Document:

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                                                                    Exhibit 10.1
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                             CONTRIBUTION AGREEMENT

                          dated as of September 4, 2002

                                     between

              THE INDIVIDUALS AND ENTITIES SET FORTH ON SCHEDULE 1

                                as Contributors,

                                       and

                            FIRST STATES GROUP, L.P.

                         a Delaware limited partnership,

                                   as Acquiror

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                               Table of Contents
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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION .................................................................    2

  1.1   Definitions ................................................................................    2
  1.2   Rules of Construction ......................................................................    7

ARTICLE II
CONTRIBUTION AND ACQUISITION; PAYMENT OF CONSIDERATION .............................................    8

  2.1   Contribution and Acquisition ...............................................................    8
  2.2   Consideration; Net Assets Adjustment .......................................................    8
  2.3   Partnership Agreement ......................................................................   11
  2.4   No Fractional Partnership Units ............................................................   11

ARTICLE III
CONTRIBUTORS' REPRESENTATIONS, WARRANTIES AND COVENANTS ............................................   11

  3.1   Organization and Power .....................................................................   11
  3.2   Authorization, No Violations and Notices ...................................................   11
  3.3   Interests ..................................................................................   12
  3.4   Brokerage Commission .......................................................................   12
  3.5   The Contributed Entities ...................................................................   12
  3.6   Indebtedness ...............................................................................   13
  3.7   Tax Matters with respect to Contributed Entities ...........................................   13
  3.8   Contracts and Agreements ...................................................................   14
  3.9   No Special Taxes ...........................................................................   14
  3.10  Compliance with Existing Laws ..............................................................   14
  3.11  Operating Agreements .......................................................................   15
  3.12  Warranties and Guaranties ..................................................................   15
  3.13  Insurance ..................................................................................   15
  3.14  Condemnation Proceedings; Roadways .........................................................   15
  3.15  Litigation .................................................................................   16
  3.16  Labor Disputes and Agreements ..............................................................   16
  3.17  Financial Statements .......................................................................   16
  3.18  Organizational Documents ...................................................................   17
  3.19  Operation of Real Property and Improvements ................................................   17
  3.20  Bankruptcy with respect to Contributed Entities ............................................   17
  3.21  Bulk Sale Compliance .......................................................................   17
  3.22  Investment Representations .................................................................   17
  3.23  Tax Matters with Respect to Contributors ...................................................   18
  3.24  Noncontravention ...........................................................................   18
  3.25  Properties Owned and Leased ................................................................   18
  3.26  Tenant Leases ..............................................................................   19
  3.27  Title ......................................................................................   19
  3.28  Environmental Matters ......................................................................   19
  3.29  Survival ...................................................................................   20

ARTICLE IV
ACQUIROR'S REPRESENTATIONS, WARRANTIES AND COVENANTS ...............................................   21

  4.1   Organization and Power .....................................................................   21
  4.2   Noncontravention ...........................................................................   21
  4.3   Litigation .................................................................................   21
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  4.4   Bankruptcy .................................................................................   21
  4.5   No Brokers .................................................................................   21
  4.6   Valid Issuance of Partnership Units ........................................................   21
  4.7   Partnership Agreement ......................................................................   22

ARTICLE V
CONDITIONS TO OBLIGATIONS OF ACQUIROR ..............................................................   22

  5.1   Contributors' Deliveries ...................................................................   22
  5.2   Representations, Warranties and Covenants; Obligations of Contributors; Certificate ........   22
  5.3   No Injunction ..............................................................................   22
  5.4   Closing of 144A Offering ...................................................................   22

ARTICLE VI
CONDITIONS TO OBLIGATIONS OF CONTRIBUTORS ..........................................................   22

  6.1   Acquiror's Deliveries ......................................................................   22
  6.2   Representations, Warranties and Covenants; Obligations of Acquiror; Certificate.............   22

ARTICLE VII
CLOSING; ADDITIONAL COVENANTS ......................................................................   23

  7.1   Closing ....................................................................................   23
  7.2   Contributors' Deliveries ...................................................................   23
  7.3   Acquiror's Deliveries ......................................................................   24
  7.4   Fees and Expenses; Closing Costs ...........................................................   24
  7.5   Right to Distribute Cash ...................................................................   24
  7.6   Right to Distribute Assets 25
  7.7   Payment of Commissions .....................................................................   25
  7.8   Acknowledgement and Release ................................................................   25

ARTICLE VIII
CONDEMNATION; RISK OF LOSS .........................................................................   26

  8.1   Condemnation ...............................................................................   26
  8.2   Risk of Loss ...............................................................................   26

ARTICLE IX
LIABILITY OF ACQUIROR; INDEMNIFICATION BY CONTRIBUTORS; RESTRICTION ON
DISPOSITION, TERMINATION RIGHTS ....................................................................   26

  9.1   Liability of Acquiror ......................................................................   26
  9.2   Indemnification by Contributors ............................................................   26
  9.3   Indemnity Procedures .......................................................................   27
  9.4   Restriction on Disposition of Real Property and Improvements ...............................   29
  9.5   Termination ................................................................................   29
  9.6   Effect of Termination ......................................................................   30

ARTICLE X
POWER OF ATTORNEY 30

 10.1   Grant of Power .............................................................................   30
 10.2   Nature of Power of Attorney .................................................................  31

ARTICLE XI
MISCELLANEOUS PROVISIONS ...........................................................................   31

 11.1   Completeness; Modification .................................................................   31
 11.2   Assignments ................................................................................   31
 11.3   Successors and Assigns .....................................................................   31
 11.4   Days .......................................................................................   31
 11.5   Governing Law; Jurisdiction ................................................................   31
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  11.6   Counterparts ..............................................................................   32
  11.7   Severability ..............................................................................   32
  11.8   Notices ...................................................................................   32
  11.9   Incorporation by Reference ................................................................   32
 11.10   Survival ..................................................................................   32
 11.11   Further Assurances ........................................................................   33
 11.12   No Partnership ............................................................................   33
 11.13   Time of Essence ...........................................................................   33
 11.14   Confidentiality ...........................................................................   33
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                             CONTRIBUTION AGREEMENT

        THIS CONTRIBUTION AGREEMENT ("Agreement"), dated as of the 4th day of
September, 2002, between the individuals and entities set forth on Schedule 1
(collectively, the "Contributors"), and First States Group, L.P., a Delaware
limited partnership (the "Acquiror"), provides:

                                    ARTICLE I
                       DEFINITIONS; RULES OF CONSTRUCTION

        1.1     Definitions. The following terms shall have the indicated
                meanings:

        "Acquiror" shall have the meaning set forth in the Preamble.

        "Act of Bankruptcy" shall mean if a party hereto or any general partner
thereof shall (a) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (b) admit in writing its inability to pay
its debts as they become due, (c) make a general assignment for the benefit of
its creditors, (d) file a voluntary petition or commence a voluntary case or
proceeding under the Federal Bankruptcy Code (as now or hereafter in effect),
(e) be adjudicated bankrupt or insolvent, (f) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, (g) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case or proceeding under the Federal Bankruptcy
Code (as now or hereafter in effect), or (h) take any corporate or partnership
action for the purpose of effecting any of the foregoing; or if a proceeding or
case shall be commenced, without the application or consent of a party hereto or
any general partner thereof, in any court of competent jurisdiction seeking (1)
the liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of debts, of such party or general partner, (2) the appointment
of a receiver, custodian, trustee or liquidator or such party or general partner
or all or any substantial part of its assets, or (3) other similar relief under
any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed; or an order (including an order for relief entered in an
involuntary case under the Federal Bankruptcy Code, as now or hereafter in
effect) judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 consecutive
days.

        "Actual Net Assets," which may be a positive or negative number, means
Adjustment Assets less Adjustment Liabilities, determined in accordance with
Sections 2.2(d) and (e) hereof as of 12:01 a.m. E.S.T. on the Closing Date.

        "Adjustment Assets" means, with respect to a Contributed Entity, the sum
of the following accounts (without duplication) of such Contributed Entity and
any Intermediate Entity or Owning Entity that is wholly-owned by such
Contributed Entity: (i) cash and cash equivalents, (ii) all security deposits or
escrow accounts held for the benefit of any of such entities, (iii) marketable
securities, (iv) accounts receivable and notes receivable (including

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amounts due from related entities), (v) pre-paid expenses (including without
limitation utility charges and items under the Operating Agreements), (vi)
pre-paid taxes, (vii) pledge accounts and (viii) any other current assets; in
each case determined in accordance with generally accepted accounting principles
applied consistently with the preparation of the Financial Statements; provided
however that (i) an aggregate allowance of $25,000 for uncollectible accounts
shall be reflected in the accounts receivable of the Contributed Entities (other
than Strategic Alliance Realty, LLC), allocated among such Contributed Entities
pro rata in accordance with their respective accounts receivable balances; and
(ii) in the case of First States Partners II, L.P., all accounts shall be
adjusted to reflect the acquisition by Acquiror of an 89% interest.

        "Adjustment Liabilities" means, with respect to a Contributed Entity,
the sum of the following accounts (without duplication) of such Contributed
Entity and any Intermediate Entity or Owning Entity that is wholly-owned by such
Contributed Entity: (i) accounts payable and notes payable (including amounts
due to related entities , line of credit borrowings and long-term debt other
than that secured by mortgages or deeds of trust on the Real Property), (ii) all
security deposits or escrow accounts held for the benefit of tenants or parties
other than Contributed Entities, Intermediate Entities and Owning Entities,
(iii) accrued tax liabilities, (iv) accrued expenses (including without
limitation utility charges and items under the Operating Agreements), (v)
deferred revenue and (vi) any other current liabilities (other than the current
portion of long-term liabilities); in each case determined in accordance with
generally accepted accounting principles applied consistently with the
preparation of the Financial Statements; provided however that (i) in the case
of First States Partners II, L.P., all accounts shall be adjusted to reflect the
acquisition by Acquiror of an 89% interest and (ii) the accounts set forth on
Schedule 1.1(a) hereto shall be excluded from Adjustment Liabilities.

        "Aggregate Cash Factor" means the number determined with respect to each
Contributed Entity and set forth on Schedule 2 hereto that has been calculated
by taking the sum of the Cash Factors of each Contributor owing an interest in
such Contributed Entity.

        "Assignment and Assumption Agreements" shall mean, collectively, those
certain assignment and assumption agreements by and between each of the
Contributors and the Acquiror.

        "Authorizations" shall mean all licenses, permits and approvals required
by any governmental or quasi-governmental agency, body or officer for the
ownership, operation and use of the Real Property and Improvements and the
Brokerage Business or any part thereof, including without limitation,
certificates of occupancy, zoning approvals and business licenses

        "Brokerage Business" shall mean all brokerage contracts by and between
Strategic Alliance and its clients.

        "Cash Factor" means the number determined with respect to each
Contributor owning a Contributor's Interest in each Contributed Entity and set
forth on Schedule 2 hereto that has been calculated by multiplying such
Contributor's ownership percentage in such Contributed Entity by the percentage
of the Purchase Price of such Contributed Entity that such Contributor has
elected to receive in cash.

                                       -3-

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        "Closing" shall mean the Closing of the contribution and acquisition of
the Contributed Interests pursuant to this Agreement.

        "Closing Date" shall mean the date on which the Closing occurs.

        "Code" shall mean the Internal Revenue Code of 1986, as amended.

        "Common Shares" shall mean common shares of beneficial ownership of the
REIT.

        "Consideration" shall have the meaning set forth in Section 2.2 hereof.

        "Contributed Entities" shall mean, collectively, Chester Court Realty,
L.P., First States Chester LLC, Dresher Court Realty, L.P., First States Dresher
LLC, First States Holdings, L.P., First States Holdings, LLC, First States
Management, LLC, First States Partners, L.P., First States Partners II, L.P.,
First States Partners III, L.P., First States Properties, L.P. and Strategic
Alliance Realty, LLC.

        "Contributors" shall have the meaning set forth in the Preamble.

        "Contributor's Interest" means, with respect to each Contributor, all
right, title and interest of such Contributor in and to the interests set forth
opposite such Contributor's name on Schedule 1 hereto.

        "Disposition Fee" means a fee payable to Glencourt Management, Inc. with
respect to the properties owned by each Contributed Entity in the amount set
forth with respect to such Contributed Entity on Schedule 2 hereto.

        "Environmental Law" shall mean: (i) the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Sections 9601 et seq.), as
amended; (ii) the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), as amended;
(iii) the Emergency Planning and Community Right to Know Act (42 U.S.C. Sections
11001 et seq.), as amended; (iv) the Clean Air Act (42 U.S.C. Sections 7401 et
seq.), as amended; (v) the Clean Water Act (33 U.S.C. Sections 1251 et seq.), as
amended; (vi) the Toxic Substances Control Act (15 U.S.C. Sections 2601 et
seq.), as amended; (vii) the Hazardous Materials Transportation Act (49 U.S.C.
Sections 1801 et seq.), as amended; (viii) the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. Sections 136 et seq.), as amended; (ix) the Safe
Drinking Water Act (42 U.S.C. Sections 300f et seq.), as amended; (x) any state,
county, municipal or local statutes, laws or ordinances similar or analogous to
the federal statutes listed in parts (i) - (ix) of this definition; (xi) any
rules, regulations, guidelines, directives, orders or the like adopted pursuant
to or to implement the statutes, laws, ordinances and amendments listed in parts
(i) - (x) of this definition; and (xii) any other law, statute, ordinance,
amendment, rule, regulation, or order relating to environmental matters or
Hazardous Materials.

        "Escrow" has the meaning set forth in Section 2.2.

                                       -4-

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        "Escrow Agent" means the person defined as such in the Escrow Agreement.

        "Escrow Agreement" means the escrow agreement in substantially the form
of Exhibit "A" hereto to be executed and delivered at the Closing.

        "Estimated Net Assets Adjustment," which may be a positive or negative
number, means Adjustment Assets less Adjustment Liabilities as determined in
good faith by the Contributors and approved by the Acquiror as of July 31, 2002
or such other mutually acceptable date chosen by the parties.

        "Fair Market Value" shall mean, as of any day, (i) the average of the
closing price for the previous 10 trading days of the Common Shares on the
principal securities market, exchange or trading system on which the Common
Shares are regularly traded or (ii) if the Common Shares are not then traded on
a securities market, exchange or system the fair market value of the Common
Shares as determined in good faith by the Board of Trustees of the REIT.

        "Financial Statements" shall mean the financial statements of American
Financial Real Estate Group ("AFREG") and the notes thereto attached hereto as
Schedule 3.17, as is included in pages F-1 to F-17 of the offering memorandum of
the REIT prepared in connection with the 144A Offering.

        "FIRPTA Certificates" shall mean the affidavit of each of the
Contributors under Section 1445 of the Code certifying that such Contributor is
not a foreign corporation, foreign partnership, foreign trust, foreign estate or
foreign person (as those terms are defined in the Code and the Income Tax
Regulations promulgated thereunder), in form and substance satisfactory to the
Acquiror.

        "Governmental Authority(ies)" shall mean any commission, department or
body of any municipality, township, city, county, state or Federal governmental
unit having jurisdiction over any of the Property or the ownership, management,
operation, use or improvement thereof.

        "Hazardous Conditions" refers to the presence on, in or about any of the
Properties (including ground water) of Hazardous Materials, the concentration,
condition, quantity, location or other characteristics of which fail to comply
with applicable Environmental Laws.

        "Hazardous Material" shall mean any chemical, substance, waste,
material, equipment or fixture defined as or deemed hazardous, toxic, a
pollutant, a containment, or otherwise regulated under any Environmental Law,
including, but not limited to, petroleum and petroleum products, waste oil,
halogenated and non-halogenated solvents, PCBs, and asbestos and asbestos
containing materials.

        "Improvements" shall mean all buildings, improvements, fixtures and
other items of real estate located on the Real Property.

        "Insurance Policies" shall mean those certain policies of insurance
described on Schedule 3.13 hereto.

        "Intermediate Entities" shall have the meaning set forth in Section
3.7(b) hereto.

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        "Offering Price" shall mean the price per Common Share paid by the
purchasers in the 144A Offering.

        "144A Offering" shall mean the private placement by the REIT of Common
Shares with gross proceeds to the REIT of not less than $150,000,000.

        "Operating Agreements" shall mean, collectively, the management
agreements, service contracts, supply contracts, equipment leases and other
agreements, if any, in effect with respect to the construction, ownership,
operation, occupancy or maintenance of the Real Property and Improvements, but
excluding in all cases leases for the Real Property.

        "Organizational Documents" shall mean, collectively, the current
partnership agreement and certificate of limited partnership, current operating
agreement and certificate of organization or bylaws and articles of
incorporation, as applicable, in all cases as amended through the date hereof,
of each of the Contributors.

        "Owning Entities" (or "Owning Entity") shall mean any entity who owns
(or is a tenant under a ground or master lease) any of the Real Property or
Improvements

        "Partnership Agreement" means the Amended and Restated Partnership
Agreement of Acquiror, in substantially the form of Exhibit "B" hereof, to be
executed and delivered at the Closing.

        "Partnership Units" shall mean units of limited partnership in the
Acquiror.

        "Partnerships" shall mean, collectively, (i) Chester Court Realty, L.P.,
a Pennsylvania limited partnership, (ii) Dresher Court Realty, L.P., a
Pennsylvania limited partnership, (iii) First States Partners, L.P., a
Pennsylvania limited partnership, (iv) First States Properties, L.P., a
Pennsylvania limited partnership, (v) First States Partners II, L.P., a
Pennsylvania limited partnership, (vi) First States Partners III, L.P., a
Delaware limited partnership and (vii) First States Holdings, L.P., a Delaware
limited partnership.

        "Permitted Exceptions" shall mean (i) those exceptions with respect to
each Real Property (other than the Principal Office Properties) which are of
record as of the date of the closing of the original purchase by the Owning
Entity of such Real Property and (ii) with respect to the Principal Office
Properties those exceptions which are shown on Schedule 3.27.

        "Post-Closing Adjustment" means the difference between Actual Net Assets
and the Estimated Net Assets Adjustment.

        "Principal Office Properties" shall mean 123 South Broad Street,
Philadelphia, PA; Jenkins Court, Jenkintown, PA; 177 Meeting Street,
Charlestown, SC and 50 West Market Street, West Chester, PA.

        "Property" shall mean all of the Real Property, Improvements and
personally contributed to Acquiror under this Agreement.

        "Purchase Price" shall have the meaning set forth in Section 2.2.

                                       -6-

<PAGE>

        "Real Property" shall mean the real property owned, directly or
indirectly, by the Contributed Entities.

        "Registration Rights Agreement" shall mean a registration rights
agreement, in substantially the form of Exhibit "C" hereto, to be executed and
delivered by the REIT and the Contributors at the Closing.

        "REIT" shall mean American Financial Realty Trust, a Maryland real
estate investment trust.

        "Retained Indebtedness" shall mean the indebtedness listed on Schedule
3.6 and all indebtedness otherwise accounted for in the Financial Statements,
including the notes related thereto.

        "SAR" shall mean Strategic Alliance Realty, LLC, a Pennsylvania limited
liability company.

        "Tenant Leases" shall have the meaning set forth in Section 3.26.

        "Title Insurance" shall have the meaning set forth in Section 3.27.

        "Unit Factor" means the number determined with respect to each
Contributor owning a Contributor's Interest in each Contributed Entity and set
forth on Schedule 2 hereto that has been calculated by multiplying such
Contributor's ownership percentage in such Contributed Entity by the percentage
of the Purchase Price of such Contributed Entity that such Contributor has
elected to receive in Partnership Units.

        "Warrants" shall have the meaning set forth in Section 2.2(a).

        1.2     Rules of Construction. The following rules shall apply to the
construction and interpretation of this Agreement:

                (a)     Singular words shall connote the plural number as well
as the singular and vice versa, and the masculine shall include the feminine and
the neuter.

                (b)     All references herein to particular articles, sections,
subsections, clauses or exhibits are references to articles, sections,
subsections, clauses or exhibits of this Agreement.

                (c)     The table of contents and headings contained herein are
solely for convenience of reference and shall not constitute a part of this
Agreement nor shall they affect its meaning, construction or effect.

                (d)     Each party hereto and its counsel have reviewed and
revised (or requested revisions of) this Agreement, and therefore any usual
rules of construction requiring that ambiguities are to be resolved against a
particular party shall not be applicable in the construction and interpretation
of this Agreement or any exhibits hereto.

                                       -7-

<PAGE>

                                   ARTICLE II
                          CONTRIBUTION AND ACQUISITION;
                            PAYMENT OF CONSIDERATION

        2.1     Contribution and Acquisition. Each of the Contributors agrees,
at the Closing, to contribute, assign and transfer its Contributor's Interest to
the Acquiror and the Acquiror agrees to accept and acquire each Contributor's
Interest in exchange for the Consideration and in accordance with the terms and
conditions set forth herein. The parties agree that the Acquiror has the right
to designate an alternate entity or person to take title to any of the
Contributors' Interests at the time of Closing.

        2.2     Consideration; Net Assets Adjustment.

                (a)     The consideration (the "Consideration") for the
contribution of each Contributed Entity shall consist of Partnership Units and
cash having an aggregate value equal to the Purchase Price for such Contributed
Entity and, with respect to First States Partners, II, L.P., warrants (the
"Warrants"), in substantially the form attached hereto as Exhibit "D", to
purchase, at an exercise price equal to the Offering Price, an aggregate number
of Partnership Units equal to (i) the Purchase Price for First States Partners
II, L.P. as determined pursuant to this Section 2.2 as of the Closing, but
without deduction for the Disposition Fee, (ii) multiplied by 0.1235955, (iii)
divided by the Offering Price, and shall be payable as provided in this Section
2.2. The Warrants shall be allocated pro rata among each of the Contributors
owning a Contributor's Interest in First States Partners II, L.P. A Disposition
Fee shall be payable with respect to each Contributed Entity (other than SAR) as
provided in Section 2.2(d). The "Purchase Price" for SAR shall be $1,428,571.
The "Purchase Price" for each Contributed Entity (other than SAR) shall be the
base purchase price ("Base Purchase Price") set forth with respect to such
Contributed Entity on Schedule 2 hereto, minus the Disposition Fee set forth
with respect to such Contributed Entity on Schedule 2 (the amount so determined,
the "Initial Purchase Price"), plus or minus the Estimated Net Assets Adjustment
for such Contributed Entity (the amount so determined, the "Estimated Purchase
Price"), plus or minus the Post-Closing Adjustment for such Contributed Entity.
Schedule 2 hereto sets forth with respect to each Contributed Entity (other than
SAR) (i) the Base Purchase Price, (ii) the Disposition Fee, (iii) the Unit
Factor and Cash Factor of each Contributor owning a Contributor's Interest
therein and (iv) the Aggregate Cash Factor.

                (b)     Set forth on Schedule 2.2 hereto is the calculation of
the Estimated Net Assets Adjustment, including each item of Adjustment Assets
and Adjustment Liabilities, for each Contributed Entity (other than SAR). In the
case of each Contributed Entity (other than SAR) as to which the Estimated Net
Assets Adjustment is a positive number, the Initial Purchase Price of such
Contributed Entity shall be increased by such amount as of the Closing. In the
case of each Contributed Entity (other than SAR) as to which the Estimated Net
Assets Adjustment is a negative number, the Initial Purchase Price of such
Contributed Entity shall be decreased by such amount as of the Closing.

                (c)     At the Closing, Acquiror shall pay the Estimated
Purchase Price for each Contributed Entity (other than SAR) by (i) issuance to
each Contributor owning a Contributor's Interest in such Contributed Entity of a
number of Partnership Units equal to (A) the Estimated

                                       -8-

<PAGE>

Purchase Price, (B) divided by the Offering Price, (C) multiplied by such
Contributor's Unit Factor; (ii) payment in immediately available funds to each
Contributor owning a Contributor's Interest in such Contributed Entity in an
amount equal to (A) the Estimated Purchase Price, (B) multiplied by such
Contributor's Cash Factor, (C) multiplied by .98; and (iii) deposit into escrow
pursuant to the terms of the Escrow Agreement of immediately available funds
(the "Escrow") in an aggregate amount equal to (A) the Estimated Purchase Price,
(B) multiplied by the Aggregate Cash Factor, (C) multiplied by .02.

                (d)     At the Closing, the Acquiror shall pay the Purchase
Price for SAR by the issuance to each Contributor owning a Contributor's
Interest therein of a number of Partnership Units equal to (i) the Purchase
Price, (ii) divided by the Offering Price.

                (e)     At the Closing, the Acquiror shall release to Glencourt
Management, Inc. the Disposition Fee with respect to each Contributed Entity.

                (f)     As promptly as practicable after the Closing, but in no
case more than 60 days thereafter, Acquiror shall deliver to Nicholas S.
Schorsch, acting on behalf of all of the Contributors (the "Contributor
Representative") a schedule, which shall have been approved by Rock J. Tonkel,
Jr. or such other independent trustee or trustees of the REIT as may be selected
by the Board of Trustees of the REIT, acting on behalf of the REIT (the
"Independent Trustee"), setting forth the calculation of Actual Net Assets and
the Post-Closing Adjustment with respect to each Contributed Entity (other than
SAR), including each item of Adjustment Assets and Adjustment Liabilities.
Within 10 days after the determination of the Post-Closing Adjustment becomes
final and binding on the parties, (i) in the case of each Contributed Entity
(other than SAR) as to which Actual Net Assets is greater than Estimated Net
Assets Adjustment, Acquiror shall (A) make a payment to each Contributor that
contributed a Contributor's Interest in such Contributed Entity in an amount
equal to such Contributor's Cash Factor, multiplied by the Post-Closing
Adjustment and (B) issue to each Contributor that contributed a Contributor's
Interest in such Contributed Entity a number of Partnership Units equal to (I)
the Post-Closing Adjustment, (II) divided by the Offering Price, (III)
multiplied by such Contributor's Unit Factor and (ii) in the case of each
Contributed Entity (other than SAR) as to which Actual Net Assets is less than
Estimated Net Assets, (A) a payment in an amount equal to the Aggregate Cash
Factor, multiplied by the Post-Closing Adjustment shall be made to Acquiror from
the Escrow and (B) Acquiror shall cancel a number of Partnership Units held by
each Contributor that contributed a Contributor's Interest in such Contributed
Entity equal to (I) the Post-Closing Adjustment, (II) divided by the Offering
Price, (III) multiplied by such Contributor's Unit Factor. As promptly as
practicable thereafter, the remaining balance, if any, of the Escrow relating to
such Contributed Entity shall be distributed to the Contributors that
contributed a Contributor's Interest in such Contributed Entity, pro rata in
accordance with their respective Cash Factors.

                (g)     If the Contributor Representative disputes any item in
the calculation of Actual Net Assets or the Post-Closing Adjustment, the
Contributor Representative shall notify the Independent Trustee, in writing
("Dispute Notice"), of each disputed item and specify the amount thereof in
dispute within 30 days after delivery to the Contributor Representative of the
determination by Acquiror. In the absence of fraud, the determination of Actual
Net Assets and the Post-Closing Adjustment shall become final and binding upon
the parties if no dispute relating thereto shall have been asserted within such
30 day period. If the Independent Trustee

                                       -9-

<PAGE>

and the Contributor Representative cannot resolve any such dispute within 30
days after delivery of such Dispute Notice, then upon demand of either party,
such dispute will be resolved by an independent accounting firm mutually
acceptable to the Independent Trustee and the Contributor Representative, after
hearing the views of the parties. If the Independent Trustee and the Contributor
Representative cannot agree upon a mutually acceptable independent accounting
firm within ten business days of such demand, the Independent Trustee and the
Contributor Representative will each select a nationally recognized independent
accounting firm, and the two independent accounting firms so selected shall
select a third nationally recognized independent accounting firm. Such third
independent accounting firm shall resolve the dispute and, in absence of
manifest error, such resolution will be final and binding on the parties. All
fees and expenses of the independent accounting firm or firms shall be borne by
the unsuccessful (or less successful) party as determined by the independent
accounting firm.

                (h)     All Partnership Units and the Warrants issuable as
Consideration pursuant to this Agreement shall be issued, and shall be deemed
for all purposes to be issued, as of the Closing Date. During the period from
the Closing until the Post-Closing Adjustment with respect to all of the
Contributed Entities becomes final and binding on the parties, the Contributors
shall be deemed for all purposes, including without limitation, for purposes of
any dividends or other distributions to the holders of Partnership Units, to be
the holder of the Partnership Units issued at the Closing pursuant to Section
2.2(c) hereof. If any dividend or other distribution is made on the Partnership
Units during such period and the number of Partnership Units issuable as
Consideration pursuant to this Agreement is thereafter adjusted in connection
with the determination of the Post-Closing Adjustment, Acquiror shall pay to the
Contributors the amount of any underpayment or the Contributors shall return to
Acquiror the amount of any overpayment, as the case may be, within ten days of
the time the determination of the Post-Closing Adjustment becoming binding on
the parties. As soon as practicable after the determination of the Post-Closing
Adjustment becomes final and binding on the parties hereto, Acquiror shall cause
to be delivered to the Contributors certificates representing the Partnership
Units and the Warrants issuable as Consideration hereunder; provided however,
that, (i) upon demand at any time during such period by the holders of a
majority of the Partnership Units issued at the Closing, Acquiror shall deliver
to the holders of the Partnership Units issued at the Closing hereunder
certificates representing such Partnership Units; provided that, in such case,
Acquiror shall hold in escrow certificates representing two percent (2%) of such
Partnership Units until the Post-Closing Adjustment becomes final and binding on
the parties.

                (i)     The parties agree that, to the extent that the
Contributors receive Partnership Units, the transfer of the Contributors'
Interests to the Acquiror shall be treated on their respective federal income
tax returns as a contribution of the Contributors' Interests to the Acquiror in
exchange for a partnership interest in the Acquiror that qualifies as a tax-free
contribution under Section 721 of the Code, but the Acquiror makes no
representation or warranty with respect to such tax treatment.

                (j)     Notwithstanding any other provision of this Agreement,
the Acquiror shall pay to the Contributors listed on Schedule 2.2(j) in cash (in
lieu of the application of the Cash Factors and Units Factors set forth on
Schedule 2) the portion, if any, of the Consideration in excess of the Initial
Purchase Price payable with respect to each Contributed Entity as to which such
Contributor is contributing a Contributor's Interest.

                                      -10-

<PAGE>

        2.3     Partnership Agreement. Each Contributor receiving any portion of
the Consideration in Partnership Units shall, upon receipt of the Partnership
Units, become a limited partner of the Acquiror and shall execute the
Partnership Agreement at the Closing.

        2.4     No Fractional Partnership Units. No fractional Partnership Units
will be issued as Consideration or paid or repaid as part of any adjustment at
Closing or thereafter hereunder. In lieu of any such fractional Partnership
Units, the value thereof shall be paid in cash at a per unit price equal to the
Offering Price.

                                   ARTICLE III
             CONTRIBUTORS' REPRESENTATIONS, WARRANTIES AND COVENANTS

        To induce the Acquiror to enter into this Agreement and to purchase the
Contributed Interests, each Contributor hereby makes (i) severally (and not
jointly) the representations and warranties set forth below solely to the extent
such representations and warranties relate to such Contributor and (ii) jointly
and severally the representations and warranties set forth below solely to the
extent such representations and warranties relate to a Contributed Entity in
which such Contributor owns a Contributor's Interest:

        3.1     Organization and Power. Each Contributor, unless an individual,
is a corporation, general or limited partnership, insurance company or trust
duly formed and validly existing and in the case of a corporation or an
insurance company in good standing under the law of its jurisdiction of
formation, all as set forth on Schedule 3.1. Each Contributor has the requisite
power and authority to execute and deliver this Agreement and any other document
or instrument required to be executed and delivered hereunder, to perform its
obligations and to consummate the transactions contemplated hereby and thereby.

        3.2     Authorization, No Violations and Notices.

                (a)     The execution, delivery and performance of this
Agreement by the Contributors, and the consummation of the transactions
contemplated hereby have been duly authorized, adopted and approved by the
partners, manager(s) and board of directors of the Contributors for each
Contributor which is a partnership, limited liability company or a non-profit
corporation, business corporation or insurance company, respectively, to the
extent required by each entities organizational documents and applicable law. No
other proceedings are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed by the entities and
individuals set forth on Schedule 1 and is a valid and binding obligation
enforceable against them in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to the
enforcement of creditors' rights and remedies or by other equitable principles
of general application.

                (b)     Except as set forth on Schedule 3.2(b), neither the
execution, delivery, or performance by the Contributors of this Agreement, nor
the consummation of the transactions contemplated hereby and under any document
executed pursuant hereto will:

                        (i)     violate, conflict with, result in a breach of
                any provision of, constitute a default (or an event that, which,
                with notice or lapse of time or

                                      -11-

<PAGE>

                both, would constitute a default) under, result in the
                termination of, accelerate the performance required by, or
                result in a right of termination or acceleration, or the
                creation or imposition of any lien, security interest, charge,
                or encumbrance upon any of the Real Property, Improvements,
                properties or assets of the Contributed Entities, or the breach
                of any right of first refusal, right of first offer, purchase
                option or other right to acquire any Real Property or
                Improvements under any of the terms, conditions, or provisions
                of any note, bond, mortgage, indenture, deed of trust, license,
                lease, agreement, or other instrument, or obligation to which
                the Contributed Entities is a party, or by which the Contributed
                Entities may be bound or affected, or to which the Contributed
                Entities or its properties or assets or the Real Property or
                Improvements may be subject; or

                        (ii)    violate any judgment, ruling, order, writ,
                injunction, decree, statute, rule, or regulation applicable to
                the Contributed Entities or its property or assets or the Real
                Property or Improvements.

        3.3     Interests. The Contributors' Interests and, except as set forth
on Schedule 3.3, all interests in the Owning Entities and Intermediate Entities
will be free and clear of all liens and encumbrances on the Closing Date and the
Contributors have good, merchantable title thereto and the right to convey their
interests in accordance with the terms of this Agreement. Upon delivery of the
Assignment and Assumption Agreements to the Acquiror at Closing, good valid and
merchantable title to the Contributors' Interests, free and clear of all liens
and encumbrances, will pass to the Acquiror.

        3.4     Brokerage Commission. Except as set forth on Schedule 3.4, the
Contributors have not engaged the services of, nor have they or will they or
Acquiror become liable to, any real estate agent, broker, finder or any other
person or entity for any brokerage or finder's fee, commission or other amount
with respect to the transactions described herein on account of any action by
the Contributors.

        3.5     The Contributed Entities.

                (a)     First States Partners II, L.P., First States Properties,
L.P., Chester Court Realty, L.P., First States Partners, L.P. and Dresher Court
Realty, L.P. are limited partnerships duly formed, validly existing and
subsisting under the laws of the Commonwealth of Pennsylvania. First States
Partners III, L.P. and First States Holdings, L.P. are limited partnerships duly
formed, validly existing and in good standing under the laws of the State of
Delaware. All the Partnerships have all requisite powers necessary to carry on
their respective businesses as now conducted, to own, lease and operate their
properties.

                (b)     Strategic Alliance Realty, LLC, First States Chester LLC
and First States Dresher LLC are limited liability companies duly formed,
validly existing and subsisting under the laws of the Commonwealth of
Pennsylvania. First States Holdings, LLC and First States Management, LLC are
limited liability companies duly formed, validly existing and in good standing
under the laws of the State of Delaware. Each such limited liability company has
all requisite power necessary to carry on its business as now conducted, to own,
lease and operate its properties.

                                      -12-

<PAGE>

                (c)     Except for the Contributors, no party has any interest
in the Contributed Entities, the right or option to acquire any interest in the
Contributed Entities or the property or any portion thereof.

        3.6     Indebtedness. Except for indebtedness, obligations or
liabilities as set forth on Schedule 3.6, any trade debt incurred by the Owning
Entities in the ordinary course of business and not more than 30 days delinquent
or indebtedness, obligations or liabilities reflected on the Financial
Statements, including the notes thereto, (i) the Contributed Entities, the
Owning Entities and any Intermediate Entities shall not have any indebtedness or
other financial obligation or liability of the type required to be reflected as
a liability on a balance sheet prepared in accordance with generally accepted
accounting principals outstanding on the Closing Date under this Agreement and
(ii) there shall be no indebtedness secured by the Real Property or
Improvements.

        3.7     Tax Matters with respect to Contributed Entities.

                (a)     Except as set forth on Schedule 3.7, the Contributed
Entities have filed when due (or due on extension) all federal income tax
returns (including K-1s for each partner of a Partnership) and applicable state
and local income tax returns required to be filed with the United States
Government and with all states and political subdivisions thereof where any such
returns are required to be filed and where the failure to file such return or
report would subject the Contributed Entities or their partners/members to any
material liability or penalty. To the knowledge of the Contributors, all tax
returns and reports filed by such Contributed Entities are true and correct in
all material respects. All material taxes imposed by the United States, or by
any foreign country, or by any state, municipality, subdivision, or
instrumentality of the United States or of any foreign country or by any other
taxing authority, which are due and payable by the Contributed Entities have
been paid in full or adequately provided for by reserves shown in their records
and books of account and in the Contributed Entities' financial information.
Except as set forth on Schedule 3.7, no Contributed Entity is currently
delinquent in the payment of any tax, assessment, or governmental charge (except
for tax assessments or governmental charges being contested) and has no tax
deficiency or claim outstanding, assessed, or proposed in writing. Except as set
forth on Schedule 3.7, the Contributed Entities have not obtained or received
any extension of time (beyond the Closing Date) for the assessment of
deficiencies for any years or waived or extended the statute of limitations for
the determination or collection of any tax. Except as set forth on Schedule 3.7,
to the Contributors' knowledge no unassessed tax deficiency is proposed or
threatened against the Contributed Entities. There are no tax liens, whether
imposed by the United States, any state, local, or other taxing authority,
outstanding against any Contributed Entity or its assets. The federal, state,
and local tax returns of the Contributed Entities have not been audited, nor has
any such entity received any notice of any federal state, or locate audit.

                (b)     Except as set forth on Schedule 3.7, to the
Contributors' knowledge, all material taxes, rental taxes or the equivalent, and
all interest and penalties due thereon, required to be paid or collected by the
Contributed Entities or the Owning Entities in connection with the operation of
the Real Property, Improvements and the Brokerage Business have been collected,
and will have been collected as of the Closing Date, and/or paid to the
appropriate governmental authorities, as required or such amounts shall be
pro-rated as of date hereof and the Closing Date.

                                      -13-

<PAGE>

Except as set forth on Schedule 3.7, to the Contributors' knowledge, the
Contributed Entities, Owning Entities and any entity between the Contributed
Entities and the Owning Entities, if any, and which are controlled by the
Contributors or Contributed Entities, directly or indirectly, (the "Intermediate
Entities") have filed all necessary returns and petitions required to be filed
through the date hereof, and will have filed, all necessary returns and
petitions required to be filed through the Closing Date. The Contributed
Entities shall prepare and file all federal and state income tax returns for the
tax period ending on the Closing Date, which shall reflect the termination for
tax purposes of the Contributed Entities. If requested by the Acquiror, the
Contributors shall cause any or all of the Contributed Entities that are
classified as partnerships for federal income tax purposes to make an election
under Section 754 of the Code for the period ending on the Closing Date.

                (c)     Each Contributed Entity, Intermediate Entity, and Owning
Entity qualifies, and has qualified during its entire existence, as a
partnership or disregarded entity for federal income tax purposes, and not as a
corporation, an association taxable as a corporation, or a publicly traded
partnership. No Contributed Entity, Intermediate Entity, or Owning Entity has
elected (or will elect prior to Closing) to be treated as an association taxable
as a corporation for federal income tax purposes under Treasury regulations
section 301.7701-3.

        3.8     Contracts and Agreements. Except as set forth on Schedule 3.8
and the Operating Agreements, there is no loan agreement, service agreement,
management contract parking agreement, maintenance agreement, guarantee, note,
bond, indenture or other debt instrument, lease or other contract to which the
Contributed Entities, any Intermediate Entity or any Owning Entity is a party or
by which any of their assets are bound which is not terminable on thirty (30)
days or less notice without penalties. The Contributed Entities, Intermediate
Entities and the Owning Entities are not in default under any Operating
Agreement or agreement listed on Schedule 3.8 with respect to (i) an amount in
excess of $1,000, or (ii) any other material term thereof.

        3.9     No Special Taxes. The Contributors, Owning Entities and
Intermediate Entities have no actual knowledge of, nor have they received any
written notice of, any special taxes or assessments relating to the Contributed
Entities or the Real Property, the Improvements, the Brokerage Business or any
part thereof or any planned public improvements that may result in a special tax
or assessment against the Real Property and Improvements.

        3.10    Compliance with Existing Laws. The Contributed Entities,
Intermediate Entities and Owning Entities possess all Authorizations, each of
which is valid and in full force and effect, and, to Contributors' actual
knowledge, no provision, condition or limitation of any of the Authorizations
has been breached or violated which could reasonably be expected to have a
material adverse effect on the Contributed Entities. The Contributed Entities,
Intermediate Entities and Owning Entities have not misrepresented or failed to
disclose any material relevant fact in obtaining all Authorizations, and the
Contributors have no actual knowledge of any change in the circumstances under
which those Authorizations were obtained that result in their termination,
suspension, modification or limitation. The Contributors have no actual
knowledge, nor have they or the Owning Entities received written notice within
the past three years, of any existing violation, excluding any environmental
violations, which remains uncured as of the date hereof, of any provision of any
applicable building, zoning, subdivision or other governmental

                                      -14-

<PAGE>

ordinance, resolution, statute, rule, order or regulation, including but not
limited to those of insurance boards of underwriters, with respect to the
ownership, operation, use, maintenance or condition of the Real Property or
Improvements or any part thereof, or requiring any repairs or alterations other
than those that have been made prior to the date hereof and other than those
which could not reasonably be expected to have a material adverse effect on the
Real Property.

        3.11    Operating Agreements. All of the Operating Agreements in force
and effect as of the date hereof are listed on Schedule 3.11 attached hereto The
Contributed Entities, Intermediate Entities and Owning Entities have performed
all of their obligations under each of the Operating Agreements and no fact or
circumstance has occurred which, by itself or with the passage of time or the
giving of notice or both, would constitute a material default under any of the
Operating Agreements. The Contributed Entities shall not enter into any new
management agreement, maintenance or repair contract, supply contract, lease in
which it is lessee or other agreements with respect to the Real Property and
Improvements, nor shall the Contributed Entities enter into any agreements
modifying the Operating Agreements, unless (a) any such agreement or
modification will not bind the Acquiror, the Real Property or Improvements or
the Contributed Entities after the Closing Date, (b) the Contributors have
obtained the Acquiror's prior written consent to such agreement or modification,
which consent shall not be unreasonably withheld or delayed, or (c) such
agreement or modification is made in the ordinary course of business consistent
with past practices, and, if it (in combination with any related agreement or
modification) exceeds an amount in excess of $50,000, reasonable prior written
notice shall have been given to Acquiror.

        3.12    Warranties and Guaranties. The Contributed Entities,
Intermediate Entities and Owning Entities shall not before Closing, release or
modify any warranties or guarantees, if any, of manufacturers, suppliers and
installers relating to the Improvements or any part thereof, except in the
ordinary course of business or with the prior written consent of the Acquiror,
which consent shall not be unreasonably withheld or delayed.

        3.13    Insurance. Except as set forth on Schedule 3.13, all of the
Contributed Entities', Intermediate Entities' and Owning Entities' Insurance
Policies are valid and in full force and effect, all premiums for such policies
were paid when due and all future premiums for such policies (and any
replacements thereof) shall be paid by the Contributed Entities on or before the
due date therefor. The Contributed Entities shall pay all premiums on, and shall
not cancel or voluntarily allow to expire, any of the Contributed Entities',
Intermediate Entities' and Owning Entities Insurance Policies prior to the
Closing Date unless such policy is replaced, without any lapse of coverage, by
another policy or policies providing coverage at least as extensive as the
policy or policies being replaced. The Contributed Entities, Intermediate
Entities and Owning Entities shall name the Acquiror as an additional insured on
each of the Contributed Entities', Intermediate Entities' and Owning Entities'
Insurance Policies.

        3.14    Condemnation Proceedings; Roadways. The Contributors,
Contributed Entities, Intermediate Entities and Owning Entities have received no
written notice of any condemnation or eminent domain proceeding pending or
threatened against the Real Property or Improvements or any part thereof. The
Contributors have no actual knowledge of any change or proposed change in the
route, grade or width of, or otherwise affecting, any street or road adjacent to
or

                                      -15-

<PAGE>

serving the Real Property which could reasonably be expected to have a material
adverse effect on the Real Property.

        3.15    Litigation. Except as set forth on Schedule 3.15, there is no
action, suit, claim or proceeding pending or known to be threatened in writing
against or affecting the Contributed Entities, Intermediate Entities or Owning
Entities or their property or any Contributor or the Real Property or
Improvements in any court, before any arbitrator or before or by any
governmental agency which (a) in any manner raises any question affecting the
validity or enforceability of this Agreement or seeks restraint, prohibition,
damages or other relief in connection with this Agreement or any other material
agreement or instrument to which the Contributed Entities, Intermediate Entities
or Owning Entities are a party or by which they are bound and that is or is to
be used in connection with, or is contemplated by, this Agreement, (b) could
reasonably be expected to materially and adversely affect the business,
financial position or results of operations of the Contributed Entities or Real
Properties or Improvements, (c) could reasonably be expected to materially and
adversely affect the ability of the Contributed Entities or Contributors or
Owning Entities to perform its obligations hereunder, or under any document to
be delivered pursuant hereto, (d) could reasonably be expected to create a lien
on the Real Property and Improvements, any part thereof or any interest therein,
or (e) could reasonably be expected to otherwise materially adversely affect the
Real Property and Improvements, any part thereof or any interest therein or the
use, operation, condition or occupancy thereof.

        3.16    Labor Disputes and Agreements. The Contributed Entities,
Intermediate Entities and Owning Entities currently have no labor disputes
pending or, threatened as to the operation or maintenance of the Real Property
and Improvements or any part thereof. Except as set forth on Schedule 3.16, the
Contributed Entities, Intermediate Entities and Owning Entities are not a party
to any union or other collective bargaining agreement with employees employed in
connection with the ownership, operation or maintenance of the Real Property and
Improvements. The Acquiror will not be obligated to give or pay any amount to
any employee of the Contributed Entities, Intermediate Entities and Owning
Entities and the Acquiror shall not have any liability under any pension or
profit sharing plan that the Contributed Entities, Intermediate Entities and
Owning Entities may have established with respect to the Real Property and
Improvements or their or its employees.

        3.17    Financial Statements. To the best of the Contributors'
knowledge, except as otherwise disclosed in writing to the Acquiror, the
Financial Statements fairly present the financial position of the Contributed
Entities and the results of the operations of the Real Property and Improvements
and the Brokerage Business, as the case may be, for the periods indicated,
except certain of such statements do not have certain footnotes or schedules
that may otherwise be required by GAAP. If requested by the Acquiror, the
Contributors will forward promptly all four-week period ending financial
information they receive from the Contributed Entities. Contributors' financial
information is prepared based on information provided by the Contributed
Entities based on books and records maintained by the Contributed Entities in
accordance with the Contributed Entities' accounting system. To the best of
Contributors' knowledge, since May 31, 2002 there has been no material adverse
change in the financial condition or in the operations of the Real Property, the
Improvements or the Brokerage Business, as the case may be.

                                      -16-

<PAGE>

        3.18    Organizational Documents. The Organizational Documents of the
Contributed Entities are in full force and effect and have not been modified or
supplemented since May 31, 2002, and no fact or circumstance has occurred that,
by itself or with the giving of notice or the passage of time or both, would
constitute a default thereunder.

        3.19    Operation of Real Property and Improvements. The Contributors
covenant that between the date hereof and the date of Closing they will make
commercially reasonable efforts to cause the Contributed Entities to (a) operate
the Real Property, Improvements and the Brokerage Business only in the manner
consistent with the Contributed Entities' prior practice, (b) maintain their
books of account and records in the usual, regular and ordinary manner, in
accordance with sound accounting principles applied on a basis consistent with
the basis used in keeping its books in prior years, and (c) use all reasonable
efforts to preserve intact their present business organization, keep available
the services of their present officers and employees and preserve their
relationships with suppliers and others having business dealings with them. The
Contributors shall make good faith efforts to encourage the Contributed Entities
to operate their respective businesses in generally the same manner as the
Contributed Entities did prior to the execution of this Agreement. Except as
otherwise permitted hereby, from the date hereof until Closing, the Contributors
shall use its good faith efforts to ensure that the Contributed Entities shall
not take any action or fail to take action the result of which (i) would have a
material adverse effect on the Real Property and Improvements with respect to
the Partnerships and the Brokerage Business with respect to Strategic Alliance
or the Acquiror's ability to continue the operation thereof after the Closing
Date in substantially the same manner as presently conducted, (ii) with respect
to the Partnerships, would reduce or cause to be reduced any rents or any other
charges over which Contributors have operational control other than such
reductions which are made in the ordinary course of business or (iii) would
cause any of the representations and warranties contained in this Article III to
be untrue in any material respect as of Closing.

        3.20    Bankruptcy with respect to Contributed Entities. No Act of
Bankruptcy has occurred with respect to the Contributors, Contributed Entities,
Intermediate Entities or Owning Entities.

        3.21    Bulk Sale Compliance. Contributors shall indemnify Acquiror
against any claim, loss or liability arising under the bulk sales law in
connection with the transaction contemplated herein.

        3.22    Investment Representations. Each Contributor receiving any
portion of the Consideration hereunder in Partnership Units represents and
warrants to the Acquiror:

                (a)     Such Contributor is an "accredited investor" as defined
in Rule 501(a) under the Securities Act, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Partnership Units, has
so evaluated the merits and risks of such investment, is able to bear the
economic risk of such investment and, at the present time, is able to afford a
complete loss of such investment. Such Contributor has completed and executed a
Contributor Questionnaire, which sets forth the basis for such Contributor's
status as an accredited investor.

                (b)     Such Contributor is aware of the Acquiror's business
affairs and financial condition and has acquired sufficient information about
Acquiror to reach an informed and

                                      -17-

<PAGE>

knowledgeable decision to acquire the Partnership Units. Such Contributor is
electing to receive the Partnership Units for investment for its own account and
not with a view to any distribution thereof within the meaning of the Securities
Act, except for sales contemplated by the Registration Rights Agreement.

                (c)     Such Contributor understands that the Partnership Units
and the Common Shares issuable upon redemption of the Partnership Units are
"restricted securities" under applicable federal and state securities laws and
that, pursuant to these laws, such Contributor must hold such securities
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available.

                (d)     Such Contributor acknowledges that it has received,
reviewed, been given the opportunity to ask questions of representatives of the
Acquiror and the REIT regarding, the Acquiror's Partnership Agreement, as
amended, and the REIT's Preliminary Offering Memorandum, dated August 2, 2002.

                (e)     Such Contributor understands that the Partnership Units
and the Common Shares issuable upon redemption of the Partnership Units shall
not have been registered under the Securities Act as of the Closing Date.
Holders of Partnership Units issuable hereunder shall have registration rights
with respect to the Common Shares issuable upon redemption of the Partnership
Units upon the terms set forth in the Registration Rights Agreement.

        3.23    Tax Matters with Respect to Contributors. The Contributors
represent and warrant that they (and, with respect to the Partnerships, each of
its partners) have obtained from their own counsel or tax accountant advice
regarding the tax consequences of (i) the transfer of the Contributors' Interest
to the Acquiror and the receipt of Partnership Units as consideration therefor,
(ii) the Contributors' admission as partners of the Acquiror, and (iii) any
other transaction contemplated by this Agreement. The Contributors further
represent and warrant that they have not relied on the Acquiror, the REIT or the
their representatives or counsel for such advice.

        3.24    Noncontravention. The execution and delivery of, and the
performance by the Contributors of their obligations under this Agreement do not
and will not contravene, or constitute a default under, any provision of
applicable law or regulation, the Contributors' Organizational Documents or any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Contributors, the Real Property, Improvements, any Intermediate Entity or
any Owning Entity or result in the creation of any lien or other encumbrance on
any Real Property, Improvement or asset of the Contributor. Except as set forth
on Schedule 3.24, there are no outstanding agreements (written or oral) pursuant
to which the Contributors, Intermediate Entity, or Owning Entity (or any
predecessor to or representative of any of the foregoing) have agreed to
contribute or have granted an option or right of first refusal to acquire the
Real Property, the Improvements, the Brokerage Business or any part thereof,
except as provided for in the leases of the Real Property, and as is necessary
to effect the purpose of this Agreement.

        3.25    Properties Owned and Leased. Except as set forth on Schedule
3.25, the Real Property and Improvements identified as owned Real Property and
Improvements on Schedule

                                      -18-

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        3.25    will represent, as of the Closing Date, all the Real Property
and Improvements owned by the Contributed Entities, directly or indirectly. The
Real Property and Improvements identified as leased Real Property and
Improvements on Schedule 3.25 will represent, as of the Closing Date, all Real
Property and Improvements leased, directly or indirectly, by the Contributed
Entities. All additional information on Schedule 3.25, including without
limitation, the name of the direct owner or lessee of the Real Property and
Improvements, any lease information, and the address for the Real Property are
true and accurate in all material respects.

        3.26    Tenant Leases. Attached as Schedule 3.26 is a true and complete
rent roll and list of all leases and other material rights or grants of
occupancy storage rights of all or any part of the Real Property or Improvements
("Tenant Leases"). Such schedule correctly shows (a) the tenant name, (b) the
date of the Tenant Lease and (c) a complete list of all written amendments to
all Tenant Leases (i) which were not assumed when the applicable Owning Entity
first acquired the property, (ii) for which the tenant under such Tenant Lease
or the seller provided an estoppel certificate when the applicable Owning Entity
first acquired the property, or (iii) for which the seller represented to the
applicable Owning Entity when the Owning Entity first acquired the property that
there were no amendments other than as disclosed to the Owning Entity, and, to
the best of the Contributors' knowledge, a complete list of all written
amendments to all other Tenant Leases. Attached as Schedule 3.26(a) is a
complete list of all rental delinquencies beyond any applicable grace periods in
excess of $1,000 and other material defaults under the Tenant Leases. Attached
as Schedule 3.26(b) is a true and complete list of all security or other
deposits under the Tenant Leases. None of the tenants under the Tenant Lease has
paid rent under a Tenant Lease more than one (1) month in advance. The
Contributing Entities and the Owning Entities have not received any written
notice from a tenant under a Tenant Lease alleging a material default by
landlord, except as shown on Schedule 3.26(c) and except for such alleged
defaults which have been cured, and to the best of the Contributing Entities'
knowledge, no landlord is in material default under any Tenant Lease. Except as
shown on Schedule 3.26(d), there are no leasing commissions due or owing or to
become due or owing in connection with the Tenant Leases, and the Contributors
shall pay or discharge in full or cause them to be paid or discharged in full
all other leasing commissions in connection with the Tenant Leases other than
commissions which are due and owing upon renewal after the Closing Date. There
are no parties in possession of the Real Property or Improvements and paying
rent except under Permitted Exceptions or Tenant Leases.

        3.27    Title. Title to each of the Real Properties identified as owned
Real Property on Schedule 3.25 is vested only in the Owning Entity as shown on
Schedule 3.25, and is good of record and in fact and subject only to the
Permitted Exceptions. Acquiror shall have the right to satisfy mechanics liens,
mortgages, deeds of trust and other existing indebtedness other than the
Retained Indebtedness and credit that towards the Consideration. Title insurance
policies for the Principal Office Properties in the forms attached as Schedule
3.27 ("Title Insurance") shall be obtainable at the Closing.

        3.28    Environmental Matters. Except as otherwise disclosed in
Schedule 3.28:

                (a)     To the best of Contributor's knowledge, there have not
been and there are not now pending or threatened in writing: (i) claims,
complaints, notices, or requests for information received by Contributor or
Owning Entities with respect to any alleged violation of

                                      -19-

<PAGE>

any Environmental Law with respect to the Property; or (ii) claims, complaints,
notices, or requests for information sent to Contributor or Owning Entities
regarding potential or alleged liability under any Environmental Law with
respect to the Property.

                (b)     To the best of Contributor's knowledge, no conditions
exist at, on, or under the Property that, with the passage of time or the giving
of notice or both, would constitute a Hazardous Condition or give rise to
liability under any Environmental Law.

                (c)     To the best of Contributor's knowledge, each Owning
Entity is in compliance in all material respects with all orders, directives,
permits, certificates, approvals, licenses, and other authorizations from
applicable Governmental Authorities, if any, relating to Environmental Laws with
respect to the Property.

                (d)     To the best of Contributor's knowledge, there are no
above-ground tanks that are not in compliance with all Environmental Laws or any
underground storage tanks (herein referred to as "USTs") on the Property; and
neither Contributor nor any Owning Entity has removed or abandoned any USTs at
the Property nor does Contributor have any knowledge of the existence,
abandonment or removal of USTs at the Property.

                (e)     To the best of Contributor's knowledge, there are no
polychlorinated biphenyls ("PCBs") or friable or damaged asbestos at the
Property; nor has Contributor nor any Owning Entity removed (or required or
requested the removal of) any PCBs or damaged or friable asbestos from the
Property, nor does Contributor have knowledge of the previous existence of any
PCBs or damaged or friable asbestos at the Property.

                (f)     To the best of Contributor's knowledge, Schedule 3.28
contains a true, complete and accurate listing of all of the following: (i) all
material reports, test results, analytical data, boring logs, and other studies
undertaken by, at the request of or on behalf of Contributor or Owning Entity
and/or in its (or its affiliates' or agents') possession or control with respect
to the Property and the environmental conditions thereof, (ii) all material
orders, directives and notices of Governmental Authorities received by
Contributor or Owning Entity or its agents, consultants and contractors in
connection with the environmental condition of the Property, and (iii) all
material correspondence to and from Governmental Authorities and environmental
consultants with respect to the environmental condition of the Property.

        3.29    Survival. Each of the representations, warranties and covenants
contained in this Article III and its various subparagraphs are intended for the
benefit of the Acquiror and may be waived in whole or in part, by the Acquiror,
but only by an instrument in writing signed by the Acquiror. Each of said
representations and warranties shall survive the closing of the transaction
contemplated hereby for twelve (12) months, except with respect to the Principle
Office Properties. The representations and warranties made with respect to the
Principle Office Properties shall survive the closing of the transaction
contemplated hereby for eighteen (18) months. No investigation, audit,
inspection, review or the like conducted by or on behalf of the Acquiror shall
be deemed to terminate the effect of any such representations, warranties and
covenants, it being understood that the Acquiror has the right to rely thereon
and that each such representation, warranty and covenant constitutes a material
inducement to the Acquiror to execute this Agreement and to close the
transaction contemplated hereby and to pay the Consideration to the
Contributors. Acquiror acknowledges and agrees that, except for

                                      -20-

<PAGE>

the representations and warranties expressly set forth herein, Acquiror is
acquiring the Real Property, the Improvements and the Brokerage Business "AS-IS,
WHERE-IS" with no representations or warranties by or from Contributors or any
of its affiliates, express or implied, or any nature whatsoever.

                                   ARTICLE IV
              ACQUIROR'S REPRESENTATIONS, WARRANTIES AND COVENANTS

        To induce the Contributors to enter into this Agreement and to sell the
Contributed Entities, the Acquiror hereby makes the following representations
and warranties:

        4.1     Organization and Power. The Acquiror is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all partnership powers and all governmental licenses,
authorizations, consents and approvals to carry on its business as now conducted
and to enter into and perform its obligations under this Agreement and any
document or instrument required to be executed and delivered on behalf of the
Acquiror hereunder.

        4.2     Noncontravention. The execution and delivery of this Agreement
and the performance by the Acquiror of its obligations hereunder do not and will
not contravene, or constitute a default under, any provisions of applicable law
or regulation, the Acquiror's partnership agreement or any agreement, judgment,
injunction, order, decree or other instrument binding upon the Acquiror or
result in the creation of any lien or other encumbrance on any asset of the
Acquiror.

        4.3     Litigation. There is no action, suit or proceeding, pending or
known to be threatened, against or affecting the Acquiror in any court or before
any arbitrator or before any Governmental Authority which (i) in any manner
raises any question affecting the validity or enforceability of this Agreement
or any other agreement or instrument to which the Acquiror is a party or by
which it is bound and that is to be used in connection with, or is contemplated
by, this Agreement, (ii) could reasonably be expected to materially and
adversely affect the business, financial position or results of operations of
the Acquiror, (iii) could reasonably be expected to materially and adversely
affect the ability of the Contributors to perform its obligations hereunder, or
under any document to be delivered pursuant hereto, (iv) could reasonably be
expected to create a lien on the Real Property, the Improvements or the
Brokerage Business, any part thereof or any interest therein or (v) could
reasonably be expected to adversely affect the Real Property, the Improvements
or the Brokerage Business, any part thereof or any interest therein or the use,
operation, condition or occupancy thereof.

        4.4     Bankruptcy. No Act of Bankruptcy has occurred with respect to
the Acquiror.

        4.5     No Brokers. The Acquiror has not engaged the services of, nor is
it or will it become liable to, any real estate agent, broker, finder or any
other person or entity for any brokerage or finder's fee, commission or other
amount with respect to the transaction described herein.

        4.6     Valid Issuance of Partnership Units. The Partnership Units which
will be part of the Consideration paid to the Contributors hereunder, when
issued and delivered in accordance

                                      -21-

<PAGE>

with the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, and will be free of restrictions on transfer except as
provided for in the Partnership Agreement (as defined below) and under
applicable state and federal securities laws. The Warrants, when issued and
delivered in accordance with the terms of this Agreement, will be duly and
validly issued. The Partnership Units underlying the Warrants have been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Warrants will be duly and validly issued and will be free of restrictions on
transfer except as provided for in the Partnership Agreement and under federal
and state securities laws.

        4.7     Partnership Agreement. The partnership agreement of First States
Partners II, L.P. as of the Closing Date shall be in substantially the form
attached hereto as Exhibit "E."

                                    ARTICLE V
                      CONDITIONS TO OBLIGATIONS OF ACQUIROR

        5.1     Contributors' Deliveries. The Contributors shall have delivered
or caused to be delivered to the Acquiror, as the case may be, on or before the
Closing Date, all of the documents and other information required of
Contributors pursuant to Section 7.2.

        5.2     Representations, Warranties and Covenants; Obligations of
Contributors; Certificate. All of the Contributors' representations and
warranties made in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date as if then made
(except with respect to representations and warranties which are made as of a
specific date), there shall have occurred no material adverse change in the
financial condition of the Real Property, the Improvements and the Brokerage
Business since the date hereof, the Contributors shall have performed and
complied in all material respects with all covenants and other obligations under
this Agreement required by this Agreement to be so performed or complied with by
the Contributors at or prior to the Closing and the Contributors shall have
executed and delivered to the Acquiror at Closing a certificate to the foregoing
effect.

        5.3     No Injunction. On the Closing Date, there shall be no effective
injunction, writ, preliminary restraining order or other order issued by a court
of competent jurisdiction restraining or prohibiting the consummation of the
transactions contemplated hereby.

        5.4     Closing of 144A Offering. Acquiror shall have consummated the
144A Offering.

                                   ARTICLE VI
                    CONDITIONS TO OBLIGATIONS OF CONTRIBUTORS

        6.1     Acquiror's Deliveries. The Acquiror shall have delivered or
caused to be delivered to the Contributors, as the case may be, on or before the
Closing Date, all of the documents and other information required of Acquiror
pursuant to Section 7.3.

        6.2     Representations, Warranties and Covenants; Obligations of
Acquiror; Certificate. All of the Acquiror's representations and warranties made
in this Agreement shall be true and correct in all material respects as of the
date hereof and as of the Closing Date as if then made (except with respect to
representations and warranties which are made as of a specific date), there
shall have occurred no material adverse change in the financial condition of the
Acquiror

                                      -22-

<PAGE>

since the date hereof, the Acquiror shall have performed and complied with in
all material respects with all covenants and other obligations under this
Agreement required by this Agreement to be so performed or complied with by the
Contributors at or prior to the Closing and the Acquiror shall have executed and
delivered to the Contributors at Closing a certificate to the foregoing effect.

                                   ARTICLE VII
                          CLOSING; ADDITIONAL COVENANTS

        7.1     Closing. Closing shall be held at a location that is mutually
acceptable to the parties simultaneous with the closing of the 144A Offering.

        7.2     Contributors' Deliveries. At Closing, the Contributors shall
deliver or cause to be delivered to Acquiror all of the following instruments,
each of which shall have been duly executed and, where applicable, acknowledged
on behalf of the Contributors and shall be dated as of the Closing Date:

                (a)     The certificate required by Section 5.2.

                (b)     The Partnership Agreement, executed by the Contributors.

                (c)     The Registration Rights Agreement, executed by the
Contributors.

                (d)     The Assignment and Assumption Agreements.

                (e)     The Escrow Agreement executed by the Contributors.

                (f)     The FIRPTA Certificates.

                (g)     Certified copies of the Contributed Entities'
Organizational Documents.

                (h)     Appropriate resolutions of the partners, directors or
managers of the Contributors for each Contributor which is a partnership,
limited liability company or a non-profit corporation, business corporation or
insurance company, respectively, together with all other necessary approvals and
consents of the Contributors, authorizing (A) the execution on behalf of the
Contributors of this Agreement and the documents to be executed and delivered by
the Contributors prior to, at or otherwise in connection with Closing, and (B)
the performance by the Contributors of its obligations hereunder and under such
documents.

                (i)     Such proof as the Acquiror may reasonably require with
respect to Contributors' compliance with the bulk sales laws or similar
statutes.

                (j)     All books, records, operating reports, appraisal
reports, files and other materials in the Contributors' possession or control
which are necessary in the Acquirors discretion to maintain continuity of
operation of the Real Property and Improvements.

                (k)     To the extent permitted under applicable law, documents
of transfer necessary to transfer to the Acquiror the Contributors' employment
rating for workmens' compensation and state unemployment tax purposes.

                                      -23-

<PAGE>

                (l)     A completed Questionnaire from each of the Contributors
receiving Partnership Units.

                (m)     The Title Insurance.

                (n)     Any other document or instrument reasonably requested
by the Acquiror or required hereby.

        7.3     Acquiror's Deliveries. At Closing, the Acquiror shall pay,
deliver or cause to be delivered to the Contributors the following:

                (a)     The Consideration as set forth in Section 2.2.

                (b)     The certificate required by Section 6.2.

                (c)     The Assignment and Assumption Agreements.

                (d)     The Escrow Agreement executed by Acquiror.

                (e)     The Registration Rights Agreement executed by REIT.

                (f)     An indemnity agreement by and between Nicholas S.
Schorsch ("Schorsch") and the Acquiror in the form attached hereto as
Exhibit "F".

                (g)     Any other document or instrument reasonably requested by
the Contributors or required hereby.

        7.4     Fees and Expenses; Closing Costs. The Acquiror shall pay all
fees, expenses and closing costs relating to the transactions contemplated by
this Agreement; provided however, that (i) the Acquiror on one hand, and the
Contributors on the other hand, shall split equally the fees of the Escrow Agent
and any franchise, license or transfer fees directly related to the consummation
of the transactions contemplated by this Agreement; (ii) the Contributors shall
pay for the releases of any deeds of trust, mortgages and other financing (other
the Retained Indebtedness) encumbering the Real Property and Improvements and
for any costs associated with any corrective instruments to the extent such
releases or corrections are required to be obtained or made pursuant to this
Agreement; and (iii) the Contributors shall pay to the Acquiror $45,000 on
account of attorneys' fees. Fees, expenses and closing costs payable by the
Contributors may be assessed by reducing the Purchase Price of one or more of
the Contributed Entities, deduction from cash proceeds payable at the Closing or
from the Escrow, as appropriate.

        7.5     Right to Distribute Cash. Any cash held by a Contributed Entity
may be distributed to the Contributors owning a Contributor's Interest therein
at any time at or prior to the Closing, provided that any cash so distributed
shall not be included in the determination of Adjustment Assets.

                                      -24-

<PAGE>

        7.6     Right to Distribute Assets. The Contributors may cause all or
any of the assets set forth on Schedule 7.6 to be distributed or transferred to
any Person at any time at or prior to the Closing.

        7.7     Payment of Commissions. After the Closing, REIT shall pay on
behalf of SAR commissions payable to Jeffrey Kahn and Jarret Wells, not to
exceed $100,000.

        7.8     Acknowledgement and Release.

                (a)     Each Contributor acknowledges that the terms of this
Agreement, including without limitation the Purchase Price for the Contributed
Entities, were negotiated at arms length among the officers of the REIT and
representatives of the initial purchaser in connection with the 144A Offering
and that the Purchase Price represents full, fair and adequate consideration for
the Contributor's Interests contributed hereunder. Each Contributor acknowledges
that it has carefully reviewed the terms of this Agreement and has had the
opportunity to retain counsel.

                (b)     Each Contributor, on behalf of itself, its successors,
heirs and assigns, hereby releases and forever discharges the REIT, the
Acquiror, the Contributed Entities, Intermediate Entities and Owning Entities,
and each of their respective individual, joint or mutual, past, present and
future officers, directors, general partners, Affiliates, stockholders,
controlling persons, successors and assigns (individually, a "Releasee" and
collectively, "Releasees") from any and all claims, demands, proceedings, causes
of action, orders, obligations, contracts, agreements, debts and liabilities
whatsoever, whether known or unknown, suspected or unsuspected, both at law and
in equity, which each of the Contributors or any of their respective successors,
heirs or assigns now has, have ever had or may hereafter have against the
respective Releasees arising contemporaneously with or prior to the Closing Date
or on account of or arising out of any matter, cause or event occurring
contemporaneously with or prior to the Closing Date, including, but not limited
to, any rights to indemnification or reimbursement from any Releasee, whether
pursuant to their respective Organizational Documents, contract or otherwise and
whether or not relating to clams pending on, or asserted after, the Closing
Date; provided, however, that nothing contained herein shall operate to release
any obligations arising under this Agreement or any agreement, certificate or
instrument executed in connection with this Agreement.

                (c)     Each Contributor hereby irrevocably covenants to refrain
from, directly or indirectly, asserting any claim or demand, or commencing,
instituting or causing to be commenced, any proceeding of any kind against any
Releasee, based upon any matter purported to be released hereby.

                (d)     If any provision of this Section 7.8 is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Section 7.8 will remain in full force and effect. Any provision of this
Section 7.8 held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

                                      -25-

<PAGE>

                                  ARTICLE VIII
                           CONDEMNATION; RISK OF LOSS

        8.1     Condemnation. In the event of any actual or threatened taking,
pursuant to the power of eminent domain, of all or any portion of the Real
Property, or any proposed sale in lieu thereof, the Contributors shall give
written notice thereof to the Acquiror promptly after the Contributors learns or
receives notice thereof. If a Principal Office Property is, or is to be, so
condemned or sold, the Acquiror shall have the right to terminate this Agreement
pursuant to Section 9.5. If the Acquiror elects not to terminate this Agreement,
all proceeds, awards and other payments arising out of such condemnation or sale
(actual or threatened) shall be paid or assigned, as applicable, to the Acquiror
at Closing.

        8.2     Risk of Loss. The risk of any loss or damage to the Real
Property prior to the Closing Date shall remain upon the Contributors. If any
such loss or damage to more than twenty five percent (25%) of the value of the
Improvements for any single Real Property occurs prior to Closing, the Acquiror
shall have the right to cause the Contributors to transfer such Real Property
and Improvements such that it is not an asset of the Contributed Entity as of
the Closing Date and the Consideration shall be reduced by the amount allocated
to the Real Property and Improvements, unless such Real Property is a Principal
Office Property, in which case if the Acquiror seeks to cause such transfer the
Contributors shall have the right to terminate this Agreement pursuant to
Section 9.5. If the Acquiror elects not to terminate this Agreement or drop a
Real Property, all insurance proceeds and rights to proceeds arising out of such
loss or damage shall be paid or assigned, as applicable, to the Acquiror at
Closing.

                                   ARTICLE IX
             LIABILITY OF ACQUIROR; INDEMNIFICATION BY CONTRIBUTORS;
                 RESTRICTION ON DISPOSITION, TERMINATION RIGHTS

        9.1     Liability of Acquiror. Except for any obligation expressly
assumed or agreed to be assumed by the Acquiror hereunder and in the Assignment
and Assumption Agreements, the Acquiror does not assume any obligation of the
Contributors or any liability for claims arising out of any occurrence prior to
Closing.

        9.2     Indemnification by Contributors. Each Contributor shall (i)
severally, and not jointly, indemnify and hold harmless the Acquiror, from and
against any and all claims, costs, penalties, damages, losses, liabilities and
expenses (including reasonable attorneys' fees) ("Losses") that may at any time
be incurred by the Acquiror, whether before or after Closing, as a result of any
breach of the representations, warranties, covenants or obligations of the
Contributors set forth herein or in any other document delivered hereunder by
the Contributors solely to the extent such representations, warranties,
covenants and obligations relate to such Contributor and (ii) jointly and
severally indemnify and hold harmless the Acquiror from and against any and all
Losses that may at any time be incurred by the Acquiror, whether before or after
Closing, as a result of any breach of the representations, warranties, covenants
or obligations of the Contributors set forth herein or in any other document
delivered hereunder by the Contributors solely to the extent such
representations, warranties, covenants and obligations relate to a Contributed
Equity in which such Contributor owns a Contributor's Interest. Notwithstanding
the foregoing, (a) Contributors will not be liable for any Loss until the

                                      -26-

<PAGE>

aggregate amount of all Losses related to the Contributed Entities exceeds
$200,000, and (b) Contributors will not be liable for any Loss relating to any
Contributed Entity to the extent that the amount of all Losses relating to such
Contributed Entity exceed the Purchase Price of such Contributed Entity. If
Losses incurred or claimed with respect to any individual Real Property shall
exceed 65% of the aggregate Consideration allocated to such individual Real
Property as set forth on Schedule 9.2 hereto, the Contributors shall have the
right and option to purchase such Real Property (together with all rights and
agreements associated therewith) from the Acquiror at a purchase price equal to
the amount of Consideration allocated to such Real Property as set forth on
Schedule 9.2 hereto, minus any amount paid by the Contributors to the Acquiror
pursuant to this Section 9.2 related to such Real Property (other than in
connection with third party claims). Such option shall be exercisable by the
Contributors by providing written notice of such exercise at any time beginning
when the aggregate amount of Losses incurred or claimed by the Acquiror with
respect to such individual Real Property exceed 65% of the aggregate
Consideration allocated to such individual Real Property and ending thirty days
after the final, non-appealable determination that Contributors are liable for
such Losses under this Section 9.2. In the event of any such exercise, the
parties shall use all commercially reasonable efforts to execute and deliver any
and all instruments, agreements and documents and obtain all approvals and
consents reasonably necessary to effectuate such transfer as soon as
practicable. Any indemnification payment otherwise due and payable under this
Section 9.2 shall be decreased to the extent of any net tax benefit and
insurance recovery realized or received by the Acquiror or its affiliates.
Notwithstanding the foregoing, no claim may be made for indemnification
hereunder with respect to any breach of a representation, warranty or covenant
on and after the date such representation, warranty or covenant no longer
survives as provided in Section 3.29 or 11.10. To the extent that a
representation or warranty set forth herein is subject to a Contributor's
knowledge, knowledge of any Contributor shall be deemed to be knowledge of all
other such Contributors.

        9.3     Indemnity Procedures.

                (a)     In the event that the Acquiror shall sustain a Loss
against which Acquiror is indemnified under this Agreement, Acquiror shall
notify the Contributors in writing of any such Loss so sustained. The
Contributors agree to pay Acquiror the amount of such Loss so sustained within
thirty (30) days after transmittal of such notice, subject to its right to
contest any claim, as hereinafter provided in Section 9.3(b) hereof;

                (b)     The Acquiror shall promptly notify the Contributors of
the existence of any claim, demand, or other matter involving liabilities to
third parties to which the Contributors' indemnification obligations would
apply; provided that the failure to notify the Contributors will not relieve the
Contributors of any liability except to the extent that the Contributors
demonstrate that the defense of such claim, demand or matter is prejudiced by
the Acquiror's failure to give such notice. The Acquiror shall give the
Contributors a reasonable opportunity to participate in the defense of the same
or prosecute such action to conclusion or settlement satisfactory to the
Acquiror at the Contributors' own expense and with counsel of the Contributors'
own selection so long as the Contributors diligently conduct such defenses to a
final conclusion such that (i) no compromise or settlement of such claims may be
effected by the Contributors without the Acquiror's consent (which shall not be
unreasonably withheld, conditioned or delayed) unless (A) there is no finding or
admission of violation of any law or any violation of the rights of any

                                      -27-

<PAGE>

person or entity and no effect on any other claims that may be made against the
Acquiror, and (B) the sole relief provided is monetary damages that are paid in
full by the Contributors; and (ii) the Acquiror will not have liability with
respect to any compromise or settlement of such claims effected without its
consent and the Acquiror shall receive a full release; provided that the
Acquiror shall at all times also have the right to fully participate in the
defense at its owns expense; provided, however that the control of such defense
shall rest primarily with the Contributors. If the Contributors shall, within a
reasonable amount of time after said notice, fail to defend, the Acquiror shall
have the right, but not the obligation, to undertake the defense of, and to
compromise or settle (exercising reasonable business judgment) the claim or
other matter on behalf, for the account, and at the risk and expense of the
Contributors. Except as provided in the preceding sentence, the Acquiror shall
not compromise or settle the claim or other matter without the prior written
consent of the Contributors. If the claim is one that cannot by its nature be
defended solely by the Contributors, the Acquiror shall make available all
information and assistance that the Contributors may reasonably request,
provided that any associated expenses shall be paid by the Contributors.
Notwithstanding the above, if the Acquiror determines in good faith that there
is a reasonable probability that such a claim, demand or matter may adversely
affect it or its affiliates other than as a result of monetary damages for which
it is entitled to indemnification under this Agreement, the Acquiror may by
notice to the Contributors hire its own counsel at Contributor's expense and/or
assume the exclusive right to defend, compromise or settle such demand, claim or
matter, but if Acquiror assumes exclusive right to defend, the Contributors
shall not be bound by any determination of any demand, claim or matter so
defended for the purposes of this Agreement or any compromise or settlement
affected without the consent of the Contributors (which many not be unreasonably
delayed, conditioned or withheld).

                (c)     If the Contributors contest or challenge any claim or
action asserted against Acquiror referred to in this Section 9.3, they shall do
so at their own cost and expense, holding Acquiror harmless from all costs,
fees, expenses, debts, liabilities and charges in connection with such contest,
shall diligently defend against any such claim, and shall hold Acquiror's
business and assets free and harmless from any attachment, execution, judgment,
lien or other legal process.

                (d)     Any indemnification payments made pursuant to this
Article IX hereof may be paid, at the option of the Contributors, in (i) cash or
(ii) cash and Partnership Units in a ratio equal to the ratio of cash and
Partnership Units for such Contributor set forth on Schedule 2 for such
Contributor and the Contributed Entity to which such indemnification relates.
Any Partnership Units used to make an indemnification payment shall be deemed to
have a per unit value equal to the Fair Market Value; provided that, if the
Contributor disagrees with such value, Contributor shall have the right to
challenge the value by submitting such challenge in writing to the Acquiror
within 15 days from the date the Contributor received notice of the Acquiror's
determination. Any dispute, controversy or claim that cannot be resolved by the
parties arising out of or relating to this Section 9.3(d) shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), and judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be held in Philadelphia, Pennsylvania, or in such other
location as the parties may mutually agree upon. The arbitration will be
conducted before a panel of three arbitrators, with one arbitrator named by each
party and the third named by the

                                      -28-

<PAGE>

two party-appointed arbitrators, or (if they should fail to agree on the third)
by the AAA. The arbitrators may not award non-monetary or equitable relief of
any sort. They shall have no power to award punitive damages or any other
damages not measured by the prevailing party's actual damages. All aspects of
the arbitration shall be treated as confidential. Neither the parties nor the
arbitrators may disclose the existence, content or results of the arbitration,
except as necessary to comply with legal or regulatory requirements. Before
making any such disclosure, a party shall give written notice to all other
parties and shall afford such parties a reasonable opportunity to protect their
interests. The non-prevailing party shall pay all expenses related to or arising
out of such arbitration proceeding, including reasonable attorneys' fees.

        9.4     Restriction on Disposition of Real Property and Improvements.
The Acquiror covenants and agrees that, until the earlier of (i) five (5) years
after the Closing Date and (ii) the date on which Contributors no longer own in
the aggregate at least 25% of the Partnership Units issued to Contributors
hereunder on the Closing Date (the earlier of (i) and (ii) being referred to as
the "Expiration Date"), Acquiror will not sell, transfer, distribute or
otherwise dispose of any or all of the Real Property and Improvements (or any
successor property or properties acquired by Acquiror in exchange for the Real
Property and Improvements in a non-taxable transaction ("Successor Properties"))
in a transaction that would result in the allocation of taxable income or gain
by Acquiror to Contributors under Section 704(c) of the Code without payment of
the indemnity amount described below. Nothing in this Section 9.4 shall prevent
Acquiror or one or more of its affiliates from (a) pledging or encumbering any
of the Real Property and Improvements or Successor Properties, as applicable, or
(b) assigning, transferring, or otherwise disposing of the Real Property and
Improvements or Successor Properties as long as such transfer does not result in
the allocation of taxable income or gain to Contributors under Section 704(c) of
the Code. In the event that Acquiror breaches its obligation not to dispose of
the Real Property and Improvements or Successor Properties, as applicable,
pursuant to this Section 9.4, Acquiror shall pay each Contributor (the "Tax
Indemnity Payment") an amount equal to the excess, if any, of (a) the tax
liability on the amount of gain under Section 704(c) of the Code allocated to
such Contributor in connection with such disposition, using an assumed combined
federal and state income tax rate of 35% over (b) the present value of such tax
liability on the last day of the Acquiror's taxable year in which the related
Code section 704(c) gain is allocated to such Contributor, using an annual
discount rate equal to the prime rate as announced by Wachovia Bank at the time
of determination plus 200 basis points and assuming that the tax liability is
paid on the last day of the Acquiror's taxable year in which the Expiration Date
occurs or is scheduled to occur. Any such payment shall be made on the last day
of the Acquiror's taxable year in which such Code section 7.04(c) gain is
allocated to the Contributor.

        9.5     Termination. This Agreement may be terminated at any time prior
to the Closing, notwithstanding any prior approvals relating thereto:

                (a)     by mutual written consent of the Acquiror and a
majority-in-interest of the Contributors;

                (b)     by Acquiror if a material breach of any provision of
this Agreement has been committed by any Contributor and such breach has not
been waived by Acquiror;

                                      -29-

<PAGE>

                (c)     by a majority-in-interest of the Contributors if a
material breach of any provision of this Agreement has been committed by
Acquiror and such breach has not been waived by a majority-in-interest of the
Contributors;

                (d)     by Acquiror if any condition in Article V has not been
satisfied as of the Closing Date of if satisfaction of such a condition by such
date is or becomes impossible (other than through the failure of Acquiror to
comply with its obligations under this Agreement); and Acquiror has not waived
such condition on or before such date;

                (e)     by a majority-in-interest of the Contributors if any
condition in Article VI has not been satisfied as of the Closing Date or if
satisfaction of such a condition by such date is or becomes impossible (other
than through the failure of the Contributors to comply with their obligations
under this Agreement), and a majority-in-interest as the Contributors have not
waived such conditions in on or before such date;

                (f)     by Acquiror if the 144A Offering does not close by
September 30, 2002, or such later date as the Acquiror and a
majority-in-interest of the Contributors may agree upon, unless the Acquiror is
in material breach of this Agreement; or

                (g)     by a majority-in-interest of the Contributors (which may
not include any Contributor in material breach of this Agreement) if the 144A
Offering does not close by September 30, 2002, or such later date as the
Acquiror and a majority-in-interest of the Contributors may agree upon.

        9.6     Effect of Termination. In the event of Termination of this
Agreement pursuant to Section 9.5, this Agreement shall become null and void and
there shall be no liability on the part of any party hereto under this
Agreement.

                                    ARTICLE X
                                POWER OF ATTORNEY

        10.1    Grant of Power. Nicholas S. Schorsch ("Schorsch") is hereby
granted the power and authority on behalf of each Contributor to execute any and
all instruments and to do or have done all things deemed by Schorsch to be
necessary or convenient to the Closing of the transactions contemplated by this
Agreement and shall irrevocably be and hereby is made, constituted and appointed
for each Contributor, agent and attorney-in-fact for all purposes relative to
the Closing of the transactions contemplated by this Agreement. Without
limitation of the foregoing, Schorsch shall have full power and authority to act
in the name and on behalf of each Contributor in the execution, acknowledgement,
verification and filing of the following documents:

                (a)     Assignment and Assumption Agreements;

                (b)     Registration Rights Agreement; and

                (c)     Escrow Agreement.

                                      -30-

<PAGE>

        10.2    Nature of Power of Attorney. The Power of Attorney granted by
each Contributor to Schorsch pursuant to Section 10.1:

                (a)     is a special power of attorney coupled with an interest
and is irrevocable; and

                (b)     may be exercised by Schorsch for all Contributors by the
single signature, acting as attorney-in-fact for all the Contributors together,
or by listing all of the Contributors and executing any instrument with the
single signature of Schorsch, acting as attorney-in-fact for all of the
Contributors together.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

        11.1    Completeness; Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior discussions, understandings,
agreements and negotiations between the parties hereto. This Agreement may be
modified only by a written instrument duly executed by the parties hereto.

        11.2    Assignments. The Acquiror may assign its rights hereunder to any
affiliate of Acquiror without the consent of the Contributors. No such
assignment shall relieve the Acquiror of any of its obligations and liabilities
hereunder.

        11.3    Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successors and
permitted assigns of the parties hereto.

        11.4    Days. If any action is required to be performed, or if any
notice, consent or other communication is given, on a day that is a Saturday or
Sunday or a legal holiday in the jurisdiction in which the action is required to
be performed or in which is located the intended recipient of such notice,
consent or other communication, such performance shall be deemed to be required,
and such notice, consent or other communication shall be deemed to be given, on
the first business day following such Saturday, Sunday or legal holiday. Unless
otherwise specified herein, all references herein to a "day" or "days" shall
refer to calendar days and not business days.

        11.5    Governing Law; Jurisdiction. This Agreement and all documents
referred to herein shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania. Subject to
Sections 2.2(f) and 9.3(b) hereof, the parties hereto irrevocably consent to the
jurisdiction of the federal and state courts located in the Commonwealth of
Pennsylvania in any suit or proceeding based on or arising under this Agreement
and irrevocably agree that any and all claims arising out of this Agreement or
related to the transactions contemplated by this Agreement shall be determined
exclusively in such courts. The parties hereto irrevocably waive the defense of
an inconvenient forum to the maintenance of such suit or proceeding.

                                      -31-

<PAGE>

        11.6    Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signature on behalf of both parties hereto appear on each counterpart
hereof. All counterparts hereof shall collectively constitute a single
agreement.

        11.7    Severability. If any term, covenant or condition of this
Agreement, or the application thereof to any person or circumstance, shall to
any extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such term, covenant or condition to other persons or
circumstances, shall not be affected thereby, and each term, covenant or
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

        11.8    Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, transmitted by
facsimile transmission, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such copies
as designated below. Any notice, request, demand or other communication
delivered or sent in the manner aforesaid shall be deemed given or made (as the
case may be) when actually delivered to the intended recipient.

If to the Contributors:         To the representatives of the Contributors at
                                the address set forth on Schedule 1 hereto.

If to the Acquiror:             First States Group, L.P.
                                1725 The Fairway
                                Jenkintown, PA 19406
                                Attention: Nicholas S. Schorsch

With a copy to:                 Klehr, Harrison, Harvey, Branzburg
                                & Ellers LLP
                                260 S. Broad Street
                                Philadelphia, PA 19102
                                Attention: Keith W. Kaplan, Esquire

Or to such other address as the intended recipient may have specified in a
notice to the other party. Any party hereto may change its address or designate
different or other persons or entities to receive copies by notifying the other
party and the Escrow Agent in a manner described in this Section.

        11.9    Incorporation by Reference. All of the exhibits attached hereto
are by this reference incorporated herein and made a part hereof.

        11.10   Survival. Except as provided in Section 3.29 hereof, all of the
representations and warranties of the Contributors and the Acquiror made in this
Agreement shall survive for a period of twelve (12) months following Closing,
and shall not merge into any document or instrument executed and delivered in
connection herewith. Notwithstanding the foregoing, the covenants contained in
Section 8.3 hereof shall survive indefinitely.

                                      -32-

<PAGE>

        11.11   Further Assurances. The Contributors and the Acquiror each
covenant and agree to sign, execute and deliver, or cause to be signed, executed
and delivered, and to do or make, or cause to be done or made, upon the written
request of the other party, any and all agreements, instruments, papers, deeds,
acts or things, supplemental, confirmatory or otherwise, as may be reasonably
required by either party hereto for the purpose of or in connection with
consummating the transactions described herein.

        11.12   No Partnership. This Agreement does not and shall not be
construed to create a Partnership, joint venture or any other relationship
between the parties hereto except the relationship of Contributors and Acquiror
specifically established hereby.

        11.13   Time of Essence. Time is of the essence with respect to every
provision hereof.

        11.14   Confidentiality. Contributors and its representatives, including
any professionals representing Contributors, shall keep the existence and terms
of this Agreement strictly confidential, except to the extent disclosure is
compelled by law, and then only to the extent of such compulsion.

        10.16   No Release. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement shall be construed to release any
Contributor or Owning Entity (nor to bar any action by Acquiror to implead any
Contributor or any Owning Entity nor to bar any other action by Acquiror against
any Contributor or Owning Entity where Acquiror or any Contributor or Owning
Entity may have liability to a third party or any Governmental Authorities) for
an environmental matter or condition which existed at or from the Property on or
prior to the Closing.

                  [Remainder of Page Intentionally Left Blank]

                                      -33-

<PAGE>

        IN WITNESS WHEREOF, the Contributors and the Acquiror have duly executed
this Agreement as of the date first written above.

                             ACQUIROR:

                             FIRST STATES GROUP, L.P.,
                               a Delaware limited Partnership

                             By: First States Group, LLC, its sole general
                                  partner

                             By:
                                ---------------------------------------------
                                Nicholas S. Schorsch, Chief Executive Officer

                             CONTRIBUTORS

                                ---------------------------------------------
                                Nicholas S. Schorsch

                                ---------------------------------------------
                                Steven Gross

                                Meadow Court Trust

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

                                ---------------------------------------------
                                Irvin G. Schorsch, III

                                ---------------------------------------------
                                Peter A. Schorsch<PAGE>

                                                                    Exhibit 10.2

                              AMENDED AND RESTATED
                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                         FIRST STATES PARTNERS II, L.P.
                      (A Pennsylvania Limited Partnership)

        This Amended and Restated Limited Partnership Agreement ("Agreement") is
made and entered into as of September 10, 2002, by and among First States
Management, LLC, a Delaware limited liability company, as the general partner
("General Partner"), and all other persons who shall execute this Agreement as
limited partners (all of whom are hereinafter collectively referred to as
"Limited Partners" and each of whom is hereinafter sometimes referred to
individually as a "Limited Partner"), for purposes of continuing First States
Partners II, L.P., a partnership under the laws of the Commonwealth of
Pennsylvania (the "Partnership").

                                   BACKGROUND

        The Partnership was formed on September 12, 2000 and prior to the date
hereof, operated pursuant to the terms of a Limited Partnership Agreement, dated
as of September 12, 2000 (the "Pre-existing Limited Partnership Agreement").

        Pursuant to the organization of American Financial Realty Trust, a
Maryland real estate investment trust (the "REIT"), Limited Partners who were
parties to the Pre-existing Limited Partnership Agreement (the "Pre-existing
Limited Partners") have contributed in the aggregate 87.49% of their Partnership
Interests to First States Group, L.P. (the "OP"), a Delaware limited partnership
in exchange for units of limited partnership interest in the OP ("Partnership
Units") or cash or a combination thereof, all pursuant to the Contribution
Agreement, dated September __, 2002, among the OP and the individuals and
entities set forth on Schedule I, attached thereto (the "Contribution
Agreement"). The General Partner desires to admit the OP as a substitute Limited
Partner.

        The parties hereto desire to continue the Partnership pursuant to the
Revised Uniform Limited Partnership Act of the Commonwealth of Pennsylvania, as
amended from time to time (the "Act") for the purposes, among other purposes, of
owning and operating directly or indirectly (through subsidiary entities) the
Bank Property (defined below). This Agreement amends and restates the
Pre-existing Limited Partnership Agreement in its entirety.

                                      - 1 -

<PAGE>

1.      DEFINITIONS. For convenience and brevity, certain terms used in this
Agreement are defined in Schedule I hereto instead of when first used in this
Agreement. Each defined term used in the Agreement has been identified by
capitalizing the first letter in such term.

2.      GENERAL PROVISIONS

        2.1     Continuation of the Partnership; Admission of Partners.

                (a)     The Partners hereby agree to continue the Partnership
under the Act. The Act shall govern the rights and obligations of the Partners
except as otherwise expressly set forth herein. The parties hereto hereby amend
and restate the Pre-existing Limited Partnership Agreement in its entirety and
enter into this Agreement.

                (b)     Upon execution of this Agreement, First States Group,
L.P. shall be admitted as a limited partner of the Partnership.

        2.2     Name. The name of the Partnership continued hereby is "First
States Partners II, L.P." The name of the Partnership may be changed at any time
in the discretion of the General Partner to any name permissible under the Act.
The General Partner shall give prompt notice of any name change to the Limited
Partners.

        2.3     Principal Place of Business. The principal place of business of
the Partnership shall be 1725 The Fairway, Jenkintown, Pennsylvania 19046 or
such other location as may hereafter be determined by the General Partner. The
General Partner shall notify the Limited Partners of any change in the principal
place of business of the Partnership.

        2.4     Title to Partnership Property. All property owned by the
Partnership, whether real or personal, tangible or intangible, shall be deemed
to be owned by the Partnership. The Partnership may hold any of its assets in
its own name or in the name of its nominee, which nominee may be a Partner or an
Affiliate of a Partner and may be one or more individuals, partnerships, trusts
or other entities.

        2.5     Partition. No Partner, nor any successor-in-interest to any
Partner, shall have the right, while this Agreement remains in effect, to have
the property of the Partnership partitioned, or to file a complaint or institute
any proceeding at law or in equity to have the property of the Partnership
partitioned, and each of the Partners, on behalf of itself and its successors,
representatives and assigns, hereby waives any such right. It is the intention
of the Partners that, during the term of this Agreement, the rights of the
Partners and their successors-in-interest shall be governed by the terms of this
Agreement, and that the right of any Partner or successor-in-interest to assign,
transfer, sell or otherwise dispose of any Interest shall be subject to the
limitations and restrictions of this Agreement.

                                      - 2 -

<PAGE>

        2.6     Purpose of the Partnership. The purpose of the Partnership shall
be to continue to own, hold, maintain, operate, manage, improve, develop and
lease, directly or indirectly (through subsidiary entities), the property known
as "Unit #1 and Unit #2 of 123 South Broad Condominium" that is located at 123
South Broad Street, Philadelphia, Pennsylvania and 1319 Walnut Street,
Philadelphia, Pennsylvania (the "Bank Property"), to engage in such other
activities as may be necessary or advisable in connection with the ownership,
operation, management and leasing of the Bank Property, and to engage in such
other activities as may be necessary therefor or incidental thereto
(collectively, the "Business"). In furtherance of its purpose, the Partnership
shall have and may exercise all of the powers now or hereafter conferred upon
limited partnerships formed under the Act, and, to the extent permitted by
applicable law, the Partnership may do any and all things related to the
Business.

        2.7     Activities of the Partners. The General Partner, Limited
Partners or any of their Affiliates may engage in or hold an interest in other
business ventures and activities of any nature, including, without limitation,
ventures and activities similar to or competitive with those of the Partnership,
and neither the Partnership nor the other Partners shall, by virtue of this
Agreement, have any interest or rights in or to such other business ventures and
activities or any liability or obligation with respect thereto. The Limited
Partners expressly acknowledge that the OP owns, will continue to own and as
part of its business plan and the business plan of the REIT will acquire
properties and businesses, including real estate assets and interests therein,
that may be competitive with the Bank Property, and no Limited Partner shall
have, by virtue of this Agreement, any interests or rights in or to any of the
other assets, properties or businesses owned or to be owned by the OP.

        2.8     Further Assurances. Each Partner agrees to perform such further
acts and to execute and deliver such further documents as may be necessary to
enable the Partnership to carry out its purposes or comply with applicable law.
Whenever necessary, each of the Partners shall also use its best efforts to
cause its Affiliates to assist in enabling the Partnership to carry out its
purposes or to comply with applicable law.

3.      CAPITALIZATION

        3.1     Capital Accounts and Percentage Interests.

                (a)     The Partnership shall establish and maintain Capital
Accounts determined and adjusted in accordance with the rules of Treasury
Regulations Section 1.704-1(b)(2)(iv). The Partners have previously made capital
contributions to the Partnership.

                (b)     A Partner shall not be entitled to withdraw any part of
its Capital Account or to receive any distribution from the Partnership, except
as specifically provided in this Agreement. Any Partner, including any
substituted Partner, that shall receive an Interest or whose Interest shall

                                      - 3 -

<PAGE>

be increased by means of a transfer to it of all or part of the Interest of
another Partner, shall have a Capital Account that reflects such transfer.

                (c)     As of the date hereof, the Partners listed on Schedule
II hereto shall have the Percentage Interests set forth on Schedule II hereto,
which may be adjusted pursuant to Section 3.7 hereof.

        3.2     Additional Capital Contributions. No additional Capital
Contributions shall be required to be made by the Partners. In the event any
additional Capital Contributions are necessary, such Capital Contributions shall
be made solely by the OP and the OP's Capital Account shall be increased to
reflect such Capital Contribution. The Percentage Interests of the Partners
shall not be adjusted as a result of any such additional Capital Contributions.

        3.3     Liability of Limited Partners. Except as and to the extent
provided by law, the Limited Partners shall not be liable for any of the debts
or obligations of the Partnership.

        3.4     Use of Capital Contributions. The Capital Contributions made
pursuant to this Section 3 shall be used, together with other funds available to
the Partnership, to engage in the Business and for the payment of the
liabilities and obligations of the Partnership.

        3.5     No Interest on or Return of Capital. No Partner shall be
entitled to interest on any Capital Contribution or Capital Account. No Partner
shall have the right to demand or receive the return of all or any part of any
Capital Contribution or Capital Account, except as otherwise may be expressly
provided herein, and no Partner shall be personally liable for the return of the
Capital Contribution of any other Partner.

        3.6     Additional Interests in the Partnership. The General Partner
may, in its sole discretion, but subject to the limitation expressed in the next
following sentence, issue additional interests in the Partnership (including
different classes of interests) for such consideration as the General Partner
may deem appropriate to such Persons (including any Partner, any Affiliate of
any Partner or any Person who is not then a Partner) and on such terms and
conditions as the General Partner may deem acceptable. Notwithstanding the
foregoing, the General Partner shall first offer any such additional interests
in the Partnership (including different classes of interests) to the existing
Partners pro rata in accordance with their Percentage Interests. Each new
Partner shall execute an instrument agreeing to be bound as either a General
Partner or a Limited Partner by the terms and conditions of this Agreement. The
General Partner shall promptly amend Schedule II to reflect the issuance of
additional Partnership Interests to a new or existing Partner.

                                      - 4 -

<PAGE>

        3.7     Adjustment to Percentage Interests.

                (a)     On the date which is first day of the 38th month after
the date hereof (the "Trigger Date"), each Partner's Percentage Interest shall
adjust to the respective Adjusted Percentage Interest set forth on Schedule II
next to each Partner's name and this Agreement shall be automatically amended to
change all references to Percentage Interest to Adjusted Percentage Interest, as
appropriate, and such amendment shall not require the consent of the Partners.

                (b)     During the 30-day period preceding the Trigger Date, the
OP may, but is not obligated to, offer to acquire all of each of the other
Limited Partner's Interest at a purchase price equal to or greater than the
Acquisition Price (as defined below). If the OP offers to acquire any Limited
Partner's Interest pursuant to this Subsection (b), it must offer to acquire all
of the Limited Partners' Interests from the other Limited Partners. No Partner
shall have any obligation to accept the OP's offer. The "Acquisition Price"
shall mean (i) the Limited Partner's Percentage Interest (ii) multiplied by the
Purchase Price for the Partnership as determined pursuant to Section 2.2 of the
Contribution Agreement as of the Closing Date (as defined in the Contribution
Agreement) but without deduction for the Disposition Fee (as defined in the
Contribution Agreement), (iii) multiplied by .1235955 payable in Partnership
Units valued at $10 per Partnership Unit.

                (c)     In the event the OP makes the offers described in
Section 3.7(b), the adjustments described in Section 3.7(a) shall not occur and
each Partner's Percentage Interest shall remain the same respective Percentage
Interest in effect immediately prior to the Trigger Date and this Agreement
shall not be amended as described in Section 3.7(a).

4.      ALLOCATIONS OF PROFIT AND LOSS

        4.1     Allocations Generally. Except as otherwise provided in Section
4.2 or 4.3 hereof, Income and Loss for a taxable year shall be allocated among
the Partners as follows:

                (a)     Income shall be allocated among the Partners in
accordance with their respective Percentage Interests.

                (b)     Loss shall be allocated among the Partners in accordance
with their respective Percentage Interests.

                (c)     Limitation on Loss Allocations. The Loss allocated
pursuant to Section 4.1(b) shall not exceed the maximum amount of Loss that can
be so allocated without causing any Partner to have an Adjusted Capital Account
Deficit at the end of any fiscal year. In the event some but not all of the
Partners would have Adjusted Capital Account Deficits as a consequence of an
allocation of Loss pursuant to Section 4.1(b) hereof, the limitation set forth
in this Section 4.1(c)

                                      - 5 -

<PAGE>

shall be applied on a Partner by Partner basis so as to allocate the maximum
permissible Loss to each Partner under Treasury Regulation
Section1.704-1(b)(2)(ii)(d).

        4.2     Special Allocations

                (a)     Minimum Gain. If, in any year there is a net decrease in
Minimum Gain (other than a decrease for which a minimum gain chargeback is not
required under Treasury Regulation Section 1.704-2(f)), then each Partner will
be allocated Income equal to that Partner's share of the net decrease in minimum
gain for the year, as determined by Treasury Regulation Section 1.704-2(g)(2).
The items of Income to be allocated under this section are determined under
Treasury Regulation Section 1.704-2(j)(2). In the event there is insufficient
Income for the year to fully chargeback each Partner's share of the decrease in
Minimum Gain, then the chargeback for the year shall be in proportion to each
Partner's share of the decrease and any decrease that has not been charged back
shall be carried over and be treated as a decrease in Minimum Gain in the
following year. This subsection is intended to comply with the minimum gain
chargeback requirement of Treasury Regulation Section 1.704-2(f) and shall be
interpreted consistently therewith.

                (b)     Partner Minimum Gain. If, in any year there is a net
decrease in Partner Minimum Gain (other than a decrease for which a Partner
Minimum Gain chargeback is not required under Treasury Regulation Section
1.704-2(i)(4)), then, after the allocation set forth above in Section 4.2(a),
each Partner will be allocated Income equal to that Partner's share of the net
decrease in Partner Minimum Gain for the year, as determined by Treasury
Regulation Section 1.704-2(i)(3). The items of Income to be allocated under this
section are determined under Treasury Regulation Section 1.704-2(j)(2). In the
event there is insufficient Income for the year to fully chargeback each
Partner's share of the decrease in Partner Minimum Gain, then the chargeback for
the year shall be in proportion to each Partner's share of the decrease and any
decrease that has not been charged back shall be carried over and be treated as
a decrease in Partner Minimum Gain in the following year. This subsection is
intended to comply with the requirement of Treasury Regulation Section
1.704-2(i)(4) that there be a chargeback of partner nonrecourse debt minimum
gain and shall be interpreted consistently therewith.

                (c)     Qualified Income Offset. In the event any Partner
received any adjustment, allocation or distribution described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that was not reasonably
expected at the end of the preceding year and that causes, or increases, an
Adjusted Capital Account Deficit, items of income and gain shall be allocated to
that Partner in an amount and manner sufficient to eliminate such Adjusted
Capital Account Deficit. If there is insufficient Income in any year to make the
allocation called for under this subsection, then the shortfall shall be carried
over to subsequent years and will be treated as items to be offset in those
years. Allocations under this subsection will only be made to the extent that a
Partner has an

                                      - 6 -

<PAGE>

Adjusted Capital Account Deficit after all other allocations provided in Section
4 have been tentatively made as if this subsection were not in the Agreement.

                (d)     Partnership Nonrecourse Deductions. Loss attributable
(under Treasury Regulation Section 1.704-2(c)) to "partnership nonrecourse
liabilities" (within the meaning of Treasury Regulation Section 1.704-2(b)(1))
shall be allocated among the Partners in the same proportion as their respective
Percentage Interests.

                (e)     Partner Nonrecourse Deductions. Loss attributable under
Treasury Regulation Section 1.704-2(i)(2) to "partner nonrecourse debt" (within
the meaning of Treasury Regulation Section 1.704-2(b)(4)) shall be allocated, in
accordance with Treasury Regulation Section 1.704-2(i)(1), to the Partner who
bears the economic risk of loss with respect to the debt to which the Loss is
attributable.

                (f)     Curative Allocations. The allocations set forth in
Sections 4.1(c), 4.2(a), 4.2(b), 4.2(c), 4.2(d) and 4.2(e) (the "Regulatory
Allocations") are intended to comply with certain provisions of the Treasury
Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset with other Regulatory Allocations or with
special allocations of other Partnership Items pursuant to this Section 4.2(f).
Therefore, notwithstanding any other provision of this Section 4 (other than the
Regulatory Allocations), the General Partner shall make such offsetting
allocations of Partnership Items in whatever manner it shall determine
appropriate so that, after such offsetting allocations are made, each Partner's
Capital Account balance is, to the extent possible, equal to the Capital Account
balance such Partner would have had if the Regulatory Allocations were not part
of the Agreement and all Partnership items were allocated pursuant to Sections
4.1(a) and 4.1(b).

        4.3     Other Allocation Rules.

                (a)     Allocations of Partnership Items with respect to any
property contributed to the capital of the Partnership shall, solely for
federal, state and local income tax purposes, be allocated among the Partners so
as to take account of any variation between the adjusted basis of such property
to the Partnership and its fair market value (as agreed herein). The Partners
further agree that any gain or income attributable to the difference between the
agreed fair market value of the Purchase Agreement and the Partnership's basis
therein for tax purposes shall be deemed to be an item governed by Section
704(c) of the Code and, pursuant to Section 704(c) of the Code and the
regulations promulgated thereunder shall be allocated when recognized in whole
or in part to the Partner contributing the Purchase Agreement. Upon contribution
of the Purchase Agreement to the Partnership, the Partnership shall be provided
sufficient information for it to determine the amount of such built-in gain or
income. The Partnership shall then allocate such built-in gain or income among
the properties to be purchased by the Partnership pursuant to the Purchase
Agreement. Such

                                      - 7 -

<PAGE>

allocation shall be based upon the proportion of the relative fair market values
of each property to the sum of the fair market values of all properties
purchased. Upon the sale, disposition, or other recognition event for tax
purposes of any property, gain or income attributable to Section 704(c), at the
time of the recognition of such gain/income by the Partnership with respect to
such property(ies), shall be allocated at that time to the Partner contributing
the Purchase Agreement. The Partners hereby further agree that such allocation
of gains/income shall not require, or otherwise entitle the Partner that
contributed the Purchase Agreement to any priority cash distribution,
notwithstanding any other provision of this Agreement, as amended.

                (b)     If during any fiscal year of the Partnership there is a
change in any Partner's Interest, then for purposes of complying with Code
Section 706(d), the determination of items of Income and Loss allocable to any
such period shall be made by using any method permissible under Code Section
706(d) and the Treasury Regulations thereunder as may be determined by the
General Partner.

                (c)     The Partners agree to be bound by the provisions of this
Section 4 in reporting their shares of Partnership Items for tax purposes.

5.      DISTRIBUTIONS

        5.1     Distributions of Cash.

                (a)     Net Cash Flow. Except as provided in Section 8 regarding
liquidating distributions, Net Cash Flow shall be determined by the General
Partner and shall be distributed to the Partners no less frequently than
annually to the Partners in accordance with their respective Percentage
Interests.

                (b)     Net Proceeds of Sales or Refinancings. Except as
provided in Section 8 regarding liquidating distributions, Net Proceeds of Sales
or Refinancings shall be distributed within a reasonably practicable time after
receipt, as determined by the General Partner to the Partners in accordance with
their Percentage Interests.

                (c)     For purposes of this Section 5.1, the Partners
acknowledge that, in accordance with the definitions of Net Cash Flow and Net
Proceeds of Sales or Refinancings provided in Schedule I, the General Partner
may, in its sole discretion, adjust the amount which would otherwise constitute
Net Cash Flow or Net Proceeds of Sales or Refinancings by establishing, adding
amounts to, and releasing (with respect to Net Cash Flow) amounts from, such
reserves as it deems, in its sole discretion, to be necessary or advisable for
working capital, contingencies, replacements, expansions, acquisitions, or other
expenditures of the Partnership.

                                      - 8 -

<PAGE>

        5.2     Distributions in Kind. The General Partner may direct that
property of the Partnership be distributed (including upon the dissolution and
liquidation of the Partnership) in kind, provided that such a distribution in
kind shall, to the extent possible, be distributed to the Partners in accordance
with Section 5.1(a) as though the fair market value of the distributed property
was Net Proceeds of Sales or Refinancings (except that distributions in
liquidation shall be made in accordance with Section 8). The amount by which the
fair market value of any property to be distributed in kind to the Partners
exceeds or is less than the book value of such property shall, to the extent not
otherwise recognized by the Partnership, be taken into account in determining
Partnership Income and Loss and determining the Capital Accounts of the Partners
as if such property had been sold at its fair market value immediately prior to
the distribution. If any assets are sold in transactions in which, by reason of
the provisions of Section 453 of the Code or any successor thereto, gain is
realized but not recognized, such gain shall be taken into account when realized
in computing gain or loss of the Partnership for purposes of allocation of
Partnership Income and Loss under Section 4, and, if such sales shall involve
substantially all the assets of the Partnership, the Partnership shall be deemed
to have been dissolved and terminated notwithstanding any election by the
Partnership to continue the Partnership for purposes of collecting the proceeds
of such sales.

        5.3     Cash in Return of Capital. No Partner shall be entitled to
demand and receive property other than cash in return for such Partner's Capital
Contribution or in payment of any other distributions to which such Partner is
entitled.

6.      MANAGEMENT AND OPERATIONS

        6.1     Authority of the General Partner. The General Partner shall have
the sole and exclusive right to manage the business of the Partnership and shall
have all of the rights and powers which may be possessed by general partners
under the Act including, without limitation, the right and power to perform any
act permitted or required to be performed by the Partnership in connection with
the accomplishment of Partnership purposes. Except as otherwise provided in this
Agreement, the General Partner shall have the following powers and duties and
shall be permitted, on behalf of the Partnership, to act in all matters
affecting the day-to-day management and supervision of the Partnership's
affairs, including:

                (a)     execute and deliver any loan documents relating to the
business of the Partnership and enter into and perform such additional
agreements as are deemed necessary by the General Partner in connection with the
Partnership's consummation of any loan to the Partnership;

                (b)     enter into arrangements with brokers to assist in the
leasing of space to tenants, if such arrangements, in the judgment of the
General Partner, are prudent, and pay any leasing or brokerage commission
incident thereto as a Partnership expense;

                                      - 9 -

<PAGE>

                (c)     purchase and maintain fire and extended coverage,
liability, workmen's compensation, rental loss and other insurance with respect
to any property owned or leased by the Partnership or any subsidiary thereof;

                (d)     enter into arrangements from time to time with qualified
property managers, including, without limitation, any Affiliate of the General
Partner for management of any real property owned or leased by the Partnership
or any subsidiary thereof, and improvements thereon, if such arrangements, in
the judgment of the General Partner, are prudent, and pay any reasonable and
customary management fee incident thereto as a Partnership expense;

                (e)     exercise any power, authority or duty delegated or
appointed to the General Partner under this Agreement; and

                (f)     take all other actions determined necessary or advisable
by the General Partner for the accomplishment of the Partnership's purposes.

        Notwithstanding the foregoing, the General Partner may not directly or
indirectly sell, assign or otherwise transfer, or refinance the Partnership's
interest in the Bank Property without the prior consent of a
Majority-In-Interest of the Limited Partners other than the OP, provided that
this consent shall cease to be required in the event the OP makes the offers
described in Section 3.7(b) hereof.

        6.2     Right to Rely on General Partner. Any Person dealing with the
Partnership may rely upon a certificate signed by the General Partner as to:

                (a)     the identity of any Partner;

                (b)     the existence or nonexistence of any fact or facts which
constitute a condition precedent to acts by a General Partner or which are in
any other manner germane to the affairs of the Partnership;

                (c)     the Persons who are authorized to execute and deliver
any instrument or document of the Partnership; or

                (d)     any act or failure to act by the Partnership or any
other matter whatsoever involving the Partnership or any Partner.

        6.3     Duties and Obligations of General Partner.

                (a)     General Duties. The General Partner shall take all
actions that may be necessary or appropriate for the continuation of the
Partnership's valid existence as a limited partnership under the laws of the
Commonwealth of Pennsylvania.

                                     - 10 -

<PAGE>

                (b)     Required Effort. The General Partner shall devote to the
Partnership such time as may be necessary for the proper performance of all
duties hereunder, but the General Partner shall not be required to devote full
time to the performance of such duties.

                (c)     Fiduciary Obligation. The General Partner shall be under
a fiduciary duty to conduct the affairs of the Partnership in the best interests
of the Partnership and of the Partners, including the safekeeping and use of all
Partnership property and the use thereof for the exclusive benefit of the
Partnership.

        6.4     No Management by Limited Partner. No Limited Partner shall have
any personal liability whatsoever to the Partnership or any of the Partners or
the creditors of the Partnership, except as expressly required by law. Except as
otherwise set forth in this Agreement, the Limited Partners shall have no rights
or powers to take part in the management and control of the Partnership and its
business and affairs.

        6.5     Withdrawal of a Limited Partner. Without the written consent of
the General Partner, no Limited Partner may voluntarily withdraw from the
Partnership. The withdrawal of a Limited Partner shall not dissolve the
Partnership.

        6.6     Death, Dissolution or Bankruptcy of a Limited Partner. The
death, incompetence, bankruptcy, dissolution or liquidation of a Limited Partner
shall not result in the termination of the Partnership. Notwithstanding anything
contained herein to the contrary, such Limited Partner's successor, estate or
legal representative shall have no voice or control in the management of the
Partnership and shall be bound by the terms of this Agreement.

        6.7     Indemnification of Partners. The Partnership, its receiver or
its trustee shall indemnify, save harmless and pay all judgments and claims
against any Partner, its officers, directors and trustees, as applicable (the
"Indemnified Parties") relating to any liability or damage incurred by reason of
any act performed or omitted to be performed by an Indemnified Party in
connection with the business of the Partnership, including attorneys fees
incurred by the Indemnified Party in connection with the defense of any action
based on any such act or omission; provided, however no Indemnified Party shall
be indemnified from any liability for fraud, bad faith, willful misconduct or
gross negligence.

        6.8     Compensation and Expenses of General Partner. In addition to the
distributions and allocations provided for elsewhere in this Agreement, the
General Partner may charge the Partnership for any direct expenses reasonably
incurred in connection with the Partnership business.

                                     - 11 -

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7.       ACCOUNTING, FINANCIAL AND TAX MATTERS

        7.1     Books and Records. The General Partner shall maintain or cause
to be maintained complete and accurate books and records with respect to the
Partnership. The books and records of the Partnership shall be kept at the
principal place of business of the Partnership or at such other location as is
convenient to the General Partner. The books and records for any taxable year
shall be retained until such taxable year has been closed for each of the
Partners under federal and state income tax laws, by the running of the statute
of limitations or otherwise. The General Partner shall, upon reasonable prior
notice and during normal business hours, make available to any Partner or its
representatives or designees all properties, assets, books of account, records
and contracts of the Partnership, and any other material reasonably requested by
the inspecting Partner, for inspection and, in the case of such books of
account, records and contracts, copying at the inspecting Partner's cost, and
shall use its best efforts to make available to the inspecting Partner the
accountants and counsel to the Partnership for interviews to verify any
information furnished or to enable the inspecting Partner otherwise to review
the Partnership and its operations. The General Partner shall provide access to
the facilities, systems and books and records of the Partnership to the extent
reasonably considered necessary by the accountants and internal audit
departments of the inspecting Partner in the performance of the audits of the
inspecting Partner.

        7.2     Fiscal Year. The Partnership's fiscal year shall be the calendar
year, until, if ever, a different fiscal year is required by the Code or
Treasury Regulations.

        7.3     Financial Statements. As soon as practicable following the end
of each fiscal year (and in any event not later than 180 days after the end of
such fiscal year), the General Partner shall prepare and deliver to each Partner
a balance sheet of the Partnership as of the end of such fiscal year and the
related statement of operations, Capital Accounts and cash flows of the
Partnership for such fiscal year, each prepared in accordance with GAAP, except
as otherwise indicated therein.

        7.4     Tax Matters Partner. The General Partner shall act as "tax
matters partner" of the Partnership within the meaning of Section 6231(a)(7) of
the Code and file a designation of itself as such with the IRS.

        7.5     Tax Returns. The General Partner shall prepare, or cause to be
prepared, and will attempt to distribute to the Limited Partners within 90 days
after the close of each calendar year, such returns and other information
(including a Form K-1) relating to the Partnership as is necessary to enable the
Limited Partners to prepare such federal, state, and local tax returns as are
required.

        7.6     Bank Accounts. The General Partner shall maintain appropriate
accounts at one or more financial institutions for all funds of the Partnership.
Such accounts shall be used solely for the business of the Partnership.
Withdrawal from such accounts shall be made only upon the signature of the
General Partner or by any person authorized to do so by the General Partner.

                                     - 12 -

<PAGE>

        7.7     Determination of Tax Book Value of Partnership Assets.

                (a)     Except as set forth below, the "Tax Book Value" of any
Partnership asset is its adjusted basis for federal income tax purposes.

                (b)     The initial Tax Book Value of any assets contributed by
a Partner to the Partnership shall be the agreed fair market value of such
assets, increased by the amount of liabilities of the contributing Partner
assumed by the Partnership in connection with the contribution of such assets
plus the amount of any other liabilities to which such assets are subject.

                (c)     The Tax Book Value of all Partnership assets may be
adjusted by the General Partner to equal their respective gross fair market
values as of the following times: (i) the admission of a new Partner to the
Partnership or the acquisition by an existing Partner of additional Interests;
(ii) the distribution by the Partnership of money or property to a withdrawing,
retiring or continuing Partner in consideration for the retirement of all or a
portion of such Partner's Interest; and (iii) the termination of the Partnership
for federal income tax purposes pursuant to Section 708(b)(1)(B) of the Code.

                (d)     The Tax Book Value of the Partnership asset distributed
to any Partner will be adjusted to equal the gross fair market value of such
asset on the date of distribution as determined by the General Partner; and

                (e)     The Tax Book Value of the Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this section
to the extent that the General Partner determines that an adjustment pursuant to
subsection (c) hereof is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment to this subsection (e).

        If Tax Book Value of an asset has been determined or adjusted to
subsection (i), (ii) or (iv) hereof, such Tax Book Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Income and Loss.

                (f)     This Section 7.7 shall not affect the book value of any
assets for financial reporting purposes.

                                     - 13 -

<PAGE>

8.      DURATION AND TERMINATION

        8.1     Duration of the Partnership. The Partnership was formed on
September 12, 2000. This Agreement shall become effective as of the date of
execution of this Agreement by the Partners. The Partnership shall continue in
perpetuity until sooner terminated in accordance with the provisions of this
Agreement or by operation of law.

        8.2     Termination of the Partnership. The Partnership shall be
dissolved upon the occurrence of any of the following events (a "Dissolution
Event"):

                (a)     the General Partner's determination that it is no longer
profitable to continue the business of the Partnership;

                (b)     the withdrawal or Bankruptcy of the General Partner;

                (c)     the sale by the Partnership of all or substantially all
of its assets; and

                (d)     the Partnership ceasing to be taxed as a partnership for
Federal income tax purposes.

        Notwithstanding any provision of the Act, the Partnership shall not
dissolve prior to the occurrence of a Dissolution Event.

        8.3     Activities of the Partnership. Upon the occurrence of a
Dissolution Event, the continuing operation of the Partnership's business shall
be confined to those activities reasonably necessary to wind up the
Partnership's affairs, discharge its obligations, and preserve and distribute
its assets.

        8.4     Winding Up and Liquidation.

                (a)     Upon dissolution of the Partnership, the General Partner
or a liquidator or liquidating committee selected by the General Partner (the
"Liquidator") shall be responsible for the winding up of the affairs of the
Partnership and the distribution of its assets. In connection with a winding up
of the affairs of the Partnership, the Liquidator shall cause an accounting to
be made of the assets and liabilities of the Partnership. If any liability is
contingent or uncertain in amount, a reserve will be established in such amount
as the Liquidator deems reasonably necessary. Upon satisfaction or other
discharge of such contingency, the amount of the reserve not required, if any,
will be distributed as provided in this Section 8.4.

                (b)     The Liquidator shall be entitled to receive such
compensation for its services as may be approved by the General Partner. The
Liquidator shall agree not to resign at any time

                                     - 14 -

<PAGE>

without fifteen (15) days' prior written notice and may be removed at any time,
with or without cause, by notice of removal signed by the General Partner. Upon
dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and
duties of the original Liquidator) shall within thirty (30) days thereafter be
selected by the General Partner. The right to appoint a successor or substitute
Liquidator in the manner provided herein shall be recurring and continuing for
so long as the functions and services of the Liquidator are authorized to
continue under the provisions hereof, and every reference herein to the
Liquidator will be deemed to refer also to any such successor or substitute
Liquidator appointed in the manner herein provided. Except as expressly provided
in this Section 8, the Liquidator appointed in the manner provided herein shall
have and may exercise, without further authorization or consent of any of the
Partners, all of the powers conferred upon the Liquidator under the terms of
this Agreement (but subject to all of the applicable limitations, contractual
and otherwise, upon the exercise of such powers) to the extent necessary or
desirable in the good faith judgment of the Liquidator to carry out the duties
and functions of the Liquidator hereunder for and during such period of time as
shall be reasonably required in the good faith judgment of the Liquidator to
complete the winding up and liquidation of the Partnership as provided for
herein.

                (c)     The Liquidator shall liquidate the assets of the
Partnership and apply and distribute the proceeds of such liquidation in the
order of priority set forth in Section 8.5, unless otherwise required by
mandatory provisions of applicable law.

                (d)     The Liquidator shall be authorized to sell any, all or
substantially all of the assets of the Partnership for deferred payment
obligations, and to hold, collect and otherwise administer any such obligations
or any other deferred payment obligations held or acquired as assets of the
Partnership.

                (e)     A reasonable time, including, without limitation, any
time required to collect deferred payment obligations, shall be allowed for the
orderly liquidation of the assets of the Partnership and the discharge of
liabilities to creditors so as to enable the Liquidator to reasonably minimize
any losses attendant upon the liquidation.

        8.5     Application of Proceeds. Upon the dissolution of the Partnership
(other than pursuant to Section 708(b)(1)(B) of the Code), the Partnership's
assets shall be liquidated and the cash proceeds therefrom shall be distributed
and applied in the following manner and order of priority:

                (a)     First, to the payment of the debts and liabilities of
the Partnership, other than liabilities for distributions by the Partnership to
the Partners or to Affiliates of the Partners;

                (b)     Second, to the establishment of any reserves as the
General Partner may deem reasonably necessary for contingent, conditional or
unmatured claims or obligations of the Partnership arising out of or in
connection with the Partnership or its liquidation. Such reserves shall

                                     - 15 -

<PAGE>

be held by the Liquidator for the purpose of disbursing such reserves in payment
of any of the aforementioned contingencies, and, as soon as practicable (or at
such earlier time as shall be deemed advisable by the General Partner), to
distribute the balance thereafter remaining in the manner provided in the
following subdivisions of this Section 8.5;

                (c)     Third, to the Partners in accordance with their
respective positive Capital Accounts, as determined after taking into account
all Capital Account adjustments for the Partnership taxable year during which
such liquidation occurs.

9.      TRANSFER OF INTERESTS IN THE PARTNERSHIP

        9.1     Restriction on Transfer by Limited Partners. No Limited Partner
shall sell, assign, transfer, exchange, mortgage, pledge, grant a security
interest in, or otherwise dispose of or encumber (any of the foregoing being
herein referred to as a "Transfer") all or any part of its Interest; provided,
however, that a Limited Partner (a "Transferring Partner") may transfer its
Interest (a) to any Family Member, (b) to any of its Affiliates, (c) with the
written consent of the General Partner which consent may be denied in the
General Partners' sole discretion, (d) pursuant to Section 3.7, (d) upon
satisfaction of the right of first refusal procedures set forth in Section 9.2.
In addition, neither the Partnership nor the Partners shall be bound by any such
assignment or transfer until the assignee or transferee has complied with
Section 9.3.

        9.2     Right of First Refusal.

                (a)     Except as expressly permitted under Sections 9.1 (a),
(b), (c) or (d), any Limited Partner may Transfer all or any part of its
Interest to a third party only after such Transferring Partner first offers its
Interest (the "Transfer Interest") to the Partners (the "Nontransferring
Partners") in the following order of preference: (i) first, to the OP; (ii)
second, to be redeemed by the Partnership (thus, proportionately increasing the
Percentage Interests of each of the Nontransferring Partners); (iii) third, to
all other Nontransferring Partners; and (iv) fourth, to the General Partner. The
Transferring Partner shall notify the Partners of its intention to Transfer its
Transfer Interest not less than sixty days prior to the proposed Transfer. The
written notice (the "First Offering Notice") shall describe in reasonable detail
the terms of the proposed Transfer, including the purchase price, the method of
payment, reasonable evidence that such payment can be made in a timely manner by
the proposed transferee and the identity of the proposed transferee.

                (b)     Within twenty days of receipt of the First Offering
Notice, the OP may elect to purchase all or part of the Transfer Interest for
the price proposed to be paid by such third party (the "First Refusal Price")
upon the same terms and conditions as are being offered by the proposed
transferee. Notice indicating whether or not such election to purchase shall be
exercised by the OP (the "First Reply Notice") must be given in writing to the
Transferring Partner and shall set forth (i) the amount of Transfer Interest to
be purchased, if any, and (ii) the remaining balance of the Transfer

                                     - 16 -

<PAGE>

Interest, if any. Failure to give such notice within twenty days shall be
equivalent to an election not to purchase any of the Transfer Interest.

                (c)     Within five days after the Transferring Partner receives
the First Reply Notice, the Transferring Partner shall offer the Transfer
Interests not purchased by the OP as indicated by the First Reply Notice, if
any, to the Partnership by written notice (the "Second Offering Notice"), which
notice shall set forth the balance of Transfer Interest remaining and all other
information which was contained in the First Offering Notice.

                (d)     Within ten days of receipt of the Second Offering
Notice, the Partnership may elect to purchase all or part of the remaining
Transfer Interest for the First Refusal Price upon the same terms and conditions
as are being offered by the proposed transferee or, at the Partnership's
election, for the cash equivalent to the First Refusal Price. Notice indicating
whether or not such election to purchase shall be exercised by the Partnership
(the "Second Reply Notice") must be given in writing to the Transferring Partner
and shall set forth (i) the amount of Transfer Interest to be purchased by the
Partnership, if any, and (ii) the remaining balance of the Transfer Interest, if
any. Failure to give such notice within ten days shall be equivalent to an
election not to purchase any of the Transfer Interest.

                (e)     Within five days after the Transferring Partner receives
the Second Reply Notice, the Transferring Partner shall offer the Transfer
Interests not purchased by Partnership as indicated by the Second Reply Notice,
to the Nontransferring Partners by written notice (the "Third Offering Notice"),
which notice shall set forth the balance of Transfer Interest remaining and all
other information which was contained in the First Offering Notice.

                (f)     Within ten days of receipt of the Third Offering Notice,
any or all Nontransferring Partners may elect to purchase all or part of the
remaining Transfer Interest for the First Refusal Price upon the same terms and
conditions as are being offered by the proposed transferee or, at the
Nontransferring Partner's election, for the cash equivalent to the First Refusal
Price. Notice indicating whether or not such election to purchase shall be
exercised by the Nontransferring Partner (the "Third Reply Notice") must be
given in writing to the Transferring Partner and shall set forth (i) the amount
of Transfer Interest to be purchased by the Nontransferring Partner, if any, and
(ii) the remaining balance of the Transfer Interest, if any. If the aggregate
Interests set forth in the Third Reply Notices exceed the aggregate Interests in
the Third Offering Notice, the right to purchase the Transfer Interests shall be
determined in proportion to the respective Percentage Interests of the Partners
delivering Third Reply Notices. Failure to give such notice within ten days
shall be equivalent to an election not to purchase any of the Transfer Interest.

                (g)     Within five days after the Transferring Partner receives
the last timely Third Reply Notice, the Transferring Partner shall offer the
Transfer Interests not purchased by

                                     - 17 -

<PAGE>

Nontransferring Partners as indicated by the Third Reply Notice(s), to the
General Partner by written notice (the "Fourth Offering Notice"), which notice
shall set forth the balance of Transfer Interest remaining and all other
information which was contained in the First Offering Notice.

                (h)     Within ten days of receipt of the Fourth Offering
Notice, the General Partner may elect to purchase all or part of the remaining
Transfer Interest for the First Refusal Price upon the same terms and conditions
as are being offered by the proposed transferee. Notice indicating whether or
not such election to purchase shall be exercised by the General Partner (the
"Fourth Reply Notice," together with the First Reply Notice, the Second Reply
Notice and the Third Reply Notice, the "Transfer Interest Reply Notices") must
be given in writing to the Transferring Partner and shall set forth (i) the
amount of Transfer Interest to be purchased by the General Partner, if any, and
(ii) the remaining balance of the Transfer Interest, if any. Failure to give
such notice within ten days shall be equivalent to an election not to purchase
any of the Transfer Interest.

                (i)     The closing of all purchases, if any, indicated by the
Transfer Interest Reply Notices shall take place within thirty days after the
Transferring Partner receives the last timely and valid Transfer Interest
Notice.

                (j)     Following ten days after the receipt of the Fourth Reply
Notice and if such notice indicates a remaining balance of the Transfer
Interest, the Transferring Partner may proceed with the Transfer of remaining
Transfer Interests not accepted in any of the Transfer Interest Reply Notices to
the third party identified in the First Offering Notice upon the terms and
conditions set forth in the First Offering Notice.

                (k)     If the Transferring Partner does not Transfer his or her
Transfer Interest within thirty days after the date of receipt of the Fourth
Reply Notice by the Transferring Partner, any Transfer shall once again be
subject to Section 9.1 and this Section 9.2.

        9.3     Effect of Transfer. No assignee or transferee of all or part of
a Limited Partner's Interest shall have the right to become a substituted
Limited Partner, unless:

                (a)     the transferor has stated such intention in the
instrument of assignment;

                (b)     the transferor or the transferee has paid all reasonable
expenses of the Partnership in connection with the admission of the transferee
as a Limited Partner;

                (c)     if requested by the General Partner, the transferee has
delivered to the Partnership an opinion of counsel reasonably satisfactory to
the General Partner that such transfer is exempt from the registration
requirements of the Securities Act of 1933 and applicable state securities laws;
and

                                     - 18 -

<PAGE>

                (d)     the transferee has executed an instrument reasonably
satisfactory to the General Partner accepting and adopting the provisions of
this Agreement.

        Neither the Partnership nor the Partners shall be bound by any
assignment or transfer until the transferor and transferee have fully complied
with this Section 9.3.

        9.4     Section 754 Election. In the event of a transfer of all or part
of an Interest, by sale, exchange, or operation of law, or in the event of the
distribution of Partnership property to a Partner, the General Partner may, in
its sole discretion, cause the Partnership to elect, pursuant to Section 754 of
the Code, or corresponding provisions of subsequent law, to adjust the basis of
Partnership property as provided in Sections 734 and 743 of the Code.

        9.5     Transfer by General Partner. The General Partner may transfer
its Interest, in whole or in part, at any time and to any party, without the
consent of the Limited Partners. Notwithstanding the foregoing, the General
Partner may not transfer its Interest, in whole or in part, to a party that is
not an Affiliate of the General Partner or the OP without the consent of a
Majority-In-Interest of the Limited Partners other than the OP, provided that
this consent shall cease to be required in the event the OP makes the offers
described in Section 3.7(b) hereof.

10.     CONFIDENTIALITY; EXCHANGE OF CERTAIN INFORMATION

        10.1    Maintenance of Confidentiality. Each of the Limited Partners,
other than the OP shall, during the term of this Agreement and at all times
thereafter, maintain in confidence all confidential and proprietary information
and data of the Partnership, and of the other Partners or their Affiliates,
(each, a "disclosing party") disclosed to it (the "Confidential Information").
Each of the Limited Partners other than the OP further agrees that it shall not
use the Confidential Information during the term of this Agreement or at any
time thereafter for any purpose other than the performance of its obligations or
the exercise of its rights under this Agreement. The Partnership and each
Partner shall take all reasonable measures necessary to prevent any unauthorized
disclosure of the Confidential Information by any of their employees, agents or
consultants.

        10.2    Permitted Disclosures. Nothing herein shall prevent the
Partnership, any Partner, or any employee, agent or consultant of the
Partnership or any Partner (the "receiving party") from using, disclosing, or
authorizing the disclosure of any information it receives in the course of the
business of the Partnership which:

                (a)     becomes publicly available other than through default
hereunder by the receiving party;

                (b)     is lawfully acquired by the receiving party from a
source not under any obligation to the disclosing party regarding disclosure of
such information;

                                     - 19 -

<PAGE>

                (c)     is in the possession of the receiving party in written
or other recorded form at the time of its disclosure hereunder; or

                (d)     is non-confidentially disclosed to any third party by or
with the permission of the disclosing party.

11.     POWER OF ATTORNEY

        11.1    Grant of Power. The General Partner is hereby granted the power
and authority on behalf of each Limited Partner to execute any and all
instruments and to do or have done all things deemed by the General Partner to
be necessary or convenient to the business of the Partnership and shall, to the
extent necessary therefore, irrevocably be and hereby is made, constituted and
appointed for each Limited Partner, agent and attorney-in-fact for all purposes
relative to creation, continuation and liquidation of the Partnership as a
limited partnership for the conduct of its business. Without limitation of the
foregoing, the General Partner shall have full power and authority to act in the
name and on behalf of each Limited Partner in the execution, acknowledgment,
verification and filing of the following documents:

                (a)     a Certificate of Limited Partnership, as well as
Certificates of Amendment thereto, under the laws of any county or state where
the Partnership may elect to do business in which such certificates, affidavits
or other documents creating, evidencing or preserving the Partnership as a
limited or special partnership may or should, in the opinion of the General
Partner, be filed and recorded;

                (b)     any other instrument which may be required to be filed
or recorded by the Partnership under the laws of any state or by any government
agency, or which the General Partner deems it advisable to file and record.

        11.2    Nature of Power of Attorney. The Power of Attorney granted by
each Limited Partner to the General Partner pursuant to Section 11.1:

                (a)     is a special power of attorney coupled with an interest
and is irrevocable;

                (b)     may be exercised by the General Partner for all Limited
Partners by a single signature of the General Partner by one of its officers,
acting as attorney-in-fact for all the Limited Partners together, or by listing
all of the Limited Partners and executing any instrument with a single signature
of the General Partner by one of its officers, acting as attorney-in-fact for
all of the Limited Partners together; and

                (c)     shall survive the delivery of an assignment by a Limited
Partner of all or any portion of its Interests in the Partnership, and where the
assignee or transferee thereof has been

                                     - 20 -

<PAGE>

approved by the General Partner for admission to the Partnership as a
substituted Limited Partner pursuant to Section 9.3, shall survive such
admission and constitute a similar power of attorney from the substituted
Limited Partner.

12.     INVESTMENT REPRESENTATIONS AND ACKNOWLEDGMENT

        12.1    Investment Purpose. Each Partner represents and warrants to the
Partnership and to each other Partner that it has acquired the Interest for such
Partner's own account, for investment only and not with a view to the
distribution thereof, except to the extent provided in or contemplated by this
Agreement.

        12.2    No Registration. The Interests have not been registered with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "1933 Act"), or under similar laws of any states in reliance upon
exemptions under those acts. The sale or other disposition of the Interests is
restricted as provided in this Agreement.

        12.3    Investor Status. Each Partner represents and warrants to the
Partnership and to each other Partner that (a) it is an "Accredited Investor"
within the meaning of Rule 501(a)(1) of the General Rules and Regulations of the
Securities and Exchange Commission under the 1933 Act; (b) that it is a resident
of the Commonwealth of Pennsylvania; (c) that it has the requisite knowledge and
experience in business and financial matters to be capable of evaluating the
merits and risks of an investment in the Partnership and has determined that
such an investment is a suitable investment; (d) that it can bear the economic
risks of this investment and can afford the loss of its entire investment in the
Partnership; (e) that it has sufficient liquid assets to make the capital
contributions set forth in Section 3.1 and has adequate means of providing for
its current needs and possible personal contingencies; (f) that it has no
present or anticipated need for liquidity of an investment in the Partnership;
and (g) that the investment cost of such Partner's Interest is reasonable in
relation to its net worth and financial needs. Each Limited Partner has had the
opportunity to ask questions of the officers of the General Partner concerning
the Partnership and the terms of its investment in the Partnership, and all such
questions have been answered to its satisfaction.

        12.4    Lack of Separate Legal Representation. Each Partner hereby
acknowledges that (i) the General Partner, the OP and the Partnership are
represented by the same legal counsel, Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, (ii) no legal counsel has been retained to represent the Limited
Partners other than the OP as a group in connection with this Agreement or
otherwise, and (iii) the attorneys and other professionals who perform services
for the Partnership also perform services for the General Partner and other
entities affiliated with the General Partner.

                                     - 21 -

<PAGE>

13.     MISCELLANEOUS

        13.1    Notice. Any notice, request, information or other document to be
given hereunder to any of the parties by any other party shall be in writing and
delivered personally or sent by overnight courier service, transmitted by fax,
or sent by certified or registered mail, postage prepaid, to the address for
such Partner set forth on the signature page hereto. Any such notice delivered
personally shall be deemed to have been given on the date that it is so
delivered, any notice sent by registered or certified mail or overnight courier
service shall be deemed to have been given on the date following the date posted
or otherwise sent and any notice sent by fax shall be deemed to have been given
on the date it is dispatched. Any party may change the address to which notices
hereunder are to be sent to it by giving written notice of such change of
address in the manner herein provided for giving notice.

        13.2    Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. If a Partner who is an individual dies or a court of competent
jurisdiction adjudges him to be incompetent to manage his person or his
property, the executor, administrator, guardian, conservator or other legal
representative of the Partner may exercise all of the rights of the Partner for
the purpose of settling such Partner's estate or administering such Partner's
property, including the power the Partner had to give an assignee the right to
become a Partner. If a Partner is a corporation, trust or other entity and is
dissolved or otherwise terminated, the powers of that Partner may be exercised
by its legal representatives or successors. The successor of a Limited Partner
shall succeed to the right of the Limited Partner to receive allocations and
distributions hereunder, and may be admitted as a Substituted Limited Partner in
accordance with the provisions of Section 9.3, but shall not be deemed a
Substituted Limited Partner, and shall not be entitled to voting rights
hereunder, unless and until so admitted.

        13.3    Entire Agreement. This instrument contains the entire agreement
of the Partners with respect to the subject matter hereof and supersedes all
prior and contemporaneous understandings and agreements of the Partners with
respect thereto.

        13.4    Amendment. This Agreement may be amended only by the written
consent of a Majority-In-Interest of all of the Partners, except (i) to
effectuate the admission of substitute limited partners pursuant to Section 9,
(ii) to effectuate the issuance of new Partnership Interests pursuant to Section
3.6, which may be approved solely by the General Partner, or (iii) as set forth
in Section 3.7; provided, however, that no such amendment shall dilute the
relative interest of any Partner in the income, loss or distributions
attributable to the ownership of an Interest in the Partnership without the
written consent of the affected Partner (except such dilution as may result from
the admission of additional Limited Partners, transfers of Partnership Interests
or otherwise as contemplated by the terms of this Agreement).

                                     - 22 -

<PAGE>

        13.5    No Oral Modification. No modification or waiver of this
Agreement or any part hereof shall be valid or effective unless in writing and
signed by the party or parties sought to be charged therewith; and no waiver of
any breach or condition of this Agreement shall be deemed to be a waiver of any
other subsequent breach or condition, whether of like or different nature.

        13.6    Severability. If any term, restriction or covenant of this
Agreement is deemed illegal or unenforceable under the laws of Commonwealth of
Pennsylvania (or any other law deemed by a court of competent jurisdiction to be
controlling), all other terms, restrictions and covenants hereof, and the
application thereof to all persons and circumstances subject hereto, shall
remain unaffected to the extent permitted by law, provided that the economics of
the transactions contemplated herein are not materially affected thereby; and if
any application of any term, restriction or covenant of this Agreement to any
person or circumstance is deemed illegal or unenforceable, the application of
such term, restriction or covenant to other persons and circumstances shall
remain unaffected to the extent permitted by law.

        13.7    Headings. The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

        13.8    Schedules. The Schedules to this Agreement shall be deemed to be
a part of this Agreement and incorporated herein by reference as if fully set
forth in the text of this Agreement.

        13.9    Pronouns, etc. Any pronoun and any variation thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the undersigned may require.

        13.10   Assignment. No Partner may assign this Agreement or any of its
rights hereunder, including all or any part of its Interest, or delegate the
performance of any of its obligations hereunder, except in accordance with the
provisions of Section 9.

        13.11   Publicity. No press release or other public announcement related
to this Agreement or the Partnership or the transactions contemplated hereby
shall be issued by any Limited Partner.

        13.12   No Third Party Beneficiaries. Except as and if otherwise
expressly provided in this Agreement, nothing in this Agreement shall be
construed as giving any person, firm, corporation, governmental entity, agency
or authority or other entity, other than the parties hereto, any right, remedy
or claim under or in respect of this Agreement or any provision hereof.

        13.13   Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts made and to be performed therein. Each of the Partners hereby
expressly submits itself generally and unconditionally to the personal
jurisdiction of any U.S. or state court which would have jurisdiction over the
subject

                                     - 23 -

<PAGE>

matter of an action to enforce any or all of the terms of this Agreement
or to recover damages for a breach of any of its provisions.

        13.14   Execution in Counterpart. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same agreement.

             [The remainder of this page intentionally left blank.]

                                     - 24 -

<PAGE>

        The parties hereto, intending to be legally bound, have caused this
Limited Partnership Agreement to be executed and delivered by their respective
duly authorized representatives as of the date first above written.

                            GENERAL PARTNER

                            First States Management, LLC

                            By: ----------------------------------------
                                Name: Nicholas Schorsch
                                Title: Manager

                            Address: c/o American Financial Realty Trust
                                     1725 The Fairway
                                     Jenkintown, PA 19046

                            LIMITED PARTNERS

                            --------------------------------------------
                            Name:    Nicholas Schorsch
                            Address: Glen Court
                                     1560 Warner Road
                                     Meadowbrook, PA 19046

                            --------------------------------------------
                            Name:    Steven Gross
                            Address: c/o Gross & Company
                                     2655 Philmont Avenue
                                     Huntingdon Valley, PA 19006

                            --------------------------------------------
                            Name:    Irvin G. Schorsch, III
                            Address: 1573 Warner Road
                                     Meadowbrook, PA 19046

                                     - 25 -

<PAGE>

                            --------------------------------------------
                            Name:    Peter A. Schorsch
                            Address: 1644 Warner Road
                                     Meadowbrook, PA 19046

                            The Irrevocable Agreement of Trust of Roger R. Kehr

                            By:
                               -----------------------------------------
                            Name: Florence Kehr, Trustee under the Agreement
                                  of Trust dated _______________, 1999
                            Address: 101 113th Street
                                     Stone Harbor, NJ 08247

                            --------------------------------------------
                            Name:    Henry Faulkner, III
                            Address: 1840 Huntingdon Road
                                     Huntingdon Valley, PA 19006

                            --------------------------------------------
                            Name:    Jeffrey Kahn
                            Address: c/o Kahn & Company
                                     1075 Virginia Drive
                                     Suite 100
                                     Fort Washington, PA 19034

                            --------------------------------------------
                            Name:    Charles Kahn, Jr.
                            Address: c/o Kahn & Company
                                     1075 Virginia Drive
                                     Suite 100
                                     Fort Washington, PA 19034

                            L.D.D. Investment Company, a Pennsylvania general
                            partnership

                                     - 26 -

<PAGE>

                            By:
                               -----------------------------------------
                                     Name: Louis Davis
                                     Title: General Partner
                            Address: 1344 Gilbert Road
                                     Meadowbrook, PA 19046

                            Hidden Glen Trust

                            By:
                               -----------------------------------------
                                     Name: Anita V. Schorsch, Trustee under the
                                     Agreement of Trust dated [________], 1999
                            Address: 1591 Warner Road
                                     Meadowbrook, PA 19046

                            Meadow Court Trust

                            By:
                               -----------------------------------------
                                     Name:Shelley D. Schorsch, Trustee under the
                                     Agreement of Trust dated [_________], 1999
                            Address: 1560 Warner Road
                                     Meadowbrook, PA 19046

                            Arlington Cemetery Company

                            By:
                               -----------------------------------------
                                     Name: Mr. Irvin Schorsch, II
                            Address: 1591 Warner Road
                                     Meadowbrook, Pennsylvania 19046

                            --------------------------------------------
                            Name:    Jeffery Perelman
                            Address: c/o JEP Management, Inc.
                                     Plymouth Corporate Center

                                     - 27 -

<PAGE>

                                     Building E-Suite 210
                                     625 Ridge Pike
                                     Conshohocken, PA 19428

                            --------------------------------------------
                            Name:    Allen Spivak
                            Address: 713 Waverley Road
                                     Bryn Mawr, PA 19010

                            First States Group, L.P.

                            By: First States Group, LLC

                            By:
                               -----------------------------------------
                                     Name: Nicholas Schorsch
                            Address: 1725 The Fairway
                                     Jenkintown, PA 19046

                                     - 28 -

<PAGE>

                                   SCHEDULE I

                               Certain Definitions

        As used in this Agreement, the following terms shall have the meanings
given them below:

        1.      "Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant fiscal year, after giving effect to the following
adjustments:

        (i) Credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore pursuant to the penultimate sentences of Treasury
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

        (ii) Debit to such Capital Account the items described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6).

        The foregoing definition of Adjusted Capital Account Deficit is intended
to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

        2.      "Affiliate" shall mean any entity that directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with a party hereto. "Control" (including, with correlative
meanings, the terms "controlled by" and "under common control with") means the
ownership or control of securities possessing at least 50% of the voting power
of all outstanding voting securities of an entity or the power to otherwise
direct or cause the direction of the management and policies of such entity,
whether through the ownership of voting stock or similar rights. For the
purposes of this definition, partnerships, joint ventures or similar entities, a
majority-in-interest of whose partners, venturers or other owners is a party
hereto and/or an Affiliate of a party hereto, shall be deemed to be Affiliates
of such party.

        3.      "Bankruptcy" shall be deemed to have occurred when a Person is
dissolved or liquidated, makes an assignment for the benefit of creditors, files
a petition in bankruptcy, is adjudicated insolvent, petitions or applies to any
tribunal for any receiver or trustee, commences any proceeding relating to
itself under any bankruptcy, reorganization, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction, has commenced against it any
such proceeding which remains undismissed for a period of thirty (30) days,
indicates its consent to, approval of or acquiescence in any such proceeding,
has appointed for it or for any substantial part of its property any receiver or
trustee, or suffers any such receivership or trusteeship undischarged for a
period of thirty (30) days.

                                     - I-1 -

<PAGE>

        4.      "Capital Account" shall mean, with respect to a Partner, such
Partner's capital account established and maintained in accordance with the
provisions of Section 3.1 and, if applicable, Section 3.2.

        5.      "Capital Contribution" shall mean, with respect to any Partner,
the aggregate amount of money and the fair market value of any property other
than money contributed to the Partnership by such Partner (net of any associated
liabilities assumed by the Partnership).

        6.      "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law).

        7.      "Depreciation" means, for each fiscal year, an amount equal to
the depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such fiscal year,
except that if the Tax Book Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such fiscal year,
Depreciation shall be determined in accordance with Treasury Regulations Section
1.704-3(d)(2) or Section 1.704-1(b)(2)(iv)(g)(3), whichever is applicable.

        8.      "Exempt Income" shall mean the income and gain of the
Partnership that is exempt from federal income tax.

        9.      "Family Member" shall mean the spouse, parents, children,
siblings, mother and father-in-law, sons and daughters-in-law and brothers and
sisters-in-law of a Partner and any trust whose beneficiaries are one or more of
the Partner and such persons or any partnership or other entity whose owners are
one or more of the Partner and such persons.

        10.     "GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.

        11.     "Income" means the gross income and gains of the Partnership (as
computed for federal income tax purposes) plus (a) income of the Partnership
exempt from tax and described in Code Section 705(a)(1)(B), (b) the excess, if
any, of the fair market value of distributed property over its Tax Book Value
and (c) the amount of any increase in the Tax Book Value of the Partnership's
property pursuant to Section 7.7 hereof. In computing Income, items of income
and gain relating to Partnership assets shall be computed based upon the Tax
Book Values of the Partnership assets rather than upon the assets' adjusted
basis for federal income tax purposes.

        12.     "Interest" shall mean an ownership interest in the Partnership.

        13.     "IRS" shall mean the Internal Revenue Service.

        14.     "Loss" means the deductions and gross losses of the Partnership
(as computed for federal income tax purposes) plus (a) items of expenditure
described in Code Section 705(a)(2)(B),

                                     - I-2 -

<PAGE>

(b) the excess, if any, of the Tax Book Value of the distributed property over
its fair market value and (c) the amount of any decrease in the Tax Book Value
of the Partnership's property pursuant to Section 7.7 hereof. In computing Loss,
items of deduction and loss relating to Partnership assets shall be computed
based upon the Tax Book Values of the Partnership assets rather than upon the
assets' adjusted basis for federal income tax purposes.

        15.     "Majority-In-Interest" shall mean Partners holding a Percentage
Interest of at least 50.01% of the Percentage Interest held by all Partners
voting on, approving or consenting to such issue.

        16.     "Minimum Gain" shall have the meaning specified in Treasury
Regulation Section 1.704-2(d).

        17.     "Net Cash Flow" shall mean the amount determined by the General
Partner in accordance with the following principles: Net Cash Flow during any
period shall be the excess, if any, of (a) the sum of (1) the gross receipts of
the Partnership (as determined in accordance with the cash receipts and
disbursements method of accounting) during such period, but without regard to
any amounts that are taken into account in determining Net Proceeds of Sales or
Refinancings, (2) all amounts contributed to the Partnership during such period
by any Partner, and (3) any amounts released during such period by the General
Partner from any reserve maintained by the Partnership, over (b) the sum of (1)
all expenditures of the Partnership (as determined under the aforesaid method of
accounting) during such period, (2) all amounts applied during such period in
payment of interest or principal on any borrowing of the Partnership, and (3)
any amount added during such period by the General Partner to reserves for
working capital, contingencies, replacements, expansions, acquisitions, or other
expenditures of the Partnership. Releases and additions to the reserves
described in this definition shall be made by the General Partner.

        18.     "Net Proceeds of Sales or Refinancings" shall mean the net cash
proceeds from sales, other dispositions or Refinancings of Partnership property,
less any portion thereof used to establish reserves, all as determined by the
General Partner, and shall include all principal and interest payments received
with respect to any note or other obligation received by the Partnership in
connection with a sale or other dispositions of Partnerships property.

        19.     "Partner" shall mean the General Partner and each Limited
Partner collectively.

        20.     "Partner Minimum Gain" shall mean partner nonrecourse debt
minimum gain as set forth in Treasury Regulation Section 1.704-2(i)(2).

        21.     "Partnership" shall mean the Pennsylvania limited partnership
continued by the Partners under the Act pursuant to this Agreement.

                                     - I-3 -

<PAGE>

        22.     "Partnership Items" shall mean items of Partnership income
(including Exempt Income), gain, loss, deduction, and nondeductible expenditure,
as determined for federal income tax purposes.

        23.     "Percentage Interest" shall mean the percentage ownership
interest of each Partner in the Partnership as set forth in Schedule II.

        24.     "Person" shall mean any individual or entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of such
Person as the context may require.

        25.     "Tax Book Value" shall have the meaning set forth in Section
7.7.

        26.     "Treasury Regulations" shall mean the income tax regulations
promulgated under the Code, as may be amended from time to time (including
corresponding provisions of succeeding regulations).

        Definitions. As used in this Agreement, the following terms shall have
the respective meanings specified on the pages indicated below.

Defined Term                                                              Page
------------                                                           -------
1933 Act ..............................................................     21
Accredited Investor ...................................................     21
Acquisition Price .....................................................      5
Act ...................................................................      1
Agreement .............................................................      1
Bank Property .........................................................      3
Business ..............................................................      3
Confidential Information ..............................................     19
Contribution Agreement ................................................      1
disclosing party ......................................................     19
Dissolution Event .....................................................     14
First Offering Notice .................................................     16
First Refusal Price ...................................................     16
First Reply Notice ....................................................     17
First States Partners II, L.P. ........................................      2
Fourth Offering Notice ................................................     18
Fourth Reply Notice ...................................................     18
General Partner .......................................................      1
Indemnified Parties ...................................................     11
Limited Partner ........................................................     1
Liquidator ............................................................     14

                                     - I-4 -

<PAGE>

Nontransferring Partners ..............................................     16
OP ....................................................................      1
partner nonrecourse debt ..............................................      7
Partnership ...........................................................      1
partnership nonrecourse liabilities ...................................      7
Partnership Units .....................................................      1
Pre-existing Limited Partners .........................................      1
Pre-existing Limited Partnership Agreement ............................      1
receiving party .......................................................     19
REIT ..................................................................      1
Regulatory Allocations ................................................      7
Second Offering Notice ................................................     17
Second Reply Notice ...................................................     17
Tax Book Value ........................................................     13
tax matters partner ...................................................     12
Third Offering Notice .................................................     17
Third Reply Notice ....................................................     17
Transfer ..............................................................     16
Transfer Interest .....................................................     16
Transfer Interest Reply Notices .......................................     18
Trigger Date ..........................................................      5
Transferring Partner ..................................................     16

                                     - I-5 -

<PAGE>

                                   SCHEDULE II

                               PERCENTAGE INTEREST

<TABLE>
<CAPTION>
                  PARTNER                        PERCENTAGE      ADJUSTED PERCENTAGE
                                                  INTEREST            INTEREST
        -----------------------------------    --------------    -------------------
        <S>                                      <C>                 <C>
        GENERAL PARTNER:

        First States Management, LLC              1.5100%              1.5100%

        LIMITED PARTNERS:

        Nicholas Schorsch                         3.0008%              4.0920%

        Steven Gross                              0.8206%              1.1190%

        Meadow Court Trust                        1.0780%              1.4700%

        Irvin G. Schorsch, III                    0.5753%              0.7845%

        Peter A. Schorsch                         0.5225%              0.7125%

        Irrevocable Agreement of Trust of         0.9614%              1.3110%
        Roger R. Kehr

        Henry Faulkner, III                       0.9867%              1.3455%

        Jeffrey Kahn                              0.6402%              0.8730%

        Charles Kahn, Jr.                         0.4290%              0.5850%

        L.D.D. Investment Company                 0.3388%              0.4620%

        Hidden Glen Trust                         0.1507%              0.2055%

        Jeffrey Perelman                          0.2629%              0.3585%

        Allen Spivak                              0.8382%              1.1430%

        Arlington Cemetery Company                0.3949%              0.5385%

        First States Group, L.P.                 87.4900%             83.4900%
        TOTAL                                   100.0000%            100.0000%
</TABLE>

                                    - II-1 -

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