Document:

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                                                                    EXHIBIT 10.3

                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                            LSS I LIMITED PARTNERSHIP

                            DATED: DECEMBER 29, 1999

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                                TABLE OF CONTENTS

                                                                         PAGE
                                                                         ----

ARTICLE I      DEFINED TERMS; EXHIBITS ....................................1
               Section 1.1      Defined Terms .............................1
               Section 1.2      Exhibits, Schedules, Etc. .................6

ARTICLE II     FORMATION; ADMISSION OF LIMITED PARTNERS; NAME;
               PLACE OF BUSINESS AND REGISTERED AGENT .....................6
               Section 2.1      Certificate of Limited Partnership;
                                Other Filings .............................6
               Section 2.2      Limited Partners; Additional Limited
                                Partners ..................................7
               Section 2.3      Name; Principal Place of Business .........7
               Section 2.4.     Registered Agent and Registered Office ....7

ARTICLE III    BUSINESS AND TERM OF PARTNERSHIP ...........................7
               Section 3.1      Business ..................................7
               Section 3.2      Term ......................................8

ARTICLE IV     CAPITAL CONTRIBUTIONS ......................................8
               Section 4.1      General Partner ...........................8
               Section 4.2      Limited Partners ..........................8
               Section 4.3      Additional Capital Contributions and
                                Issuances of Additional Partnership
                                Interests .................................8
               Section 4.4      Additional Funding .......................10
               Section 4.5      Equity Plan ..............................10
               Section 4.6      Dividend Reinvestment Plan ...............10
               Section 4.7      Interest .................................11
               Section 4.8      Return of Capital ........................11

ARTICLE V      PROFITS, LOSSES AND ACCOUNTING ............................11
               Section 5.1      Profits ..................................11
               Section 5.2      Accounting ...............................11
               Section 5.3      Partners' Accounts .......................12
               Section 5.4      Section 754 Elections ....................13

ARTICLE VI     POWERS, DUTIES, LIABILITIES, COMPENSATION AND
               VOTING OF GENERAL PARTNER .................................13
               Section 6.1      Powers of General Partner ................13
               Section 6.2      Delegation of Authority ..................15
               Section 6.3      Duties of General Partner ................15

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               Section 6.4      Liabilities of General Partner;
                                Indemnification ..........................16
               Section 6.5      Compensation of General Partner;
                                Reimbursement ............................18
               Section 6.6      Reliance on Act of General Partner .......18
               Section 6.7      Outside Services; Dealings with
                                Affiliates; Outside Activities ...........18
               Section 6.8      General Partner Participation ............19

ARTICLE VII    RIGHTS, PROHIBITIONS AND REPRESENTATIONS
               WITH RESPECT TO LIMITED PARTNERS ..........................20
               Section 7.1      Rights of Limited Partners ...............20
               Section 7.2      Prohibitions with Respect to the Limited
                                Partners .................................20
               Section 7.3      Ownership by Limited Partner of Corporate
                                General Partner or Affiliate .............20
               Section 7.4      Grant of Redemption Rights ...............21
               Section 7.5      Warranties and Representations of the
                                Limited Partners .........................21
               Section 7.6      Indemnification by Limited Partners ......22
               Section 7.7      Limited Partner Guarantees ...............22
               Section 7.8      No Sale of Property ......................22

ARTICLE VIII   DISTRIBUTIONS AND PAYMENTS TO PARTNERS ....................23
               Section 8.1      Distributions of Cash Flow ...............23
               Section 8.2      REIT Distribution Requirements ...........23
               Section 8.3      No Right to Distributions in Kind ........23
               Section 8.4      Disposition Proceeds .....................23
               Section 8.5      Withdrawals ..............................23
               Section 8.6      Amounts Withheld .........................23

ARTICLE IX     TRANSFERS OF INTERESTS ....................................24
               Section 9.1      General Partner ..........................24
               Section 9.2      Admission of a Substitute or Additional
                                General Partner ..........................24
               Section 9.3      Effect of Bankruptcy, Withdrawal, Death
                                or Dissolution of a General Partner ......24
               Section 9.4      Removal of a General Partner .............25
               Section 9.5      Restrictions on Transfer of Limited
                                Partnership Interests ....................25
               Section 9.6      Admission of Substitute Limited Partner ..26
               Section 9.7      Rights of Assignees of Partnership
                                Interests ................................27
               Section 9.8      Effect of Bankruptcy, Death, Incompetence
                                or Termination of a Limited Partner ......27
               Section 9.9      Joint Ownership of Interests .............27
               Section 9.10     Transferees ..............................28
               Section 9.11     Absolute Restriction .....................28

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ARTICLE X      TERMINATION OF THE PARTNERSHIP ............................28
               Section 10.1     Termination ..............................28
               Section 10.2     Payment of Debts .........................29
               Section 10.3     Debts to Partners ........................29
               Section 10.4     Remaining Distribution ...................29
               Section 10.5     Reserve ..................................29
               Section 10.6     Final Accounting .........................29

ARTICLE XI     AMENDMENTS ................................................29
               Section 11.1     Authority to Amend .......................29
               Section 11.2     Notice of Amendments .....................30

ARTICLE XII    POWER OF ATTORNEY .........................................30
               Section 12.1     Power ....................................30
               Section 12.2     Survival of Power ........................31

ARTICLE XIII   CONSENTS, APPROVALS, VOTING AND MEETINGS ..................31
               Section 13.1     Method of Giving Consent or Approval .....31
               Section 13.2     Meetings of Limited Partners .............32
               Section 13.3     Opinion ..................................32
               Section 13.4     Submissions to Partners ..................32

ARTICLE XIV    MISCELLANEOUS .............................................32
               Section 14.1     Governing Law ............................32
               Section 14.2     Agreement for Further Execution ..........32
               Section 14.3     Entire Agreement .........................32
               Section 14.4     Severability .............................32
               Section 14.5     Notices ..................................33
               Section 14.6     Mediation/Arbitration of Disputes ........33
               Section 14.7     Titles and Captions ......................33
               Section 14.8     Counterparts .............................33
               Section 14.9     Pronouns .................................33
               Section 14.10    Survival of Rights .......................34
               Section 14.11    Personal Liability .......................34

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                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                            LSS I LIMITED PARTNERSHIP

         THIS AGREEMENT OF LIMITED PARTNERSHIP made as of the 29th day of
December 1999, by and among LIBERTY SELF-STOR, INC., a Maryland corporation,
having an address at Suite 100, 8500 Station Street, Mentor, Ohio 44060, the
general partner ("General Partner"), and the limited partners listed on Exhibit
A attached hereto ("Limited Partners"), is intended to evidence the mutual
agreement of the General Partner and the Limited Partners to form a limited
partnership pursuant to Title 6, Chapter 17 of the Delaware Code (the "Act") for
the purposes and upon the terms and conditions hereinafter set forth.

                                    ARTICLE I
                             DEFINED TERMS; EXHIBITS

         Section 1.1 DEFINED TERMS. Whenever used in this Agreement, the
following terms shall have the meanings respectively assigned to them in this
Article I, unless otherwise expressly provided herein or unless the context
otherwise requires:

         "Additional Funds" has the meaning set forth in Section 4.4 hereof.

         "Additional Limited Partner" shall mean a Person admitted to this
         Partnership as a Limited Partner pursuant to and in accordance with
         Section 2.2(b) of this Agreement.

         "Additional Securities" shall mean any additional REIT Shares (other
         than REIT Shares issued in connection with an exchange pursuant to
         Section 7.4 and Exhibit D hereof) or rights, options, warrants or
         convertible or exchangeable securities containing the right to
         subscribe for or purchase REIT Shares, as set forth in Section
         4.3(a)(ii).

         "Affiliate" of another Person shall mean (a) any Person directly or
         indirectly owning, controlling or holding with power to vote ten
         percent (10%) or more of the outstanding voting securities of such
         other Person; (b) any Person ten percent (10%) or more of whose
         outstanding voting securities are directly or indirectly owned,
         controlled or held with power to vote by such other Person; (c) any
         Person directly or indirectly controlling, controlled by, or under
         common control with, such other Person; (d) any officer, director,
         member or partner of such other Person; and (e) if such other Person is
         an officer, director, member or partner in a company, the company for
         which such Person acts in any such capacity.

         "Agreed Value" shall mean the fair market value of Contributed Property
         as agreed to by the Contributing Partner and the Partnership, using any
         reasonable method as they may adopt and the fair market value of the
         Partnership Properties after being adjusted in accordance with Part B
         of Exhibit B.

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         "Agreement" shall mean this Agreement of Limited Partnership of LSS I
         Limited Partnership, as amended, modified, supplemented or restated
         from time to time, as the context requires.

         "Articles of Incorporation" shall mean that certain Articles of
         Incorporation, dated May 12, 1999, of the General Partner, as amended,
         modified, supplemented or restated from time to time, as the context
         requires.

         "Bankruptcy Code" shall mean the United States Bankruptcy Code, as
         amended, 11 U.S.C. sec. 101 et seq., and as hereafter amended from time
         to time.

         "Business Day" shall mean any day when the New York Stock Exchange is
         open for trading.

         "Capital Account" shall mean, as to any Partner, the account
         established and maintained for such Partner pursuant to Section 5.3
         hereof.

         "Capital Contribution" shall mean the amount in cash or the Agreed
         Value of Contributed Property contributed by each Partner (or his
         original predecessor in interest) to the capital of the Partnership for
         his interest in the Partnership.

         "Cash Flow" shall mean the excess of cash revenues actually received by
         the Partnership in respect of Partnership operations for any period,
         less Operating Expenses for such period. Cash Flow shall not include
         Disposition Proceeds.

         "Class A Limited Partners" shall mean those persons listed under the
         heading "Class A Limited Partners" on the signature pages hereto.

         "Class B Limited Partners" shall mean those persons listed under the
         heading "Class B Limited Partners" on the signature pages hereto.

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

         "Commission" shall mean the U.S. Securities and Exchange Commission.

         "Computation Date" shall mean the date on which an Redemption Exercise
         Notice is delivered to the General Partner.

         "Contributed Entities" shall mean the various limited partnerships
         and/or limited liability companies that own the Initial Properties
         prior to the formation transaction.

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         "Contributed Property" shall mean a Partner's interest in property or
         other consideration (excluding services and cash) contributed to the
         Partnership by such Partner.

         "Disposition Proceeds" shall mean the net cash proceeds from all sales
         and other dispositions (other than in the ordinary course of business)
         and all refinancings of Property, less any portion thereof used to
         establish reserves or reinvested by the General Partner, all as
         determined by the General Partners(s). Disposition Proceeds shall
         include all principal and interest payments with respect to any note or
         other obligation received by the Partnership in connection with sales
         and other dispositions (other than in the ordinary course of business)
         of Property.

         "Equity Plan" shall mean the General Partner's 1999 Stock Option Plan,
         as the same may be amended from time to time.

         "Event of Bankruptcy" shall mean as to any Person the filing of a
         petition for relief as to such Person as debtor or bankrupt under the
         Bankruptcy Code or similar provision of law of any jurisdiction (except
         if such petition is contested by such Person and has been dismissed
         within ninety (90) days of the filing thereof); insolvency of such
         Person as finally determined by a court of competent jurisdiction;
         filing by such Person of a petition or application to accomplish the
         same or for the appointment of a receiver or a trustee for such Person
         or a substantial part of such Person's assets; commencement of any
         proceedings relating to such Person as a debtor under any other
         reorganization, arrangement, insolvency, adjustment of debt or
         liquidation law of any jurisdiction, whether now in existence or
         hereinafter in effect, either by such Person or by another; provided,
         however, that if such proceeding is commenced by another, such Person
         indicates his approval of such proceeding, consents thereto or
         acquiesces therein, or such proceeding is contested by such Person and
         has not been finally dismissed within ninety (90) days. The term "Event
         of Bankruptcy" as defined in this Agreement and as used herein, is
         intended and shall be deemed to supersede and replace the events of
         withdrawal described in Sections 17-402(a)(4) and (5) of the Act.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
         amended.

         "General Partner" shall mean Liberty Self-Stor, Inc. and any Person who
         becomes a substitute or additional General Partner as provided herein,
         and any of their successors as General Partner.

         "General Partnership Interest" shall mean the ownership interest of a
         General Partner in the Partnership.

         "Indemnitee" shall mean (i) any Person made a party to a proceeding by
         reason of its status as (A) the General Partner, or (B) a trustee,
         director or officer of the General Partner, and

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         (ii) such other Persons (including Affiliates of the General Partner or
         the Partnership) as the General Partner may designate from time to
         time, in its sole and absolute discretion.

         "Initial Properties" shall mean those Properties listed on Exhibit C
         hereto.

         "IRS" shall mean the Internal Revenue Service.

         "Limited Partners" shall mean the Class A Limited Partners and the
         Class B Limited Partners in their respective capacities as limited
         partners of the Partnership, their permitted successors or assigns who
         have been admitted to the Partnership as limited partners of the
         Partnership, or any Person who, at the time of reference thereto, is a
         limited partner of the Partnership.

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

         "Majority-In-Interest of the Limited Partners" shall mean Limited
         Partner(s) who hold in the aggregate more than fifty percent (50%) of
         the Percentage Interests then allocable to and held by the Limited
         Partners, as a class.

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

         "Partner" shall mean the General Partner or any Limited Partner.

         "Partnership" shall mean LSS I Limited Partnership, a Delaware limited
         partnership.

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

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         "Partnership Record Date" shall mean the record date established by the
         General Partner for the distribution of Cash Flow pursuant to Sections
         8.1 and 8.2 hereof, which record date shall be the same as the record
         date established by the General Partner for a distribution to its
         shareholders of some or all of its portion of such distribution.

         "Partnership Unit" shall mean a unit of interest in the Partnership
         issued under this Agreement. The initial issuance of Partnership Units
         to each Partner is as set forth on Exhibit A hereto.

         "Percentage Interest" shall mean the percentage ownership interest in
         the Partnership of each Partner, as determined by dividing the
         Partnership Units owned by a Partner by the total number of Partnership
         Units then outstanding.

         "Person" shall mean any individual, partnership, corporation, limited
         liability company, trust or other entity.

         "Profits" and "Losses" shall have the meaning set forth in Section
         5.2(c) hereof.

         "Property" shall mean any self-storage property or other investment in
         which the Partnership holds an ownership interest.

         "REIT" shall mean a real estate investment trust under Sections 856
         through 860, inclusive, of the Code.

         "REIT Expenses" means (i) costs and expenses relating to the formation
         and continuity of existence of the General Partner and any Subsidiaries
         thereof (which Subsidiaries shall, for purposes hereof, be included
         within the definition of General Partner), including taxes, fees and
         assessments associated therewith, any and all costs, expenses or fees
         payable to any trustee, director, officer, or employee of the General
         Partner, (ii) costs and expenses relating to a public offering and
         registration of securities or private offering of securities by the
         General Partner and all statements, reports, fees and expenses
         incidental thereto, including underwriting discounts and selling
         commissions applicable to any such offering of securities, (iii) costs
         and expenses associated with the preparation and filing of any periodic
         reports by the General Partner under federal, state or local laws or
         regulations, including filings with the Commission, (iv) costs and
         expenses associated with compliance by the General Partner with laws,
         rules and regulations promulgated by any regulatory body, including the
         Commission, and (v) all other operating or administrative costs of the
         General Partner, including, without limitation, insurance premiums, and
         legal, accounting and trustees fees, incurred in the ordinary course of
         its business on behalf of or in connection with the Partnership.

         "REIT Share" shall mean one share of common stock, $0.001 par value, of
         the General Partner.

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

         "Substitute General Partner" has the meaning set forth in Section 9.2.

         "Substitute Limited Partner" shall mean any Person admitted to the
         Partnership as a Limited Partner pursuant to Section 9.6 hereof.

         "Transfer" has the meaning set forth in Section 9.5(a) hereof.

         "Value" shall mean, with respect to a REIT Share, the average of the
         daily market price for the thirty (30) consecutive trading days
         immediately preceding the Valuation Date. The market price for each
         such trading day shall be: (i) if the REIT Shares are listed or
         admitted to trading on any national securities exchange or the NASDAQ
         National Market System, the closing price, regular way, on such day, or
         if no such sale takes place on such day, the average of the closing bid
         and asked prices on such day; (ii) if the REIT Shares are not listed or
         admitted to trading on any national securities exchange or the NASDAQ
         National Market System, the last reported sale price on such day or, if
         no sale takes place on such day, the average of the closing bid and
         asked prices on such day, as reported by a reliable quotation source
         designated by the General Partner; or (iii) if the REIT Shares are not
         listed or admitted to trading on any national securities exchange or
         the NASDAQ National Market System and no such last reported sale price
         or closing bid and asked prices are available, the average of the
         reported high bid and low asked prices on such day, as reported by a
         reliable quotation source designated by the General Partner, or if
         there shall be no bid and asked prices on such day, the average of the
         high bid and low asked prices, as so reported, on the most recent day
         (not more than ten (10) days prior to the date in question) for which
         prices have been so reported; provided, however, that if there are no
         bid and asked prices reported during the ten (10) days prior to the
         date in question, the Value of the REIT Shares shall be determined by
         the General Partner acting in good faith on the basis of such
         quotations and other information as it considers, in its reasonable
         judgment, appropriate. In the event the REIT Shares includes rights
         that a holder of REIT Shares would be entitled to receive, and the
         General Partner acting in good faith determines that the value of such
         rights is not reflected in the Value of the REIT Shares determined as
         aforesaid, then the Value of such rights shall be determined by the
         General Partner acting in good faith on the basis of such quotations
         and other information as it considers, in its reasonable judgment,
         appropriate.

         Section 1.2 EXHIBITS, SCHEDULES, ETC. References to "Exhibit" or to a
"Schedule" are, unless otherwise specified, to one of the Exhibits or Schedules
attached to this Agreement, and references to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement. Each Exhibit and Schedule attached hereto and referred to herein is
hereby incorporated herein by reference.

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                                   ARTICLE II
                    FORMATION; ADMISSION OF LIMITED PARTNERS;
                  NAME; PLACE OF BUSINESS AND REGISTERED AGENT

         Section 2.1 CERTIFICATE OF LIMITED PARTNERSHIP; OTHER FILINGS. The
General Partner shall prepare (or caused to be prepared), execute, acknowledge,
record and file at the expense of the Partnership, a Certificate of Limited
Partnership and all requisite fictitious name statements and notices in such
places and jurisdictions as may be required by the Act or necessary to cause the
Partnership to be treated as a limited partnership under, and otherwise to
comply with, the laws of each state or other jurisdiction in which the
Partnership conducts business.

         Section 2.2 LIMITED PARTNERS; ADDITIONAL LIMITED PARTNERS. (a) The
Limited Partners shall be those Persons identified as Limited Partners on
Exhibit A attached hereto, as amended from time to time pursuant to the terms of
this Agreement, and such Persons are hereby admitted to the Partnership as
Limited Partners.

               (b) The General Partner shall in timely fashion amend this
Agreement and, if required by the Act, the Certificate of Limited Partnership to
reflect the admission pursuant to the terms of this Agreement of a Person as a
Limited Partner.

         Section 2.3 NAME; PRINCIPAL PLACE OF BUSINESS. The name of the
Partnership shall be LSS I Limited Partnership. The principal place of business
of the Partnership shall be at 8500 Station Street, Mentor, Ohio. The General
Partner may at any time change the location of such office, provided the General
Partner gives notice to the Partners of any such change.

         Section 2.4. REGISTERED AGENT AND REGISTERED OFFICE. The registered
agent of the Partnership shall be Corporation Service Company, a Delaware
corporation, located at 1013 Centre Road, Wilmington, New Castle County,
Delaware 19805-1265, or such other Person as the General Partner may select in
its sole discretion. The registered office of the Partnership shall be
Corporation Service Company, a Delaware corporation, located at 1013 Centre
Road, Wilmington, New Castle County, Delaware 19805-1265, or such other location
as the General Partner may select in its sole and absolute discretion.

                                   ARTICLE III
                        BUSINESS AND TERM OF PARTNERSHIP

         Section 3.1 BUSINESS. The purpose and nature of the business of the
Partnership is to conduct any business that may lawfully be conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT, unless the Board of
Trustees of the General Partner determines to cease to maintain the
qualification of the General Partner as a REIT. To consummate the foregoing and
to carry out the obligations of the Partnership in connection therewith or
incidental thereto, the General Partner shall have the authority, in

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accordance with and subject to the limitations set forth elsewhere in this
Agreement, to make, enter into, perform and carry out any arrangements,
contracts or agreements of every kind for any lawful purpose, without limit as
to amount or otherwise, with any corporation, association, partnership, limited
liability company, firm, trustee, syndicate, individual or any political or
governmental division, subdivision or agency, domestic or foreign, and generally
to make and perform agreements and contracts of every kind and description and
to do any and all things necessary or incidental to the foregoing for the
protection and enhancement of the assets of the Partnership.

         Section 3.2 TERM. The Partnership as herein constituted shall continue
for perpetuity, unless earlier dissolved or terminated pursuant to law or the
provisions of this Agreement.

                                   ARTICLE IV
                              CAPITAL CONTRIBUTIONS

         Section 4.1 GENERAL PARTNER. The General Partner has contributed cash
and certain other assets to the capital of the Partnership in the amount set
forth opposite the name of the General Partner on Exhibit A attached hereto.

         Section 4.2 LIMITED PARTNERS. The Limited Partners have contributed
their respective ownership interests in the Contributed Entities and cash and
certain other assets to the capital of the Partnership. The Agreed Values of the
Limited Partners' proportionate ownership interests in the Contributed Entities
are set forth on Exhibit A attached hereto.

         Section 4.3 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF
ADDITIONAL PARTNERSHIP INTERESTS. Except as provided in this Section 4.3 or in
Section 4.4, the Partners shall have no right or obligation to make any
additional Capital Contributions or loans to the Partnership. The General
Partner may contribute additional capital to the Partnership, from time to time,
and receive additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.3.

                  (a)      Issuances of Additional Partnership Interests.

                           (i) General. The General Partner is hereby authorized
                           to cause the Partnership to issue such additional
                           Partnership Interests in the form of Partnership
                           Units for any Partnership purpose at any time or from
                           time to time, to the Partners or to other Persons for
                           such consideration and on such terms and conditions
                           as shall be established by the General Partner in its
                           sole and absolute discretion, all without the
                           approval of any of the Limited Partners. Any
                           additional Partnership Interest issued thereby may be
                           issued in one or more classes, or one or more series
                           of any of such classes, with such designations,
                           preferences and relative, participating, optional or
                           other special rights, powers and duties, including
                           rights, powers and duties senior to Limited
                           Partnership Interests, all as shall be determined by
                           the General Partner in its sole and absolute
                           discretion and without the approval of any

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                           Limited Partner, subject to Delaware law, including,
                           without limitation, (i) the allocations of items of
                           Partnership income, gain, loss, deduction and credit
                           to each such class or series of Partnership
                           Interests; (ii) the right of each such class or
                           series of Partnership Interests to share in
                           Partnership distributions; and (iii) the rights of
                           each class or series of Partnership Interests upon
                           dissolution and liquidation of the Partnership;
                           provided, however, that no additional Partnership
                           Interests shall be issued to the General Partner
                           unless:

                           (1)      The additional Partnership Interests are
                                    issued in connection with an issuance of
                                    Additional Securities as permitted under
                                    clause (ii) below, or

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

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

                           (ii) Upon Issuance of Additional Securities. The
                           General Partner shall not issue any additional REIT
                           Shares (other than REIT Shares issued in connection
                           with an exchange pursuant to Section 7.4 hereof) or
                           rights, options, warrants or convertible or
                           exchangeable securities containing the right to
                           subscribe for or purchase REIT Shares (collectively,
                           "Additional Securities") other than to all holders of
                           REIT Shares, unless (A) the General Partner shall
                           cause the Partnership to issue to the General Partner
                           Partnership Interests or rights, options, warrants or
                           convertible or exchangeable securities of the
                           Partnership having designations, preferences and
                           other rights, all such that the economic interests
                           are substantially similar to those of the Additional
                           Securities, and (B) the General Partner contributes
                           the proceeds from the issuance of such Additional
                           Securities and from any exercise of rights contained
                           in such Additional Securities to the Partnership.
                           Without limiting the foregoing, the General Partner
                           is expressly authorized to issue Additional
                           Securities for less than fair market value, and to
                           cause the Partnership to issue to the General Partner
                           corresponding Partnership Interests, so long as (x)
                           the General Partner concludes in good faith that such
                           issuance is in the best interests of the General
                           Partner and the Partnership, and (y) the General
                           Partner contributes all proceeds from such issuance
                           to the Partnership. For example, in the event the
                           General Partner issues REIT Shares for a cash
                           purchase price and contributes all of the proceeds of
                           such issuance to the Partnership as required
                           hereunder, the General Partner shall

                                       9
<PAGE>   14

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

               (b) Certain Deemed Contributions of Proceeds of Issuance of REIT
Shares. In connection with any and all issuances of REIT Shares, the General
Partner shall contribute all of the proceeds raised in connection with such
issuance to the Partnership as Capital Contributions, provided that if the
proceeds actually received and contributed by the General Partner are less than
the gross proceeds of such issuance as a result of any underwriter's discount or
other expenses paid or incurred in connection with such issuance, then the
General Partner shall be deemed to have made Capital Contributions to the
Partnership in the aggregate amount of the gross proceeds of such issuance and
the Partnership shall be deemed simultaneously to have paid such offering
expenses in connection with the required issuance of additional Partnership
Units to the General Partner for such Capital Contributions pursuant to Section
4.3(a) hereof.

         Section 4.4 ADDITIONAL FUNDING. If the General Partner determines that
it is in the best interests of the Partnership to provide for additional
Partnership funds ("Additional Funds") for any Partnership purpose, the General
Partner may (i) cause the Partnership to obtain such funds from outside
borrowings, or (ii) elect to borrow such funds itself and lend these funds to
the Partnership on the same terms and conditions as applicable to its
borrowings.

         Section 4.5 EQUITY PLAN. If at any time or from time to time stock
options or other equity compensation granted in connection with the General
Partner's Equity Plan or other compensation programs are exercised in accordance
with the terms of such agreements:

               (a) the General Partner shall, as soon as practicable after such
exercise, contribute to the capital of the Partnership an amount equal to the
exercise price paid to the General Partner by such exercising party in
connection with the exercise of the stock option;

               (b) the Partnership shall issue and the General Partner shall
receive the number of Partnership Units corresponding to the number of REIT
Shares delivered by the General Partner to such exercising party multiplied by a
fraction the numerator of which is 100% and the denominator of which is the
Exchange Factor (as defined in Exhibit D hereto) in effect on the date of such
contribution;

               (c) after the issuance of such Partnership Units to the General
Partner, the Percentage Interest of each Limited Partner shall be adjusted such
that the Percentage Interest of the Limited Partner shall be equal to a
fraction, the numerator of which is the number of Partnership Units owned by
such Limited Partner and the denominator of which is the total number of issued
and outstanding Partnership Units on such date. The General Partner shall
promptly give each

                                       10
<PAGE>   15

Limited Partner written notice of its Percentage Interest, as adjusted; and

               (d) after the issuance of such Partnership Units to the General
Partner, the Percentage Interest of the General Partner shall be adjusted such
that it equals 100% minus the sum of the Percentage Interests of all Limited
Partners immediately after being adjusted pursuant to paragraph (c) of this
Section 4.5.

         Section 4.6 DIVIDEND REINVESTMENT PLAN. All amounts received by the
General Partner in respect of its dividend reinvestment plan, if any, shall be
contributed by the General Partner to the Partnership in exchange for additional
Partnership Units as follows:

               (a) the Partnership shall issue and the General Partner shall
receive the number of Partnership Units corresponding to the number of REIT
Shares delivered by the General Partner to such exercising party multiplied by a
fraction the numerator of which is 100% and the denominator of which is the
Exchange Factor (as defined in Exhibit D hereto) in effect on the date of such
contribution;

               (b) after the issuance of such Partnership Units to the General
Partner, the Percentage Interest of each Limited Partner shall be adjusted such
that the Percentage Interest of the Limited Partner shall be equal to a
fraction, the numerator of which is the number of Partnership Units owned by
such Limited Partner and the denominator of which is the total number of issued
and outstanding Partnership Units on such date. The General Partner shall
promptly give each Limited Partner written notice of its Percentage Interest, as
adjusted; and

               (c) after the issuance of such Partnership Units to the General
Partner, the Percentage Interest of the General Partner shall be adjusted such
that it equals 100% minus the sum of the Percentage Interests of all Limited
Partners immediately after being adjusted pursuant to paragraph (b) of this
Section 4.6.

         Section 4.7 INTEREST. No interest shall be paid on the Capital
Contribution or Capital Account of any Partner.

         Section 4.8 RETURN OF CAPITAL. Except as expressly provided in this
Agreement, no Partner shall be entitled to demand or receive the return of his
Capital Contribution.

                                    ARTICLE V
                         PROFITS, LOSSES AND ACCOUNTING

         Section 5.1 PROFITS . After giving effect to the special allocations
set forth in Part A of Exhibit B hereof, Profits and Losses shall be allocated
among the Partners in accordance with their respective Percentage Interests.

         Section 5.2 ACCOUNTING. (a) The books of the Partnership shall be kept
on the accrual

                                       11
<PAGE>   16

basis and in accordance with generally accepted accounting principles
consistently applied.

               (b) The fiscal year of the Partnership shall be the calendar
year.

               (c) The terms "Profits" and "Losses," as used herein, shall mean
all items of income, gain, expense or loss as determined utilizing federal
income tax accounting principles and shall also include each Partner's share of
income described in Section 705(a)(1)(B) of the Code, any expenditures described
in Section 705(a)(2)(B) of the Code, any expenditures described in Section
709(a) of the Code which are not deducted or amortized in accordance with
Section 709(b) of the Code, losses not deductible pursuant to Sections 267(a)
and 707(b) of the Code and adjustments made pursuant to Exhibit B attached
hereto.

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

               (e) Except as specifically provided herein, all elections
required or permitted to be made by the Partnership under the Code shall be made
by the General Partner in its sole discretion.

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

         Section 5.3 PARTNERS' ACCOUNTS. (a) There shall be maintained a Capital
Account for each Partner in accordance with this Section 5.3 and the principles
set forth in Exhibit B attached hereto and made a part hereof. The amount of
cash and the net fair market value of property contributed to the Partnership by
each Partner, net of liabilities assumed by the Partnership, shall be credited
to its Capital Account, and from time to time, but not less often than annually,
the share of each Partner in Profits, Losses and fair market value of
distributions shall be credited or charged to its Capital Account. The
determination of Partners' Capital Accounts, and any adjustments thereto, shall
be made consistent with tax accounting and other principles set forth in Section
704(b) of the Code and applicable regulations thereunder and Exhibit B attached
hereto.

                                       12
<PAGE>   17

               (b) Except as otherwise specifically provided herein or in a
guarantee of a Partnership liability, signed by a Limited Partner, no Limited
Partner shall be required to make any further contribution to the capital of the
Partnership to restore a loss, to discharge any liability of the Partnership or
for any other purpose, nor shall any Limited Partner personally be liable for
any liabilities of the Partnership or of the General Partner except as provided
by law or this Agreement. All Limited Partners hereby waive their right of
contribution which they may have against other Partners in respect of any
payments made by them under any guarantee of Partnership debt.

               (c) Immediately following the transfer of any Partnership
Interest, the Capital Account of the transferee Partner shall be equal to the
Capital Account of the transferor Partner attributable to the transferred
interest, and such Capital Account shall not be adjusted to reflect any basis
adjustment under Section 743 of the Code.

               (d) For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes, taking into account any adjustments required pursuant to Section
704(b) of the Code and the applicable regulations thereunder as more fully
described in Exhibit B attached hereto.

         Section 5.4 SECTION 754 ELECTIONS. The General Partner shall elect,
pursuant to Section 754 of the Code, to adjust the basis of the Partnership's
assets for all transfers of Partnership interests if such election would benefit
any Partner or the Partnership.

                                   ARTICLE VI
                    POWERS, DUTIES, LIABILITIES, COMPENSATION
                          AND VOTING OF GENERAL PARTNER

         Section 6.1 POWERS OF GENERAL PARTNER. Notwithstanding any provision of
this Agreement to the contrary, the General Partner's discretion and authority
are subject to the limitations imposed by law, by the General Partner's Articles
of Incorporation and By-Laws. Subject to the foregoing and to other limitations
imposed by this Agreement, the General Partner shall have full, complete and
exclusive discretion to manage and control the business and affairs of the
Partnership and make all decisions affecting the business and assets of the
Partnership. Without limiting the generality of the foregoing (but subject to
the restrictions specifically contained in this Agreement), the General Partner
shall have the power and authority to take the following actions on behalf of
the Partnership:

               (a) to acquire, purchase, own, lease and dispose of any real
property and any other property or assets that the General Partner determines
are necessary or appropriate or in the best interests of conducting the business
of the Partnership;

               (b) to construct buildings and make other improvements (including
renovations)

                                       13
<PAGE>   18

on or to the properties owned or leased by the Partnership;

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

               (d) to pay, either directly or by reimbursement, for all
Operating Expenses to third parties or to the General Partner (as set forth in
this Agreement);

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

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

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

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

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

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

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

                                       14
<PAGE>   19

               (l) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority conferred
upon the General Partner, including, without limitation, management agreements,
franchise agreements, agreements with federal, state or local liquor licensing
agencies and agreements with operators of restaurants and bars;

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

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

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

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

               (q) to take whatever action the General Partner deems appropriate
to maintain an equivalency of Partnership Units and REIT Shares; and

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

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

         Section 6.2 DELEGATION OF AUTHORITY. The General Partner may delegate
any or all of its powers, rights and obligations hereunder, and may appoint,
employ, contract or otherwise deal with any Person for the transaction of the
business of the Partnership, which Person may, under supervision of the General
Partner, perform any acts or services for the Partnership as the General Partner
may approve.

         Section 6.3 DUTIES OF GENERAL PARTNER. (a) The General Partner, subject
to the limitations

                                       15
<PAGE>   20

contained elsewhere in this Agreement, shall manage or cause to be managed the
affairs of the Partnership in a prudent and businesslike manner and shall devote
sufficient time and effort to the Partnership affairs.

                  (b)      In carrying out its obligations, the General Partner
shall:

                           (i) Render annual reports to all Partners with
                           respect to the operations of the Partnership;

                           (ii) On or before April 30th of every year, mail to
                           all persons who were Partners at any time during the
                           Partnership's prior fiscal year an annual report of
                           the Partnership, including all necessary tax
                           information, and any other information regarding the
                           Partnership and its operations during the prior
                           fiscal year deemed by the General Partner to be
                           material;

                           (iii) Maintain complete and accurate records of all
                           business conducted by the Partnership and complete
                           and accurate books of account (containing such
                           information as shall be necessary to record
                           allocations and distributions), and make such records
                           and books of account available for inspection and
                           audit by any Partner or such Partner's duly
                           authorized representative (at the sole expense of
                           such Partner) during regular business hours and at
                           the principal office of the Partnership; and

                           (iv) Cause to be filed such certificates and do such
                           other acts as may be required by law to qualify and
                           maintain the Partnership as a limited partnership
                           under the laws of the State of Delaware.

               (c) The General Partner shall take such actions as it deems
appropriate to maintain an equivalency of Partnership Units and REIT Shares.

         Section 6.4 LIABILITIES OF GENERAL PARTNER; INDEMNIFICATION. (a) The
General Partner shall not be liable for the return of all or any part of the
Capital Contributions of the Limited Partners. Any returns shall be made solely
from the assets of the Partnership according to the terms of this Agreement.

               (b) In carrying out its duties hereunder, the General Partner
shall not be liable to the Partnership or to any other Partner for any actions
taken in good faith and reasonably believed to be in the best interests of the
Partnership, or for errors of judgment, but shall be liable only for fraud or
gross negligence. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, the General Partner and the
General Partner's shareholders collectively, and that the General Partner is
under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners) in
deciding whether to cause the Partnership to take (or decline to take) any
actions. In the event

                                       16
<PAGE>   21

of a conflict between the interests of the shareholders of the General Partner
on one hand and the Limited Partners on the other, the General Partner shall
endeavor in good faith to resolve the conflict in a manner not adverse to either
the shareholders of the General Partner or the Limited Partners; provided,
however, that for so long as the General Partner has securities registered
pursuant to Section 12 or Section 15 of the Exchange Act, any such conflict that
cannot be resolved in a manner not adverse to either the shareholders of the
General Partner or the Limited Partners shall be resolved in favor of the
shareholders. The General Partner shall not be liable for monetary damages for
losses sustained, liabilities incurred, or benefits not derived by Limited
Partners in connection with such decisions, provided that the General Partner
has acted in good faith. Any amendment, modification or repeal of this Section
6.4 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 6.4 as in effect immediately prior to
such amendment, modification or repeal with respect to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when claims relating to such matters may arise or be asserted.

               (c) The Partnership shall indemnify and defend an Indemnitee to
the fullest extent permitted by law, and save and hold it harmless from and
against, and in respect of, all: (i) fees, costs and expenses (including
reasonable attorney fees) incurred in connection with or resulting from any
claim, action or demand against any Indemnitee or the Partnership that arises
out of or in any way relates to the Partnership, and (ii) claims, actions and
demands arising out of or in any way related to the Partnership, and any losses
or damages resulting from such claims, actions and demands, including, without
limitation, reasonable costs and expenses of litigation and appeal and amounts
paid in settlement or compromise of any such claim, action or demand; provided,
however, that this indemnification shall not apply if: (A) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (B) the Indemnitee actually received an improper personal benefit in
money, property or services; or (C) in the case of any criminal proceeding, the
Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.4(c). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.4(c). Any indemnification pursuant to this Section 6.4 shall be
made only out of the assets of the Partnership.

               (d) The Partnership may reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.4 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard

                                       17
<PAGE>   22

of conduct has not been met.

               (e) The indemnification provided by this Section 6.4 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.

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

               (g) For purposes of this Section 6.4, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by the Indemnitee of its duties to the
Partnership also imposes duties on, or otherwise involves services by the
Indemnitee, to the plan or participants or beneficiaries of the plan; excise
taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute fines within the meaning of this
Section 6.4; and actions taken or omitted by the Indemnitee with respect to an
employee benefit plan in the performance of its duties for a purpose reasonably
believed by the Indemnitee to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Partnership.

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

               (i) An Indemnitee shall not be denied indemnification in whole or
in part under this Section 6.4 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

               (j) The provisions of this Section 6.4 are for the benefit of the
Indemnities, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other persons.

               (k) Notwithstanding any other provisions of this Agreement or the
Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the General
Partner to continue to qualify as a REIT, or (ii) to prevent the General Partner
from incurring any taxes under Section 857 or Section 4981 of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners. Further, any provision of this Agreement that might jeopardize
the General Partner's REIT status shall be (i) void and of no effect, or (ii)

                                       18
<PAGE>   23

reformed, as necessary, to avoid the General Partner's loss of REIT status,
unless the Board of Trustees of the General Partner shall determine not to
maintain the General Partner's REIT status.

         Section 6.5 COMPENSATION OF GENERAL PARTNER; REIMBURSEMENT. The General
Partner, as such, shall not receive any compensation for services rendered to
the Partnership. Notwithstanding the preceding sentence, the General Partner
shall be entitled to its allocable share of the profits and distributable Cash
Flow of the Partnership and shall be entitled, in accordance with the provisions
of Section 6.7 below, to pay reasonable compensation to its Affiliates and other
entities with which it may be associated for services performed. The General
Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole and absolute discretion, for all REIT
Expenses.

         Section 6.6 RELIANCE ON ACT OF GENERAL PARTNER. No financial
institution or any other person, firm or corporation dealing with the General
Partner or the Partnership shall be required to ascertain whether the General
Partner is acting in accordance with this Agreement, but such financial
institution or such other person, firm or corporation shall be protected in
relying solely upon the assurance of and the execution of any instrument or
instruments by the General Partner.

         Section 6.7 OUTSIDE SERVICES; DEALINGS WITH AFFILIATES; OUTSIDE
ACTIVITIES. (a) Notwithstanding any provision of this Article VI to the
contrary, the General Partner may employ such agents, accountants, attorneys and
others as it shall deem advisable, including its trustees, directors, officers,
shareholders, and its Affiliates and entities with which the General Partner,
any Limited Partner or their respective Affiliates may be associated, and may
pay them reasonable compensation from Partnership funds for services performed,
which compensation shall be reasonably believed by the General Partner to be
comparable to and competitive with fees charged by unrelated Persons who render
comparable services which could reasonably be made available to the Partnership.
The General Partner shall not be liable for the neglect, omission or wrongdoing
of any such Person so long as it was not grossly negligent in appointing such
Person.

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

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

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

                                       19
<PAGE>   24

               (e) Subject to the Articles of Incorporation, By-laws and any
agreements entered into by the General Partner or its Affiliates with the
Partnership or a Subsidiary, any officer, director, employee, agent, trustee,
Affiliate or shareholder of the General Partner shall be entitled to and may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any business ventures of such person.

               (f) In the event the General Partner exercises its rights under
its Articles of Incorporation to redeem REIT Shares, then the General Partner
shall cause the Partnership to purchase from it a number of Partnership Units as
determined based on the application of the Exchange Factor on the same terms
that the General Partner redeemed such REIT Shares.

         Section 6.8 GENERAL PARTNER PARTICIPATION. The General Partner agrees
that all business activities of the General Partner, including activities
pertaining to the acquisition, development and ownership of Properties, shall be
conducted through the Partnership. Without the Consent of the Limited Partners,
the General Partner shall not, directly or indirectly, participate in or
otherwise acquire any interest in any real or personal property. The General
Partner agrees that all borrowings for the purpose of making distributions to
its shareholders will be incurred by the Partnership.

                                   ARTICLE VII
                    RIGHTS, PROHIBITIONS AND REPRESENTATIONS
                        WITH RESPECT TO LIMITED PARTNERS

         Section 7.1 RIGHTS OF LIMITED PARTNERS. (a) The Partnership may engage
the Limited Partners or persons or firms associated with them for specific
purposes and may otherwise deal with such Partners on terms and for compensation
to be agreed upon by any such Partner and the Partnership; provided, however,
that no Limited Partner shall be entitled to participate in the management or
control of the business of the Partnership.

               (b) Each Limited Partner shall be entitled to have the
Partnership books kept at the principal place of business of the Partnership and
at all times, during reasonable business hours and at such Partner's sole
expense, shall be entitled to inspect and copy any of them and have on demand
true and full information of all things affecting the Partnership and a formal
accounting of Partnership affairs whenever circumstances render it just and
reasonable.

               (c) No Limited Partner shall be liable for any debts,
liabilities, contracts or obligations of the Partnership. A Limited Partner
shall be liable to the Partnership only to make payments of its Capital
Contribution, if any, as and when due hereunder. After its Capital Contribution
is fully paid, no Limited Partner shall, except as otherwise required by the
Act, be required to make any further Capital Contributions or other payments or
lend any funds to the Partnership.

                                       20
<PAGE>   25

         Section 7.2 PROHIBITIONS WITH RESPECT TO THE LIMITED PARTNERS. No
Limited Partner shall have the right:

               (a) To take part in the control or management of the Partnership
business, to transact business for or on behalf of the Partnership or to sign
for or to bind the Partnership, such powers being vested solely in the General
Partner as set forth herein;

               (b) To have such Partner's Capital Contributions repaid except to
the extent provided in this Agreement;

               (c) To require partition of Partnership property or to compel any
sale or appraisement of Partnership assets or sale of a deceased Partner's
interests therein, notwithstanding any provisions of law to the contrary; or

               (d) To sell or assign all or any portion of such Partner's
Limited Partnership Interest in the Partnership or to constitute the vendee or
assignee thereunder a Substitute Limited Partner, except as provided in Article
IX hereof.

         Section 7.3 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER
OR AFFILIATE. No Limited Partner shall at any time, either directly or
indirectly, own any shares or other interest in the General Partner or in any
Affiliate thereof if such ownership by itself or in conjunction with other
shares or other interests owned by other Limited Partners would, in the opinion
of counsel for the Partnership, jeopardize the classification of the General
Partner as a REIT for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section 7.3 and the Limited Partners shall promptly and fully respond to such
inquiries.

         Section 7.4 GRANT OF REDEMPTION RIGHTS. (a) Each Class A Limited
Partner shall have the right, but not the obligation (such rights hereinafter
sometimes referred to as the "Redemption Rights"), to redeem all or a portion of
the Partnership Units held by such Limited Partner (as a Class A Limited
Partner) to the Partnership (or its designee) at any time or from time to time
prior to the time the Partnership is dissolved, on the terms and subject to the
conditions and restrictions contained in Exhibit D hereto. The Redemption Rights
granted hereunder may be exercised by any one or more of such Limited Partners,
on the terms and subject and to the conditions and restrictions contained in
Exhibit D hereto, upon delivery to the General Partner of an Exercise Notice in
the form of Schedule 1 attached to Exhibit D, which notice shall specify the
Partnership Units to be redeemed by such Limited Partner. Once delivered, the
Redemption Exercise Notice shall be irrevocable, subject to payment by the
Partnership of the Purchase Price in respect of such Partnership Units in
accordance with the terms hereof.

               (b) The terms and provisions applicable to the Redemption Rights
shall be as set forth in attached Exhibit D.

                                       21
<PAGE>   26

               (c) Any Partnership Units acquired by the General Partner in
accordance with Exhibit D hereto pursuant to an exercise by any Class A Limited
Partner of the Redemption Rights shall be deemed to be acquired by and
reallocated or reissued to the General Partner. The General Partner shall amend
Exhibit A hereto to reflect each such conversion and reallocation or reissuance
of Partnership Units and each corresponding recalculation of the Partnership
Units of the Partners.

               (d) No Class B Limited Partner shall be entitled to the
Redemption Rights unless and until the Board of Trustees of the General Partner
agrees to reclassify the Class B Limited Partner as a Class A Limited Partner.

         Section 7.5 WARRANTIES AND REPRESENTATIONS OF THE LIMITED PARTNERS. (a)
Each Class A Limited Partner hereby warrants and represents to and for the
benefit of the General Partner and the Partnership that such Limited Partner
owns good, valid and marketable title to the ownership interests in the
Contributed Entities being contributed to the capital of the Partnership by such
Limited Partner (the "Ownership Interests") and that such Ownership Interests
are free and clear of all mortgages, pledges, liens, security interests,
encumbrances and restrictions of any nature whatsoever. Each Limited Partner
further warrants and represents to and for the benefit of the General Partner
and the Partnership that such Limited Partner has all necessary power and
authority to transfer the Ownership Interests to the Partnership without the
consent or authorization of, or notice to, any third party, except those third
parties from whom such consents or authorizations have been obtained. Each Class
A Limited Partner also represents and warrants to and for the benefit of the
General Partner and the Partnership those matters set forth on Exhibit E hereto.

               (b) Each Class B Limited Partner hereby warrants and represents
to and for the benefit of the General Partner and the Partnership that such
Limited Partner owns good, valid and marketable title to the interests in the
property being contributed to the capital of the Partnership by such Limited
Partner (the "Other Interests") and that such Other Interests are free and clear
of all mortgages, pledges, liens, security interests, encumbrances and
restrictions of any nature whatsoever. Each Limited Partner further warrants and
represents to and for the benefit of the General Partner and the Partnership
that such Limited Partner has all necessary power and authority to transfer the
Other Interests to the Partnership without the consent or authorization of, or
notice to, any third party, except those third parties from whom such consents
or authorizations have been obtained.

         Section 7.6 INDEMNIFICATION BY LIMITED PARTNERS. Each Limited Partner
hereby agrees to indemnify and defend the General Partner and the Partnership
and hold the General Partner, its shareholders, officers and trustees and the
Partnership and its partners and each of their respective representatives,
successors and assigns harmless from and against any and all claims, demands,
losses, liabilities, damages and expenses (including reasonable attorneys' fees)
arising out of or in connection with (i) the inaccuracy of the warranties and
representations made by such Limited Partner under Section 7.5 above, or (ii)
the ownership of the Ownership Interests by such Limited Partner.

                                       22
<PAGE>   27

         Section 7.7 LIMITED PARTNER GUARANTEES. Upon the request of the General
Partner, or upon its own election, a Limited Partner (the "Initiating Limited
Partner") from time to time, may, but shall not be required to, guarantee or
otherwise provide credit support for Partnership indebtedness as such Limited
Partner may elect; provided, however, that the Limited Partner shall be entitled
to take such action(s) only if the General Partner determines that any such
action would not have a material adverse effect on the tax position of the
General Partner. All Partners are entitled to notice of any such guarantee(s) or
credit support, and shall have the right to provide guarantees or credit support
on the same terms and conditions as the Initiating Limited Partner does, and all
Limited Partners interested in providing such guarantee or credit support shall
cooperate with the General Partner and each other in considering any guarantee
or credit support proposal, and the General Partner will cooperate in permitting
or obtaining any consents for such guarantees or credit support.

         Section 7.8 NO SALE OF PROPERTY. (a) Notwithstanding any other
provision to the contrary, except Section 7.8(b) below, the Partnership agrees
not to sell or exchange or offer for sale or exchange the Contributed Entities
and/or Initial Properties or any portion thereof during the ten (10) year period
following the date of this Agreement.

               (b) The Partnership shall have the authority to enter into a
like-kind exchange as defined in Section 1031 of the Code with respect to all or
any portion of the Initial Properties to the extent that such an exchange will
not cause recognition of gain under Section 704(c) to any Class A Limited
Partner with respect to the Contributed Entities and/or the Initial Properties.
To the extent any property is received in a like-kind exchange as provided in
this section, such property received will be considered to be one of the Initial
Properties.

                                  ARTICLE VIII
                     DISTRIBUTIONS AND PAYMENTS TO PARTNERS

         Section 8.1 DISTRIBUTIONS OF CASH FLOW. (a) The General Partner shall
distribute on a quarterly basis such portion of the Cash Flow of the Partnership
as the General Partner shall determine in its sole discretion. All such
distributions of Cash Flow shall be made to Partners who are Partners on the
Partnership Record Date in accordance with each Partner's respective Percentage
Interest on such Partnership Record Date.

               (b) In no event may a Partner receive a distribution with respect
to a Partnership Unit if such Partner is entitled to receive a distribution from
the General Partner with respect to a REIT Share for which all or part of such
Partnership Unit has been exchanged.

         Section 8.2 REIT DISTRIBUTION REQUIREMENTS. Unless the General Partner
determines that such a distribution would not be in the best interests of the
Partnership, the Partnership shall make a distribution of Cash Flow for each
fiscal year of the Partnership to enable the General Partner (i) to meet its
distribution requirement for qualification as a REIT as set forth in Section
857(a)(1) of the Code, and (ii) to avoid the excise tax imposed by Section 4981
of the Code.

                                       23
<PAGE>   28

         Section 8.3 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be
entitled to demand property other than cash in connection with any distribution
by the Partnership.

         Section 8.4 DISPOSITION PROCEEDS. Disposition Proceeds shall be
distributed to the Partners at such time as the General Partner may determine in
accordance with each Partner's respective Percentage Interest on such
Partnership Record Date.

         Section 8.5 WITHDRAWALS. No Partner shall be entitled to make
withdrawals from its Capital Account except as provided herein.

         Section 8.6 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code
or any provision of any state or local tax law with respect to any payment
distribution, or allocations to the Partnership, the General Partner, or the
Limited Partners shall be treated as amounts distributed to the General Partner
and the Limited Partners pursuant to this Article VIII for all purposes under
this Agreement. The General Partner is authorized to withhold from
distributions, or with respect to allocations, to the General Partner and
Limited Partners and to pay over to any federal, state, or local government any
amounts required to be so withheld pursuant to the Code or any provisions of any
other federal, state, or local law and shall allocate such amounts to the
General Partner and Limited Partners with respect to which such amount was
withheld.

                                   ARTICLE IX
                             TRANSFERS OF INTERESTS

         Section 9.1 GENERAL PARTNER. The General Partner shall not withdraw
from the Partnership and shall not sell, assign, pledge, encumber or otherwise
transfer of all or any portion of its interest in the Partnership. In the event
the General Partner withdraws from the Partnership, in violation of this
Agreement or otherwise, or dissolves, terminates or upon an Event of Bankruptcy
of the General Partner, then the Partnership shall be dissolved and terminated
unless a Majority-In-Interest of the Limited Partners elect to continue the
Partnership business by selecting a substitute general partner.

         Section 9.2 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A
Person shall be admitted as a Substitute or Additional General Partner of the
Partnership only if the transaction giving rise to such substitution or
admission is otherwise permitted under this Agreement and the following terms
and conditions are satisfied:

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

                                       24
<PAGE>   29

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

               (c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from counsel in the state or any other jurisdiction as
may be necessary) that the admission of the Person to be admitted as a
Substitute or Additional General Partner is in conformity with the Act and that
none of the actions taken in connection with the admission of such Person as a
Substitute or Additional General Partner will cause the termination of the
Partnership under Section 708 of the Code or will result in the loss of any
Limited Partner's limited liability status.

         Section 9.3 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER. (a) Upon the occurrence of an Event of Bankruptcy as to a
General Partner or the withdrawal, removal or dissolution of a General Partner
(except that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or
removal of a partner in such partnership shall be deemed not to be a dissolution
of such General Partner if the business of such General Partner is continued
within ninety (90) days by the remaining general partners or all remaining
members of such partnership), the Partnership shall be dissolved and terminated
unless the Partnership is continued pursuant to Section 9.3(b).

               (b) Following the occurrence of an Event of Bankruptcy as to a
General Partner or the withdrawal, removal or dissolution of a General Partner
(except that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or
removal of a partner in such partnership shall be deemed not be a dissolution of
such General Partner if the business of such General Partner is continued within
ninety (90) days by the remaining general partners or all remaining members of
such partnership), persons holding at least a majority of the Limited
Partnership Interests, within ninety (90) days after such occurrence, may elect
to continue the business of the Partnership for the balance of the term
specified in Section 3.2 by selecting, subject to Section 9.2 and any other
provisions of this Agreement, a Substitute General Partner. If the Limited
Partners elect to reconstitute the Partnership and admit a Substitute General
Partner, the relationship between the Partners and any Person who has acquired
an interest of a Partner in the Partnership shall be governed by this Agreement.

         Section 9.4 REMOVAL OF A GENERAL PARTNER. (a) Upon the occurrence of an
Event of Bankruptcy as to, or the dissolution of, a General Partner, such
General Partner shall be deemed to be removed automatically; provided, however,
that if a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a
partner in such partnership shall be deemed not to be a dissolution of the
General Partner if the business of such General Partner is continued within
ninety (90) days by the remaining general partners or all remaining members of
such Partnership.

                                       25
<PAGE>   30

               (b) If a General Partner has been removed pursuant to this
Section 9.4 and the Partnership is not continued pursuant to Section 9.3(b), the
Partnership shall be dissolved.

         Section 9.5 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a) Except as otherwise provided in this Article IX, no Limited Partner may
offer, sell, assign, hypothecate, pledge or otherwise transfer its Limited
Partnership Interest, in whole or in part, whether voluntarily or by operation
of law or at judicial sale or otherwise (collectively, a "Transfer"), without
the written consent of the General Partner, which consent may be withheld in the
sole and absolute discretion of the General Partner. The General Partner may
require, as a condition of any Transfer, that the transferor assume all costs
incurred by the Partnership in connection therewith.

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

               (c) No Transfer by a Limited Partner of its Partnership Interest
may be made to any Person if (i) in the opinion of legal counsel for the
Partnership, the Transfer would result in the Partnership's being treated as an
association taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code), (ii) such transfer is
effectuated through an "established securities market" or a "secondary market"
(or the substantial equivalent thereof) within the meaning of Section 7704 of
the Code, or (iii) the Transfer would create a risk that the General Partner
would not be taxed as a REIT for federal income tax purposes.

               (d) Section 9.5(a) shall not prevent any donative Transfer by an
individual Limited Partner to his immediate family members or any trust in which
the individual or his immediate family members own, collectively, one hundred
percent (100%) of the beneficial interests, provided that the transferor assumes
all costs of the Partnership in connection therewith and any such transferee
shall not have the rights of a Substitute Limited Partner (unless and until
admitted as a Substitute Limited Partner pursuant to this Section 9.5 and
Section 9.6 of this Agreement).

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

         Section 9.6 ADMISSION OF SUBSTITUTE LIMITED PARTNER. (a) Subject to the
other provisions of this Article IX (including, without limitation, the
provisions of Section 9.5(a) regarding consent of the General Partner), an
assignee of the Limited Partnership Interest of a Limited Partner (including,
without limitation, any purchaser, transferee, donee, or other recipient of any
disposition of such Limited Partnership Interest) shall be deemed admitted as a
Limited Partner of the Partnership only upon the satisfactory completion of the
following:

                                       26
<PAGE>   31

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

                              (ii) to the extent required, an amended
                              certificate of limited partnership evidencing the
                              admission of such Person as a Limited Partner
                              shall have been signed, acknowledged and filed for
                              record in accordance with the Act;

                              (iii) the assignee shall have delivered a letter
                              containing the representations and warranties and
                              agreements set forth in Section 9.12;

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

                              (v) the assignee shall have executed a power of
                              attorney containing the terms and provisions set
                              forth in Article XII; and

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

               (b) For the purpose of allocating profits and losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the certificate described in
Section 9.6(a)(ii) or, if no such filing is required, the later of the date
specified in the transfer documents, or the date on which the General Partner
has received all necessary instruments of transfer and substitution.

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

         Section 9.7 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS. (a) Subject
to the provisions of Sections 9.5 and 9.6 hereof, except as required by
operation of law, the Partnership shall not be obligated for any purposes
whatsoever to recognize the assignment by any Limited Partner of his Partnership
Interest until the Partnership has received notice thereof.

                                       27
<PAGE>   32

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

         Section 9.8 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF
A LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue. If an order for relief in a
bankruptcy proceeding is entered against an individual Limited Partner, the
trustee or receiver of his estate or, if he dies, his executor, administrator or
trustee, or, if he is finally adjudicated incompetent, his committee, guardian
or conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.

         Section 9.9 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two (2) individuals as joint tenants with right of survivorship (but
not as tenants in common), provided that such individuals either are married or
are related. The written consent or vote of both owners of any such jointly held
Partnership Interest shall be required to constitute the action of the owners of
such Partnership Interest; provided, however, that the written consent of only
one (1) joint owner will be required if the Partnership has been provided with
evidence satisfactory to counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one (1) owner of a
Partnership Interest held in a joint tenancy with a right of survivorship, the
Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one (1) of the owners of a jointly held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner prior to the death of either owner, the General Partner shall cause the
Partnership Interest to be divided into two (2) equal Partnership Interests,
which shall thereafter be owned separately by each of the former owners.

         Section 9.10 TRANSFEREES. Any Partnership Interests owned by the
Partners and transferred pursuant to this Article IX shall be and remain subject
to all of the provisions of this Agreement.

         Section 9.11 ABSOLUTE RESTRICTION. Notwithstanding any provision of
this Agreement to the contrary, the sale or exchange of any interest in the
Partnership will not be permitted if the interest sought to be sold or
exchanged, when added to the total of all other interests sold or exchanged
within the period of twelve (12) consecutive months ending with the proposed
date of

                                       28
<PAGE>   33

the sale or exchange, would result in the termination of the Partnership under
Section 708 of the Code, if such termination would materially and adversely
affect the Partnership or any Partner.

         Section 9.12 INVESTMENT REPRESENTATION. Each Limited Partner hereby
represents and warrants to the General Partner and to the Partnership that the
acquisition of his Partnership Interest is made as a principal for his account
for investment purposes only and not with a view to the resale or distribution
of such Partnership Interest. Each Limited Partner agrees that he will not sell,
assign or otherwise transfer his Partnership Interest or any fraction thereof,
whether voluntarily or by operation of law or at judicial sale or otherwise, to
any Person who does not similarly represent and warrant and similarly agree not
to sell, assign or transfer such Partnership Interest or fraction thereof to any
Person who does not similarly represent, warrant and agree.

                                    ARTICLE X
                         TERMINATION OF THE PARTNERSHIP

         Section 10.1 TERMINATION. The Partnership shall be dissolved upon (i)
an Event of Bankruptcy as to the General Partner or the dissolution or
withdrawal of the General Partner unless the Limited Partners elect to
reconstitute the partnership in accordance with Article IX, (ii) ninety (90)
days following the sale of all or substantially all of the Partnership's assets
(provided that if the Partnership receives an installment obligation as
consideration for such sale or other disposition, the Partnership shall
continue, unless sooner dissolved under the provisions of this Agreement, until
such time as such note or notes are paid in full), (iii) the expiration of the
term specified in Section 3.2, if any, (iv) the redemption of all Limited
Partnership Interests (other than any of such interests held by the General
Partner), or (v) the election by the General Partner (but only in accordance
with and as permitted by applicable law) that the Partnership should be
dissolved. Upon dissolution of the Partnership (unless the business of the
Partnership is continued as set forth above), the General Partner (or its
trustee, receiver, successor or legal representative) shall proceed with the
winding up of the Partnership, and its assets shall be applied and distributed
as herein provided.

         Section 10.2 PAYMENT OF DEBTS. The assets shall first be applied to the
payment of the liabilities of the Partnership (other than any loans or advances
that may have been made by Partners to the Partnership) and the expenses of
liquidation. A reasonable time 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 General Partner to minimize any losses resulting from
liquidation.

         Section 10.3 DEBTS TO PARTNERS. The remaining assets shall next be
applied to the repayment of any loans made by any Partner to the Partnership.

         Section 10.4 REMAINING DISTRIBUTION. The remaining assets shall then be
distributed to the Partners in accordance with the Partners' positive Capital
Account balances, after making the adjustments for allocations under Article V
hereof.

                                       29
<PAGE>   34

         Section 10.5 RESERVE. Notwithstanding the provisions of Sections 10.3
and 10.4, the General Partner may retain such amount as it deems necessary as a
reserve for any contingent liabilities or obligations of the Partnership, which
reserve, after the passage of a reasonable period of time, shall be distributed
pursuant to the provisions of this Article X.

         Section 10.6 FINAL ACCOUNTING. Each of the Partners shall be furnished
with a statement examined by the Partnership's independent accountants, which
shall set forth the assets and liabilities of the Partnership as of the date of
the complete liquidation. Upon the compliance by the General Partner with the
foregoing distribution plan, the Limited Partners shall cease to be such, and
the General Partner, as the sole remaining Partner of the Partnership, shall
execute and cause to be filed a Certificate of Cancellation of the Partnership
and any and all other documents necessary with respect to termination and
cancellation of the Partnership.

                                   ARTICLE XI
                                   AMENDMENTS

         Section 11.1 AUTHORITY TO AMEND. (a) This Agreement may be amended by
the General Partner without the approval of any other Partner if such amendment
is solely for the purpose of clarification and does not change the substance
hereof and the Partnership has obtained an opinion of counsel to that effect.

               (b) This Agreement may be amended by the General Partner without
the approval of any other Partner if such amendment is for the purpose of adding
or substituting Limited Partners.

               (c) This Agreement may be amended by the General Partner without
the approval of any other Partner if such amendment is, in the opinion of
counsel for the Partnership, necessary or appropriate to satisfy requirements of
the Code with respect to partnerships or REITs or of any federal or state
securities laws or regulations. Any amendment made pursuant to this Section
11.1(c) may be made effective as of the date of this Agreement.

               (d) Notwithstanding any contrary provision of this Agreement, any
amendment to this Agreement or other act which would (i) adversely affect the
limited liability of the Limited Partners, (ii) change the method of allocation
of Profits and Losses as provided in Article V or the distribution provisions of
Articles VIII or X hereof, or (iii) seek to impose an obligation for additional
contributions by the Limited Partners shall require the consent and approval of
Limited Partners holding more than 65% of the Percentage Interests of the
Limited Partners. Notwithstanding any contrary provision of this Agreement, any
amendment to this Agreement that would affect the operation of the Redemption
Rights set forth in Section 7.4 hereof shall require the consent and approval of
Class A Limited Partners holding more than sixty-five percent (65%) of the
Percentage Interests of the Class A Limited Partners.

               (e) Except as otherwise specifically provided in this Section
11.1, amendments

                                       30
<PAGE>   35

to this Agreement shall require the approval of the General Partner and
Majority-in-Interest of the Limited Partners.

         Section 11.2 NOTICE OF AMENDMENTS. A copy of any amendment to be
approved by the Partners pursuant to Sections 11.1(d) or 11.1(e) shall be mailed
in advance to such Partners. Partners shall be notified as to the substance of
any amendment pursuant to Sections 11.1(a), (b) or (c), and upon request shall
be furnished a copy thereof.

                                   ARTICLE XII
                                POWER OF ATTORNEY

         Section 12.1 POWER. Each of the Limited Partners irrevocably
constitutes and appoints the General Partner as such Limited Partner's true and
lawful attorney in such Limited Partner's name, place and stead to make,
execute, swear to, acknowledge, deliver and file:

               (a) Any certificates or other instruments which may be required
to be filed by the Partnership under the laws of the State of Delaware or of any
other state or jurisdiction in which the General Partner shall deem it advisable
to file;

               (b) Any documents, certificates or other instruments, including,
but not limited to, any and all amendments and modifications of this Agreement
or of the instruments described in Section 12.1(a) which may be required or
deemed desirable by the General Partner to effectuate the provisions of any part
of this Agreement and, by way of extension and not in limitation, to do all such
other things as shall be necessary to continue and to carry on the business of
the Partnership; and

               (c) All documents, certificates or other instruments which may be
required to effectuate the dissolution and termination of the Partnership, to
the extent such dissolution and termination is authorized hereby. The power of
attorney granted hereby shall not constitute a waiver of, or be used to avoid,
the rights of the Partners to approve certain amendments to this Agreement
pursuant to Sections 11.1 (d) and 11.1 (e) or be used in any other manner
inconsistent with the status of the Partnership as a limited partnership or
inconsistent with the provisions of this Agreement.

         Section 12.2 SURVIVAL OF POWER. It is expressly intended by each of the
Partners that the foregoing power of attorney is coupled with an interest, is
irrevocable and shall survive the death, incompetence, dissolution, liquidation
or adjudication of insanity or bankruptcy or insolvency of each such Partner.
The foregoing power of attorney shall survive the delivery of an assignment by
any of the Partners of such Partner's entire interest in the Partnership, except
that where an assignee of such entire interest has become a substitute Limited
Partner, then the foregoing power of attorney of the assignor Partner shall
survive the delivery of such assignment for the sole purpose of enabling the
General Partner to execute, acknowledge and file any and all instruments
necessary to effectuate such substitution.

                                       31
<PAGE>   36

                       ARTICLE XIII CONSENTS, APPROVALS,
                              VOTING AND MEETINGS

         Section 13.1 METHOD OF GIVING CONSENT OR APPROVAL. Any consent or
approval required by this Agreement may be given as follows:

               (a) by a written consent given by the consenting Partner and
received by the General Partner at or prior to the doing of the act or thing for
which the consent is solicited, provided that such consent shall not have been
nullified by:

                              (i) Notice to the General Partner of such
                              nullification by the consenting Partner prior to
                              the doing of any act or thing, the doing of which
                              is not subject to approval at a meeting called
                              pursuant to Section 13.2, or

                              (ii) Notice to the General Partner of such
                              nullification by the consenting Partner prior to
                              the time of any meeting called pursuant to Section
                              13.2 to consider the doing of such act or thing,
                              or

                              (iii) The negative vote by such consenting Partner
                              at any meeting called pursuant to Section 13.2 to
                              consider the doing of such act or thing;

               (b) by the affirmative vote by the consenting Partner to the
doing of the act or thing for which the consent is solicited at any meeting
called pursuant to Section 13.2 to consider the doing of such act or thing; or

               (c) by the failure of the Partner to respond or object to a
request from the General Partner for such Partner's consent within thirty (30)
days from its receipt of such request (or such shorter period of time as the
General Partner may indicate in such request in order to ensure that the General
Partner has sufficient time to respond, if required, to any third party with
respect to the subject matter of such request).

         Section 13.2 MEETINGS OF LIMITED PARTNERS. Any matter requiring the
consent or vote of all or any of the Partners may be considered at a meeting of
the Partners held not less than five (5) nor more than sixty (60) days after
notice thereof shall have been given by the General Partner to all Partners.
Such notice (i) may be given by the General Partner, in its discretion, at any
time, or (ii) shall be given by the General Partner within fifteen (15) days
after receipt from Limited Partners holding more than fifty percent (50%) of the
Percentage Interests of the Limited Partners of a request for such meeting.

         Section 13.3 OPINION. Except for Consents obtained pursuant to Sections
13.1 or 13.2, no Limited Partner shall exercise any consent or voting rights
unless either (a) at the time of the giving of consent or casting of any vote by
the Partners hereunder, counsel for the Partnership or counsel employed by the
Limited Partners (and reasonably satisfactory to the General Partner) shall have
delivered to the Partnership an opinion satisfactory to the Partners to the
effect that such conduct (i) is permitted by the Act, (ii) will not impair the
limited liability of the Limited Partners, and (iii) will not adversely affect
the classification of the Partnership as a partnership for federal

                                       32
<PAGE>   37

income tax purposes, or (b) irrespective of the delivery or nondelivery of such
opinion of counsel, Limited Partners holding more than seventy-five percent
(75%) of the Percentage Interests of the Limited Partners determine to exercise
their consent and/or voting rights.

         Section 13.4 SUBMISSIONS TO PARTNERS. The General Partner shall give
the Partners notice of any proposal or other matter required by any provision of
this Agreement, or by law, to be submitted for consideration and approval of the
Partners. Such notice shall include any information required by the relevant
provision or by law.

                                   ARTICLE XIV
                                  MISCELLANEOUS

         Section 14.1 GOVERNING LAW. The Partnership and this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware.

         Section 14.2 AGREEMENT FOR FURTHER EXECUTION. At any time or times upon
the request of the General Partner, the Limited Partners hereby agree to sign,
swear to, acknowledge and deliver all further documents and certificates
required by the laws of Delaware, or any other jurisdiction in which the
Partnership does, or proposes to do, business, or which may be reasonable,
necessary, appropriate or desirable to carry out the provisions of this
Agreement or the Act. This Section 14.2 shall not prejudice or affect the rights
of the Limited Partners to approve certain amendments to this Agreement pursuant
to Sections 11.1(d) and 11.1(e).

         Section 14.3 ENTIRE AGREEMENT. This Agreement and the exhibits attached
hereto contain the entire understanding among the parties and supersede any
prior understandings or agreements among them respecting the within subject
matter. There are no representations, agreements, arrangements or
understandings, oral or written, between or among the parties hereto relating to
the subject matter of this Agreement which are not fully expressed herein.

         Section 14.4 SEVERABILITY. This Agreement is intended to be performed
in accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations of the jurisdictions in which the Partnership
does business. If any provision of this Agreement, or the application thereof to
any person or circumstance, shall, for any reason and to any extent, be invalid
or unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.

         Section 14.5 NOTICES. Notices to Partners or to the Partnership shall
be deemed to have been given when personally delivered or mailed, by prepaid
registered or certified mail, addressed as set forth in Exhibit A attached
hereto, unless a notice of change of address has previously been given in
writing by the addressee to the addressor, in which case such notice shall be
addressed to the address set forth in such notice of change of address.

         Section 14.6 MEDIATION/ARBITRATION OF DISPUTES. None of the parties
(including any Partner and the Partnership) shall institute a proceeding in any
court or administrative agency to resolve a dispute between the parties before
that party has sought to resolve the dispute through direct negotiation with the
other party. If the dispute is not resolved within three weeks after a

                                       33
<PAGE>   38

demand for direct negotiation, the parties shall attempt to resolve the dispute
through mediation. If the parties do not promptly agree on a mediator, either
party may request the Court of Common Pleas of Lake County, Ohio, to appoint a
mediator certified by the Supreme Court of Ohio. The fees and expenses of the
mediator shall be paid equally by each party. If the mediator is unable to
facilitate a settlement of the dispute within a reasonable period of time, as
determined by the mediator, the mediator shall issue a written statement to the
parties to that effect and the aggrieved party may then seek relief through
arbitration in Cleveland, Ohio, administered by the American Arbitration
Association, under its commercial arbitration rules and its supplementary
procedures for larger, complex disputes, provided that persons eligible to be
selected as arbitrators shall be limited to attorneys-at-law who (i) are on the
AAA's Large Complex Case panel and (ii) who have practiced law for at least 15
years specializing in either general commercial litigation or general corporate
and commercial matters. The arbitrators shall base their award on applicable
laws and judicial precedent and include in such award a statement of the reasons
upon which the award is based. Judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof and shall
be final, binding and non-appealable. The obligation herein to mediate and/or
arbitrate shall not prevent any party from seeking temporary restraining orders,
preliminary injunctions or other procedures in a court of competent jurisdiction
to obtain interim relief when deemed necessary by such court to preserve the
status quo or prevent irreparable injury pending resolution by arbitration of
the actual dispute.

         Section 14.7 TITLES AND CAPTIONS. All titles and captions are for
convenience only, do not form a substantive part of this Agreement, and shall
not restrict or enlarge any substantive provisions of this Agreement.

         Section 14.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each one of which shall constitute an original executed copy of
this Agreement.

         Section 14.9 PRONOUNS. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or persons may require.

         Section 14.10 SURVIVAL OF RIGHTS. Subject to the provisions hereof
limiting transfers, this Agreement shall be binding upon and inure to the
benefit of the Partners and the Partnership and their respective legal
representatives, successors, transferees and assigns.

         Section 14.11 PERSONAL LIABILITY. As provided in the Articles of
Incorporation establishing the General Partner, no trustee, officer,
shareholder, employee or agent of the General Partner shall be held to any
personal liability, jointly or severally, for any obligation of, or claim
against, the General Partner.

                                       34
<PAGE>   39

         IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.

                                 GENERAL PARTNER:

                                 LIBERTY SELF-STOR, INC.,
                                 a Maryland corporation

                                 By:   /s/ Richard M. Osborne
                                   ---------------------------------------------
                                 LIMITED PARTNERS:
                                 (See attached limited partner signature pages)

                                     35

<PAGE>   40

                       LIMITED PARTNERSHIP SIGNATURE PAGE

                  The undersigned, desiring to become a Limited Partner of LSS I
Limited Partnership, hereby agrees to all of the terms of the Agreement of
Limited Partnership of LSS I Limited Partnership and agrees to be bound by the
terms and provisions thereof.

                  Executed by the undersigned as a Class A Limited Partner of
LSS I Limited Partnership.

LIMITED PARTNER:

          /s/ Richard M. Osborne
-----------------------------------------------
              Richard M. Osborne

         Suite 113, 8500 Station Street
-----------------------------------------------
         (Residence Street Address)

         Mentor, Ohio   44060
-----------------------------------------------
         (City, State, Zip Code)

         ###-##-####
-----------------------------------------------
        (Taxpayer Identification or Social Security Number)

                                       36
<PAGE>   41

                       LIMITED PARTNERSHIP SIGNATURE PAGE

              The undersigned, desiring to become a Limited Partner of LSS I
Limited Partnership, hereby agrees to all of the terms of the Agreement of
Limited Partnership of LSS I Limited Partnership and agrees to be bound by the
terms and provisions thereof.

              Executed by the undersigned as a Class A Limited Partner of LSS I
Limited Partnership.

LIMITED PARTNER:

          /s/ Thomas J. Smith
-----------------------------------------------
              Thomas J. Smith

         Suite 100, 8500 Station Street
-----------------------------------------------
              (Residence Street Address)

         Mentor, Ohio   44060
-----------------------------------------------
         (City, State, Zip Code)

         ###-##-####
-----------------------------------------------
         (Taxpayer Identification or Social Security Number)

                                       37

<PAGE>   42

                       LIMITED PARTNERSHIP SIGNATURE PAGE

              The undersigned, desiring to become a Limited Partner of LSS I
Limited Partnership, hereby agrees to all of the terms of the Agreement of
Limited Partnership of LSS I Limited Partnership and agrees to be bound by the
terms and provisions thereof.

              Executed by the undersigned as a Class A Limited Partner of LSS I
Limited Partnership.

LIMITED PARTNER:

RETIREMENT MANAGEMENT COMPANY,
an Ohio corporation

By:     /s/ Richard M. Osborne
   ----------------------------------------------------------

          Suite 113, 8500 Station Street
-------------------------------------------------------------
          (Residence Street Address)

          Mentor, Ohio    44060
-------------------------------------------------------------
          (City, State, Zip Code)

          34-1734205
-------------------------------------------------------------
          (Taxpayer Identification or Social Security Number)

                                       38

<PAGE>   43

                       LIMITED PARTNERSHIP SIGNATURE PAGE

                  The undersigned, desiring to become a Limited Partner of LSS I
Limited Partnership, hereby agrees to all of the terms of the Agreement of
Limited Partnership of LSS I Limited Partnership and agrees to be bound by the
terms and provisions thereof.

              Executed by the undersigned as a Class B Limited Partner of LSS I
Limited Partnership.

LIMITED PARTNER:

LIBERTY SELF-STOR, INC.,
a Maryland corporation

By:  /s/ Richard M. Osborne
   --------------------------------------------------------

       Suite 113, 8500 Station Street
-----------------------------------------------------------
       (Residence Street Address)

       Mentor, Ohio   44060
-----------------------------------------------------------
       (City, State, Zip Code)

        94-6542723
-----------------------------------------------------------
        (Taxpayer Identification or Social Security Number)

                                       39

<PAGE>   44

                                    EXHIBIT A

                                LIST OF PARTNERS
<TABLE>
<CAPTION>

                                           AGREED VALUE
                                           OF CAPITAL             PERCENTAGE             PARTNERSHIP
PARTNERS                                   CONTRIBUTION            INTEREST                 UNITS
----------------------------------------   --------------       --------------          -------------

<S>                                         <C>                       <C>                  <C>
GENERAL PARTNER:........................
Liberty Self-Stor, Inc.                       $64,432.90                  1%               101,392
Suite 113, 8500 Station Street
Mentor, Ohio   44060

CLASS A LIMITED PARTNERS................
Richard M. Osborne                         $3,297,494.70             51.173%             5,188,528
Suite 113, 8500 Station Street
Mentor, Ohio   44060

Thomas J. Smith                               $31,619.80              .4907%                49,753
Suite 100, 8500 Station Street
Mentor, Ohio   44060

Retirement Management Company              $1,188,001.50            18.4363%             1,869,292
Suite 113, 8500 Station Street
Mentor, Ohio   44060

CLASS B LIMITED PARTNERS................
Liberty Self-Stor, Inc.                    $1,862,111.10               28.9%             2,930,226
                                           -------------               -----             ---------
Suite 113, 8500 Station Street
Mentor, Ohio 44060

TOTAL                                         $6,443,660                100%            10,139,191
</TABLE>

                                       A-1

<PAGE>   45

                                    EXHIBIT B

                           FEDERAL INCOME TAX MATTERS

         For purposes of interpreting and implementing Article V of the
Partnership Agreement, the following rules shall apply and shall be treated as
part of the terms of the Partnership Agreement:

         A. Special Allocation Provisions.

               1. For purposes of determining the amount of gain or loss to be
allocated pursuant to Article V of the Partnership Agreement, any basis
adjustments permitted pursuant to Section 743 of the Code shall be disregarded.

               2. When Partnership Interests are transferred during any taxable
year, the General Partner intends to allocate Partnership Profits and Losses and
other items of income, loss, deductions and credits using the closing of the
books method.

               3. Notwithstanding any other provision of the Partnership
Agreement, to the extent required by law, income, gain, loss and deduction
attributable to property contributed to the Partnership by a Partner shall be
shared among the Partners so as to take into account any variation between the
basis of the property and the fair market value of the property at the time of
contribution in accordance with the requirements of Section 704(c) of the Code
and the applicable regulations thereunder as more fully described in Part B
hereof. Treasury regulations under Section 704(c) of the Code allow partnerships
to use any reasonable method for accounting for Book-Tax Differences for
contributions of property so that a contributing partner receives the tax
benefits and burdens of any built-in gain or loss associated with contributed
property. The Operating Partnership shall account for Book-Tax Differences using
a method specifically approved in the regulations, the traditional method. An
allocation of remaining built-in gain under Section 704(c) will be made when
Section 704(c) property is sold.

               4. Notwithstanding any other provision of the Partnership
Agreement, in the event the Partnership is entitled to a deduction for interest
imputed under any provision of the Code on any loan or advance from a Partner
(whether such interest is currently deducted, capitalized or amortized), such
deduction shall be allocated solely to such Partner.

               5. Notwithstanding any provision of the Partnership Agreement to
the contrary, to the extent any payments in the nature of fees made to a Partner
or reimbursements of expenses to any Partner are finally determined by the
Internal Revenue Service to be distributions to a Partner for federal income tax
purposes, there will be a gross income allocation to such Partner in the amount
of such distribution.

               6. (a) Notwithstanding any provision of the Partnership Agreement
to the contrary and subject to the exceptions set forth in Section
1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a net decrease in
Partnership Minimum Gain during any Partnership fiscal year, each Partner shall
be specially allocated items of Partnership income and gain for such year (and,
if necessary, subsequent years) in an amount equal to such Partner's share of
the net decrease in Partnership Minimum Gain determined in accordance with
Section 1.704-2(g)(2) of the Treasury

                                       B-1

<PAGE>   46

Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section 1.704-2(f) of the Treasury Regulations. This paragraph 6(a) is
intended to comply with the minimum gain chargeback requirement in such Section
of the Regulations and shall be interpreted consistently therewith. To the
extent permitted by such Section of the Regulations and for purposes of this
paragraph 6(a) only, each Partner's Adjusted Capital Account Balance shall be
determined prior to any other allocations pursuant to Article V of the
Partnership Agreement with respect to such fiscal year and without regard to any
net decrease in Partner Minimum Gain during such fiscal year.

               (b) Notwithstanding any provision of the Partnership Agreement to
the contrary, except paragraph 6(a) of this Exhibit and subject to the
exceptions set forth in Section 1.704-2(i)(4) of the Treasury Regulations, if
there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any
Partnership fiscal year, each Partner who has a share of the Partner Nonrecourse
Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the
Treasury Regulations, shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain, determined in accordance with Section 1.704-2(i)(5) of the Treasury
Regulations. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Section 1.704-2(i)(4) of the Treasury Regulations. This paragraph 6(b) is
intended to comply with the minimum gain chargeback requirement in such Section
of the Treasury Regulations and shall be interpreted consistently therewith.
Solely for purposes of this paragraph 6(b), each Partner's Adjusted Capital
Account Balance shall be determined prior to any other allocations pursuant to
Article V of the Partnership Agreement with respect to such fiscal year, other
than allocations pursuant to paragraph 6(a) hereof.

         7. Notwithstanding any provision of the Partnership Agreement to the
contrary, in the event any Partners unexpectedly receive any adjustments,
allocations or distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6),
items of Partnership income and gain shall be specially allocated to such
Partners in an amount and manner sufficient to eliminate the deficits in their
Adjusted Capital Account Balances created by such adjustments, allocations or
distributions as quickly as possible.

         8. No Losses shall be allocated to any Partner to the extent that such
allocation would result in a deficit in its Adjusted Capital Account Balance
while any other Partner continues to have a positive Adjusted Capital Account
Balance; in such event, Losses shall first be allocated to any Partners with
positive Adjusted Capital Account Balances, and in proportion to such balances,
to the extent necessary to reduce their positive Adjusted Capital Account
Balances to zero. Any excess shall be allocated to the General Partner. To the
extent that any Losses are allocated pursuant to this paragraph, Profits shall
thereafter be allocated in reverse order of such allocations of Losses to the
extent of such Losses.

         9. Any special allocations of items pursuant to this Part A shall be
taken into account in computing subsequent allocations so that the net amount of
any items so allocated and the Profits, Losses and all other items allocated to
each such Partner pursuant to Article V of the

                                       B-2

<PAGE>   47

Partnership Agreement shall, to the extent possible, be equal to the net amount
that would have been allocated to each such Partner pursuant to the provisions
of Article V of the Partnership Agreement if such special allocations had not
occurred.

         10. Notwithstanding any provision of the Partnership Agreement to the
contrary, Nonrecourse Deductions for any fiscal year or other period shall be
specially allocated to the Partners in the manner and in accordance with the
percentages set forth in Section 5.2(d) of the Partnership Agreement.

         11. Notwithstanding any provision of the Partnership Agreement to the
contrary, any Partner Nonrecourse Deduction for any fiscal year or other period
shall be specially allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Section 1.704-2(i) of the
Treasury Regulations.

         12. The allocation of Profits and Losses to any Partner shall be deemed
to be an allocation to that Partner of the same proportionate part of each
separate item of taxable income, gain, loss, deduction or credit that comprises
such Profits and Losses.

               B. Capital Account Adjustments and 704(c) Tax Allocations.

         1. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' capital accounts, the
determination, recognition and classification of any such item shall be the same
as its determination, recognition and classification for federal income tax
purposes; provided, however, that:

                              (a) Any income, gain or loss attributable to the
               taxable disposition of any property shall be determined by the
               Partnership as if the adjusted basis of such property as of such
               date of disposition was equal in amount to (i) the Agreed Value
               less book depreciation in the case of the Initial Properties or
               other contributed properties, or (ii) the Carrying Value with
               respect to property subsequently purchased.

                              (b) The computation of all items of income, gain,
               loss and deduction shall be made by the Partnership and, as to
               those items described in Section 705(a)(1)(B) or Section
               705(a)(2)(B) of the Code, without regard to the fact that such
               items are not includable in gross income or are neither currently
               deductible nor capitalizable for federal income tax purposes.

         2. A transferee of a Partnership interest will succeed to the capital
account relating to the Partnership interest transferred; provided, however,
that if the transfer causes a termination of the Partnership under Section
708(b)(1)(B) of the Code, the Partnership properties shall be deemed to have
been distributed in liquidation of the Partnership to the Partners (including
the transferee of a Partnership interest) and recontributed by such Partners and
transferees in reconstitution of the Partnership. The capital accounts of such
reconstituted Partnership shall be maintained in accordance with the principles
set forth herein.

         3. Upon an issuance of additional Partnership interests for cash, the
capital

                                       B-3

<PAGE>   48

accounts of all Partners (and the Agreed Values of all Partnership properties)
shall, immediately prior to such issuance, be adjusted (consistent with the
provisions hereof) upward or downward to reflect any unrealized gain or
unrealized loss attributable to each Partnership property (as if such unrealized
gain or unrealized loss had been recognized upon an actual sale of such property
at the fair market value thereof, immediately prior to such issuance, and had
been allocated to the Partners, at such time, pursuant to Article V of the
Partnership Agreement). In determining such unrealized gain or unrealized loss
attributable to the properties, the fair market value of Partnership properties
shall be determined by the General Partner using such reasonable methods of
valuation as it may adopt.

               4. Immediately prior to the distribution of any Partnership
property in liquidation of the Partnership, the capital accounts of all Partners
shall be adjusted (consistent with the provisions hereof and Section 704 of the
Code) upward or downward to reflect any unrealized gain or unrealized loss
attributable to the Partnership property (as if such unrealized gain or
unrealized loss had been recognized upon an actual sale of each such property,
immediately prior to such distribution, and had been allocated to the Partners,
at such time, pursuant to Article V of the Partnership Agreement). In
determining such unrealized gain or unrealized loss attributable to property,
the fair market value of Partnership property shall be determined by the General
Partner using such reasonable methods of valuation as it may adopt.

               5. In accordance with Section 704(c) of the Code and the
regulations thereunder, income, gain, loss and deduction with respect to any
property shall, solely for tax purposes, and not for capital account purposes,
be allocated among the Partners so as to take account of any variation between
the adjusted basis of such property to the Partnership for federal income tax
purposes.

               6. In the event the Agreed Value of any Partnership asset is
adjusted as described in paragraph 3 above, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Agreed Value in the same manner as under Section 704(c) of the
Code and the regulations thereunder.

               7. Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement.

         C. Definitions. For the purposes of this Exhibit, the following terms
shall have the meanings indicated unless the context clearly indicates
otherwise:

               "Adjusted Capital Account Balance": means the balance in the
               capital account of a Partner as of the end of the relevant fiscal
               year of the Partnership, after giving effect to the following:
               (i) credit to such capital account any amounts the Partner is
               obligated to restore, pursuant to the terms of this Agreement or
               otherwise, or is deemed obligated to restore pursuant to the
               penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5)
               of the Treasury Regulations, and (ii) debit to such capital
               account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
               (5) and (6) of the Regulations.

                                       B-4

<PAGE>   49
               "Carrying Value": means the adjusted basis of such property for
               federal income tax purposes as of the time of determination.

               "Nonrecourse Deductions": shall have the meaning set forth in
               Section 1.704-2(b)(1) of the Treasury Regulations. The amount of
               Nonrecourse Deductions for a Partnership fiscal year equals the
               excess, if any, of the net increase, if any, in the amount of
               Partnership Minimum Gain during that fiscal year over the
               aggregate amount of any distributions during that fiscal year of
               proceeds of a Nonrecourse Liability, that are allocable to an
               increase in Partnership Minimum Gain, determined according to the
               provisions of Section 1.704-2(c) of the Treasury Regulations.

               "Nonrecourse Liability": shall have the meaning set forth in
               Section 1.704-2(b)(3) of the Treasury Regulations.

               "Partner Nonrecourse Debt Minimum Gain": means an amount, with
               respect to each Partner Nonrecourse Debt, determined in
               accordance with Section 1.704-2(i) of the Treasury Regulations.

               "Partner Nonrecourse Debt": shall have the meaning set forth in
               Section 1.704-2(b)(4) of the Treasury Regulations.

               "Partner Nonrecourse Deductions": shall have the meaning set
               forth in Section 1.704-2(i)(2) of the Treasury Regulations. For
               any Partnership taxable year, the amount of Partner Nonrecourse
               Deductions with respect to a Partner Nonrecourse Debt equal the
               net increase during the year, if any, in the amount of Partner
               Nonrecourse Debt Minimum Gain reduced (but not below zero) by
               proceeds of the liability that are both attributable to the
               liability and allocable to an increase in the Partner Nonrecourse
               Debt Minimum Gain.

               "Partnership Agreement": shall mean this Agreement of Limited
               Partnership Agreement of LSS I Limited Partnership.

               "Partnership Minimum Gain": shall have the meaning set forth in
               Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury
               Regulations.

For purposes of this Exhibit, all other capitalized terms will have the same
definition as in the Partnership Agreement.

                                       B-5

<PAGE>   50

                                    EXHIBIT C

                               INITIAL PROPERTIES

<TABLE>
<CAPTION>
                                            YEAR
                                           BUILT/          RENTABLE
    LOCATION                              EXPANDED         SQUARE FT.        ACRES       UNITS        CONSTRUCTION
    --------                              --------         ----------        -----       -----        ------------
<S>                                       <C>               <C>                <C>        <C>       <C>
OHIO:
Avon                                        1981-           67,423            6.1225      495        Masonry & Steel
  998 Avon Belden Road                    1986/1998
  Avon, Ohio 44011

Canton                                     1979-87          41,175           11.1533      388        Concrete
  3700 Fohl Road, S.W.
  Canton, Ohio 44706

Catawba                                   1988/1998         43,052            7.57        302        Steel
  5681 East Harbor Road
  Marblehead, Ohio 43440

Cleveland                                   1997            40,150            3.6801      278        Steel
  5440 S. Marginal Road
  Cleveland, Ohio 44114

Dayton                                      1989            19,550            5.001       206        Concrete
  3785 Shiloh Springs Rd.
  Dayton, Ohio 45426

East Canton                                 1997            26,700           12.6298      177        Steel
  5136 Lincoln Street
  East Canton, Ohio 44730

East Liverpool                            1986-1996         29,990           11.49        222        Steel
  15031 Strader Road
  East Liverpool, Ohio 43920

Louisville                                1988-1990         53,060            6.828       364        Masonry
  7100 Columbus Road
  Louisville, Ohio 44641

Mentor                                      1983            20,382            6.000       204        Masonry
  6784 Hopkins Road
  Mentor, Ohio 44060

Perry                                     1992/1997         63,950            6.194       397        Steel
  4376 North Ridge Road
  Perry, Ohio 44081

Ravenna                                     1988            16,950            1.785       150        Steel
  111 Loomis Parkway
  Ravenna, Ohio 44266
</TABLE>

                                       C-1

<PAGE>   51

<TABLE>
<CAPTION>
                                            YEAR
                                           BUILT/          RENTABLE
    LOCATION                              EXPANDED         SQUARE FT.        ACRES       UNITS        CONSTRUCTION
    --------                              --------         ----------        -----       -----        ------------

<S>                                         <C>              <C>              <C>         <C>          <C>
Willoughby                                  1997             33,998          2.37         276           Masonry
  38255 St. Clair Street
  Willoughby, Ohio 44094

NEW YORK

Endicott                                    1989             35,580          4.993        297           Concrete/Steel
  1400 Campville Road                                                                                   Roof
  Endicott, NY 13760

Southold                                    1989             53,055          6.949        552           Steel
  1040 Hortons Lane
  Southold, NY 11971

Riverhead                                 1985-1986          20,625          3.045        183           Steel
  99 Mill Road
  Riverhead, NY
                                                          ------------------------------------
TOTAL/AVERAGE                                               565,640         95.8107     4,491
                                                          ====================================
</TABLE>

                                       C-2

<PAGE>   52

                                    EXHIBIT D

                             REDEMPTION RIGHTS TERMS

                  The Redemption Rights granted by the Partnership to the Class
A Limited Partners pursuant to Section 7.4 hereof shall be subject to the
following terms and conditions:

                  1. Definitions. The following terms and phrases shall, for
purposes of this Exhibit D and the Agreement, have the meanings set forth below:

                  "Cash Purchase Price" shall have the meaning set forth in
Paragraph 4 hereof.

                  "Computation Date" shall mean the date on which an Redemption
                  Exercise Notice is delivered to the General Partner.

                  "Exchange Factor" shall mean 100%, provided that such factor
                  shall be adjusted in accordance with the Antidilution
                  Provisions of Paragraph 7 hereof.

                  "Exercising Partner" shall have the meaning set forth in
                  Paragraph 2 hereof.

                  "Offered Partnership Units" shall mean the Partnership Units
                  of the Exercising Partner(s) identified in a Redemption
                  Exercise Notice which, pursuant to the exercise of Redemption
                  Rights, can be redeemed by the Partnership or acquired by the
                  General Partner under the terms hereof.

                  "Purchase Price" shall mean the Cash Purchase Price or the
                  Stock Purchase Price, or a combination thereof.

                  "Redemption Date" shall mean the tenth (10th) Business Day
                  after receipt by the General Partner of a Redemption Exercise
                  Notice.

                  "Redemption Exercise Notice" shall have the meaning set forth
                  in Paragraph 2 hereof.

                  "Redemption Rights" shall have the meaning set forth in
                  Paragraph 2 hereof.

                  "Securities Act" shall mean the Securities Act of 1933, as
                  amended, or any successor statute.

                  "Stock Purchase Price" shall have the meaning set forth in
                  Paragraph 4 hereof.

                  2. Grant of Redemption Rights. Beginning one year from the
date of this Agreement, each Class A Limited Partner shall have the right, but
not the obligation (hereinafter such right sometimes referred to as the
"Redemption Rights"), to require the Partnership to redeem on the Redemption
Date, all or any portion of the Units held by such Limited Partner (as a Class A
Limited Partner) at a redemption price equal to the Cash Purchase Price. The
Redemption Rights of a Limited Partner may be exercised on one or

                                       D-1

<PAGE>   53

more occasions by the Limited Partner. The Redemption Rights shall be exercised
pursuant to a written notice (the "Redemption Exercise Notice") in the form set
forth in Schedule 1 attached hereto. The Redemption Exercise Notice shall be
given by the Partner who is exercising the Redemption Rights ("Exercising
Partner") to the General Partner. A Limited Partner may not exercise the
Redemption Rights as to fewer Partnership Units than the number of such
Partnership Units that is equal to the lesser of (a) 1,000 Partnership Units or
(b) all of the Units held by such Class A Limited Partner (as a Class A Limited
Partner). Neither the Electing Partner nor any assignee of any Limited Partner
shall have any right with respect to any Partnership Units so redeemed to
receive any distributions from the Partnership made after the Redemption Date.
The assignee of any Limited Partner may exercise the rights of such Limited
Partner pursuant to this Section 2, and such Limited Partner shall be deemed to
have assigned such rights to such assignee and shall be bound by the exercise of
such rights by such Limited Partner's assignee. In connection with any exercise
of such rights by such assignee on behalf of such Limited Partner, the Cash
Purchase Price shall be paid by the Partnership directly to such assignee and
not to such Limited Partner.

                  3. General Partner Exchange.

                     (a) Notwithstanding the provisions of Section 2, if a
Limited Partner elects to exercise the Redemption Rights, the General Partner
may, in its sole and absolute discretion, elect to assume directly and satisfy
the Redemption Rights by paying to the Electing Partner either the Cash Purchase
Price and/or the Stock Purchase Price for each Partnership Unit redeemed, as
elected by the General Partner (in its sole and absolute discretion) on the
Redemption Date, whereupon the General Partner shall acquire the Partnership
Units offered for redemption by the Electing Partner and shall be treated for
all purposes of this Agreement as the owner of such Partnership Interests.

                     (b) Unless the General Partner (in its sole and absolute
discretion) shall exercise its right to assume directly and satisfy the
Redemption Rights by paying to the Electing Partner either the Cash Purchase
Price and/or the Stock Purchase Price for each Partnership Unit redeemed, the
General Partner itself shall have no obligation to the Redeeming Partner or to
the Partnership with respect to the Redeeming Partner's exercise of the
Redemption Right.

                     (c) In the event that the General Partner satisfies the
Redemption Rights in the manner described in Paragraphs 3(a) or (b), each of the
Exercising Partner, the Partnership, and the General Partner shall treat the
transaction between the General Partner and the Exercising Partner for federal
income tax purposes as a sale of the Exercising Partner's Partnership Units to
the General Partner.

                     (d) Each Exercising Partner shall execute such documents as
the General Partner may reasonably require in connection with the issuance of
REIT Shares in the event that the General Partner satisfies the Redemption
Rights in the manner described in Paragraphs 3(a).

                     (e) If the Redemption Rights are satisfied by the delivery
of REIT Shares,

                                       D-2

<PAGE>   54

the Exercising Partner shall be deemed to become a holder of REIT Shares as of
the close of business on the closing date.

                     (f) Notwithstanding the provisions of Section 2 and this
Section 3, a Limited Partner shall not be entitled to receive REIT Shares if the
delivery of REIT Shares to such Partner on the Redemption Date by the General
Partner pursuant to this Section 3 would be prohibited under the Articles of
Incorporation. The Cash Purchase Price shall be paid in such instance in
accordance with the terms of Section 2.

                  4. Computation of Purchase Price/Form of Payment. The Cash
Purchase Price shall mean an amount of cash equal to the product of (i) the
number of shares of the REIT Shares that would be issued to the Exercising
Partner if the Stock Purchase Price were paid for such Offered Partnership Units
(taking into account the adjustments required pursuant to the definition of
"Exchange Factor") multiplied by (ii) the REIT Share Value computed as of the
Computation Date. The Cash Purchase Price shall be paid in the form of cash, or
cashier's check, or by wire transfer to the Exercising Partner's designated
account. The Stock Purchase Price shall mean the number of REIT Shares equal to
the product, expressed as a whole number, of (i) the number of Class A Units
being exchanged, multiplied by (ii) the Exchange Factor.

                  5. Closing Deliveries. On the Redemption Date, payment of the
Purchase Price shall be accompanied by proper instruments of transfer and
assignment and by the delivery of (i) representations and warranties of (A) the
Exercising Partner with respect to its due authority to sell all of the right,
title and interest in and to such Offered Partnership Units and with respect to
the status of the Offered Partnership Units being sold, free and clear of all
liens, and (B) the Partnership or General Partner with respect to due authority
for the purchase of such Offered Partnership Units, and (ii) to the extent that
REIT Shares are issued in payment of the Stock Purchase Price, (A) an opinion of
counsel for the General Partner reasonably satisfactory to the Exercising
Partner(s), to the effect that such REIT Shares have been duly authorized, are
validly issued, fully-paid and non-assessable, and have been duly registered
under the Securities Act, and (B) a stock certificate or certificates evidencing
the REIT Shares to be issued and registered in the name of the Exercising
Partner(s) or its (their) designee.

                  6. Term of Rights. Unless sooner terminated, the rights of the
parties with respect to the Redemption Rights shall commence as of the date
hereof and lapse for all purposes and in all respects on the date that the
Partnership is dissolved; provided, however, that the parties hereto shall
continue to be bound by a Redemption Exercise Notice delivered to the General
Partner prior to such date.

                  7. Antidilution Provisions.

                     (a) The Exchange Factor shall be subject to adjustment from
time to time effective upon the occurrence of the following events and shall be
expressed as a percentage, calculated to the nearest one-thousandth of one
percent (.001%):

                         (i) In case the General Partner shall pay or make a
                     dividend or

                                       D-3

<PAGE>   55

                     other distribution on any class of shares of the General
                     Partner in REIT Shares, the Exchange Factor in effect at
                     the opening of business on the day following the date fixed
                     for the determination of stockholders entitled to receive
                     such dividend or other distribution shall be increased in
                     proportion to the increase in outstanding REIT Shares
                     resulting from such dividend or other distribution, such
                     increase to become effective immediately after the opening
                     of business on the day following the record date fixed for
                     such dividend or other distribution.

                         (ii) In case outstanding REIT Shares shall be
                     subdivided into a greater number of shares, the Exchange
                     Factor in effect at the opening of business on the day
                     following the day upon which such subdivision becomes
                     effective shall be proportionately increased, and,
                     conversely, in case the outstanding REIT Shares shall be
                     combined into a smaller number of shares, the Exchange
                     Factor in effect at the opening of business on the day
                     following the day upon which such combination becomes
                     effective shall be proportionately reduced, such increase
                     or reduction, as the case may be, to become effective
                     immediately after the opening of business on the day
                     following the day upon which such subdivision or
                     combination becomes effective.

                     (b) In case the General Partner shall issue rights, options
or warrants to all holders of its REIT Shares entitling them to subscribe for or
purchase REIT Shares at a price per share less than the current market price per
share (as determined in the next sentence), each holder of a Partnership Unit
shall be entitled to receive such number of rights or warrants, as the case may
be, as he would have been entitled to receive had he exchanged his Partnership
Units immediately prior to the record date for such issuance by the General
Partner. For the purpose of any computation pursuant to the next sentence, the
current market price per share of REIT Shares on any date shall be deemed to be
the average of the daily closing prices for the five consecutive Trading Days
selected by the General Partner commencing not more than twenty (20) Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or distribution
requiring such computation. For purposes of this Exhibit D, the term "Trading
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than
any day which securities are not traded on such exchange or in such market and
the term "'ex' date", when used in respect of any issuance or distribution,
shall mean the first date on which the shares trade regular way on such exchange
or in such market without the right to receive such issuance or distribution.

                     (c) In case the REIT Shares shall be changed into the same
or a different number of shares of any class or classes of stock, whether by
capital reorganization, reclassification, or otherwise (other than subdivision
or combination of shares or a stock dividend described in subparagraph (a)(ii)
of this Paragraph) then and in each such event the Limited Partners shall have
the right thereafter to exchange their Partnership Units for the kind and amount
of shares and other securities and property which would have been received upon
such reorganization, reclassification or other change by holders of the number
of shares into which the Partnership Units might have been exchanged immediately
prior to such

                                       D-4

<PAGE>   56

reorganization, reclassification or change.

                     (d) The General Partner may, but shall not be required to,
make such adjustments to the number of REIT Shares issuable upon exchange of a
Partnership Unit, in addition to those required by this Paragraph 7, as the
General Partner's board of trustees considers to be advisable in order that any
event treated for Federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients. The General Partner's board of
trustees shall have the power to resolve any ambiguity or correct any error in
the adjustments made pursuant to this Paragraph and its actions in so doing
shall be final and conclusive.

                  8. Fractions of Shares. No fractional REIT Shares shall be
issued upon exchange of Partnership Units. If more than one Partnership Unit
shall be surrendered for exchange at one time by the same Exercising Partner,
the number of full REIT Shares which shall be issuable upon exchange thereof (or
the cash equivalent amount thereof if the Cash Purchase Price is paid) shall be
computed on the basis of the aggregate amount of Partnership Units so
surrendered. Instead of any fractional REIT Share which would otherwise be
issuable upon exchange of any Partnership Unit or Partnership Units, the General
Partner shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the Value of a REIT Share on the Redemption Date.

                  9. Notice of Adjustments of Exchange Factor. Whenever the
Exchange Factor is adjusted as herein provided:

                     (a) the General Partner shall compute the adjusted Exchange
Factor in accordance with Paragraph 7 hereof and shall prepare a certificate
signed by the chief financial officer or the Treasurer of the General Partner
setting forth the adjusted Exchange Factor and showing in reasonable detail the
facts upon which such adjustment is based; and

                     (b) a notice stating that the Exchange Factor has been
adjusted and setting forth the adjusted Exchange Factor shall forthwith be
mailed by the General Partner to all holders of Redemption Rights at their last
addresses on record under this Agreement.

                                       D-5

<PAGE>   57

                                   SCHEDULE 1

                           REDEMPTION EXERCISE NOTICE

TO: LIBERTY SELF-STOR, INC.

Reference is made to that certain Agreement of Limited Partnership,
dated              , 1999 (the "Partnership Agreement"), pursuant to
which Liberty Self-Stor, Inc., an Ohio corporation, and certain other persons,
including the undersigned, formed a Delaware limited partnership known as LSS I
Limited Partnership (the "Partnership"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Partnership Agreement. Pursuant
to Section 7.4 and Paragraph 2 of Exhibit D of the Partnership Agreement, each
of the undersigned, being a Class A Limited Partner of the Partnership (an
"Exercising Partner"), hereby elects to exercise its Redemption Rights as to the
number of Offered Partnership Units specified opposite its name below:

Dated:

EXERCISING PARTNER              PARTNERSHIP UNITS              NUMBER OF OFFERED

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

EXERCISING PARTNER

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

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

                                   Schedule 1

<PAGE>   58

                                    EXHIBIT E

              REPRESENTATIONS AND WARRANTIES OF WARRANTING PARTNERS

Each of [___________________________________________________ (collectively, the
"Warranting Partners"), jointly and severally, represents to the Partnership
that, except as set forth on the Disclosure Schedule delivered to the General
Partner in connection with the execution of this Agreement, as follows:

                  (a) ORGANIZATION; AUTHORITY. Each of the Contributed Entities
is a Partnership or limited liability company duly formed, validly existing and
in good standing (to the extent applicable) under the laws of its jurisdiction
of formation. Each Warranting Partner has the requisite power and authority to
enter into and perform this Agreement.

                  (b) AUTHORIZATION; BINDING AGREEMENT. The execution, delivery
and performance of this Agreement by each Warranting Partner has been duly and
validly authorized by all necessary action of such Warranting Partner. This
Agreement has been duly executed and delivered by each Warranting Partner and
constitutes the legal, valid and binding obligation of such Warranting Partner,
enforceable against such Warranting Partner in accordance with the terms hereof.

                  (c) CONSENTS AND APPROVALS. Except for those obtained prior to
the date hereof, no consent, waiver, approval or authorization of, or filing,
registration or qualification with or notice to, any governmental unit or any
other person is required to be made, obtained or given by any of the Warranting
Partners or the Contributed Entities in connection with the execution, delivery
and performance of this Agreement.

                  (d) NO VIOLATION. None of the execution, delivery or
performance of this Agreement by any Warranting Partner does, or with the giving
of notice, lapse of time or both, will (1) violate, conflict with or constitute
a default under any term or condition of (A) the organizational documents of
such Warranting Partner or any of the Contributed Entities, or (B) any term or
provision of any judgment, decree, order, statute, injunction, rule or
regulation of a governmental unit applicable to such Warranting Partner or any
of the Contributed Entities, or (C) any agreement, instrument or document to
which such Warranting Partner or any of the Contributed Entities is a party or
by which any of them is bound or to which their assets or properties is subject
or bound or (2) result in the creation of any lien, claim, equity, security
interest or other encumbrance ("Lien") upon the Contributed Property of such
Warranting Partner or the assets or properties of such Warranting Partner or the
Contributed Entities.

                  (e) COMPLIANCE WITH LAWS. To the Warranting Partners' best
knowledge, each of the Contributed Entities is in compliance in all material
respects with all private restrictions and laws, ordinances and regulations
applicable to the conduct of the business of such Contributed Entities and the
ownership, use and operation of their properties and each has obtained all
licenses, permits and other governmental approvals for the conduct thereof,
which licenses and permits are in full force and effect, and the Contributed
Entities

                                       E-1

<PAGE>   59

have not taken (or failed to take) any action that would result in the
revocation of such licenses or permits nor have the Contributed Entities
received any notice of violation from any federal, state or municipal or other
governmental or quasi-governmental authority or notice of an intention by any
such authority to revoke any certificate of occupancy or other certificate,
license or permit issued by it in connection with the use of any such
Contributed Entities' properties.

                  (f) ENVIRONMENTAL MATTERS. To the Warranting Partners' best
knowledge, (1) the Contributed Entities and their respective properties are in
compliance, and heretofore have complied, with all Environmental Laws (as
hereinafter defined); (2) none of the Contributed Entities has received any
written notice from any governmental or quasi-governmental authority or other
person that it, its current or former operations, or its properties now or
heretofore owned, leased or used by it or any of its predecessors, are not or
have not been in compliance with any Environmental Laws or that it has any
material liability in respect thereof; and (3) there are no administrative,
regulatory or judicial proceedings pending or threatened against any Contributed
Entity pursuant to, or alleging any violation of or liability under, any
Environmental Laws. To the Warranting Partners' best knowledge, all of the
properties now or heretofore owned, leased or used by any of the Contributed
Entities are free of all Hazardous Materials, and, to the best knowledge of
Warranting Partners, no Hazardous Materials have ever been located on any of the
properties now or heretofore owned, leased or used by any of the Contributed
Entities.

                  The term "Hazardous Materials" shall mean any substance,
material, waste, gas or particulate matter which is regulated by any local
governmental authority, the state in which any real property of the Contributed
Entities is situated, or the United States Government, including but not limited
to, any material or substance which is (i) defined as a "hazardous waste",
"hazardous material", "hazardous substance", "extremely hazardous waste" or
"restricted hazardous waste" under any provision of law of the state in which
any real property of the Contributed Entities is situated, (ii) petroleum or
petroleum based, (iii) asbestos, (iv) polychlorinated biphenyl, (v) radioactive
material, (vi) designed a "hazardous substance" pursuant to Section 311 of the
Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1317), (vii)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conversation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section
6903) or (viii) defined as a "hazardous substance" pursuant to Section 101 of
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601). The term "Environmental
Laws" shall mean all statutes specifically described in the foregoing sentence
and all federal, state and local environmental health and safety statutes,
ordinances, codes, rules, regulations, orders and decrees regulating, relating
to or imposing liability or standards concerning or in connection with Hazardous
Materials.

                  (g) OWNERSHIP OF PROPERTIES. Each of the Contributed Entities
(i) is the sole owner of its respective properties and (ii) has good, valid and
marketable title to such properties, free and clear of all Liens other than
Permitted Exceptions (as hereafter defined).

                  The term "Permitted Exceptions" shall mean in respect of real
property or any interest or estate therein: (1) zoning laws and ordinances; (2)
any deeds of trust or mortgages listed

                                       E-2

<PAGE>   60

as exceptions to title in the most recent title commitments to insure title
issued by _____________ relating to the properties of the Contributed Entities
and delivered to the General Partner in connection with the execution of this
Agreement (the "Title Commitments"); (3) any laws, ordinances, Liens, easements,
rights of way, restrictions, exemptions, reservations, conditions, limitations,
covenants, adverse rights or interests described as exceptions on Schedule B (or
any other applicable Schedule) of the Title Commitments; provided that any
Contributed Partnership's property is not in violation thereof or, if in
violation, provided that the same do not require the demolition, vacation or
cessation of the present use of any portion of the improvements material to such
property or require the discontinuance of the use of all or any material portion
of such property for its present use; (4) any other easements, restrictions,
reservations and encumbrances which do not individually or in the aggregate (A)
impair the use of any such property in the operation of the business of the
respective Contributed Partnership or (B) detract from the value of such
property for the purpose of such business; and (5) taxes and assessments, both
general and special, which are a lien but not yet due and payable.

                  (h) ABSENCE OF UNDISCLOSED LIABILITIES AND CONTRACTUAL
OBLIGATIONS. Except for liabilities arising in the ordinary course of business
since the date of the Contributed Entities' financial statements as of and for
the period ended June 30, 1999, the Contributed Entities have no liabilities of
any nature, whether matured or unmatured, fixed or contingent (regardless of
whether the disclosure thereof otherwise would be required by generally accepted
accounting principles) which could have, individually or in the aggregate, a
material adverse effect upon such Contributed Partnership or the Partnership.
There are no Significant Agreements (as hereinafter defined) of a Contributed
Partnership other than as previously disclosed to the General Partner.

                  For purposes hereof, "Significant Agreement" of a Contributed
Partnership means and includes any of the following to which such entity is a
party or by which it or any of its assets or properties may be subject or bound:
(1) all agreements, instruments and documents evidencing, securing or pertaining
to contractual obligations of a Contributed Partnership that involve annual
payments or receipts in excess of $50,000.00; (2) all leases involving real
property; and (3) all mortgages and deeds of trust encumbering any real
property.

                  (i) SIGNIFICANT AGREEMENTS; BINDING AGREEMENTS. Each of the
Significant Agreements is valid and binding and in full force and effect,
enforceable against the Contributed Partnership which is a party thereto in
accordance with its terms, subject to the bankruptcy or insolvency of such
parties, similar laws of general applicability relating to or affecting
creditors' rights generally, to general equity principles and to the discretion
of any court in granting any relief or issuing any order and to the
unenforceability of attorneys' fees provisions. Such Contributed Partnership is
not in default in the performance of any obligation thereunder, and no event has
occurred which, with the giving of notice or lapse of time or both, would
constitute a default thereunder or permit the other party to terminate the
rights of such Contributed Partnership thereunder.

                  (j) LITIGATION. There are no claims, actions, suits,
proceedings or investigations pending, or, to the Warranting Partners'
knowledge, threatened, before any court,

                                       E-3

<PAGE>   61

governmental unit or any arbitrator in respect of any Contributed Partnership or
its assets.

                  (k) TRANSFER TAXES. There are no transfer taxes payable,
accruing or otherwise arising out of the transfer of the Contributed Partnership
Interests or the Contributed Property to the Partnership, the admission of the
General Partner to this Partnership or arising out of any of the transactions
specified in this Agreement that are expected to occur contemporaneously or
concurrent with or immediately after the execution hereof, which shall not have
been paid by the Limited Partners.

                  (l) PROJECT IMPROVEMENTS. To the Warranting Partners' best
knowledge, all buildings and improvements on the property owned by each
Contributed Partnership, and all tangible personal property, equipment and
fixtures constituting a part thereof, are in good condition and repair, and the
roofs, walls and foundations of the buildings are free from leaks and seepage of
moisture. To the best knowledge of the Warranting Partners, there is no
defective condition (latent or otherwise) in respect of the buildings and
improvements on the property owned by any Contributed Partnership.

                  (m) PROJECT EQUIPMENT; UTILITIES. The equipment located at the
property owned by each Contributed Entity is sufficient to permit the full
operation of the improvements for their respective intended purposes. All water,
sewer, gas, electric, telephone and drainage facilities and all of the utilities
required by law for the normal operation of the property owned by the
Contributed Entities are installed to the property line and are connected with
valid permits, are in good working order and are adequate to serve such property
in full compliance with law.

                  (n) CONDEMNATION PROCEEDINGS. No proceedings have been
commenced or threatened by any authority having the power of eminent domain to
condemn any part of the land or improvements relating to any of the properties
owned by the Contributed Entities.

                  (o) INSURANCE. The Warranting Partners have not received any
notices from any insurance company of any defects or inadequacies in any
property owned by a Contributed Entity or any part thereof which would affect
adversely the insurability of such property, and each such property complies
with the requirements of all insurance carriers providing insurance therefor.

                  (p) ACCURACY OF INFORMATION. All of the information provided
to the General Partner by the Warranting Partners and/or the Contributed
Entities (and/or the affiliates, agents, and advisors of any of them) in respect
of the Contributed Entities and/or the Initial Properties is complete and
accurate in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make such
Information, in light of the circumstances under which such Information was
provided, not misleading.

                  For the purposes of the representations and warranties made
pursuant to this Exhibit E, a statement that a fact is true to "the Warranting
Partner's best knowledge" means that, after due investigation, none of the
following Persons actually knows such statement to be untrue.

                                       E-4<PAGE>   1

                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT
                              --------------------

                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into this 28th day of December, 1999, at Cleveland, Ohio, by and between
LIBERTY SELF-STOR, INC., a Maryland corporation (hereinafter referred to as
"Employer"), and THOMAS J. SMITH (hereinafter referred to as "Employee").

                                    RECITALS:

                  Employer desires to offer Employee an opportunity to work for
Employer as President and Chief Operating Officer, upon the terms and conditions
hereinafter set forth, and Employee desires to accept such offer. Accordingly,
the parties agree as follows:

                  1. EMPLOYMENT. Employer hereby employs Employee and Employee
agrees to be employed by Employer as President and Chief Operating Officer, for
a term of two (2) years, commencing on the date that the reincorporation of
Meridian Point Realty Trust '83 into Liberty Self-Stor, Inc. is approved by the
shareholders of Meridian Point Realty Trust '83 and terminating two years from
that date (hereinafter referred to as the "Employment Period"). Thereafter, the
Employment Period shall be automatically renewed for additional, subsequent and
consecutive one (1) year terms, unless either Employer or Employee gives written
notice to the other of the intent to terminate this Agreement at least sixty
(60) days prior to the end of the then current term, in which event the
Employment Period shall end at the end of the then current term.

                  2. COMPENSATION. During the Employment Period, Employee shall
receive as compensation:

                  (a) Salary at the annual rate of $125,000, payable not less
frequently than

                                        1

<PAGE>   2

semi-monthly;

                     (b) The right to participate in all corporate employee
benefit programs offered to employees by Employer;

                     (c) Bonuses as determined in the sole discretion of
Employer's Board of Directors;

                     (d) Two weeks vacation each calendar year, commensurate
with Employer's vacation policy; and

                     (e) Use of a company car of Employee's choosing, including
all expenses related to the use of such car with the exception of gasoline.

                  3. DUTIES. During the Employment Period, the Board of
Directors of Employer shall be entitled to establish the business hours,
conditions of employment, job assignments, duties and responsibilities of
Employee hereunder, and to modify the foregoing from time to time. Employee
shall devote all of his business efforts to Employer.

                  4. EXPENSES. Employer shall reimburse Employee for all
reasonable and necessary business expenses incurred by Employee on behalf of
Employer during the Employment Period.

                  5. DEATH OF EMPLOYEE. If Employee should die during the
Employment Period, Employer shall continue to pay compensation to Employee's
wife (or if at the time of Employee's decease Employee has no wife, then to his
beneficiaries) for a period of ninety days at the rate of compensation earned by
Employee immediately prior to his death. The amount of the bonus, if any, which
Employee is to receive under paragraph 2 for such year shall be prorated for the
portion of the year beginning on the first day of the Employment Period (or the
most recent anniversary thereof) and ending upon the date of Employee's death.

                                        2

<PAGE>   3

                  6. DISABILITY OF EMPLOYEE.

                     (a) In the event that Employee shall become mentally or
physically disabled (as hereinafter defined) during the Employment Period,
Employer shall continue to pay compensation to Employee, at the rate of
compensation earned by Employee immediately prior to his disability, for a
period of six months after the onset of such disability. If, at the end of such
period, Employee shall continue to be so disabled Employer may elect, upon ten
days prior written notice, to discontinue payments of compensation. Employer
shall have no further duties or obligations hereunder. The amount of the bonus,
if any, which Employee is to receive under paragraph 2 for such year shall be
prorated for the portion of the year ending upon the end of the period described
in this paragraph.

                     (b) If Employee, within six months after he had initially
become mentally or physically disabled, shall recover from such mental or
physical disability so as to be able to again perform the duties required of him
hereunder, he shall be entitled to return to work. Upon such return to work, all
of the terms and conditions hereof shall be reinstituted and shall continue in
full force and effect as if no such disability had occurred. However, if
following such return to work, Employee shall once again become mentally or
physically disabled so as to be unable to perform the duties required of him
hereunder, and such disability shall continue for a period of ninety consecutive
days, Employer may, upon ten days prior written notice, terminate this
Agreement. Upon such termination, Employer shall have no further obligations to
Employee hereunder. The amount of the bonus, if any, which Employee is to
receive under paragraph 2 for such year shall be prorated for the portion of the
year ending upon the end of the period described in this paragraph.

                     (c) For purposes of this paragraph 6, Employee shall become
"mentally or physically disabled" if (i) Employee has been declared legally
incompetent by a final court

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<PAGE>   4

decree, (ii) Employee receives disability insurance benefits from any disability
income insurance policy maintained by Employer for a period of six (6)
consecutive months, or (iii) the Board shall find, on the basis of medical
evidence satisfactory to the Board, that as a result of a mental or physical
condition Employee is unable to perform his normal duties of employment
hereunder or is prevented from engaging in the same level of performance as he
engaged in prior to the onset of such condition, and that such disability is
likely to continue for a substantial period of time. Such decision of the Board
shall be referred to hereinafter as a "Disability Determination."

                     (d) The date on which the disability will be deemed to have
occurred shall be the day after Employee last performed the services for
Employer which are required of him pursuant to this Agreement, which performance
of services was discontinued because of the condition which gave rise to the
court decree of legal incompetence, the payment of disability insurance benefit,
or the Disability Determination, whichever is applicable.

                     (e) In the event that Employee disagrees with the
Disability Determination, Employee shall be entitled to request that the Board
reconsider its decision. Such request shall be in writing, shall be delivered
within thirty (30) days of the date on which the Board advised Employee of the
Disability Determination, and shall be supported by medical evidence from a
physician selected and paid for by Employee. If the Board does not grant
Employee's request for reconsideration, Employee may advise the Board, in
writing within thirty (30) days, of his desire to appeal. At that time, a
physician selected by the Board and the physician who supported Employee's
request for reconsideration shall choose a third consulting physician to decide
the dispute. Such physician (hereinafter, the "Arbitrator") must be
board-certified in the specialty most closely related to the nature of the
disability alleged to exist. The expenses of the Arbitrator shall be borne
equally by

                                        4

<PAGE>   5

Employer and Employee. The decision of the Arbitrator shall be final and binding
and shall be conclusive on the issue of the disability of the Employee (or lack
thereof).

                  7. TERMINATION.

                     (a) TERMINATION FOR CAUSE. Employer may terminate
Employee's employment hereunder at any time for cause, which shall be deemed to
include but not be limited to the following:

                         (i) Employee's engaging in fraud, misappropriation of
                     funds, embezzlement or like conduct committed against
                     Employer.

                         (ii) Employee's conviction of a felony.

                         (iii) Employee's material violation of a generally
                     recognized policy of Employer.

                         (iv) Employee's material violation of any provision of
                     this Agreement.

In the event of such a termination for cause, Employer shall have no further
obligation to Employee pursuant to this Agreement after the date of termination.

                     (b) TERMINATION WITHOUT CAUSE. Employer may elect to
terminate Employee's employment for any reason other than for cause (pursuant to
subparagraph (a) above) prior to the expiration of the Employment Period. In the
event of a termination without cause, Employer shall be obligated (i) to
continue to pay the salary amount set forth in paragraph 2(a) above for one year
following the date of termination, and (ii) to pay to Employee any bonus earned
but not yet paid on the date of termination, prorated to reflect the portion of
the bonus computation period during which Employee actually worked; provided
however that all other employment benefits such as use of a company car shall
immediately cease. The amounts to be paid to Employee pursuant to this
subparagraph are

                                        5

<PAGE>   6

intended by the parties to be in settlement of any and all claims of Employee
arising out of or related to Employee's employment with Employer, including,
without limitation, the termination of such employment, any express or implied
employment agreement, this Agreement, or the breach thereof (collectively,
"Employment Claims"). In consideration of such payment, Employee hereby releases
and waives any and all Employment Claims against Employer, and covenants not to
sue Employer in connection with any Employment Claim. In further consideration
for such release and waiver, it is agreed that Employee shall not be required to
mitigate damages, by seeking other employment or otherwise, and Employer shall
not be entitled to set off against amounts payable to Employee pursuant to this
subparagraph any amounts earned by Employee from other employment during the
balance of the Employment Period.

                  8. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. As a material
inducement to Employer to enter into this Agreement, Employee represents and
warrants as follows:

                     (a) Neither Employee, nor any member of Employee's
immediate family, nor any entity in which Employee has a substantial interest
(i) has any direct or indirect ownership interest in any entity with which
Employer or any affiliate of Employer has a business relationship or which
competes with Employer or any affiliate of Employer, except that the ownership
of 1% or less of any class of securities of a publicly-held corporation shall
not constitute a breach of this representation and warranty, and (ii) is, and
will not become during the term of this Agreement, directly or indirectly,
interested in any material contract with Employer or any affiliate of Employer
(other than this Agreement).

                     (b) Neither Employee's execution of this Agreement nor
Employee's employment by Employer hereunder will breach any agreement or
covenant entered into by

                                        6

<PAGE>   7

Employee that is currently in effect.

                  9. COVENANTS AGAINST COMPETITION. Employee recognizes and
acknowledges that (i) the principal business of Employer will be the operation,
management, development, expansion, ownership and acquisition of self-storage
facilities (the "Company Business"); and (ii) the work of Employee for Employer
has brought Employee and will continue to bring him into close contact with many
confidential affairs not readily available to the public. Accordingly, Employee
covenants and agrees that:

                     (a) NON-COMPETE. During the Employment Period and for two
(2) years following the termination of Employee's employment hereunder, however
caused (the "Restricted Period"), Employee shall not, directly or indirectly,
(A) within the State of Ohio, (B) in any other state in which Employer has
actively engaged in the Company Business during any part of the term of
Employee's employment with Employer, and (C) with respect to any customer or
supplier with whom Employer has had material dealings during any part of the
term of Employee's employment with Employer, compete with Employer in any
manner, on behalf of himself or any other person, firm, business, corporation or
other entity (each such other person, firm, business or other entity being
referred to hereinafter as a "Person"), including, without limitation, that
Employee shall not (i) engage in the Company Business for his own account; (ii)
except for employment of Employee by Employer or an affiliate of Employer, enter
the employ of, or render any services to, any Person engaged in the Company
Business; (iii) request or instigate any account or customer of Employer to
withdraw, diminish, curtail or cancel any of its business with Employer, or (iv)
become interested in any Person engaged in the Company Business as an owner,
partner, shareholder, officer, director, licensor, licensee, principal, agent,
employee, trustee, consultant or in any other relationship or capacity;
provided, however, that Employee may own, directly or

                                        7

<PAGE>   8

indirectly, solely as an investment, securities of any corporation which are
publicly-traded if he (A) is not a controlling person of, or a member of a group
which controls, such corporation, or (B) does not, directly or indirectly, own
1% or more of any class of securities of such corporation. In the event of
Employee's breach of any provision of this paragraph 9, the running of the
Restricted Period shall be automatically tolled (i.e., no part of the Restricted
Period shall expire) from and after the date of the first such breach.

                     (b) CONFIDENTIAL INFORMATION. Employee recognizes and
acknowledges that confidential information, including, without limitation,
information, knowledge or data (i) of a technical nature such as but not limited
to methods, know-how, formulae, compositions, processes, discoveries, machines,
inventions, products, product specifications, computer programs and similar
items or research projects; (ii) of a business nature such as but not limited to
information about cost, purchasing, profits, market, sales or customers,
including lists of customers, and the financial condition of Employer; (iii)
pertaining to future developments such as but not limited to research and
development or future marketing or merchandising, and trade secrets of Employer;
and (iv) all other matters which Employer treats as confidential (the items
described above being referred to collectively hereinafter as "Confidential
Information"), are valuable, special and unique assets of Employer. During and
after the Restricted Period, Employee shall keep secret and retain in strictest
confidence, and shall not use for the benefit of himself or others except in
connection with the business and affairs of Employer, any and all Confidential
Information learned by Employee before or after the date of this Agreement, and
shall not disclose such Confidential Information to anyone outside of Employer
either during or after employment by Employer, except as required in the course
of performing duties of his employment with Employer, without the express
written consent of Employer or as required by law.

                                        8

<PAGE>   9

                     (c) PROPERTY OF EMPLOYER. Employee agrees to deliver
promptly to Employer all drawings, blueprints, manuals, letters, notes,
notebooks, reports, sketches, formulae, computer programs and files, memoranda,
customer lists and all other materials relating in any way to the Company
Business and in any way obtained by Employee during the period of his employment
with Employer which are in his possession or under his control, and all copies
thereof, (i) upon termination of Employee's employment with Employer, or (ii) at
any other time at Employer's request. Employee further agrees he will not make
or retain any copies of any of the foregoing and will so represent to Employer
upon termination of his employment.

                     (d) EMPLOYEES OF EMPLOYER. During the Restricted Period,
Employee shall not, directly or indirectly, hire, solicit or encourage to leave
the employment of Employer or its affiliates any employee of Employer or its
affiliates or hire any such employee who has left the employment of Employer or
its affiliates within one year of the termination of such Employee's employment
with Employer or its affiliates.

                     (e) CONSULTANTS OF THE EMPLOYER. During the Restricted
Period, Employee shall not, directly or indirectly, hire, solicit or encourage
to cease to work with Employer or its affiliates any consultant then under
contract or under contract within the prior year with Employer or its
affiliates.

                  10. RIGHTS AND REMEDIES UPON BREACH. Both parties recognize
that the services to be rendered under this Agreement by Employee are special,
unique and of extraordinary character. If Employee breaches, or threatens to
commit a breach of, any of the provisions of paragraph 9 (the "Restrictive
Covenants"), then Employer shall have the following rights and remedies, each of
which shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of,

                                        9

<PAGE>   10

any other rights and remedies available to Employer under law or in equity:

                     (a) SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to Employer and that money
damages will not provide adequate remedy to Employer. As to the covenants
contained in paragraph 9, specific performance shall be for a period of time
equal to the unexpired portion of the Restricted Period, giving full effect to
the tolling provision of paragraph 9, and beginning on the earlier of the date
on which the court's order becomes final and non-appealable, and the date on
which all appeals have been exhausted.

                     (b) ACCOUNTING. The right and remedy to require Employee to
account for and pay over to Employer all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by him as the result of any transactions constituting a breach of any
of the Restrictive Covenants, and Employee shall account for and pay over such
Benefits to Employer.

                     (c) BLUE-PENCILLING. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
scope, duration and/or geographical area covered by such provision, such court
shall have the power to reduce the scope, duration or area of such provision
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

                 11. LIMITATIONS ON AUTHORITY. Notwithstanding anything else
herein contained, Employee, without the consent and direction of the Board of
Directors of Employer, may not on behalf of Employer:

                     (a) Borrow or loan money, except as required by his duties
                 in the ordinary course of business.

                                       10

<PAGE>   11

                     (b) Assign, transfer, pledge, compromise, or release any
                 claims or debts of Employer, except in the ordinary course of
                 business.

                     (c) Make, execute or deliver any assignment for the benefit
                 of creditors, any bond, confession of judgment, chattel
                 mortgage, deed, guaranty, indemnity bond, contract to sell or
                 contract of sale of any of the assets of Employer.

                     (d) Lease or mortgage with respect to any of Employer's
                 corporate real property or any interest therein, or enter into
                 any such contract for such purposes, except in the ordinary
                 course of business.

                     (e) Pledge or hypothecate or in any manner whatsoever
                 transfer any interest in the assets of Employer.

                     (f) Materially change or alter Employer's present lines of
                 business.

                     (g) Do any act outside of the normal course of business
                 which could have a materially adverse effect on the business
                 and/or financial condition of Employer. Any violation of the
                 terms of this paragraph shall be deemed to be a material
                 violation of a provision of this Agreement.

                 12. INDEMNIFICATION. Employer shall indemnify Employee (and
his legal representatives or other successors) to the extent permitted by law
and Employee shall be entitled to the protection of any insurance policies which
Employer may elect to maintain generally for the benefit of its directors or
officers against all costs, charges and expenses whatsoever incurred or
sustained by Employee in connection with any action, suit or proceeding to which
he may be made a party by reason of his being or having been an employee,
director or officer of Employer or any other corporation that he served in any
such capacity at the request of Employer.

                 13. NON-ASSIGNMENT. This Agreement is a personal services
contract and

                                       11

<PAGE>   12

it is expressly agreed that the rights and interests of Employee and Employer
hereunder may not be sold, transferred, assigned, pledged or hypothecated;
provided, however, that Employer may assign its rights and obligations hereunder
to a wholly-owned subsidiary of Employer, whether presently existing or formed
after the date hereof.

                 14. BINDING EFFECT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their heirs, representatives and
successors.

                 15. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.

                 16. EFFECT OF CAPTIONS. The captions in this Agreement are
included for convenience only and shall not in any way effect the interpretation
or construction of any provision hereof.

                 17. REMEDIES CUMULATIVE; NO WAIVER. All remedies specified
herein or otherwise available shall be cumulative and in addition to any and
every other remedy provided hereunder or now or hereafter available. No waiver
or failure (intentional or unintentional) to act with respect to any breach or
default hereunder shall be deemed to be a waiver with respect to any subsequent
breach or default, whether of a similar or different nature.

                 18. NOTICES. All notices, requests, demands or other
communications hereunder shall be sent by registered or certified mail to:

                             To Employer:  Meridian Point Realty Trust '83
                                           8500 Station St., Suite 100
                                           Mentor, Ohio 44060

                                       12

<PAGE>   13

                             Copy to:      Marc C. Krantz, Esq.
                                           Kohrman Jackson & Krantz P.L.L.
                                           20th Floor, One Cleveland Center
                                           1275 East Ninth Street
                                           Cleveland, Ohio   44114-1793

                             To Employee:  Thomas J. Smith
                                           7573 Salida Road
                                           Mentor-on-the-Lake, Ohio 44160

or to such other address as a party may designate by notice in accordance with
this paragraph.

                 19. GOVERNING LAW; JURISDICTION; LIMITATIONS ON FILING ACTIONS.
This Agreement shall be governed by and construed in accordance with the
substantive law of the State of Ohio. The parties intend to and hereby do confer
jurisdiction upon the courts of any jurisdiction within the State of Ohio to
determine any dispute arising out of or related to this Agreement, including the
enforcement and the breach hereof. The parties agree that any claim arising out
of or related to this Agreement, or the breach hereof, must be filed within six
(6) months after the date of the alleged breach, and in any event within six
months after the date of termination of Employee's employment, that any claim
which is not filed within such six month period is waived, and that any statute
of limitations to the contrary is hereby waived.

                  20. ACKNOWLEDGMENT. Employee acknowledges that: (i) he has
carefully read all of the terms of this Agreement, and that such terms have been
fully explained to him; (ii) he understands the consequences of each and every
term of this Agreement; (iii) he has had sufficient time and an opportunity to
consult with his own legal advisor prior to signing this Agreement, and that
Employer has encouraged him to seek legal counsel prior to signing this
Agreement; (iv) he had other employment opportunities at the time he entered
into this Agreement; (v) he specifically understands that by signing this
Agreement he is giving up

                                       13

<PAGE>   14

certain rights he may have otherwise had, and that he is agreeing to limit his
freedom to engage in certain employment during and after the termination of this
Agreement, and (vi) the limitations to his right to compete contained in this
Agreement represent reasonable limitations as to scope, duration and
geographical area, and that such limitations are reasonably related to
protection which Employer reasonably requires.

                  21. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between Employer and Employee and supersedes all
prior agreements and understandings relating to the subject matter hereof.

                                       14

<PAGE>   15

                  IN WITNESS WHEREOF, the undersigned have hereunto set their
hands on the date first hereinabove mentioned.

                                  LIBERTY SELF-STOR, INC.

                                  By:  /s/ Richard M. Osborne
                                     --------------------------------------
                                  Its: Chairman and Chief Executive Officer
                                       ------------------------------------

                                  /s/ Thomas J. Smith
                                  -------------------

                                  Thomas J. Smith

                                       15

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