partnership and the other Partner) shall be required to inquire into the
authority of such representative as to such act, approval, consent or vote on
behalf of the Partner who has designated such representative. If a Partner
designates more than one representative, and such representatives act
inconsistently or express inconsistent positions, then the other Partner may
rely on the acts and expressions of either one of such representatives, as such
other Partner determines in its sole discretion. Any representative of a Partner
may be replaced by a successor representative by notice to the other Partner and
designation of a substitute for such representative. Sponsor Partner hereby
designates Jeffrey Kelter and Robert F. Savage, Jr. as its initial
representatives. BIT Partner hereby designates Ardyth L. Hall and David C.
Schenning as its initial representatives.

                                       37
<PAGE>
            4.8.2. The designated representatives of each of the Partners shall
collectively constitute the Executive Committee of the Partnership. Any matter
which this Agreement requires be Approved by the Partners shall be determined by
the Executive Committee. Regardless of the number of Persons serving on the
Executive Committee, Sponsor Partner shall have only one (1) vote and BIT
Partner shall have only one (1) vote. If the Persons serving on the Executive
Committee on behalf of either Partner vote inconsistently on any matter, the
other Partner may select which vote to accept as the vote of such Partner, as
such other Partner determines in its sole discretion.

     Section 4.9. Leases and Compliance with Leases.

                  (a) Attached hereto as EXHIBIT C are the initial Leasing
Guidelines for each of the Properties. On or before November 15th in each year,
the Managing Partner shall submit to the other Partner, for the approval of such
Partner, proposed Leasing Guidelines for all Leases for each Property to be
entered into in the following Annual Period and for all modifications during
such Annual Period of any Lease in existence as of such date, which Leasing
Guidelines the Managing Partner shall have prepared in good faith and in a
commercially reasonable manner. If any disagreement arises between the Managing
Partner and the other Partner regarding the Leasing Guidelines for a Property,
the Managing Partner and the other Partner shall endeavor in good faith to
resolve the differences on or before December 15th in each year. If the Managing
Partner and the other Partner do not agree upon the Leasing Guidelines for a
Property on or before December 15th in each year, then the existing Leasing
Guidelines for such Property shall continue as the Leasing Guidelines for such
Property during the next Annual Period (or until the Managing Partner and the
other Partner agree upon new Leasing Guidelines for such Property).

                  (b) Prior to closing upon the acquisition of one or more
additional Properties pursuant to an Additional Portfolio Investment Agreement,
the Partners shall agree upon the Leasing Guidelines for each such additional
Property. Upon the establishment of such initial Leasing Guidelines for each
additional Property, each of such Leasing Guidelines shall be subject to annual
revision in accordance with paragraph (a) above.

                  (c) Unless and until a modification thereto or replacement
thereof is Approved by the Partners, all Leases shall conform to the lease form
attached hereto as EXHIBIT D, subject to (i) such changes to the lease form as
may be required to comply with the requirements of the laws of the jurisdiction
in which the applicable Property is situated, (ii) such changes in such Lease as
may be Approved by the Partners, and (iii) such changes in such Lease as the
Managing Partner determines to be appropriate, in the Managing Partner's
commercially reasonable judgment, except that such authority of the Managing
Partner shall not extend to either (A) modifying the term, rental rate, tenant
concessions, or square footage beyond the range permitted under the applicable
Leasing Guidelines, or (B) modifying any provision of the form lease pertaining
to ERISA, UBTI, or the Labor Covenant.

                                       38
<PAGE>
      Section 4.10. Other Prohibited Transactions. Notwithstanding any other
provision of this Agreement to the contrary, the Managing Partner shall not
permit or cause the Partnership, the Subsidiary General Partner, or any
Subsidiary to take any of the following actions with respect to any Property in
the absence, in each instance, of the prior written consent of BIT Partner:

                  (a) Neither the Partnership, the Subsidiary General Partner,
nor any Subsidiary shall enter into any agreement or Lease with respect to any
Property which contains any provision for the payment of rental or other sums
based in whole or in part on the income or profits (other than gross receipts)
derived by the other contracting party thereunder from the premises demised
thereby as determined in accordance with Code Section 512(b)(3)(B)(ii) and the
Treasury Regulations promulgated thereunder;

                  (b) Neither the Partnership, the Subsidiary General Partner,
nor any Subsidiary shall enter into any agreement or Lease relating to any
Property under or in connection with which the rent or other payment
attributable to personal property for any year exceeds ten percent (10%) of the
total rents received under or in connection with such agreement or Lease as
determined in accordance with Code Section 512(b)(3)(A)(ii) and the Treasury
Regulations promulgated thereunder;

                  (c) Neither the Partnership, the Subsidiary General Partner,
nor any Subsidiary shall provide any services which are primarily for the
convenience of the tenants of any Property and are other than services usually
or customarily rendered in connection with the rental for occupancy only of
industrial/warehouse space, as more particularly described in Treasury
Regulations Section 1.512(b)-1(c)(5) (and provisions for the tenants' use of
parking spaces and storage areas, if any, shall be included in the tenants'
occupancy leases without separately stated charges for such use);

                  (d) Neither the Partnership, the Subsidiary General Partner,
nor any Subsidiary shall sell or otherwise dispose of the Property in any manner
that would cause the Property to be treated as property held primarily for sale
to customers in the ordinary course of the Partnership's trade or business as
determined in accordance with Code Section 512(b)(5)(A) or (B) and the Treasury
Regulations thereunder; and

                  (e) At any time that any Property would otherwise be
considered debt-financed property for purposes of Code Section 514, the
Partnership will meet the requirements of Code Section 514(c)(9)(B)(i) through
(vi), such that any such financing shall not constitute "acquisition
indebtedness" for purposes of Code Section 514.

      Section 4.11. Labor Covenant.

                  (a) Except as otherwise provided in this Section 4.11, all, if
any, on-site construction (including repair and replacement work) at any
Property (i) shall be performed solely by contractors and sub-contractors
employing craft workers represented by unions affiliated with the local and/or
national Building and Construction Trades Council, AFL-CIO, and/or The Building
and Construction Trades Department,

                                       39
<PAGE>
AFL-CIO, and (ii) all such employment shall (to the extent within the Managing
Partner's control) conform to traditional craft jurisdictions in the area of
such Property.

                  (b) Except as otherwise provided in this Section 4.11, if any
construction of the exterior or structural portions of the Improvements on any
Property uses components that are fabricated off-site (e.g., EIFS or brick panel
systems), the components must be fabricated in a union-signatory plant and must
be delivered to the construction site by a union-signatory transportation
company.

                  (c) The Managing Partner shall (i) include the Labor Covenant
in each contract entered into by the Partnership (or the Subsidiary General
Partner or any Subsidiary) in connection with any construction at any Property,
and (ii) include in each contract entered into by the Partnership in connection
with any construction at the Property (except for services for operation and
maintenance of the Property), a requirement that each such contracting party
include the Labor Covenant in each of its subcontracts. From time to time during
the course of any construction at any Property, the Managing Partner shall be
obligated to provide such evidence as BIT Partner may reasonably require that
the Labor Covenant is being fully and faithfully observed, and the Managing
Partner shall include the obligation to provide such evidence in each contract
entered into by the Partnership (or the Subsidiary General Partner or any
Subsidiary) in connection with any such construction at a Property.

                  (d) If, pursuant to this Agreement, casualty insurance
proceeds or condemnation awards are permitted to be applied to reconstruction,
replacement or repair of the Improvements, the Managing Partner shall be
obligated to cause the Labor Covenant to be observed with respect to such
reconstruction, replacement or repair.

                  (e) Subject to subparagraphs (i) through (iii) of this
paragraph, the Labor Covenant shall be included in any New Lease. The Managing
Partner shall use commercially reasonable efforts to incorporate the Labor
Covenant (subject to subparagraphs (i) through (iii) of this paragraph) in any
amendment of any Existing Lease. If included in any Lease, but subject to the
limitations of subparagraphs (i) through (iii) of this paragraph, the Labor
Covenant shall be included in all contracts with any contractors or
subcontractors in connection with any construction work under such Lease.

                        (i) The Labor Covenant will be required for any work
under a Landlord-Controlled TI Contract.

                        (ii) For any Property not in the Indianapolis, Indiana
metropolitan area, the Labor Covenant shall be required to be included in each
Tenant-Controlled TI Contract for which the costs under such Tenant-Controlled
TI Contract exceed the property-specific threshold amount as set forth on
SCHEDULE 2 attached hereto and incorporated herein.

                        (iii) For any Property in the Indianapolis, Indiana
metropolitan area, the Labor Covenant shall be required to be included in all
Tenant-

                                       40
<PAGE>
Controlled TI Contracts except for those Tenant-Controlled TI Contracts for
which the aggregate costs under such Tenant-Controlled TI Contracts do not
exceed the property-specific threshold amount as set forth on SCHEDULE 2
attached hereto and incorporated herein.

                        (iv) Property-specific Tenant-Controlled TI Contracts
thresholds for each additional Property acquired by the Partnership will be
established by the Partners as part of the prospective investment's underwriting
and investment approval process (with the understanding that the methodology
utilized for the Initial Portfolio will form the basis for such decision) and
will be evidenced by adopting a supplement to, or replacement of, Schedule 2 to
this Agreement.

                  (f) Except as provided in subparagraphs (i) and (ii) of this
paragraph, all Service Contracts shall be entered into with contractors who use
or employ union labor ("THE SERVICES COVENANT").

                        (i) A Tenant-Obligation Service Contract shall be
subject to the Services Covenant only if in excess of Twenty Thousand Dollars
($20,000) annually.

                        (ii) Prior to soliciting or accepting bids for, or
entering into any Service Contract, the Managing Partner shall provide the scope
of services for the proposed Service Contract to BIT Partner and BIT Partner
shall promptly provide a comprehensive list of qualifying contractors who use or
employ union labor and operate in the market of the applicable Property. The
Managing Partner shall solicit bids for the proposed Service Contract from all
the contractors on such list; provided, however, that if there are less than two
(2) contractors on such list, the Managing Partner may recommend and solicit
bids from any other contractor that provides such services in the applicable
market.

                  (g) Sponsor Partner, as the Managing Partner, acknowledges
that the undertakings in this Section (collectively, "THE LABOR COVENANT") are a
material inducement to BIT Partner's willingness to enter into this Agreement.

      Section 4.12. Debt Capitalization.

            4.12.1. The Partners shall use reasonable efforts to cause the
Partnership to maintain (either through new financing or assumption of existing
financing, secured by Property-specific mortgages) a Leverage Ratio equal to the
Target Leverage Ratio. If the Leverage Ratio as of the Initial Funding Date is
in excess of the Target Leverage Ratio, the Partnership will use reasonable
efforts to reduce the Leverage Ratio to the Target Leverage Ratio by refinancing
one or more of the Properties or by acquiring additional Properties in
accordance with the terms set forth on EXHIBIT G attached hereto or such other
terms as Approved by the Partners. If the Leverage Ratio as of the Initial
Funding Date is less than the Target Leverage Ratio, the Partnership will use
reasonable efforts to increase the Leverage Ratio to the Target Leverage Ratio
by financing or refinancing one or more of the Properties or by

                                       41
<PAGE>
assuming additional indebtedness through acquiring additional Properties in
accordance with the terms set forth on EXHIBIT G attached hereto or such other
terms as Approved by the Partners.

            4.12.2. Nothing in this Section 4.12 shall be construed as a consent
under, or waiver of, any of the other requirements of this Article 4, including,
but not limited to, Section 4.2 (Major Decisions). Neither Partner shall be
required to approve, or deemed to have approved, any Major Decision under
Section 4.2 hereof because of the provisions of this Section 4.12. The Partners
acknowledge and agree that the Target Leverage Ratio is aspirational. The
Leverage Ratio resulting from a capital event otherwise Approved by the Partners
under this Article 4 (such as an acquisition [including the acquisition of the
Initial Portfolio], disposition, financing or refinancing) shall be deemed to
have resulted from the Partners' and the Partnership's reasonable efforts to
match the Leverage Ratio with the Target Leverage Ratio and the Leverage Ratio
resulting therefrom shall be deemed to have been Approved by the Partners for
the purposes of this Section 4.12.

            4.12.3. The Partners shall use reasonable efforts to cause the
Partnership to seek to obtain and maintain a Leverage Ratio at the Target
Leverage Ratio by encumbering specific Properties with mortgage indebtedness.
Additionally, it is understood by both Partners that any new debt financing
(i.e., excluding existing indebtedness to be assumed by the Partnership in
connection with the Initial Portfolio) would exceed a 60% Leverage Ratio for any
Property only in unusual circumstances. It is understood by both Partners that
debt financing will not be utilized on select investments of the Partnership if
such debt financing is deemed by BIT Partner to be likely to cause income from
such Property to be taxed for BIT Partner as UBTI.

            4.12.4. Sponsor Partner acknowledges that, in accordance with the
provisions of this Agreement, BIT Partner (i) may elect not to approve new
indebtedness on certain Properties due to UBTI concerns, and (ii) BIT Partner
may elect to cause the refinancing one or more mortgages on specific Properties
pursuant to the provisions of Section 4.2(e) hereof. Any such mortgage
refinanced by BIT Partner or any of its Affiliates shall constitute indebtedness
included in the calculation of the Leverage Ratio.

      Section 4.13. Asset Acquisition Fee. For its services in identifying and
evaluating acquisitions, Sponsor Partner (or an Affiliate of Sponsor Partner
designated by Sponsor Partner) shall receive an Asset Acquisition Fee from the
Partnership in connection with the acquisition of any Property from a third
party (i.e., from a Person other than either Partner or any Affiliate of either
Partner) in accordance with an Additional Portfolio Investment Agreement, which
fee shall be payable only upon the completion of closing on such acquisition.
Sponsor Partner shall not receive an Asset Acquisition Fee in connection with
(a) the Initial Portfolio, or (b) any acquisition from either Partner or any
Affiliate of either Partner.

      Section 4.14. Asset Disposition Fee. Upon any sale, exchange or other
voluntary disposition of any Property, Sponsor Partner (or an Affiliate of
Sponsor Partner

                                       42
<PAGE>
designated by Sponsor Partner) shall receive the Asset Disposition Fee from the
Partnership, which fee shall be payable only upon the completion of closing on
such disposition; provided, however, that Sponsor Partner shall not receive the
Asset Disposition Fee if either (i) a broker is engaged by or on behalf of the
Partnership (or the Subsidiary General Partner or applicable Subsidiary) who is
not an Affiliate of Sponsor Partner (or the fees of such broker, even if engaged
by others, are payable out of the proceeds of such sale, exchange or other
voluntary disposition and such proceeds would otherwise be payable to the
Partnership), or (ii) such Property or other asset is purchased by Sponsor,
Sponsor Partner, BIT Partner, Trustee, the Trust, or any other Affiliate of
either Partner.

      Section 4.15. Additional Properties. The Partnership may acquire (directly
or through one or more Subsidiaries) additional industrial Properties in
Indiana, Ohio, Pennsylvania, New Jersey, and such other jurisdictions as may be
Approved by the Partners, in accordance with the terms set forth on EXHIBIT G
attached hereto or such other terms as are Approved by the Partners. The terms
and conditions for any such acquisition (and any Additional Capital
Contributions to be made in connection therewith) shall be contained in an
Additional Portfolio Investment Agreement in substantially the form of the
Initial Portfolio Investment Agreement or in such other form as may be Approved
by the Partners.

      Section 4.16. Limited Liability Status Indemnity.

                  (a) The Managing Partner shall cause (i) the Partnership to
comply with all applicable laws, rules and regulations governing the
registration and maintenance of status as a limited liability partnership, (ii)
the Subsidiary General Partner to comply with all applicable laws, rules and
regulations governing the registration and maintenance of status as a limited
liability company, and (iii) the Subsidiaries to comply with all applicable
laws, rules and regulations governing the registration and maintenance of status
as limited partnerships.

                  (b) The Managing Partner shall provide to the other Partner
copies and evidence of the filing of all necessary certificates, reports and
other documents required to satisfy the Managing Partner's obligations under
paragraph (a) of this Section at least thirty (30) days prior to the last date
on which such certificate, report or other document may be filed without penalty
or loss of registration.

                  (c) If the Managing Partner receives a notice from the other
Partner that the Managing Partner is in breach of its covenant under paragraph
(a) or paragraph (b) of this Section (which notice must also specify the nature
of the breach of the Managing Partner's covenant under paragraph (a) or
paragraph (b) of this Section), then the Managing Partner shall indemnify the
other Partner and its owners, advisors, consultants, officers, directors,
employees and agents (and, with respect to clauses (ii) and (iii) of paragraph
(a) of this Section, the Partnership) against, and hold such Persons harmless
from (and, at the election of any such Persons, defend such Persons against),
any and all loss, cost or expense that any such Persons may incur in excess of
the liability such Person would have as a limited partner in a limited

                                       43
<PAGE>
partnership, to the extent such excess liability (i) results from, or is in any
way related to, the Managing Partner's breach of the covenant set forth in
paragraph (a) above and (ii) arises from an event occurring on or after two (2)
Business Days after the date on which the Managing Partner receives (or is
deemed to have received) the notice of such breach from the other Partner.

                                    ARTICLE 5
                          DISTRIBUTIONS AND ALLOCATIONS

      Section 5.1. Distributions of Net Cash Flow.

                  (a) All Net Cash Flow, if any, received by the Partnership
shall be distributed as follows and in the following order of priority:

                        (i) First, to the Partners on a pari passu basis with
respect to the outstanding loan balances, funds necessary to pay any outstanding
principal and interest on any and all Emergency Loans made pursuant to Section
3.4 hereof (with any such payments being treated, first, as a payment of
interest and, second, as a repayment of principal);

                        (ii) Second, to the Partners, on a pari passu basis with
respect to the outstanding loan balances, funds necessary to pay any outstanding
principal and interest on any and all Default Loans made to the Partnership
pursuant to Section 3.3 hereof (with any such payments being treated, first, as
a payment of interest and, second, as a repayment of principal);

                        (iii) Third, to the Partners, on a pro rata basis in
accordance with each Partner's Unreturned Capital Contributions, until each
Partner has received distributions in an aggregate amount equal to such
Partner's Preferred Amount; and

                        (iv) Fourth, the balance, if any, to the Partners in
accordance with their respective Net Cash Flow Participation Percentages.

                  (b) All Net Cash Flow shall be distributed by the Partnership
on no less than a monthly basis and no later than on the twentieth (20th) day of
the month following the month on account of which distributions are to be made.

                  (c) The foregoing priorities for the application of Net Cash
Flow are for the benefit of the Partners only and not for the benefit of any
third party or creditor of the Partnership, and neither the Partnership nor any
Partner shall be liable or responsible to any third party or creditor of the
Partnership for any deviation from the priorities provided for hereinabove.

                  (d) Neither any Make-Whole Payment by BIT Partner to Sponsor
Partner nor any payment from the Liability Account (as defined on EXHIBIT F
attached hereto) by Sponsor Partner to BIT Partner shall be included in Net Cash
Flow

                                       44
<PAGE>
or considered in the distribution of Net Cash Flow pursuant to this Section 5.1,
provided, however, that such payments shall be included in calculating the
aggregate amount distributed to each Partner toward such Partner's Preferred
Amount.

      Section 5.2. Distributions of Net Capital Proceeds.

                  (a) All Net Capital Proceeds, if any, realized by or available
to the Partnership shall be distributed as follows and in the following order of
priority:

                        (i) First, to the Partners, on a pari passu basis with
respect to the outstanding loan balances, the funds necessary to pay any
outstanding principal and interest on any and all Emergency Loans made pursuant
to Section 3.4 hereof (with any such payments being treated, first, as a payment
of interest and, second, as a repayment of principal);

                        (ii) Second, to the Partners, on a pari passu basis with
respect to the outstanding loan balances, the funds necessary to pay any
outstanding principal and interest on any and all Default Loans made to the
Partnership pursuant to Section 3.3 hereof (with any such payments being
treated, first, as a payment of interest and, second, as a repayment of
principal);

                        (iii) Third, to the Partners, on a pro rata basis in
accordance with each Partner's Unreturned Capital Contributions, until each
Partner has received distributions in an aggregate amount equal to such
Partner's Preferred Amount; and

                        (iv) Fourth, the balance, if any, to the Partners in
accordance with their respective Net Capital Proceeds Participation Percentages.

                  (b) All Net Capital Proceeds shall be distributed as soon as
practicable after the closing of the capital transaction which has given rise to
such Net Capital Proceeds.

                  (c) The foregoing priorities for the application of Net
Capital Proceeds are for the benefit of the Partners only and not for the
benefit of any third party or creditor of the Partnership, and neither the
Partnership nor any Partner shall be liable or responsible to any third party or
creditor of the Partnership for any deviation from the priorities provided for
hereinabove.

                  (d) Neither any Make-Whole Payment by BIT Partner to Sponsor
Partner nor any payment from the Liability Account (as defined on EXHIBIT F
attached hereto) by Sponsor Partner to BIT Partner shall be included in Net
Capital Proceeds or considered in the distribution of Net Capital Proceeds
pursuant to this Section 5.2, provided, however, that such payments shall be
included in calculating the aggregate amount distributed to each Partner toward
such Partner's Preferred Amount.

                                       45
<PAGE>
      Section 5.3. Net Income and Loss.

                  (a) Except as otherwise provided in this Article 5, Net
Income, if any, for any allocation period shall be allocated in the following
priority:

                        (i) First, to the Partners in proportion to, to the
extent of, and in reverse order of the cumulative amount of Net Losses allocated
to each such Partner under Section 5.3(b)(iii), and not previously offset
pursuant to this Section 5.3(a)(i);

                        (ii) Second, 100% to the Partners to the extent of and
in proportion to each such Partner's Unallocated Preferred Return; and

                        (iii) Thereafter, 60% to BIT Partner and 40% to Sponsor
Partner.

                  (b) For each allocation period, except as otherwise provided
in this Article 5, Net Losses shall be allocated to the Partners as follows:

                        (i) First, to the Partners in proportion to, to the
extent of, and in reverse order of the cumulative amount of Net Income allocated
to each such Partner pursuant to Section 5.3(a)(iii), and not previously offset
pursuant to this Section 5.3(b)(i);

                        (ii) Second, 100% to the Partners in proportion to, to
the extent of, and in reverse order of the cumulative amount of Net Income
allocated to each such Partner pursuant to Section 5.3(a)(ii) and not previously
offset by this Section 5.3(b)(ii); and

                        (iii) Thereafter, 60% to BIT Partner and 40% to Sponsor
Partner.

      Section 5.4. Section 704(c) Special Allocations. Notwithstanding the
foregoing provisions of Section 5.3 hereof, if any Partner contributes to the
Partnership property the tax basis of which is different than its fair market
value or if there is a revaluation of any Partnership property such that the
book value of such property differs from its adjusted tax basis for federal
income tax purposes, the allocation of income, gains, losses and deductions with
respect to such property shall take into account such difference in the manner
intended by Code Section 704(c) and any Treasury Regulations issued from time to
time thereunder, and the Capital Accounts shall accordingly be adjusted, in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) as in effect
from time to time. If the Code and Treasury Regulations then in effect provide
more than one method of allocation, the Managing Partner shall determine which
method to apply, provided that the selected method will not result in a
violation of the Fractions Rule.

                                       46
<PAGE>
      Section 5.5. Regulatory Allocations.

                  (a) Minimum Gain Chargeback. Notwithstanding any other
provision of this Agreement (except as provided in paragraph (b) below), if
there is a net decrease in Minimum Gain for a Partnership taxable year, each
Partner shall be allocated, before any other allocation of Partnership items for
such taxable year, items of gross income and gain for such year (and, if
necessary, for subsequent years) in proportion to, and to the extent of, the
amount of such Partner's share of the net decrease in Minimum Gain during such
year. The income allocated pursuant to this paragraph (a) in any taxable year
shall consist first of gains recognized from the disposition of property subject
to one or more nonrecourse liabilities of the Partnership, and any remainder
shall consist of a pro rata portion of other items of income or gain of the
Partnership. It is the intent of the parties hereto that any allocation pursuant
to this paragraph (a) shall constitute a "minimum gain chargeback" under
Treasury Regulations Section 1.704-2(f).

                  (b) Exceptions to Section 5.5(a). The allocation otherwise
required pursuant to paragraph (a) above shall not apply to a Partner to the
extent that: (i) such Partner's share of the net decrease in Minimum Gain is
caused by a guaranty, refinancing or other change in the instrument evidencing a
nonrecourse debt of the Partnership which causes such debt to become a partially
or wholly recourse debt or a Partner nonrecourse debt (as defined below), and
such Partner bears the economic risk of loss (within the meaning of Treasury
Regulations Section 1.752-2) for such changed debt; (ii) such Partner's share of
the net decrease in Minimum Gain results from the repayment of a nonrecourse
liability of the Partnership, which repayment is made using funds contributed by
such Partner to the capital of the Partnership; (c) the Internal Revenue Service
("IRS"), pursuant to Treasury Regulations Section 1.704-2(f)(4), waives the
requirement of such allocation in response to a request for such waiver made by
the Managing Partner on behalf of the Partnership (which request the Managing
Partner may or may not make, in its sole discretion, if it determines that the
Partnership would be eligible therefor); or (iv) additional exceptions to the
requirement of such allocation are established by revenue rulings issued by the
IRS pursuant to Treasury Regulations Section 1.704-2(f)(5) and those exceptions
apply to such Partner.

                  (c) Qualified Income Offset. Notwithstanding any other
provision of this Agreement, no Partner shall be allocated Net Losses or
deductions if the allocation causes a Partner to have an Adjusted Capital
Account Deficit. If a Partner unexpectedly receives an adjustment, allocation or
distribution that causes the Partner to have an Adjusted Capital Account
Deficit, items of Partnership gross income and gain shall be specially allocated
to such Partner in an amount and manner sufficient to eliminate such Adjusted
Capital Account Deficit as quickly as possible. This paragraph (c) is intended
to comply with, and shall be interpreted consistently with, the "qualified
income offset" provisions in Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

                  (d) Gross Income Allocation. If at the end of any Partnership
taxable year, a Partner has an Adjusted Capital Account Deficit, such Partner
shall be

                                       47
<PAGE>
specially allocated items of Partnership income or gain in an amount and manner
sufficient to eliminate such Adjusted Capital Account Deficit as quickly as
possible.

                  (e) Partner Nonrecourse Debt. Notwithstanding any other
provision of this Agreement, any item of Net Loss, deduction or expenditures
described in Code Section 705(a)(2)(B) that is attributable to a Partner
nonrecourse debt (as defined below) shall be allocated to those Partners that
bear the economic risk of loss for such Partner nonrecourse debt, and among such
Partners in accordance with the ratios in which they share such economic risk,
determined in accordance with Treasury Regulations Section 1.704-2(i). For
purposes of this Agreement, the term "Partner nonrecourse debt" shall have the
meaning given the term "partner nonrecourse debt" in Treasury Regulations
Section 1.704-2(b)(4) and shall generally mean a nonrecourse debt of the
Partnership for which any Partner bears the economic risk of loss, determined in
accordance with applicable Treasury Regulations; and the identification of any
item of Net Loss, deduction or expenditures attributable to a Partner
nonrecourse debt shall be determined in accordance with Treasury Regulations
Section 1.704-2(i)(2). Notwithstanding any other provision of this Agreement, if
there is a net decrease for a Partnership taxable year in any Partner
nonrecourse debt minimum gain of the Partnership (as defined as "partner
nonrecourse debt minimum gain" in Treasury Regulations Section 1.704-2(i)), each
Partner with a share of such Partner nonrecourse debt minimum gain shall be
allocated items of gross income and gain in the manner provided in Treasury
Regulations Section 1.704-2(i)(4).

                  (f) Interpretation. The foregoing provisions of this Section
5.6 are intended to comply with Treasury Regulations Sections 1.704-1(b) and
1.704-2, and shall be interpreted consistently with this intention. Any terms
used in such provisions that are not specifically defined in this Agreement
shall have the meaning, if any, given such terms in the Regulations cited above.

                  (g) Curative Allocations. If any allocation of gain, income,
loss, expense or any other item is made pursuant to paragraphs (a), (c), (d) or
(e) of this Section 5.5 ("THE REGULATORY ALLOCATIONS") with respect to one or
more Partners ("THE DEFICIT PARTNERS"), then the balance of such items for the
current and all subsequent fiscal years shall be allocated among the Partners
other than the Deficit Partners as if such items were allocated among all the
Partners (including the Deficit Partners) without regard to this Section 5.5,
until the amount of such items that would have been allocated to the Deficit
Partners but for the Regulatory Allocations equal the amount allocated to the
Deficit Partners pursuant to the Regulatory Allocations.

      Section 5.6. Consistency with Fractions Rule. The allocation provisions
contained in this Agreement are intended to comply with Code Section
514(c)(9)(E), and in particular the fractions rule ("FRACTIONS RULE") of Section
1.514(c)-2 of the Treasury Regulations. Therefore, the Partners agree that the
allocation provisions shall be amended if the Partnership is advised by a
nationally recognized law firm or accounting firm Approved by the Partners that
an amendment is required to comply with the foregoing sections of the Code and
Treasury Regulations, so long as such adjustment does not have a material
adverse effect on any Partner (provided, however,

                                       48
<PAGE>
that a Partner experiencing a material adverse effect shall have the right to
waive this material adverse effect limitation). The provisions of this Section
5.6 override and supersede all other allocation provisions in this Agreement.

      Section 5.7. Section 708(b)(i) Dissolution. Notwithstanding Section 5.3,
but subject to Section 5.6, in connection with the dissolution of the
Partnership, Net Income or Losses shall be allocated among the Partners in such
a manner that the distributions to each Partner pursuant to Section 10.3(f)
shall be, to the maximum extent possible, the same amount as would distributed
to such Partner if such distributions were to be governed solely by Section 5.2.
Notwithstanding the preceding sentence, actual distributions made subsequent to
the allocations under this Section 5.7 shall be made pursuant to Section
10.3(f).

                                    ARTICLE 6
                         BOOKS AND RECORDS; TAX MATTERS

      Section 6.1. Accounting. The Partnership shall use the calendar year as
its fiscal year and shall maintain its books of account using an accrual basis
method of accounting.

      Section 6.2. Partnership Funds. All funds of the Partnership shall be kept
in segregated accounts or investments in the name of the Partnership and shall
not be commingled with any other funds. To the extent practicable, all funds of
the Partnership shall be invested in short-term U.S. government securities or
bank certificates of deposit, or shall be deposited in interest-bearing bank
accounts or other instruments Approved by the Partners. Any remaining funds of
the Partnership shall be kept in a Partnership account or accounts in such bank
or banks as shall be Approved by the Partners and shall be disbursed only on
statements and vouchers approved by the Managing Partner. For purposes of the
foregoing sentence, the Partners hereby approve Wachovia Bank, N.A. and Wells
Fargo & Company as acceptable banks.

      Section 6.3. Statements and Budgets.

                  (a) The Managing Partner shall prepare and provide, or cause
the Property Manager to prepare and provide, to the other Partner (i) reports as
and when required under the Property Management Agreement, and (ii) such other
reports as may be reasonably requested by BIT Partner.

                  (b) BIT Partner shall have the right at any time and from time
to time to request an audit of the Partnership for any period of time, and the
cost of any such audit (which is in addition to any annual audit requested by
the Partnership under any Property Management Agreement) shall be paid for by
BIT Partner; provided, however, that if the Managing Partner is in material
default (after any applicable notice and cure period) under the terms of this
Agreement, the cost shall be at the expense of the Managing Partner; provided,
further, however, that in no event shall the Managing Partner be liable for
payment of the cost of more than one (1) audit per fiscal year.

                                       49
<PAGE>
                  (c) The Managing Partner shall prepare and provide, or have
the Property Manager prepare and provide, to BIT Partner for its written
approval in accordance with Section 4.2, (i) annually, on or before November 15
prior to commencement of each Annual Period following the first Annual Period
(or within thirty [30] days of the date hereof with respect to the remainder of
2003), a budget ("PROPOSED ANNUAL BUDGET") for such forthcoming Annual Period
setting forth (where applicable, on a Property-by-Property basis) the estimated
receipts and expenditures (capital, operating and other) of the Partnership, and
reasonable reserves for contingencies, covering the sales, leasing, development
and other operations of the Partnership, the Subsidiary General Partner, the
Subsidiaries, and the Properties for such Annual Period. BIT Partner shall,
within fifteen (15) days following the date of delivery of such Proposed Annual
Budget to it, either approve or disapprove of the Proposed Annual Budget. If BIT
Partner shall fail to respond within said fifteen (15) day period, it shall be
deemed to have approved of the Proposed Annual Budget so provided. If BIT
Partner does not approve the Proposed Annual Budget, it must provide the reasons
to the Managing Partner with a reasonable amount of specificity. If BIT Partner
shall not approve of the Proposed Annual Budget or any portion thereof, the
Managing Partner shall be entitled in the applicable Annual Period to make
expenditures, incur obligations and take such other actions in accordance with
(A) such portions of the current Proposed Annual Budget as are approved by BIT
Partner, and (B) for the portions not yet approved by BIT Partner, the line item
permitted expenditures set forth in the then most recently approved Annual
Budget plus three percent (3%) of such previous line item amount. Any payment
obligations for Permitted Expenses shall be payable by the Managing Partner
irrespective of the foregoing limitations; provided, however, that for the
remainder of 2003, until an Annual Budget is approved (or deemed approved) as
provided above, the Annual Budget shall be deemed to be the expense amounts
provided to BIT Partner by Keystone Partner for purposes of underwriting the
transactions described herein.

                  (d) The Proposed Annual Budget shall include, if applicable,
any proposed changes to the investment criteria set forth on EXHIBIT G. If
necessary, the Executive Committee shall review and adjust such criteria
quarterly and the changes to such criteria, if any, shall become part of the
Annual Budget once Approved by the Partners.

                  (e) Prior to closing upon the acquisition of one or more
additional Properties pursuant to an Additional Portfolio Investment Agreement,
the Partners shall agree upon changes to the then-effective Annual Budget with
respect to each such Property (including any increase, decrease, or reallocation
among the Properties of the Capital Reserve Account). Upon the amendment of the
Annual Budget in connection with the acquisition of such additional Property,
the amended Annual Budget shall thereafter be subject to annual revision in
accordance with paragraph (d) above.

                  (f) Prior to closing upon the disposition of one or more of
the Properties in accordance with the terms of this Agreement, the Partners
shall agree

                                       50
<PAGE>
upon changes to the then-effective Annual Budget with respect to each such
Property and the remaining Properties (including any increase, decrease, or
reallocation among the Properties of the Capital Reserve Account). Upon the
amendment of the Annual Budget in connection with the disposition of such
Property, the amended Annual Budget shall thereafter be subject to annual
revision in accordance with paragraph (d) above.

      Section 6.4. Inspection. All books of account and all other records of the
Partnership (including an executed counterpart of this Agreement and all
amendments hereto, and an executed counterpart of the certificates of formation
of the Partnership, and all amendments to the foregoing) shall at all times be
kept by the Managing Partner at the Partnership's place of business and, upon
reasonable prior notice to the Managing Partner, may be inspected at any
reasonable time by the other Partner and may be copied at the expense of such
other Partner.

      Section 6.5. Tax Matters.

                  (a) The Managing Partner shall cause to be prepared and timely
filed all federal, state and local income tax returns for the Partnership (and,
if applicable, for the Subsidiary General Partner and each Subsidiary) on the
accrual basis and shall furnish copies thereof to BIT Partner, with the required
partnership schedules showing allocations of book and tax items.

                  (b) The Managing Partner, on behalf of the Partnership, shall
cause to be filed a proper election in accordance with Code Section 709(b) (or
any successor section thereto) to amortize the Partnership's organization
expenses.

                  (c) The Managing Partner shall have the right, but shall not
be obligated, on behalf of the Partnership and at the time and in the manner
provided by Code Section 754 (or any successor section thereto) and the Treasury
Regulations thereunder, to make an election to adjust the basis of Partnership
property in the manner provided in Code Sections 734(b) and 743(b) (or any
successor sections thereto). If such an adjustment to the tax basis of the
property is made, the Capital Accounts shall be increased or decreased as
provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

                  (d) The Managing Partner shall file all documents necessary to
elect that the Partnership be classified as a partnership for purposes of
taxation under the Code (or shall omit to file any documents in a case where the
Code or regulations thereunder provide that the Partnership would be classified
as a partnership in the absence of any election). The Managing Partner shall
file all documents necessary to elect that the Subsidiary General Partner and
each Subsidiary be classified as a disregarded entity for purposes of taxation
under the Code (or shall omit to file any documents in a case where the Code or
regulations thereunder provide that the Subsidiary General Partner or applicable
Subsidiary would be classified as a disregarded entity in the absence of any
election).

                                       51
<PAGE>
      Section 6.6. Tax Matters Partner.

                  (a) The Managing Partner shall be "THE TAX MATTERS PARTNER"
for Code purposes and shall use reasonable efforts to advise BIT Partner, and
shall deliver to BIT Partner copies of any notices or other correspondence,
regarding any audit or other matter of which the Managing Partner is notified,
or becomes aware. The Managing Partner may exercise reasonable discretion in
determining the manner and scope of the response to any request for information
by the IRS or any other government tax agency.

                  (b) The Managing Partner may, in its discretion, retain the
services of Accountant to represent the Partnership in any audit matter and may
execute a power of attorney in favor of Accountant on behalf of the Partnership.
Notwithstanding the foregoing, BIT Partner shall have the right to request, for
cause, a revocation of the power of attorney of Accountant and/or a dismissal of
Accountant (or any replacement for Accountant, from time to time), and the
Managing Partner must comply with such request.

                  (c) Notwithstanding anything contained herein to the contrary,
the Managing Partner shall not have the right, unless Approved by the Partners,
(i) to extend the statute of limitations with respect to the Partnership or any
Partner in any matter, or (ii) to agree to any settlement of any tax matter
affecting any Partner.

                  (d) The Partnership shall reimburse the Managing Partner for
any and all reasonable out-of-pocket costs and expenses (including reasonable
attorneys' and other professional fees) incurred by it in its capacity as the
Tax Matters Partner. Except in the case of any gross negligence or willful
misconduct on the part of the Managing Partner, the Partnership shall indemnify,
defend, and hold the Managing Partner harmless from and against any loss,
liability, damage, cost or expense (including reasonable attorneys' fees)
sustained or incurred as a result of any act or decision concerning Partnership
tax matters and within the scope of the Managing Partner's responsibilities as
Tax Matters Partner.

      Section 6.7. Noncompliance. Subject to Section 15.1(a), if the Managing
Partner fails to fulfill or perform any of its obligations under this Article 6
in any material respect, and such failure continues after the other Partner has
notified the Managing Partner of such failure and the Managing Partner has
failed to cure such failure within the cure period provided pursuant to Section
11.1 below, then the other Partner, in addition to any other rights or remedies
it may have pursuant to this Agreement or as otherwise provided by law, may
engage, at the sole expense of the Managing Partner, such independent certified
public accountants and other independent advisors as it may reasonably select to
enable the Partnership to cure such failure.

      Section 6.8. Appraisals.

                  (a) At the expense of BIT Partner, the Partnership shall
obtain an annual appraisal of each Property conducted by one or more third-party
nationally-

                                       52
<PAGE>
recognized appraisal firms with significant experience in the industrial
property sector of each applicable Property's operating market.

                  (b) At any time, at the request of BIT Partner, the
Partnership shall obtain an appraisal of any one or more Properties (or an
update of the most recent appraisal of any such Property) and provide such
appraisal to BIT Partner. Such appraisal shall be at the expense of BIT Partner
unless the Managing Partner is in default hereunder, in which case such
appraisal shall be an expense of the Partnership.

                  (c) At any time, at the request of Sponsor Partner, the
Partnership shall obtain an appraisal of any one or more Properties (or an
update of the most recent appraisal of any such Property) and provide such
appraisal to Sponsor Partner and BIT Partner. Such appraisal shall be at the
expense of the Partnership.

      Section 6.9. Bank Accounts. Except as provided in Section 6.2 or Approved
by the Partners, all funds of the Partnership will be deposited in such separate
Partnership bank account or accounts as designated from time to time by the
Managing Partner and approved by BIT Partner. Withdrawals from any such bank
account or accounts will be made upon the signatures of such persons as are
selected by the Managing Partner or the signatures of such other persons as the
Managing Partner may from time to time designate. The Managing Partner shall
also grant signing authority on all such Partnership bank accounts to one or
more persons designated by BIT Partner; provided, however, that such persons
shall not exercise such authority unless there is an Event of Default by Sponsor
Partner under the terms of this Agreement following which Sponsor Partner is
removed as the Managing Partner.

      Section 6.10. Tax Service.

                  (a) If approved by the Partners, the Managing Partner shall
cause the Partnership to retain the services of a real estate tax service
company (or companies) (a "TAX CONSULTANT"), as selected and Approved by the
Partners, to contest assessments with respect to any Property.

                  (b) The Managing Partner shall provide to the other Partner an
annual verification of the status of taxes and assessments for each Property.
Notwithstanding the foregoing, the other Partner may, in its sole discretion,
retain the services of a third party real estate tax service company (or
companies), as selected in such other Partner's sole discretion, to provide
verification of the status of taxes and assessments if either (i) no Tax
Consultant is retained by the Partnership who is responsible (at no additional
charge) for providing such information to the Partnership (in which case the
expenses incurred in connection with retaining such service company shall be at
the expense of such other Partner), or (ii) the Managing Partner fails to
deliver such annual verification to the other Partner (in which case the
expenses incurred in connection with retaining such service company shall be at
the expense of the Partnership).

                                       53
<PAGE>
                                    ARTICLE 7
                       TRANSFER OF PARTNERSHIP INTERESTS;
                             WITHDRAWAL OF PARTNERS

      Section 7.1. Transfer of Sponsor Partner's Interest.

                  (a) Except for (i) transfers otherwise expressly permitted in
this Section 7.1 (including paragraph 7.1(c) below), and (ii) transfers for
which Sponsor Partner has obtained the prior written consent of BIT Partner
(which consent may be granted or withheld in BIT Partner's sole discretion),
Sponsor Partner may not sell, transfer, assign or otherwise dispose of, or
mortgage, hypothecate or otherwise encumber or permit or suffer any encumbrance
of all or any part of its interest in the Partnership (except if as a result of
involuntary bankruptcy), and any attempt to so transfer or encumber any such
interest shall be void; provided, however, that, notwithstanding the foregoing,
if any transfer occurs which constitutes a violation of this Section 7.1 and
either (i) such transfer does not constitute a voluntary act of Sponsor Partner,
or (ii) Sponsor Partner was not aware that such transfer constituted a violation
of this Section 7.1, then Sponsor Partner shall have thirty (30) days from and
after the date of notice to Sponsor Partner from the Partnership or BIT Partner
of such violation to cure the default. Notwithstanding such cure period, and
regardless of whether a cure is effected, Sponsor Partner shall indemnify and
hold harmless BIT Partner from and against any loss, claim or liability arising
from such transfer.

                  (b) Nothing herein shall (i) limit the right of Sponsor
Partner to engage in transactions which result in the merger or consolidation of
Sponsor Partner or its Affiliates with other Persons, so long as the principal
purpose of such transactions is not the avoidance of the transfer limitations in
this Agreement or (ii) limit the transfer of ownership interests in Sponsor
Partner or Sponsor, provided that Sponsor Partner shall at all times remain an
Affiliate of Sponsor for so long as Sponsor Partner holds its partnership
interests in the Partnership.

                  (c) Upon prior written notice to BIT Partner (which notice
shall be accompanied by evidence sufficient to demonstrate that such transfer
complies with the limitations of this Section), Sponsor Partner shall have the
right to transfer its interest to an Affiliate of Sponsor Partner which at all
times shall be owned and controlled (whether directly or indirectly through one
or more other entities, each of which shall also meet such ownership and control
requirement) one hundred percent (100%) by Sponsor, Sponsor Operating
Partnership, or Sponsor Partner; provided, however, that no such transfer shall
release or relieve Sponsor Partner from its obligations under this Agreement (or
Sponsor Operating Partnership under the Sponsor Operating Partnership Guaranty)
and Sponsor Partner (and Sponsor Operating Partnership through the Sponsor
Operating Partnership Guaranty) shall remain fully liable for such obligations
notwithstanding such transfer, regardless of whether such obligations arise
before or after such transfer, as fully as if such transfer had not taken place.

                                       54
<PAGE>
                  (d) Any assignee of Sponsor Partner's interest in the
Partnership shall take such interest subject collectively to the restrictions
set forth in this Section 7.1. Any attempt to transfer or encumber any such
interest in violation of this Section 7.1 shall be void.

                  (e) Sponsor Partner hereby grants BIT Partner a right of first
refusal to purchase Sponsor Partner's interest in the Partnership prior to
Sponsor Partner transferring or encumbering such interest (other than pursuant
to paragraph 7.1(b) or (c) above). In the event of any proposed transfer or
encumbrance of Sponsor Partner's interest in the Partnership (other than
pursuant to paragraph 7.1(b) or (c) above), BIT Partner shall be provided with
at least thirty (30) days advance notice, which notice shall include, if
applicable, all the terms of the proposed transfer of Sponsor Partner's interest
in the Partnership. BIT Partner shall have thirty (30) days from receipt of such
notice in which to exercise its right of first refusal as to such transfer by
providing notice to Sponsor Partner that BIT Partner will acquire Sponsor's
Partner's interest in the Partnership in accordance with the specified terms.
BIT Partner shall have thirty (30) days from issuing notice of its exercise of
its right of first refusal in which to close the acquisition of Sponsor
Partner's interest in the Partnership on such terms. The Partnership shall pay
all costs of the acquisition of Sponsor Partner's interest by BIT Partner
hereunder.

                  (f) No assignee or transferee of the whole or any portion of
Sponsor Partner's interest in the Partnership (including pursuant to paragraph
7.1(c) above) will have the right to become a substituted Partner in place of
its assignor or transferor unless all of the following conditions are satisfied:

                        (i) A duly executed and acknowledged instrument of
assignment is delivered to BIT Partner setting forth the intention of the
assignor that the assignee become a substituted Partner in its place.

                        (ii) The assignor and assignee execute and acknowledge
such other instruments as may be legally necessary to effect such assignment and
assumption by the assignee of all of the terms and provisions of this Agreement
and the assumption of any unperformed obligation of the assignor provided that
any such assignor shall not thereby be released of any of its unperformed
obligations hereunder.

                        (iii) Such assignment or transfer shall not result in a
termination of the Partnership pursuant to applicable provisions of the Code.

                        (iv) The assignor executes and acknowledges a promissory
note and such other instruments as BIT Partner may reasonably deem necessary, in
BIT Partner's reasonable judgment, to evidence the assignor's obligation to fund
assignor's unfunded portion (if any) of any capital call Approved by the
Partners prior to such transfer.

                        (v) The Partnership and BIT Partner have been provided
with an opinion of counsel, satisfactory in form and substance to BIT Partner in
its

                                       55
<PAGE>
reasonable judgment, to the effect that such proposed transfer or encumbrance
(A) will not have more than a de minimis adverse tax consequence or constitute a
non-exempt prohibited transaction under ERISA for the Partnership, BIT Partner,
or BIT, and (B) will not violate, or cause the Partnership to violate, any
Securities Laws.

                        (vi) Unless a transfer in accordance with paragraph
7.1(c) above, BIT Partner has consented to such transfer, assignment, pledge,
hypothecation or other disposition.

      Section 7.2. Transfer of BIT Partner's Interest.

                  (a) Except for (i) transfers otherwise expressly permitted in
this Section 7.2, and (ii) transfers for which BIT Partner has obtained the
prior written consent of Sponsor Partner (which consent may be granted or
withheld in Sponsor Partner's sole discretion), BIT Partner may not sell,
transfer, assign or otherwise dispose of, or mortgage, hypothecate or otherwise
encumber or permit or suffer any encumbrance of all or any part of its interest
in the Partnership (except if as a result of involuntary bankruptcy), and any
attempt to so transfer or encumber any such interest shall be void; provided,
however, that, notwithstanding the foregoing, if any transfer occurs which
constitutes a violation of this Section 7.2 and either (i) such transfer does
not constitute a voluntary act of BIT Partner, or (ii) BIT Partner was not aware
that such transfer constituted a violation of this Section 7.2, then BIT Partner
shall have thirty (30) days from and after the date of notice to BIT Partner
from the Partnership or Sponsor Partner of such violation to cure the default.
Notwithstanding such cure period, and regardless of whether a cure is effected,
BIT Partner shall indemnify and hold harmless Sponsor Partner from and against
any loss, claim or liability arising from such transfer.

                  (b) Nothing herein shall limit the replacement of the Person
serving as Trustee by another Person in accordance with the terms and provisions
of the documents governing the Trust.

                  (c) Upon prior written notice to Sponsor Partner (which notice
shall be accompanied by evidence sufficient to demonstrate that such transfer
complies with the limitations of this paragraph), BIT Partner shall have the
right to transfer its interest to an Affiliate of BIT Partner which at all times
shall be owned and controlled (whether directly or indirectly through one or
more other entities, each of which shall also meet such ownership and control
requirement) one hundred percent (100%) by the Trust, either directly or acting
by and through Trustee; provided, however, that no such transfer shall release
or relieve BIT Partner from its obligations under this Agreement and BIT Partner
shall remain fully liable for such obligations notwithstanding such transfer,
regardless of whether such obligations arise before or after such transfer, as
fully as if such transfer had not taken place.

                  (d) Any assignee of BIT Partner's interest in the Partnership
shall take such interest subject collectively to the restrictions set forth in
this Section 7.2. Any attempt to transfer or encumber any such interest in
violation of this Section 7.2 shall be void.

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                  (e) BIT Partner hereby grants Sponsor Partner a right of first
refusal to purchase BIT Partner's interest in the Partnership prior to BIT
Partner transferring or encumbering such interest (other than pursuant to
paragraph 7.2(c) above). In the event of any proposed transfer or encumbrance of
BIT Partner's interest in the Partnership (other than pursuant to paragraph
7.2(c) above), Sponsor Partner shall be provided with at least thirty (30) days
advance notice, which notice shall include, if applicable, all the terms of the
proposed transfer of BIT Partner's interest in the Partnership. Sponsor Partner
shall have thirty (30) days from receipt of such notice in which to exercise its
right of first refusal as to such transfer by providing notice to BIT Partner
that Sponsor Partner will acquire BIT's Partner's interest in the Partnership in
accordance with the specified terms. Sponsor Partner shall have thirty (30) days
from issuing notice of its exercise of its right of first refusal in which to
close the acquisition of BIT Partner's interest in the Partnership on such
terms. The Partnership shall pay all costs of the acquisition of BIT Partner's
interest by Sponsor Partner hereunder.

                  (f) No assignee or transferee of the whole or any portion of
BIT Partner's interest in the Partnership will have the right to become a
substituted Partner in place of its assignor or transferor unless all of the
following conditions are satisfied:

                        (i) A duly executed and acknowledged instrument of
assignment is delivered to Sponsor Partner setting forth the intention of the
assignor that the assignee become a substituted Partner in its place.

                        (ii) The assignor and assignee execute and acknowledge
such other instruments as may be legally necessary to effect such assignment and
assumption by the assignee of all of the terms and provisions of this Agreement
and the assumption of any unperformed obligation of the assignor provided that
any such assignor shall not thereby be released of any of its unperformed
obligations hereunder.

                        (iii) Such assignment or transfer shall not result in a
termination of the Partnership pursuant to applicable provisions of the Code.

                        (iv) The assignor executes and acknowledges a promissory
note and such other instruments as Sponsor Partner may reasonably deem
necessary, in Sponsor Partner's reasonable judgment, to evidence the assignor's
obligation to fund assignor's unfunded portion (if any) of any capital call
Approved by the Partners prior to such transfer.

                        (v) The Partnership and Sponsor Partner have been
provided with an opinion of counsel, satisfactory in form and substance to
Sponsor Partner in its reasonable judgment, to the effect that such proposed
transfer or assignment (A) will not have more than a de minimis adverse tax
consequence for the Partnership or Sponsor Partner or constitute a non-exempt
prohibited transaction under ERISA, and (B) will not violate, or cause the
Partnership to violate, any Securities Laws.

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                        (vi) Unless a transfer in accordance with paragraph
7.2(c) above, Sponsor Partner has consented to such transfer, assignment,
pledge, hypothecation or other disposition.

      Section 7.3. Bankruptcy. In the event of the bankruptcy (as defined in
Section 10.1(d) below) of a Partner, the personal representative or trustee (or
successor-in-interest) of such Partner shall have the rights of the Partner in
the Net Income, Net Losses, Net Cash Flow and Net Capital Proceeds of the
Partnership to the extent of the interest of the Partner therein, subject to the
terms and conditions of this Agreement, but shall not have any voting or other
approval rights; and its estate (or successor-in-interest) shall be liable for
all of its obligations as a Partner. In addition, the personal representative or
trustee (or successor-in-interest) shall have the same right, if any, and
subject to the same limitations, as the Partner would have had under the
provisions of this Article 7 to assign the Partnership interest of the Partner;
and in the event of any such assignment, the assignee may become a substituted
Partner subject to the provisions of Section 7.1 or 7.2, as the case may be.

      Section 7.4. Waivers. The provisions of Sections 7.1 and 7.2 may be waived
at any time and from time to time if such waiver is Approved by the Partners.

      Section 7.5. Expenses. Expenses of the Partnership or of the
non-transferring Partner occasioned by such transfers of interest described in
this Article 7 shall be reimbursed to the Partnership or the non-transferring
Partner, as the case may be, by the transferring Partner.

      Section 7.6. Withdrawal of Partners.

                  (a) Sponsor Partner may not voluntarily withdraw, resign or
retire as a Partner from the Partnership except upon the assignment of its
entire interest in the Partnership (if and as permitted by this Article 7).

                  (b) BIT Partner may not voluntarily withdraw, resign or retire
as a Partner from the Partnership except upon the assignment of its entire
interest in the Partnership (if and as permitted by this Article 7) or upon the
surrender, abandonment or other voiding of its interest pursuant to the next
succeeding sentence hereof. BIT Partner may at any time, by written notice
delivered to Sponsor Partner, renounce its interest in all current and future
profits, losses and distributions of the Partnership, and abandon to the
Partnership its capital contributions; provided, however, that any such
surrender, abandonment or other voiding shall not in any case (i) cause a
dissolution of the Partnership, (ii) terminate or diminish any obligations of
Sponsor Partner to BIT Partner hereunder which would survive a dissolution of
the Partnership, or (iii) relieve BIT Partner of a Capital Contribution funding
obligation which is then outstanding.

      Section 7.7. Compliance with Loan Documents. Notwithstanding any provision
of this Article 7 to the contrary, in no event shall any interest in the
Partnership be transferred or encumbered without obtaining the approval thereof
by the holder of any

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mortgage or other security instrument encumbering the Property, to the extent
such approval is required by the terms of such mortgage or other instrument.

                                    ARTICLE 8
                                SALE OF PROPERTY;
                              RIGHT OF FIRST OFFER

      Section 8.1. Sale of Property. The Partners hereby acknowledge and agree
that (i) except pursuant to this Article 8, the Partnership shall not sell,
exchange, transfer, or otherwise convey all or any portion of any Property
without such action being Approved by the Partners in accordance with Section
4.2 of this Agreement; and (ii) either Partner shall have the absolute and
unconditional right to direct the Partnership at any time to sell, exchange,
transfer, or otherwise convey all or any portion of any Property to any person
or entity in accordance with Section 8.2, subject to any limitations on such
right set forth in Sections 8.2 and 8.4 hereof.

      Section 8.2. Right of First Offer.

            8.2.1. Subject to and in accordance with the remaining terms of this
Section 8.2, after the second (2nd) anniversary of the Initial Funding Date
(except as otherwise provided in Section 12.1 hereof), either Partner may
exercise its right to direct the Partnership to sell any one (1) Property
without regard to whether such Property was identified in the then-current
Annual Budget as a Property that the Partnership intends to sell. No Partner may
exercise such right more than two (2) times in any year.

            8.2.2. The Partner which elects to exercise its right to direct the
Partnership to sell a Property (for purposes of this Section 8.2, "THE
INITIATING PARTNER") shall first deliver a notice to the other Partner (for
purposes of this Section 8.2, "THE NON-INITIATING PARTNER") of such election,
which notice shall identify the subject Property. The Non-Initiating Partner
shall have thirty (30) days from the date on which such notice is delivered (or
deemed delivered) in which to exercise its right ("THE RIGHT OF FIRST OFFER") to
make a first Qualifying Offer (as defined below) for such Property ("THE FIRST
OFFER"). The Initiating Partner shall notify the Non-Initiating Partner, within
thirty (30) days after the delivery (or deemed delivery) of the First Offer to
the Initiating Partner, whether the Partnership will accept the First Offer from
the Non-Initiating Partner. If, within such period, the Initiating Partner fails
to notify the Non-Initiating Partner of the Initiating Partner's acceptance or
rejection of the First Offer, then the First Offer shall be deemed to have been
accepted by the Initiating Partner on behalf of the Partnership. If the
Initiating Partner accepts, or is deemed to have accepted, the First Offer on
behalf of the Partnership, the Non-Initiating Partner shall have ninety (90)
days from the delivery (or deemed delivery) of the notice of acceptance in which
to acquire such Property from the Partnership on the terms of the First Offer,
and the Non-Initiating Partner shall assume all non-discharged indebtedness
secured by the subject Property and shall indemnify the Initiating Partner (and
its owner, advisors, consultants, officers, directors, employees and agents) and
the Partnership against, and hold such Persons harmless from (and, at the
election of any such Persons, defend such Persons against),

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any and all liabilities arising with respect to the subject Property accruing
from and after the date such Property is transferred to the Non-Initiating
Partner; provided, however, the Partnership shall remain liable for all
liabilities accruing before the date such Property is transferred to the
Non-Initiating Partner.

            8.2.3. If (i) the Non-Initiating Partner does not exercise its Right
of First Offer, (ii) the Initiating Partner rejects the First Offer, or (iii)
the Non-Initiating Partner (through no fault of the Initiating Partner) fails to
acquire the Property within the time provided after the First Offer is accepted,
then the Partnership shall engage a third-party broker (selected by the
Initiating Partner) to solicit Qualifying Offers from third parties for such
Property for a period of up to one hundred eighty (180) days.

            8.2.4. If the Non-Initiating Partner makes a First Offer that is
rejected by the Initiating Partner, the Initiating Partner, acting on behalf of
the Partnership, may accept a Qualifying Offer equal to or greater than
ninety-seven percent (97%) of the amount of the First Offer. If the highest
Qualifying Offer is less than ninety-seven percent (97%) of the amount of the
First Offer, then (i) the Initiating Partner must notify the Non-Initiating
Partner of such Qualifying Offer within five (5) days after receipt of the
Qualifying Offer, and (ii) the Non-Initiating Partner shall have the right to
purchase such Property on the terms of such highest Qualifying Offer within
ninety (90) days after the delivery of the notice of such Qualifying Offer,
which right shall be deemed waived unless, within thirty (30) days after the
delivery of the notice of such Qualifying Offer, the Non-Initiating Partner
gives notice to the Initiating Partner of the Non-Initiating Partner's election
to purchase such Property on the terms of such Qualifying Offer.

            8.2.5. If the Non-Initiating Partner does not exercise its Right of
First Offer, the Initiating Partner, acting on behalf of the Partnership, may
accept the highest Qualifying Offer.

            8.2.6. For purposes of this Section 8.2, an offer is a "QUALIFYING
OFFER" if, and only if, such offer (i) is for a fixed price payable in cash
only, (ii) is not based in whole or in part on assuming any Make-Whole Loan,
(iii) will not constitute a non-exempt prohibited transaction under ERISA or the
Code, (iv) will not violate or cause the Partnership to violate any Securities
Laws, and (v) will not create a reasonable likelihood that any income of the
Partnership allocated to BIT Partner will be taxed as UBTI.

      Section 8.3. Liquidity Provisions. Either Partner (for purposes of this
Section 8.3, "THE INITIATING PARTNER") shall have the right to direct the
Partnership to liquidate its assets (provided, however, that BIT Partner may not
exercise any of the rights under this Section 8.3 until after the fifth (5th)
anniversary of the Initial Funding Date, except as otherwise provided under
Section 11.1 of this Agreement) by delivering a notice to the other Partner (for
purposes of this Section 8.3, "THE NON-INITIATING PARTNER") that the Initiating
Partner is exercising its rights under this Section 8.3. By notice to the
Initiating Partner within thirty (30) days after the delivery (or deemed
delivery) of the Initiating Partner's exercise notice, the Non-Initiating
Partner shall determine the method for liquidating the assets of the Partnership
by selecting either

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(i) the property draft method described in subsection 8.3.1 below or (ii) the
marketing right method described in subsection 8.3.2 below. If the
Non-Initiating Partner fails to select a liquidation method within the time
allowed, liquidation shall be accomplished in accordance with the Property Draft
Method described in subsection 8.3.1 below. Upon the completion of either
liquidation method, the Partnership shall be dissolved, and the remaining assets
of the Partnership liquidated, in accordance with the provisions of Article 10
hereof.

            8.3.1. Property Draft Method.

                  (a) Within thirty (30) days after the selection of the
property draft method of liquidating the assets of the Partnership (the
"VALUATION PERIOD"), each Partner shall prepare and deliver to the other Partner
such Partner's determination of (i) the Appraised Gross Fair Market Value of
each Property held by the Partnership or a Subsidiary, and (ii) the net asset
value of each such Property resulting after deducting all debt and other
liabilities relating to each Property (including any prepayment penalties or
fees or assumption costs or fees which would be incurred as a result of the
distribution of a Property to a Partner, and with respect to which penalties,
fees or expenses the Partners agree to pursue the most economical alternative)
("THE NET VALUE"). If only one Partner provides such a list within the specified
period, the values ascribed to each Property in such list shall be final for
purposes of this subsection 8.3.1 and the requirements of paragraph 8.3.1(b)
below shall be waived.

                  (b) Within ten (10) Business Days after the delivery of the
lists of Appraised Gross Fair Market Value and Net Value pursuant to paragraph
8.3.1(a) above ("THE SELECTION PERIOD"), the Partners shall select a third-party
nationally-recognized appraisal firm which (i) is licensed in each of the states
where the Properties are located, (ii) has a minimum of ten (10) years
experience appraising industrial properties in the counties where the Properties
are located, (iii) is not an Affiliate nor has been engaged by either of the
Partners or any of their Affiliates regularly or routinely as a service provider
over the previous five (5) years, and (iv) is a member of The Appraisal
Institute (a "QUALIFIED APPRAISER"). If the Members cannot agree upon a
Qualified Appraiser within the Selection Period, then, within five (5) Business
Days after the expiration of the Selection Period, each Partner shall designate
a Qualified Appraiser, which Qualified Appraisers shall, on or prior to the date
which is ten (10) Business Days after the expiration of the Selection Period,
jointly designate a third Qualified Appraiser (provided, however, that if the
two Qualified Appraisers cannot agree on a third Qualified Appraiser within such
ten (10) Business Day period after the expiration of the Selection Period, then
the two Qualified Appraisers shall cause the third Qualified Appraiser to be
selected by the Appraisal Institute within twenty (20)

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Business Days after the expiration of the Selection Period). If either Partner
does not designate a Qualified Appraiser within the Selection Period, then the
Qualified Appraiser selected by the other Partner shall choose the Appraised
Gross Fair Market Value and Net Value attributable to each Property as provided
below. The Qualified Appraiser designated by the Partners, designated by the
Partners' Qualified Appraisers, or designated by the Appraisal Institute, as the
case may be, shall have twenty (20) Business Days from and after the latest to
occur of its selection or its receipt of the Members' Appraised Gross Fair
Market Value and Net Value determinations ("THE ARBITRATION PERIOD") to choose
the Appraised Gross Fair Market Value and Net Value which, in such Qualified
Appraiser's professional judgment, most closely approximates the Appraised Gross
Fair Market Value and Net Value of each Property. The Qualified Appraiser shall
not average the values or determine new values for the Appraised Gross Fair
Market Value or Net Value for any Property and shall be strictly limited to
choosing one or the other Partner's designation of such values (absent patent
error in the calculation of such values). The Qualified Appraiser's selection of
one Appraised Gross Fair Market Value and Net Value for each Property from the
Partners' determinations of the Appraised Gross Fair Market Value and Net Value
of each Property shall be final, conclusive and binding on the Partners for the
purpose of this subsection 8.3.1 and shall be delivered to the Partners on or
before the expiration of the Arbitration Period by a written notice, which shall
set forth the Appraised Gross Fair Market Value and Net Value of each Property
(a "PRICE LIST"), which Price List shall not be subject to further review or
challenge by either Partner (absent a patent error in the calculation or
selection of such values).

                  (c) Within five (5) Business Days after receipt of the Price
List, the Non-Initiating Partner shall deliver to the other Partner a written
notice stating which Property it selects to have distributed to it (a "SELECTION
NOTICE"). The other Partner shall then have three (3) Business Days after
receipt of such notice to select a Property to be distributed to it and to
deliver a Selection Notice to the Non-Initiating Partner. Subject to paragraph
8.3.1(d) below, this procedure shall continue with each Partner alternating
delivery of Selection Notices to the other Partner every three (3) Business Days
until all of the Properties have been selected or until neither Partner wishes
to make a selection from the remaining unselected Properties. In the event that
a Partner fails to deliver a Selection Notice to the other Partner within the
allotted period, such Partner shall be deemed to have waived that selection (but
only that selection) and the other Partner shall have three (3) Business Days
from the expiration of the preceding three (3) Business Day period to deliver a
Selection Notice to the other Partner. If, at the conclusion of this process,
neither Partner has selected a particular Property, then the Partnership shall
market such Property or group of Properties for sale to any Person (in
accordance with subsection 8.3.2 below).

                  (d) If, at any time during the procedure set forth in
paragraph 8.1.3(c) above, a selection by Sponsor Partner results in Sponsor
Partner receiving Properties whose aggregate Net Values exceed the Threshold (as
defined below), then Sponsor Partner shall make no further selection after the
selection which causes the aggregate Net Values to exceed the Threshold, and
instead, BIT Partner shall have the right to select any or all of the remaining
Properties in its Selection Notice. In the event that BIT Partner selects less
than all of the remaining Properties, then Sponsor Partner shall have the right
to select any or all of the remaining Properties. If Sponsor Partner selects
less than all of the remaining Properties, such remaining Properties shall be
marketed for sale to any Person (in accordance with subsection 8.3.2 below). For
purposes of this subsection, the "THRESHOLD" shall mean

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an amount equal to the amount that Sponsor Partner would have received if all
Properties were sold for cash and the Net Capital Proceeds from such sale were
distributed to the Partners in accordance with Section 5.2 in amount equal to
the sum of the Net Values set forth on the Price List.

                  (e) After the Partners have completed selecting the Properties
(whether or not all of the Properties have been selected), the following
procedure shall be followed:

                        (i) Within five (5) Business Days after the completion
of the selection process, the Net Value of all of the Properties selected by
each Partner ("THE DRAFT VALUE") shall be compared to the amount ("THE
PROPORTIONATE VALUE") such Partner would have received on account of its
Partnership Interest if all of the Properties selected by the Partners were sold
for cash and the Net Capital Proceeds from such sales were distributed to the
Partners in accordance with Section 5.2 in amount equal to the sum of the Net
Values set forth on the Price List for such Properties. If one Partner has
selected Properties whose Draft Value is in excess of such Partner's
Proportionate Value (an "EXCESS"), then at the time of the distribution of the
Properties to the Partners, such Partner shall make a cash payment to the other
Partner in an amount equal to the Excess (a "CASH ADJUSTMENT PAYMENT"). If a
Partner does not make the Cash Adjustment Payment when the Properties are to be
distributed, then (A) no Properties shall be distributed, (B) such failure shall
be deemed to be an Event of Default hereunder, and (C) in order to eliminate the
need for the defaulting Partner to make the Cash Adjustment Payment, the
non-defaulting Partner, in addition to having the right to pursue any other
rights or remedies available at law or in equity, shall have the right,
exercisable in its sole discretion by delivering written notice to the
defaulting Partner within thirty (30) days after the date on which the Cash
Adjustment Payment was to be made, to either (x) cancel the drafting process and
purchase the defaulting Partner's Partnership Interest at a price equal to
ninety-seven percent (97%) of such Partner's Proportionate Value based upon the
Net Values set forth in the Price List, or (y) select one or more of the
Properties previously selected by the defaulting Partner to be (1) distributed
to the non-defaulting Partner and/or (2) marketed for sale to any Person by the
Partnership as described below in subsection 8.3.2, even if such election
results in the non-defaulting Partner having to make a Cash Adjustment Payment
to the defaulting Partner in which case the Properties shall be distributed in
accordance with such notice.

                        (ii) Any Property not selected by a Partner pursuant to
this subsection 8.3.1 or which goes to market will be marketed for sale to any
Person, and the proceeds of such sale(s) shall be distributed in accordance
with, subsection 8.3.2. For the purpose of cash distributions under this
subsection, distributions of Properties shall be treated as distributions of
cash in an amount equal to the aggregate Net Values of such Properties as
adjusted by any Cash Adjustment Payments made or received on the date such
transfers took place and payments were made. Upon the completion of the sale of
all remaining Properties, the Partnership shall be dissolved in accordance with
Article 10 of this Agreement.

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                        (iii) Within sixty (60) days of completion of the
selection of Properties as set forth above in this subsection, the Managing
Partner shall cause the Properties to be distributed to the appropriate Partner,
any Cash Adjustment Payment required to be made by one Partner to the other
Partner shall be made, and each Partner's Capital Account shall be adjusted
accordingly. Costs incurred in connection with the drafting process and
distribution of Properties pursuant thereto shall be allocated as follows: (i)
all survey, title and escrow costs incurred in connection with the distribution
of a Property to a Partner shall be borne by the Partner receiving the
applicable Property, (ii) all transfer taxes incurred in connection with the
distribution of a Property to a Partner shall be borne by the Partnership and
shall be paid prior to the distribution of any Net Cash Flow (or, if the
Partnership does not have sufficient Net Cash Flow to pay such expenses, then
such expenses shall be borne ratably by the Partners in proportion to the
Partner's respective Proportionate Values), (iii) all early payment penalties or
fees, or assumption costs or fees, or like charges incurred in connection with
the prepayment or assumption of debt secured by Properties to be distributed
shall be borne by the Partner receiving the applicable Property (with respect to
which the Partners agree to pursue the most economical alternative), (iv) all
costs of reviewing or renegotiating debt secured by Properties (excepting those
costs set forth in clause (iii) above) shall be shared by the Partners in
accordance with their respective Proportionate Values, (v) all costs of the
Qualified Appraiser shall be shared by the Partners in accordance with their
respective Proportionate Values, and (vi) all costs of any other Qualified
Appraisers required by this subsection shall be borne by the Partner designating
such Qualified Appraiser. Any Partner receiving a Property pursuant to a
distribution under this Section shall, as of and after the date of the
distribution of such Property, hold harmless the Partnership and the other
Partner from and against any and all manner of claim arising out of or relating
to that Property that the Partnership or such other Partner may suffer or incur
as a result of any event that may occur after the date of such distribution
(except for a claim arising as a result of the gross negligence, fraud or
intentional misconduct of the Partnership or such other Partner, in which case
such indemnification shall not cover the claim to the extent resulting from such
gross negligence, fraud or intentional misconduct).

            8.3.2. Marketing Right Method.

                  (a) Within thirty (30) days after the selection of the
marketing right method of liquidating the assets of the Partnership, the
Partners shall determine the Appraised Gross Fair Market Value of each Property.
If the Partner's cannot agree on the Appraised Gross Fair Market Value of any
Property, the Non-Initiating Partner shall select, and the Partnership shall
engage, a third-party, nationally-recognized appraisal firm or firms with
significant experience within the industrial property sector in the market in
which such Property is located. Absent a patent error in calculation, the
Appraised Gross Fair Market Value determined by such appraisal firm or firms
shall be final for purposes of this subsection 8.3.2.

                  (b) The Non-Initiating Partner shall have ninety (90) days in
which to acquire all or any of the Properties from the Partnership (or the
respective

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Subsidiaries, as applicable) for a purchase price equal to the Appraised Gross
Fair Market Value determined pursuant to paragraph 8.3.2(a) above. The
Non-Initiating Partner shall accept and assume all liabilities arising with
respect to each such Property after the conveyance, and shall indemnify and hold
harmless the Partnership and other Partner therefrom. All costs of the transfer
of each Property shall be borne by the Non-Initiating Partner.

                  (c) If the Non-Initiating Partner does not acquire all of the
Property pursuant to paragraph 8.3.2(b) above, then the Partnership shall engage
a third-party broker (selected by the Initiating Partner) to solicit Qualifying
Offers (as defined below) from third parties for each remaining Property.

                  (d) The Initiating Partner, acting on behalf of the
Partnership, may accept a Qualifying Offer for any Property equal to or greater
than ninety-seven percent (97%) of the Appraised Gross Fair Market Value for
such Property as determined pursuant to paragraph 8.3.2(a) above. If the highest
Qualifying Offer for any Property is less than ninety-seven percent (97%) of the
Appraised Gross Fair Market Value for such Property determined pursuant to
paragraph 8.3.2(a) above, then (i) the Initiating Partner must notify the
Non-Initiating Partner of such Qualifying Offer, and (ii) the Non-Initiating
Partner shall have the right to purchase such Property on the terms of such
highest Qualifying Offer within ninety (90) days of the delivery (or deemed
delivery) of the notice of such Qualifying Offer, which right shall be deemed
waived unless, within thirty (30) days after the delivery (or deemed delivery)
of the notice of such Qualifying Offer, the Non-Initiating Partner gives notice
to the Initiating Partner of its intention to purchase such Property on the
terms of such Qualifying Offer.

                  (e) For purposes of this subsection 8.3.2, an offer is a
"QUALIFYING OFFER" if, and only if, such offer (i) is for a fixed price payable
in cash only, (ii) is not based in whole or in part on assuming any Make-Whole
Loan, (iii) will not constitute a non-exempt prohibited transaction under ERISA
or the Code, (iv) will not violate or cause the Partnership to violate any
Securities Laws, and (v) will not create a reasonable likelihood that any income
of the Partnership allocated to BIT Partner will be taxed as UBTI.

      Section 8.4. Limitations on Exercise.

                  (a) Notwithstanding any provision of this Article 8 to the
contrary, in no event shall any Property or any interest therein be conveyed
without obtaining the approval thereof by the holder of any mortgage or other
security instrument encumbering such Property, to the extent such approval is
required by the terms of such mortgage or other instrument.

                  (b) Notwithstanding any provision of this Article 8 to the
contrary, neither Partner may separately exercise any of the rights under this
Article 8 if a Partner has initiated the sale of any Property pursuant to
Article 12 hereof.

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                  (c) Notwithstanding any provisions of this Article 8 to the
contrary, neither Partner may separately exercise any of the rights under
Section 8.2 if a Partner has initiated the liquidity provisions pursuant to
Section 8.3 hereof.

                                    ARTICLE 9
                                    INSURANCE

      Section 9.1. Coverage. The Managing Partner shall, during all times while
the Partnership (or any Subsidiary) is engaged in the operation of any Property,
or in any construction operations or other similar activities, cause the
Partnership (or each applicable Subsidiary) to carry, at the expense of the
Partnership, and require all of its contractors and subcontractors to carry,
insurance in amounts, with deductibles, and from companies reasonably
satisfactory to the Partners. The Partners shall evaluate and agree from time to
time, as necessary, with respect to the coverages then in effect or which should
be in effect, and may in their joint determination add, eliminate, expand or
reduce any of the same, which determination shall include, but not be limited
to, the availability of coverages at commercially reasonable rates.
Notwithstanding anything to the contrary contained in this Article 9, the
Partnership shall not be required to maintain any insurance coverage which is
not available at commercially reasonable rates. Without limiting the generality
of the foregoing (but subject to the qualifications set forth above), the
Managing Partner shall maintain on behalf of the Partnership, the Subsidiary
General Partner, and/or the Subsidiaries, as applicable, the following minimum
coverages:

                  (a) Insurance which shall comply with the Worker's
Compensation, Employer's Liability or similar laws of the State in which each
Property is located;

                  (b) Commercial general liability insurance covering all
operations of the Partnership (and each Subsidiary) in a minimum amount of not
less than $10,000,000 per occurrence (an "occurrence" type policy) and for all
such occurrences in the aggregate, including (i) coverage for personal and
bodily injury, death, and property damage, and (ii) coverage for
products/completed operations in an amount of not less than $2,000,000 per
occurrence and for all such occurrences in the aggregate (provided, however,
that the insurance required in this paragraph (b) can be met through any
combination of General Liability and Excess Liability policies);

                  (c) Commercial property insurance providing "all-risk"
coverage in the broadest form then reasonably available and in amounts equal to
the full replacement cost of each Property (with no coinsurance or deduction for
physical depreciation thereof), and also including coverage against the loss of
rental income from each Property for a period of at least twelve (12) months;

                  (d) Boiler and machinery insurance covering physical damage to
the Improvements on each Property and to the major components of any central

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heating, air conditioning or ventilation systems and such other equipment as the
Partners may elect to insure;

                  (e) Flood insurance for each Property (if applicable and
available) in an amount reasonably determined by the Partners;

                  (f) Automobile liability insurance covering "any auto" engaged
in the operations of the Partnership (and each Subsidiary); and

                  (g) For each Property, other reasonably available insurance
coverages in reasonable amounts as customarily maintained for a type of property
similar to such Property.

      Section 9.2. Insurance During Any Period of Construction, Repair,
Restoration or Replacement.

                  (a) If not covered by the policy referenced in Section 9.1(c)
above, any construction, repair, restoration or replacement of any Property
shall be insured via a completed value Builder's Risk policy (non-reporting
form) in the broadest form then reasonably available in an amount approved by
the Partners (including coverage for 100% of soft costs).

                  (b) The Managing Partner shall require that each architect,
engineer or other design professional engaged by the Partnership in connection
with any construction, repair, restoration or replacement of any Property,
maintain errors and omissions or similar coverages in limits and written by
companies Approved by the Partners, and if such policies contain a retroactive
date, that date must be no later than the date of any contract between the
Managing Partner (or the Partnership or applicable Subsidiary, as the case may
be) and such architect, engineer or other design professional.

      Section 9.3. Evidence of Insurance; Notices.

                  (a) The Managing Partner shall deliver to BIT Partner,
promptly upon the execution and delivery of this Agreement and thereafter at
least five (5) days before the expiration date of each such policy, original
policies (or renewals or extensions of the insurance afforded thereby) or
duplicates thereof, or binders evidencing such insurance, together with evidence
of payment of the current premiums therefor (satisfactory to BIT Partner) and
the Managing Partner shall deliver to BIT Partner, at least five (5) days prior
to the expiration or cancellation of, or material change in, any such insurance,
additional policies or duplicates thereof, or binders evidencing the renewal of
such insurance with evidence of payment of the premium therefor.

                  (b) Each insurance policy of the Partnership shall contain an
endorsement requiring the insurer to notify the Partnership, in writing and at
least thirty (30) days in advance of any material change in the policy and of
any notice of

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cancellation; and upon its receipt of any such notice the Managing Partner shall
promptly forward a copy of the same to all Partners.

                  (c) The Partners, the Property Manager, and each Affiliate
involved in the ownership or operation of any Property shall be named as
additional insureds. If insurance is issued in the name of a Subsidiary, the
Partnership and the Subsidiary General Partner also shall be named as additional
insureds.

      Section 9.4. Concerning Liability Insurance. With respect to the policies
required under Section 9.1(b), the Managing Partner shall obtain endorsements
thereto naming the Property Manager, each Affiliate involved in the ownership or
operation of any Property, the Partners, the Trust, Trustee, and their
respective directors, officers, agents and employees, and the successors and
assigns of each of them, as Additional Insureds, as their interests may appear.
If such insurance is issued in the name of a Subsidiary rather than in the name
of the Partnership, the Partnership and the Subsidiary General Partner also
shall be named as additional insureds. The coverage afforded the Additional
Insureds under such policies shall be primary and non-contributory.

      Section 9.5. Miscellaneous Insurance Matters.

                  (a) Any insurance coverage required to be provided by the
Managing Partner/Owner in this Section 9, shall be considered at all times to be
primary insurance and any coverage carried by any Partner in its individual
capacity, shall be considered excess insurance. Additionally, the Managing
Partner shall require all contractors and subcontractors of the Partnership to
comply fully with the Occupational Safety and Health Act of 1970, as amended
from time-to-time.

                  (b) Title insurance with respect to the Land and Improvements
of each Property and all other real estate of the Partnership or any Subsidiary;

      Section 9.6. Insurers. All insurance policies required under Sections 9.1
and 9.2 of this Agreement shall be purchased from, and maintained with, insurers
licensed to do business as insurers in the State in which the applicable Land is
located. All insurance policies required under Section 9.1(a), (b), (c) and (d),
and Section 9.2(a) shall be purchased from, and maintained with, either (i)
insurers having a rating of at least A-, VIII in A.M. Best Company's Key Rating
Guide, or (ii) Royal Indemnity Company (so long as no material adverse change
occurs in the condition or practices of Royal Indemnity Company as existing on
the Initial Funding Date which would make Royal Indemnity Company a commercially
unreasonable choice as an insurer).

      Section 9.7. Contravention of Insurance. The Partners shall not do
anything or, to the extent within their control, permit anything to be done on
or about any Property that shall impair or contravene any policies of insurance
that may be carried on such Property, or any part thereof. The Managing Partner
shall comply with all reasonable requirements or recommendations of each
insurance underwriter with respect to management of the risks insured by such
underwriter.

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      Section 9.8. Waiver of Subrogation. All insurance policies required in
this Article 9 shall contain a waiver of the insurer's rights of subrogation in
favor of the applicable Subsidiary, the Partners, the Property Manager and any
Affiliates of any such Persons.

                                   ARTICLE 10
                           DISSOLUTION AND TERMINATION

      Section 10.1. Dissolution.

                  (a) If an Event of Dissolution (as hereinafter defined)
described in subsections 10.1(b)(ii), (v), (vi), (vii), or (viii) below shall
occur, the Partnership shall be wound up and terminated as provided in this
Article 10. If an Event of Dissolution described in subsections 10.1(b)(i),
(iii) or (iv) below occurs, then the Partnership shall be wound up and
terminated unless the other Partner elects to continue the Partnership, which
election shall be exercised, if at all, by notice given, within ninety (90) days
following the occurrence of such Event of Dissolution, to the Partner causing
the Event of Dissolution. If the other Partner elects to continue the
Partnership following an Event of Dissolution, and the Partner causing the Event
of Dissolution is the Managing Partner, the other Partner shall designate one or
more Persons to serve as the substitute Managing Partner(s) hereunder.

                  (b) The term "EVENT OF DISSOLUTION" as used herein shall mean:

                        (i) the bankruptcy, withdrawal (including a withdrawal
under Section 7.6 of this Agreement), removal or dissolution of a Partner;

                        (ii) the sale of all of the Properties (including the
transfer or sale of the Properties pursuant to Section 8.3 of this Agreement);

                        (iii) at the election of the non-defaulting Partner, the
occurrence of a Termination Default hereunder on the part of a Partner;

                        (iv) a transfer of a Partner's interest in the
Partnership in violation of Section 7.1 or 7.2 above; provided, however, that
notwithstanding the foregoing, if such transfer was a violation of Section 7.1
or 7.2 above and such transfer did not constitute a voluntary act of such
Partner, then the Persons involved shall have thirty (30) days from and after
the date of notice to such Persons from the Partnership or the other Partner of
such violation to cure the default before an Event of Dissolution shall be
deemed to have occurred;

                        (v) any dissociation of a Partner (whether voluntary or
involuntary, and whether a wrongful dissociation), including, without
limitation, those events causing dissociation as set forth in Section 15-601 of
the Act (other than those set forth at paragraphs 4(ii) and 8 of such Section
15-601 of the Act);

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                        (vi) any event causing the dissolution of the
Partnership under the Act, including, without limitation, those set forth in
Section 15-801 of the Act (provided, however, that the Partners acknowledge and
agree that the Partnership is not a "partnership at will" and, therefore,
neither Partner has any right or power to cause the dissolution of the
Partnership under Section 15-801(1) of the Act);

                        (vii) the entry of a decree of judicial dissolution
under Section 15-801 of the Act; or

                        (viii) the completion of the application of a
liquidation method pursuant to Section 8.3 hereof;

provided, however, that the Partnership shall not terminate until its affairs
have been wound up and its assets distributed as provided herein.

                  (c) If an Event of Dissolution described in Sections
10.1(b)(i), 10.1(b)(iii), or 10.1(b)(iv) shall occur and the other Partner shall
elect to continue the Partnership pursuant to Section 10.1(a), then (i) the
Partnership will continue; and (ii) in any such case the Partner causing the
Event of Dissolution (or its legal representative) will continue as a Partner
with the same share of Net Income and Net Losses of the Partnership and the same
Participation Percentages as before such Event of Dissolution and will have all
the rights of a Partner hereunder; provided, however, that such Partner (1)
shall no longer be the Managing Partner (if it had been the Managing Partner),
and (2) shall have no voting or approval rights granted to any Partner,
provided, however, that such Partner shall continue to have (A) voting and
approval rights with respect to any Special Major Decision to be exercised in
accordance with Section 4.2 of this Agreement (provided, further, however, that
such Partner shall not have the right to conditional consent to any Special
Major Decision), and (B) the rights granted to a Partner under Section 8.3 of
this Agreement.

                  (d) As used in Sections 7.1, 7.2 and 10.1(b) above, the term
"BANKRUPTCY" shall mean (i) the commencement by a Partner of a voluntary case
under any Chapter of the Bankruptcy Code (Title 11 of the United States Code),
as now or hereafter in effect, or the taking by a Partner of any equivalent or
similar action by filing of a petition or otherwise under any other federal or
state law in effect at the time relating to bankruptcy or insolvency, (ii) the
filing of a petition against any Partner under any Chapter of the Bankruptcy
Code (Title 11 of the United States Code), as now or hereafter in effect, or the
filing of a petition seeking any equivalent or similar relief against any
Partner under any other federal or state law in effect at the time relating to
bankruptcy or insolvency, in any case, which is not discharged within ninety
(90) days, (iii) the making by a Partner of a general assignment for the benefit
of any of its creditors, (iv) the appointment of a receiver, trustee, custodian
or similar officer for a Partner or for the property of a Partner and the
failure by a Partner to secure the discharge of such receiver, trustee,
custodian or similar officer within ninety (90) consecutive days from the date
of appointment, or (v) the admission in writing by any Partner of any inability
to pay debts generally as they become due.

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      Section 10.2. Appointment of Liquidating Partner. Upon the dissolution of
the Partnership, if the Partnership's business is not continued pursuant to
Section 10.1(a) hereof, either (a) Sponsor Partner, if dissolution was caused
other than as a result of a default by Sponsor Partner or (b) BIT Partner, if
dissolution was caused by a default by Sponsor Partner, shall engage an advisor
to wind up the affairs of the Partnership and distribute its assets. The Partner
so selected and acting hereunder from time to time ("THE LIQUIDATING PARTNER")
shall be compensated for its services hereunder and shall proceed diligently to
wind up the affairs of the Partnership and distribute its assets in the manner
hereinafter provided.

      Section 10.3. Distributions and Other Matters. Promptly upon an Event of
Dissolution, if the Partnership's business is not continued pursuant to Section
10.1(a) hereof, the Liquidating Partner will liquidate the assets of the
Partnership and apply and distribute the proceeds of such liquidation as follows
and in the following order of priority:

                  (a) to the payment of the debts and liabilities of the
Partnership (other than those to Partners) in the order of priority provided by
law; provided that the Liquidating Partner shall first pay (to the extent
permitted by law) liabilities with respect to which any Partner is or may be
personally liable;

                  (b) to the payment of all Make-Whole Loans, if any;

                  (c) to the payment of the debts of the Partnership to Partners
for Emergency Loans and/or Default Loans on a pari passu pro rata basis (based
on the then-outstanding amounts of such indebtedness);

                  (d) to the payment of the expenses of liquidation of the
Partnership in the order of priority provided by law; provided that the
Liquidating Partner shall first pay, to the extent permitted by law, expenses
with respect to which any Partner is or may be personally liable;

                  (e) to the setting up of such reserves as the Liquidating
Partner may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership arising out of or in connection
with the Partnership business; provided that any such reserve will be held by
the Liquidating Partner for the purpose of disbursing such reserves in payment
of any of the aforementioned contingencies and, at the expiration of such period
as the Liquidating Partner shall deem advisable, to distribute the balance
thereafter remaining in the manner hereinafter provided; and

                  (f) then, after taking into account allocations of Net Income
and Loss pursuant to Article 5 and any prior distributions of cash or property
to the Partners, in accordance with the positive Capital Account balances of the
Partners.

The foregoing liquidating distributions shall be made not later than (A) the
last day of the taxable year in which the liquidation occurs (as determined
under Regulations

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Section 1.704-1(b)(2)(ii)(g)) or, (B) if later, the ninetieth (90th) day after
the liquidation occurs.

      Section 10.4. Distributions of Property. No Partner may demand or receive
property other than cash in return for its contributions, loans or advances or
upon dissolution as provided herein, except if Approved by the Partners. If it
becomes necessary to make a distribution of Partnership property in kind, such
property shall be transferred and conveyed to the Partners and in the case of
BIT Partner, to such person or entity as it shall designate, so as to vest in
each of them as a tenant in common an undivided interest in the whole of said
property equal to such Partner's interest in the distribution of proceeds in
accordance with Section 5.2, or shall be transferred to a corporate trustee for
the benefit of Sponsor Partner and BIT Partner, if any, in proportion to their
interests in the distribution. If such a property distribution occurs, (i) the
property distributed (or, in the case of a complete or partial redemption of a
Partner, all Partnership property) shall be revalued immediately before its
distribution at its gross fair market value (except that no property shall be
valued at less than the amount of the nonrecourse indebtedness (or appropriate
portion thereof) to which it is subject), (ii) the increase or decrease in the
value of such property as compared to the value at which such property is then
carried on the books of the Partnership shall be allocated among the Partners as
if there were a taxable disposition of such property at such gross fair market
value on such date, (iii) the Capital Accounts of the Partners shall be adjusted
to take into account any Net Income or Net Loss resulting from the deemed
taxable disposition, (iv) with respect to any revalued property retained within
the Partnership, any Partnership depreciation, depletion, amortization, or gain
or loss, as computed for tax purposes shall be allocated so as to take account
of the variation between the adjusted tax basis and the book value of such
property in the same manner as under Code Section 704(c).

      Section 10.5. Actions of the Liquidating Partner; Statements of Account;
Articles of Cancellation.

                  (a) During the period of liquidation (which will be such
reasonable time as may be required for the orderly completion of liquidation and
distribution as set forth above) the Liquidating Partner, or its designee, as
trustee for the benefit of all Partners as tenants in common, will take any and
all action necessary or appropriate to complete such liquidation and
distribution as provided in this Article 10, having for such purpose all of the
powers enumerated in Article 4 appropriate to accomplish the same.

                  (b) The Liquidating Partner, or its designee, will prepare a
final statement of the accounts of the Partnership as of the date of
termination, and, as promptly as possible thereafter, a copy thereof will be
furnished to each Partner. Such statement will set forth the actual or
contemplated application and distribution of the assets of the Partnership. Upon
completion of the distribution as required hereby, (i) a further statement for
the period of liquidation will be so prepared by the Liquidating Partner and
furnished to each Partner and (ii) the Partners (or their legal

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representatives, heirs, successors or assigns) will cause articles of
dissolution and cancellation to be filed to the extent and in the manner
required by the Act.

                                   ARTICLE 11
                                     DEFAULT

      Section 11.1. Defaults and Remedies. If a Partner defaults in the
performance or nonperformance of any covenant or other obligation hereunder or
commits fraud or misapplies funds (a "DEFAULTING PARTNER"), the other Partner
("NONDEFAULTING PARTNER") shall have the right to serve the Defaulting Partner a
notice of default ("NOTICE OF DEFAULT") specifically setting forth the nature of
the default and upon receipt of such notice the Defaulting Partner shall have a
period of thirty (30) days to cure such default; provided, however, that if such
default is also a default under applicable loan documents, the period afforded
the Defaulting Partner to effect such cure shall not exceed the period permitted
under such applicable loan documents. If such default is not capable of being
cured within such period and can be cured within a reasonable period of time
without a material adverse impact on a Property, the Partnership, the Subsidiary
General Partner, any Subsidiary or the Nondefaulting Partner, and the Defaulting
Partner has commenced in good faith the curing of such default within such
thirty (30) day period and does thereafter prosecute such cure to completion
with diligence, the Defaulting Partner shall have a reasonable period thereafter
to cure such default, which period shall not exceed an additional thirty (30)
days or such longer period as the Nondefaulting Partner may approve in writing
in its sole discretion; provided, however, that if such default is also a
default under applicable loan documents, the period afforded the Defaulting
Partner to effect such cure shall not exceed the period permitted under such
applicable loan documents. If the Defaulting Partner does not cure such default
within the applicable period permitted to cure such default, or ceases to
prosecute such cure to completion with diligence (such default, at the
expiration of such period or such efforts, as the case may be, being an "EVENT
OF DEFAULT" hereunder), the Nondefaulting Partner shall have the right to do one
or more of the following, at the same or different times for itself and on
behalf of the Partnership:

                  (a) Bring any proceeding in the nature of specific
performance, injunction or other equitable remedy, it being acknowledged by each
of the Partners that damages at law may be an inadequate remedy for a default or
threatened breach of this Agreement;

                  (b) Bring any action at law on behalf of the Partnership as
may be permitted to recover damages;

                  (c) If the Defaulting Partner is the Managing Partner and the
Event of Default is a Termination Default, elect to dissolve and terminate the
Partnership pursuant to Section 10.1(a) hereof;

                  (d) If the Defaulting Partner is the Managing Partner and the
Event of Default is a Termination Default, elect to remove the Defaulting
Partner as the

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Managing Partner by written notice to that effect given to the Defaulting
Partner, in which case the Nondefaulting Partner, or an Affiliate or designee of
the Nondefaulting Partner, shall become the Managing Partner;

                  (e) If the Event of Default is a Termination Default, initiate
the liquidity provisions of Section 8.3 hereof (and, if the Defaulting Partner
is Sponsor Partner, BIT Partner may initiate such provisions even if on or
before the fifth (5th) anniversary of the Initial Funding Date); and/or

                  (f) Take or initiate such other action and enforce such other
remedies as may be available under this Agreement, at law, in equity or
otherwise.

It is further agreed that the Defaulting Partner shall pay, and indemnify the
Nondefaulting Partner against, all reasonable legal fees, costs and expenses,
including appraisal costs, if any, lawfully and reasonably incurred by the
Nondefaulting Partner in pursuing any of the remedies set forth in Sections
11.1(a) through (f) above following an Event of Default on the part of the
Defaulting Partner.

      Section 11.2. Removal of Sponsor Partner as the Managing Partner. Upon
removal of Sponsor Partner as the Managing Partner as above provided, Sponsor
Partner shall continue as a Partner with the same Capital Account, Participation
Percentage, and Net Income and Net Loss Allocation, except that (i) Sponsor
Partner shall have no approval or voting rights otherwise granted to any Partner
under this Agreement, provided, however, that Sponsor Partner shall continue to
have (A) voting and approval rights with respect to any Special Major Decision
to be exercised in accordance with Section 4.2 of this Agreement (provided,
further, however, that Sponsor Partner shall not have the right to conditional
consent to any Special Major Decision), and (B) the rights granted to a Partner
under Section 8.3 of this Agreement, and (ii) Sponsor Partner shall not be
entitled to be paid the Asset Management Fee, the Asset Acquisition Fee, or the
Asset Disposition Fee.

      Section 11.3. Cross-Default. A Partner shall be in default under this
Agreement (and the other Partner shall be entitled to all rights and remedies
reserved under this Agreement) if such Partner defaults (subject to any
applicable notice and/or opportunity to cure) under any other agreement with the
Partnership, the other Partner, or any Affiliate of the other Partner in
connection with the financing (whether debt or equity) of any Property
(including, without limitation, any Investment Agreement or any agreement
evidencing or securing any Make-Whole Loan).

                                   ARTICLE 12
                                    DEADLOCK

      Section 12.1. Prior to Third Year. On or before the second (2nd)
anniversary of the Initial Funding Date, if both Partners have exhausted
commercially reasonable efforts to agree on a Major Decision pertaining to a
Property for a period of at least thirty (30) days, either Partner may

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initiate the sale of such Property, but no Partner may initiate a sale pursuant
to this Section 12.1 more than once in any year. Such sale shall be conducted in
accordance with Section 8.2 of this Agreement (notwithstanding the initiation of
such sale prior to the second (2nd) anniversary of the Initial Funding Date),
except that, if the Non-Initiating Partner (as such term is defined in Section
8.2 above) exercises its Right of First Offer (as such term is defined in
Section 8.2 above), the Initiating Partner (as such term is defined in Section
8.2 above) may only accept, on behalf of the Partnership, a Qualifying Offer (as
such term is defined in Section 8.2 above) equal to or greater than one hundred
percent (100%) of the amount of the First Offer (as such term is defined in
Section 8.2 above).

      Section 12.2. From and After Third Year. After the second (2nd)
anniversary of the Initial Funding Date, either Partner may initiate the sale of
a Property in accordance with, and subject to, Section 8.2 of this Agreement.

                                   ARTICLE 13
                                USE OF TRADE NAME

            If (i) neither Sponsor Partner nor any Affiliate of Sponsor Partner
owns an interest in the Partnership, or (ii) neither Sponsor Partner nor any
Affiliate of Sponsor Partner is the Managing Partner (notwithstanding the
continued ownership of an interest in the Partnership by Sponsor Partner or an
Affiliate of Sponsor Partner), then the substitute Managing Partner shall cause
the Partnership and all Subsidiaries to cease to use the name "Keystone" (a)
immediately as to the marketing of the Properties, and (b) as soon as practical
with respect to all other uses of the name "Keystone" in connection with the
Properties. Sponsor Partner agrees, for itself and its Affiliates, to cooperate
with the substitute Managing Partner in its efforts to remove and cease to use
the name "Keystone" in connection with the Properties.

            At all times while any Property is operated under the "Keystone"
name or is managed by Sponsor Partner or an Affiliate of Sponsor Partner, such
Property will be managed in all material respects in accordance with at least
the same quality standards and management policies as are used by Sponsor
Partner and its Affiliates in operating industrial properties which are wholly
owned or otherwise managed by Sponsor Partner or its Affiliates.

            In no event shall the Partnership, the Subsidiary General Partner,
or any Subsidiary use "Keystone" in its legal or registered name.

                                   ARTICLE 14
                                     NOTICES

      Section 14.1. Notices. All notices, demands or requests which any party
may be required or may desire to give under this agreement (a) shall be in
writing, and (b) until otherwise specified in a written notice by the respective
parties or any of them, shall be sent to the parties at the respective addresses
given below. Each such notice, demand

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or request (i) shall be deemed to have been properly served for all purposes if
personally delivered or deposited into the United States Mail registered or
certified mail, and return receipt requested, or by Federal Express or other
similar overnight delivery service, postage prepaid, to its addressee at its
address as set forth below; (ii) if personally delivered shall be deemed to have
been received by its addressee upon delivery or refusal to accept delivery;
(iii) if so mailed by any party shall be deemed to have been received by its
addressee upon receipt or refusal to accept delivery as indicated by return
receipt; and (iv) if sent by Federal Express or other overnight delivery service
in accordance with such service's requirements for delivery on the next business
day shall be deemed to have been received by its addressee on the next business
day after the day of deposit with such service. In addition, any such notice,
demand or request may be sent by telefax, telex or other wire transmission (with
request for assurance of receipt in a manner appropriate with respect to
communications of that type, and provided that a confirmation copy is
concurrently sent by a nationally recognized express courier for overnight
delivery, as provided above).

             If to Sponsor Partner:

                         Keystone Operating Partnership, L.P.
                         200 Four Falls Corporate Center, Suite 208
                         West Conshohocken, Pennsylvania  19428
                         Attention:  General Counsel
                         Facsimile:  (484) 530-0131

             With a copy to:

                         Neal, Gerber & Eisenberg
                         Two North LaSalle Street, Suite 2200
                         Chicago, Illinois  60606
                         Attention:  Douglas J. Lubelchek, Esquire
                         Facsimile:  (312) 269-1747

             If to BIT Partner:

                         BIT Investment Twenty Limited Partnership
                         c/o Mercantile-Safe Deposit and Trust Company, Trustee
                         Institutional Real Estate
                         Two Hopkins Plaza, Eighth Floor
                         Baltimore, Maryland  21201
                         Attention:  Asset Management
                         Facsimile:  (410) 237-5420

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<PAGE>
             With a copy to:

                         Ballard Spahr Andrews & Ingersoll, LLP
                         300 East Lombard Street, 18th Floor
                         Baltimore, Maryland  21202
                         Attention:  Raymond G. Truitt, Esquire
                         Facsimile:  (410) 528-5650

      Section 14.2. Change of Address. Either Partner may specify a different
address by sending notice to the other Partner of such different address, which
notice shall be effective ten (10) days after the delivery, or deemed delivery
thereof, as provided in Section 14.1.

                                   ARTICLE 15
                                  MISCELLANEOUS

      Section 15.1. Exculpation and Indemnification.

                  (a) Except as may be otherwise expressly provided in any
separate indemnification agreement issued by Sponsor Partner to BIT Partner,
neither the Managing Partner, nor any partner, officer, director or trustee of
the Managing Partner (or, at any time Sponsor Partner is the Managing Partner,
Sponsor or other general partner of Sponsor Partner) shall be liable,
responsible or accountable in damages or otherwise to the Partnership or any
other Partners for any action or failure to act taken or omitted on behalf of
the Partnership in good faith and commercially reasonably believed to be within
the scope of the authority conferred on the Managing Partner under this
Agreement or by law unless such action constituted gross negligence, willful
misconduct or a fraudulent act on the part of the Managing Partner or its
Affiliates or its shareholders, partners, officers, agent or employees.
Notwithstanding the foregoing, if the Managing Partner or any such other person
receives any payment of funds or other benefit in violation of this Agreement,
then the Managing Partner shall be liable to the Partnership and the other
Partners with respect thereto. The Managing Partner will be deemed to have acted
in good faith if it relies on advice of the Accountant, nationally recognized
law firms, or unaffiliated engineers, or other professionals (as to advice on
matters within their respective areas of expertise) who have been selected by
the Managing Partner and, if otherwise required under this Agreement, Approved
by the Partners.

                  (b) The Partnership, to the extent not prohibited by Section
406 or Section 410 of ERISA, shall indemnify, defend and hold harmless the
Managing Partner, its Affiliates, and their respective partners, agents and
employees from and against any and all loss, cost, damage, expense, claim or
liability whatsoever (including reasonable attorneys' fees and litigation costs)
incurred by the Managing Partner and its Affiliates (and their respective
partners, agents and employees) arising out of or in connection with the
authorized services rendered by the Managing Partner to the

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Partnership, in discharge of its duties hereunder, except for its or their acts
or omissions constituting fraud, willful misconduct, or gross negligence.

                  (c) If the Partnership is made a party to any litigation or
otherwise incurs any loss or expense as a result of or in connection with any
Partner's personal obligations or liabilities unrelated to the Partnership, such
Partner shall indemnify, defend and reimburse the Partnership for all such loss
and expense incurred, including reasonable attorneys' fees, and the interest of
such Partner in the Partnership may be charged therefor.

                  (d) The Managing Partner hereby agrees to indemnify, defend
and hold the Partnership and the other Partner (and its respective Affiliates,
agents, officers, trustees, employees and attorneys) harmless from any liability
to any third person or entity incurred by reason of any gross negligence,
willful misconduct, or fraudulent act on the part of the Managing Partner or its
Affiliates or its shareholders, partners, officers, agents, or employees arising
out of or in connection with the services rendered by the Managing Partner
relating to the ownership and operation of the Property or otherwise with
respect to the affairs of the Partnership.

                  (e) Each Partner other than the Managing Partner (including,
to the extent not prohibited by Section 406 or Section 410 of ERISA, BIT
Partner) hereby agrees to indemnify, defend and hold the Partnership and the
other Partner (and its respective Affiliates, agents, officers, trustees,
employees and attorneys) harmless from any liability to any third person or
entity incurred by reason of any gross negligence, willful misconduct, or
fraudulent act on the part of such Partner or its Affiliates or its
shareholders, partners, officers, agents, or employees arising out of or in
connection with the exercise of any authority granted to such Partner under this
Agreement or any action taken by such Partner on behalf of the Partnership
outside the scope of authority granted to such Partner hereunder.

                  (f) Except as otherwise provided in this Agreement, the
Partnership and each Partner shall have, and shall be entitled to maintain and
assert, all rights, remedies and actions that it may have against any other
Partner, at law, in equity, or pursuant to any Investment Agreement.

      Section 15.2. Filings. The Partners agree that they shall from time to
time sign, acknowledge, and file any certificates, instruments or documents
(including fictitious name certificates), as well as amendments thereto, as may
be required by or be appropriate under the laws of the State of Delaware or of
any other state or jurisdiction in which the Partnership is doing or intends to
do business in connection with the use of the name of the Partnership by the
Partnership, or otherwise in connection with the conduct of the business and
affairs of the Partnership.

      Section 15.3. Inspections. Either Partner shall have the full right and
privilege at reasonable times and upon reasonable prior written notice, at its
own cost and expense, to inspect all or any part of the Land, Property, other
Partnership property (subject to the

                                       78
<PAGE>
rights of all tenants occupying space therein) and/or all books and records of
the Partnership and all Subsidiaries.

      Section 15.4. Estoppel Certificates. Upon the request of any Partner at
reasonable intervals, each Partner shall deliver to the requesting Partner a
certificate stating (i) whether or not the Partnership is in full force and
effect; (ii) that this Agreement has not been modified (except by any instrument
or instruments identified in said certificate); and (iii) that the Partner
executing such certificate is not aware of any default by the requesting Partner
(or if there is such a default, the certificate shall specify the nature and
extent thereof).

      Section 15.5. Remedies. Notwithstanding any other provision of this
Agreement all rights and remedies of Partners provided for herein shall be
deemed cumulative and not exclusive and the exercise of any one thereof shall
not be deemed a waiver of any other right or remedy.

      Section 15.6. Partial Invalidity. The invalidity or unenforceability of a
portion of this Agreement will not affect the validity or enforceability of the
remainder hereof.

      Section 15.7. Governing Law; Successors. Except to the extent a particular
provision of this Agreement relates to Federal law, this Agreement will be
governed by and construed according to the laws of the State of Delaware, and
will bind and inure to the benefit of the heirs, personal representatives, and
permitted successors and assigns of the Partners.

      Section 15.8. Amendment. This Agreement may be amended only by the
unanimous written consent of both Partners.

      Section 15.9. Execution in Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall be deemed one original.

      Section 15.10. Computation of Time. In computing any period of time
pursuant to this Agreement, the day of the act, date of notice, event or default
from which the designated period of time begins to run will not be included. The
last day of the period so counted will be included, unless it is not a Business
Day, in which event the period runs until the end of the next day which is a
Business Day.

      Section 15.11. Titles and Captions. All titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context hereof.

      Section 15.12. Independent Ventures. Nothing contained in this Agreement
shall be deemed to restrict in any way the freedom of any Partner to conduct,
independently of the Partnership, any business or other activity whatsoever,
whether or not similar to or competitive with the business of the Partnership,
without any accountability to the Partnership or to the other Partners.

                                       79
<PAGE>
      Section 15.13. Non-Discrimination in Employment. The Partnership shall not
discriminate against any employee or applicant for employment by the Partnership
because of race, creed, color, age, sex, marital status, national origin or
disability. The Managing Partner shall take action (which shall be deemed to be
Approved by the Partners) to require that applicants are employed, and that
employees are treated during employment, without regard to their race, creed,
color, sex, age, marital status, national origin or disability. Such action
shall include, but not be limited to, the following: employment, upgrading,
demotion or transfer; recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of compensation; and selection for
training, including apprenticeship. The Managing Partner agrees to post in
conspicuous places, available to employees and applicants for employment,
notices to be provided setting forth the provisions of this non-discrimination
clause.

      Section 15.14. Prohibited Payments. The Partnership, its Partners, any
employee or third party acting on behalf of the Partnership or the Managing
Partner or any Partner in connection with conducting the affairs of the
Partnership shall not make any bribes, kickbacks, or other payments regardless
of form whether in money, property or services, directly or indirectly, to or
for the benefit of any government official or employee, domestic or foreign,
whether on the national level or a lower level such as state, county or local
(in the case of a foreign government also including any level inferior to the
national level) and including regulatory agencies or governmentally controlled
businesses, corporations, companies or societies, for the purpose of affecting
such person's action or the action of the government such person represents to
obtain favorable treatment in securing business or to obtain special
concessions, or to pay for business secured or special concessions obtained in
the past. No money or property of the Partnership shall be paid or used or
offered, nor shall the Managing Partner in connection with conducting the
affairs of the Partnership directly or indirectly pay or use or offer, consent
or agree to pay or use or offer any money or property of the Partnership, for or
in aid of, any political party, committee or organization, or for, or in aid of,
any corporation, joint-stock or other association organized or maintained for
political purposes, or for, or in aid of, any candidate for political office or
for nomination for such offices, or in connection with any election including
referendum or constitutional amendment, or for any political purpose whatever,
or for lobbying in connection with legislation or regulation thereunder, or for
the reimbursement or indemnification of any person for moneys or property so
used.

      Section 15.15. Entire Agreement. This Agreement and the Exhibits hereto
(all of which are hereby made a part hereof and incorporated herein) and any
other agreements referred to herein, contain the entire understanding between
the Partners, and supersede any prior understandings and agreements between them
representing the subject matter hereof.

      Section 15.16. Demands, Capital Calls, Notices, Consents and Approvals.
The Partners agree that whenever this Agreement requires the consent or approval
of all or any of the Partners or involves demands, capital calls and other
notices, the Partners shall act diligently and with all reasonable dispatch and
such consent, approval

                                       80
<PAGE>
or response shall not be arbitrarily or unreasonably withheld, delayed or
qualified except as otherwise expressly provided in this Agreement and such
demands and capital calls shall be made pursuant to proper notice as set forth
in Article 14 to the designated representative in Section 4.8. In fulfilling
obligations and exercising rights under this Agreement, each Partner shall
cooperate with the other Partner to promote the efficient acquisition,
financing, use and ownership of the Property.

      Section 15.17. Meetings. Any Partner shall have the right to call a
meeting of the Partners by delivery of a notice, not less than ten (10) Business
Days prior to any such meeting, to the other Partner specifying the date, time
and place of such meeting, and further specifying whether such meeting shall be
in person or by teleconference.

      Section 15.18. No Brokers. Each Partner shall and does hereby covenant and
agree, absolutely, unconditionally and irrevocably, to indemnify and hold
harmless the Partnership and the other Partner from any damage, claim, expense
or loss incurred by the indemnitee by reason of any third-party brokerage or
finder's agreements made by the indemnifying Partner with respect to the
transactions contemplated by this Agreement, other than those expressly
disclosed in an Investment Agreement, and except as may hereafter be authorized
hereunder in connection with any disposition, financing or refinancing of the
Property.

      Section 15.19. Waiver of Jury Trial. (A) EACH OF THE PARTNERS HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, AFTER OPPORTUNITY FOR
CONSULTATION WITH INDEPENDENT COUNSEL, WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR OBLIGATIONS (I) UNDER
THIS AGREEMENT, (II) ARISING FROM THE FINANCIAL RELATIONSHIP BETWEEN THE PARTIES
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER DOCUMENT REFERRED TO
HEREIN, OR (III) ARISING FROM ANY COURSE OF DEALING, COURSE OF CONDUCT,
STATEMENT (VERBAL OR WRITTEN) OR ACTION OF THE PARTIES IN CONNECTION WITH SUCH
FINANCIAL RELATIONSHIP; (B) NEITHER PARTNER WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED; (C) THE PROVISIONS OF THIS SECTION
HAVE BEEN FULLY NEGOTIATED BY THE PARTNERS AND THESE PROVISIONS SHALL BE SUBJECT
TO NO EXCEPTIONS; AND (D) NO PARTNER HAS IN ANY WAY AGREED WITH OR REPRESENTED
TO THE OTHER PARTNER THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.

      Section 15.20. Waiver of Partition. Unless otherwise expressly authorized
in this Agreement, no Partner will, either directly or indirectly, take any
action to require partition or appraisement of the Partnership or of any of its
assets or properties or cause the sale of any Partnership property, and
notwithstanding any provisions of applicable law to the contrary, each Partner
(and its legal representative, successor, or assign) hereby irrevocable waives
any and all right to maintain any action for partition or to

                                       81
<PAGE>
compel any sale with respect to its interest in, or with respect to any assets
or properties of the Partnership, except as expressly provided in this
Agreement.

      Section 15.21. Limited Liability - BIT Partner. NOTWITHSTANDING ANY
PROVISION OF THIS AGREEMENT TO THE CONTRARY, (I) THE LIABILITY OF THE TRUST, BIT
PARTNER, AND TRUSTEE SHALL BE LIMITED TO THE ASSETS OF THE TRUST AND BIT
PARTNER, AND (II) RECOURSE FOR ANY LIABILITY OF THE TRUST, BIT PARTNER, OR
TRUSTEE SHALL EXCLUDE ALL ASSETS OF (X) ALL PARTICIPATING PLANS AND (Y) TRUSTEE.

      Section 15.22. Limited Liability - Sponsor Partner. EXCEPT AS PROVIDED IN
THIS SUBSECTION (ANYTHING CONTAINED ABOVE OR ELSEWHERE HEREIN TO THE CONTRARY
NOTWITHSTANDING), NO PERSONAL LIABILITY OR PERSONAL DEFICIENCY JUDGMENT SHALL BE
ASSERTED OR ENFORCED AGAINST ANY PARTNERS OF SPONSOR OPERATING PARTNERSHIP OR
SPONSOR PARTNER, AGAINST THE TRUSTEES, OFFICERS, EMPLOYEES, AGENTS, PARTNERS,
SHAREHOLDERS OR PRINCIPALS OF SPONSOR, SPONSOR OPERATING PARTNERSHIP, SPONSOR
PARTNER, OR SUCH PARTNERS, OR AGAINST THE ASSETS OF ANY SUCH PARTIES, FOR
PAYMENT OF ANY AMOUNT HEREUNDER OR FOR OBSERVANCE OR PERFORMANCE OF ANY OF THE
OBLIGATIONS OF SPONSOR PARTNER OR THE PARTNERSHIP; PROVIDED, HOWEVER, THAT
NOTHING CONTAINED ABOVE SHALL LIMIT THE REMEDIES AGAINST ANY SUCH PERSON FOR
THEIR GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, IN WHICH EVENT SUCH
REMEDIES SHALL BE DETERMINED BY APPLICABLE LAW; PROVIDED, FURTHER, HOWEVER, THAT
IN NO EVENT SHALL THERE BE ANY PERSONAL LIABILITY AGAINST ANY TRUSTEE, OFFICER,
EMPLOYEE, AGENT, PARTNER, SHAREHOLDER, PRINCIPAL, OR OTHER INDIVIDUAL ACTING IN
ANY CAPACITY.

      Section 15.23. Confidentiality. Except as required by applicable law or in
order to enforce the terms of this Agreement, neither Partner shall disclose to
any third parties (other than such Partner's counsel, advisors and investors) or
to the public the terms of this Agreement, and any information subject to
subsection 3.5.1 above, without the other Partner's prior written consent.

                      [SIGNATURES BEGIN ON FOLLOWING PAGE]

                                       82
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed and ensealed this
Agreement as of the day and year first set forth above, but effective, as
between the parties, as of the Formation Date.

                                     SPONSOR PARTNER:

WITNESS:                             KEYSTONE KPJV, LP,
                                     a Delaware limited partnership

                                     By: KEYSTONE KPJV, LLC,
                                         a Delaware limited liability company,
                                         its sole general partner

                                         By: KEYSTONE OPERATING
                                             PARTNERSHIP, L.P.,
                                             a Delaware limited partnership,
                                             its sole member

                                             By: KEYSTONE PROPERTY
                                                 TRUST, a Maryland statutory
                                                 real estate investment trust,
                                                 its general partner

                                             By:  /s/ Stephen J. Butte (SEAL)
                                             --------------------------------
                                             Name:  Stephen J. Butte
                                             Title: Senior Vice President of
                                             Keystone Property Trust

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]
<PAGE>
                     [SIGNATURES CONTINUED FROM PRIOR PAGE]

                                       BIT PARTNER:

WITNESS:                               BIT INVESTMENT TWENTY
                                       LIMITED PARTNERSHIP,
                                       a Maryland limited partnership

                                       By: BIT INVESTMENT TWENTY, LLC,
                                           a Maryland limited liability company,
                                           its sole general partner

                                           By:      /s/ Ardyth L. Hall (SEAL)
                                           ----------------------------------
                                           Name:    Ardyth L. Hall
                                           Title:   Vice President

                                       1Exhibit 10.6

                                                             EXECUTION COPY

                    FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),  dated as
of October 31, 2002, is by and among Noveon  International,  Inc. (formerly
known as PMD Group  Holdings Inc.)  ("Holdings"),  Noveon,  Inc.  (formerly
known as PMD Group  Inc.)  (the  "Borrower"),  the  financial  institutions
signatory  hereto in their capacity as Lenders (as defined below) under the
Credit  Agreement (as defined below),  Deutsche Bank Trust Company Americas
(formerly  named Bankers  Trust  Company) as  administrative  agent for the
Lenders  (the  "Administrative  Agent"),  Credit  Suisse First  Boston,  as
syndication  agent for the Lenders (the  "Syndication  Agent") and together
with Deutsche  Bank Trust  Company  Americas each a joint lead arranger and
joint book manager.

                           W I T N E S S E T H :
                           - - - - - - - - - -

     WHEREAS,  Borrower,  Holdings,  certain  financial  institutions  (the
"Lenders"),  Administrative Agent and Syndication Agent are parties to that
certain  Credit  Agreement  dated as of  February  28,  2001  (as  amended,
restated,  supplemented  or  otherwise  modified and in effect from time to
time, the "Credit Agreement"),  pursuant to which the Lenders have provided
to Borrower credit facilities and other financial accommodations; and

     WHEREAS,  Borrower has requested that Administrative Agent and Lenders
amend the Credit  Agreement  in certain  respects  as set forth  herein and
Lenders and Administrative  Agent are agreeable to the same, subject to the
terms and conditions hereof.

     NOW,  THEREFORE,  in  consideration  of the premises and of the mutual
covenants  contained herein, and other good and valuable  consideration the
receipt and adequacy of which are hereby  acknowledged,  the parties hereto
hereby agree as follows:

     1. Defined Terms.  Terms capitalized  herein and not otherwise defined
herein  are used with the  meanings  ascribed  to such  terms in the Credit
Agreement.

     2. Amendment to Credit  Agreement.  The Credit Agreement is, as of the
First  Amendment  Effective  Date (as  defined  below),  hereby  amended as
follows:

     (a) Section 1.1 of the Credit  Agreement is amended by  inserting  (in
alphabetical order) the following defined terms:

          "Discount Note Prepayment" means the repayment by Holdings of $45
million of the outstanding accrued and unpaid interest and principal on the
Holdings  Discount Note in a transaction in which the prepayment is treated
as a "Special  Prepayment"  as defined in the Holdings  Discount  Note,  as
amended,  and  pursuant  to which  the  principal  amount  of the  Holdings
Discount  Note is  reduced  in the  manner  specified  in  Section 8 of the
Holdings Discount Note.

          "Discount Note Cash Prepayment Amount" means $45 million.

          "First  Amendment"  means that certain First  Amendment to Credit
     Agreement  dated  as of  October  __,  2002  by  and  among  Holdings,
     Borrower, Lenders, Administrative Agent and Syndication Agent.

          "First  Amendment  Effective Date" as defined in Section 5 of the
     First Amendment.

          "First  Amendment  Voluntary   Prepayment"  means  the  voluntary
     prepayment  by the  Borrower of Term Loans in a minimum  amount of $45
     million out of cash on hand on the First Amendment Effective Date.

     (b) Section 1.1 of the Credit Agreement is further amended by deleting
the  references to "December 31, 2002" in the  definitions  of "Excess Cash
Flow" and "Excess Cash Payment Date" and  replacing  such  references  with
references to "December 31, 2003".

     (c) Section 1.1 of the Credit  Agreement is further  amended by adding
the  following  new proviso  immediately  at the end of the  definition  of
"Leverage Ratio":

          "provided, further, that for purposes of calculating the Leverage
Ratio for the Fiscal Quarter ended  September 30, 2002,  Consolidated  Debt
less Cash and Cash  Equivalents  shall be  calculated  on a pro forma basis
giving  pro forma  effect to the  Restricted  Payment  by the  Borrower  to
Holdings  of the  Discount  Note  Prepayment  Amount as if such  Restricted
Payment had been made during such Fiscal Quarter."

     (d)  Section  4.3(a) of the Credit  Agreement  is amended by  amending
clause (v) contained therein to insert the language "other than a voluntary
prepayment  consisting of the First Amendment Voluntary Prepayment" therein
immediately after the phrase "each voluntary prepayment of Term Loans".

     (e)  Section  4.3(a) of the Credit  Agreement  is  further  amended by
deleting the "." at the end of clause (v) thereof and replacing it with the
following new language:

          "; and (vi)  subject  to  Section  4.5(c),  the  First  Amendment
Voluntary  Prepayment shall be applied in the appropriate currency first to
the Scheduled Term A Dollar  Repayments,  Scheduled Term A Euro Repayments,
Scheduled Term B Dollar  Repayments,  Scheduled  Term B Euro  Repayments in
each case due  December 31, 2002 and in Fiscal Year 2003 in direct order of
maturity)  and,  thereafter,  subject to Section 4.5(c) shall be applied in
the appropriate  currency and in  proportional  amounts equal to the Term A
Dollar Percentage, Term A Euro Percentage, Term B Dollar Percentage, Term B
Euro Percentage (in each case,  after giving effect to the prepayments made
to  the  Scheduled  Term  A  Dollar  Repayments,   Scheduled  Term  A  Euro
Repayments,  Scheduled  Term B  Dollar  Repayments,  Scheduled  Term B Euro
Repayments  due  December  31,  2002 and in Fiscal  Year 2003 as  specified
above), as the case may be, of such remaining prepayment,  and, within each
Term  Loan,  shall be  applied to reduce  the  remaining  Scheduled  Term A
Repayments  and Scheduled Term B Repayments on a pro rata basis (based upon
the then remaining principal amount of such Scheduled Term A Repayments and
Scheduled Term B Repayments, respectively)."

     (f) Section  4.4(d) of the Credit  Agreement is amended by inserting a
new sentence at the end of such Section to read as follows:

          "Notwithstanding  anything  else in this Section to the contrary,
in the event that the Leverage  Ratio for the most recent  Excess Cash Flow
Period is less than 2.75x, then no mandatory  repayment of Excess Cash Flow
shall be required by this Section for such Excess Cash Flow Period."

     (g) Section 8.5 of the Credit  Agreement is amended by inserting a new
sentence at the end of such Section to read as follows:

          "Notwithstanding  anything  else in this Section to the contrary,
immediately  following payment of the First Amendment Voluntary Prepayment,
the Borrower may make a Restricted  Payment to Holdings out of cash on hand
in the amount of the Discount Note Cash  Prepayment  Amount;  provided that
Holdings  shall  immediately  utilize such  Restricted  Payment to make the
Discount Note Prepayment."

     3. Amendment Fee. In  consideration of the execution of this Amendment
by Administrative Agent and the Required Lenders,  Borrower hereby agree to
pay to each Lender which  executes this  Amendment on or prior to 5:00 p.m.
(central  standard time) October 25, 2002 a fee (the "Amendment Fee") in an
amount equal to (a) such Lender's Domestic  Revolving  Commitment plus such
Lender's Multicurrency  Revolving Commitment each as in effect on the First
Amendment  Effective Date plus the aggregate  outstanding Dollar Equivalent
principal  amount of such  Lender's  Term Loans (after giving effect to the
First Amendment Voluntary Prepayment) multiplied by (b) 0.10%.

     4. Representations and Warranties.  In order to induce  Administrative
Agent and the Lenders to enter into this  Amendment,  each of Borrower  and
Holdings  hereby  represents and warrants to  Administrative  Agent and the
Lenders, in each case after giving effect to this Amendment, as follows:

     (a)  Each of the  Borrower  and  Holdings  has the  right,  power  and
capacity  and has been  duly  authorized  and  empowered  by all  requisite
corporate  and  shareholder  action to enter  into,  execute,  deliver  and
perform  this  Amendment  and all  agreements,  documents  and  instruments
executed and delivered pursuant to this Amendment.

     (b) This  Amendment  constitutes  each of the Borrower's and Holdings'
legal,  valid and binding  obligation,  enforceable  against it,  except as
enforcement  thereof  may be  subject  to  the  effect  of  any  applicable
bankruptcy,   insolvency,   reorganization,   moratorium  or  similar  laws
affecting  creditors'  rights  generally  and general  principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity
or at law or otherwise).

     (c)  The  representations  and  warranties  contained  in  the  Credit
Agreement and the other Loan Documents are true and correct in all material
respects at and as of the First Amendment  Effective Date as though made on
and as of  the  First  Amendment  Effective  Date  (except  to  the  extent
specifically  made with  regard to a  particular  date,  in which case such
representation and warranty is true and correct in all material respects as
of such earlier date).

     (d) Each of the  Borrower's  and  Holdings'  execution,  delivery  and
performance  of this  Amendment do not and will not violate its Articles or
Certificate of Incorporation or By-laws, any law, rule, regulation,  order,
writ,  judgment,  decree  or  award  applicable  to it or  any  contractual
provision  (except as otherwise  expressly  waived hereby) to which it is a
party or to which it or any of its property is subject.

     (e) No  authorization or approval or other action by, and no notice to
or filing or registration  with, any  governmental  authority or regulatory
body  (other  than  those  which  have been  obtained  and are in force and
effect)  is  required  in  connection  with  the  execution,  delivery  and
performance  by  Borrower,  Holdings  or any  other  Credit  Party  of this
Amendment  and all  agreements,  documents  and  instruments  executed  and
delivered pursuant to this Amendment.

     (f) No Event of Default or Unmatured Event of Default exists under the
Credit  Agreement or would exist after giving effect to the  amendments and
transactions contemplated by this Amendment.

     5.  Conditions to  Effectiveness  of Amendment.  This Amendment  shall
become effective on the date (the "First Amendment Effective Date") each of
the following conditions precedent is satisfied:

     (a)  Execution  and  Delivery  of   Amendment.   Borrower,   Holdings,
Administrative Agent and Required Lenders shall have executed and delivered
the Amendment.

     (b) Execution  and Delivery of Loan  Documents.  Administrative  Agent
shall have received each of the following documents,  all of which shall be
satisfactory in form and substance to Administrative Agent and its counsel:

          (1) A certificate  of a  Responsible  Officer of Holdings and the
     Borrower in the form of Exhibit A attached hereto;

          (2) A Reaffirmation of Guaranty executed by a Responsible Officer
     of the Subsidiary Guarantors in the form of Exhibit B attached hereto;

          (3) An  opinion  of Fried,  Frank,  Harris,  Shriver &  Jacobson,
     special counsel to the Credit Parties,  addressed to Agent and each of
     the Lenders and dated the First Amendment  Effective Date, which shall
     be in form and substance reasonably satisfactory to the Administrative
     Agent  and shall  cover  such  matters  incident  to the  transactions
     contemplated   herein  and  in  the  other  Loan   Documents   as  the
     Administrative Agent or the Required Lenders may reasonably request;

          (4) A  certificate,  dated the First  Amendment  Effective  Date,
     signed by the secretary or any assistant secretary of each of Borrower
     and Holdings,  in the form of Exhibit  5.1(f) to the Credit  Agreement
     with appropriate insertions, as to the incumbency and signature of the
     officers  of each of  Borrower  and  Holdings  (in form and  substance
     satisfactory  to  Administrative  Agent) and any  certificate or other
     document or instrument to be delivered  pursuant  hereto or thereto by
     or on behalf of Borrower or Holdings,  together  with  evidence of the
     incumbency of such Secretary or Assistant Secretary, and certifying as
     true and correct,  attached copies of the Certificate of Incorporation
     and By-Laws of Borrower  and Holdings  (or  certifying  that there has
     been no change in such Certificate of  Incorporation  and By-Laws from
     those  delivered  to  the  Lenders  on the  Effective  Date)  and  the
     resolutions of Borrower and Holdings  referred to in such  certificate
     and  all  of  the  foregoing   (including  each  such  Certificate  of
     Incorporation  and By-Laws) shall be  satisfactory  to  Administrative
     Agent or the Required Lenders;

          (5) Good standing  certificates for each of Borrower and Holdings
     from their respective jurisdictions of incorporation.

     (c)  Payment of the First  Amendment  Voluntary  Prepayment.  Borrower
shall have paid in full to the Administrative  Agent for the benefit of the
Lenders with Term Loans the First  Amendment  Voluntary  Prepayment,  which
First  Amendment  Voluntary  Prepayment  shall  be  applied  in the  manner
provided  by  Section  4.3(a) of the  Credit  Agreement  as amended by this
Amendment.

     (d) Payment of First Amendment  Effective Date Amendment Fee. Borrower
shall have paid in full to Administrative  Agent, for ratable  distribution
to those Lenders that have signed this Amendment on or prior to October 25,
2002, an amount equal to the Amendment Fee.

     (e) Representations and Warranties. The representations and warranties
of the Borrower,  Holdings and the other Credit  Parties  contained in this
Amendment,  the Credit Agreement and the other Loan Documents shall be true
and correct in all material  respects as of the First  Amendment  Effective
Date,  with the same  effect as  though  made on such  date,  except to the
extent that any such representation or warranty relates to an earlier date,
in which case such  representation or warranty shall be true and correct in
all material respects as of such earlier date.

     (f) No  Defaults.  No  Unmatured  Event of Default or Event of Default
under the Credit Agreement shall have occurred and be continuing.

     6. Miscellaneous. The parties hereto hereby further agree as follows:

     (a) Costs,  Expenses  and  Taxes.  Borrower  hereby  agrees to pay all
reasonable  fees,  costs and expenses of  Administrative  Agent incurred in
connection  with  the  negotiation,   preparation  and  execution  of  this
Amendment and the  transactions  contemplated  hereby,  including,  without
limitation,  the reasonable fees and expenses of Winston & Strawn,  counsel
to the Administrative Agent.

     (b)  Counterparts.  This  Amendment  may be  executed  in one or  more
counterparts  any of  which  may be a  facsimile  and each of  which,  when
executed and delivered,  shall be deemed to be an original and all of which
counterparts,  taken  together,  shall  constitute  but one  and  the  same
document with the same force and effect as if the  signatures of all of the
parties  were on a single  counterpart,  and it shall not be  necessary  in
making  proof  of  this  Amendment  to  produce  more  than  one  (1)  such
counterpart.

     (c) Headings.  Headings used in this Amendment are for  convenience of
reference only and shall not affect the construction of this Amendment.

     (d)  Integration.  This Amendment and the Credit Agreement (as amended
hereby)  constitute  the entire  agreement  among the  parties  hereto with
respect to the subject matter hereof.

     (e) Governing Law. THIS AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN  ACCORDANCE  WITH,  THE INTERNAL  LAWS AND DECISIONS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES).

     (f) Binding Effect.  This Amendment shall be binding upon and inure to
the benefit of and be  enforceable  by Holdings,  Borrower,  Administrative
Agent and Lenders and their  respective  successors and assigns.  Except as
expressly set forth to the contrary  herein,  this  Amendment  shall not be
construed  so as to confer any right or benefit  upon any Person other than
Holdings,  Borrower,   Administrative  Agent  and  the  Lenders  and  their
respective successors and permitted assigns.

     (g) Amendment;  Waiver.  The parties hereto agree and acknowledge that
nothing  contained  in this  Amendment  in any manner or respect  limits or
terminates  any of the  provisions  of the Credit  Agreement  or any of the
other Loan  Documents  other than as expressly set forth herein and further
agree and  acknowledge  that the Credit  Agreement (as amended  hereby) and
each of the other  Loan  Documents  remain and  continue  in full force and
effect  and  are  hereby  ratified  and  confirmed.  Except  to the  extent
expressly set forth herein,  the execution,  delivery and  effectiveness of
this Amendment shall not operate as a waiver of any rights, power or remedy
of Lenders or Administrative  Agent under the Credit Agreement or any other
Loan  Document,  nor  constitute  a waiver of any  provision  of the Credit
Agreement or any other Loan Document. No delay on the part of any Lender or
Administrative   Agent  in  exercising  any  of  their  respective  rights,
remedies,  powers and privileges  under the Credit  Agreement or any of the
Loan Documents or partial or single exercise  thereof,  shall  constitute a
waiver  thereof.  On and  after  the First  Amendment  Effective  Date each
reference  in  the  Credit  Agreement  to  "this  Agreement,"  "hereunder,"
"hereof,"  "herein"  or words of like  import,  and each  reference  to the
Credit Agreement in the Loan Documents and all other documents delivered in
connection  with the Credit  Agreement shall mean and be a reference to the
Credit Agreement as amended hereby.  Holdings and Borrower  acknowledge and
agree that this Amendment constitutes a "Loan Document" for purposes of the
Credit Agreement, including, without limitation, Section 10.1 of the Credit
Agreement.  None of the  terms  and  conditions  of this  Amendment  may be
changed,  waived, modified or varied in any manner,  whatsoever,  except in
accordance with Section 12.1 of the Credit Agreement.

                          [Signature Page Follows]

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have caused this Amendment to
be executed by their respective  officers thereunto duly authorized,  as of
the date first written above.

                                        NOVEON, INC.

                                        By:/s/ Sean M. Stack
                                           ------------------------------------
                                        Name:  Sean M. Stack
                                             ----------------------------------
                                        Title: V.P. & Treasurer
                                              ---------------------------------

                                        NOVEON INTERNATIONAL, INC.

                                        By:/s/ Sean M. Stack
                                           ------------------------------------
                                        Name:  Sean M. Stack
                                             ----------------------------------
                                        Title: V.P. & Treasurer
                                              ---------------------------------

<PAGE>

                                        DEUTSCHE BANK TRUST COMPANY AMERICAS,
                                        in its individual capacity and as
                                        Administrative Agent

                                        By:/s/ M. A. Orlando
                                           ------------------------------------
                                        Name:  Marco Orlando
                                             ----------------------------------
                                        Title: Director
                                              ---------------------------------

<PAGE>

                                        CREDIT SUISSE FIRST BOSTON, acting
                                        through Cayman Islands Branch

                                        By:/s/ James P. Moran
                                           ------------------------------------
                                        Name:  James P. Moran
                                             ----------------------------------
                                        Title: Director
                                              ---------------------------------

                                        By:/s/ Ian W. Nalitt
                                           ------------------------------------
                                        Name:  Ian W. Nalitt
                                             ----------------------------------
                                        Title: Associate
                                              ---------------------------------

<PAGE>

                                        [Name of Lending Institution]

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

<PAGE>

                                 EXHIBIT A
                                 ---------

                           CERTIFICATE OF OFFICER
                           ----------------------

     I, the undersigned, the Insert Title of Noveon, Inc. (the "Borrower"),
and Insert Title of Noveon International,  Inc. ("Holdings"), in accordance
with Section 5(b) of that certain First Amendment to Credit Agreement dated
as of October ___, 2002 (the  "Agreement")  among  Holdings,  the Borrower,
Deutsche Bank Trust  Company  Americas,  as  Administrative  Agent,  Credit
Suisse First Boston as Syndication  Agent,  and the financial  institutions
signatory  thereto as Lenders,  do hereby certify on behalf of Borrower and
Holdings, the following:

     1.   The  representations and warranties set forth in Section 4 of the
          Agreement are true and correct in all material respects as of the
          date  hereof  except  to  the  extent  such  representations  and
          warranties  are  expressly  made as of a specified  date in which
          event such  representations  and warranties were true and correct
          in all material respects as of such specified date;

     2.   No Event of Default  or  Unmatured  Event of  Default  (except as
          otherwise  expressly waived by the Agreement) has occurred and is
          continuing after giving effect to the Agreement; and

     3.   The  conditions  of  Section 5 of the  Agreement  have been fully
          satisfied.

     Unless otherwise  defined herein,  capitalized terms used herein shall
have the meanings set forth in the Agreement.

                          [signature page follows]

<PAGE>

     IN WITNESS WHEREOF, the undersigned has duly executed and delivered on
behalf of Borrower and Holdings this Certificate of Officer on this ___ day
of October, 2002.

NOVEON, INC.                            NOVEON INTERNATIONAL, INC.

By:                                     By:
   -------------------------------         -------------------------------
Name:                                   Name:
     -----------------------------           -----------------------------
Title:                                  Title:
      ----------------------------            ----------------------------

<PAGE>

                                 EXHIBIT B

                         REAFFIRMATION OF GUARANTEE
                         --------------------------

     Each of the  undersigned  acknowledges  receipt of a copy of the First
Amendment to Credit  Agreement  (the  "Agreement";  capitalized  terms used
herein shall,  unless otherwise defined herein,  have the meanings provided
in the Agreement) dated as of October___,  2002, by and among Noveon,  Inc.
(the "Borrower"),  Noveon International,  Inc. ("Holdings"),  Deutsche Bank
Trust Company Americas, as Administrative Agent, Credit Suisse First Boston
as Syndication Agent, and the financial  institutions  signatory thereto as
Lenders, consents to such Agreement and each of the transactions referenced
in the Agreement and hereby reaffirms its obligations  under the Subsidiary
Guaranty.

Dated as of October ___, 2002.

                                        [INSERT SUBSIDIARY NAMES]

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}]]