Document:

EXHIBIT 10.1(c)

              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
                          OF THE OPERATING PARTNERSHIP

                        ACADIA REALTY LIMITED PARTNERSHIP

                AMENDED & RESTATED LIMITED PARTNERSHIP AGREEMENT

          THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this
"Agreement") has been executed and delivered as of the 22nd day of March, 1999,
by and among Acadia Realty Trust, as general partner (the "General Partner"), a
Maryland real estate investment trust, and each of the persons listed as limited
partners on Annex A, (the "Limited Partners") (the General Partner and the
Limited Partners being each a "Partner" and collectively, the "Partners").

                                   BACKGROUND

          A.    Acadia Realty Limited Partnership (the "Partnership") was duly
organized on May 13, 1993 under the Delaware Revised Limited Partnership Act
under the name "Mark Centers Limited Partnership."

          B.    The Limited Partnership Agreement of the Partnership was entered
into as of June 3, 1993 (the "Original Agreement") and was amended by the First
Amendment dated as of June 6, 1996, the Second Amendment dated as of August 12,
1998, and the Third Amendment dated as of December 31, 1998.

          C.    The General Partner completed its initial public offering in
May,1993 and certain of the transactions contemplated by the Original Agreement
have previously been completed or are no longer contemplated.

          D.    The Partners desire to amend and restate the Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:

          1. Partnership.
             -----------

          1.1 Continuation. The Partners hereby continue the Partnership which
was formed upon the filing of the Certificate of Limited Partnership of the
Partnership (the "Certificate") with the Secretary of State of the State of
Delaware in compliance with the provisions of the Act, for the limited purposes
set forth herein. Except as otherwise specifically provided in this Agreement,
the rights and obligations of the Partners and the management and termination of
the Partnership shall be governed by the Act.

796300.10

<PAGE>

          1.2    Name. The name of the Partnership is "Acadia Realty Limited
Partnership" or such other name as may from time to time be selected by the
General Partner, provided that prompt notice of any such other name selected
shall be given to the other Partners. The General Partner shall cause to be
executed and filed on behalf of the Partnership such assumed or fictitious name
certificates as may be required to be filed in connection with the business of
the Partnership.

          1.3    Registered Office and Agent. The address of the Partnership's
registered office in the State of Delaware is 32 Loockerman Square, Suite 100L,
Dover, Kent County, Delaware 19901, and the name of the Partnership's registered
agent at such address is The Prentice-Hall Corporation System, Inc. The General
Partner, in its discretion, may from time to time change such registered office
and agent.

          2.    Definitions.
                -----------

          2.1    As used in this Agreement, the following terms shall have the
meanings set forth respectively after each:

          "Act" shall mean the Delaware Revised Limited Partnership Act, as
amended from time to time, and any successor statute.

          "Adjusted Capital Account Deficit" shall mean, at any time, the then
deficit balance in the Capital Account of a Partner, after giving effect to the
following adjustments:

          (i) credit to such Capital Account any amounts that such Partner is
      obligated to restore or is deemed obligated to restore as described in the
      penultimate sentences of Regulations Section 1.704-2(g)(1) and Regulations
      Section 1.704-2(i)(5), or any successor provisions; and

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

          "Agreement" shall mean this Amended and Restated Limited Partnership
Agreement, as it may be amended from time to time.

          "Bankruptcy" of a Partner shall mean (a) the filing by a Partner of a
voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
(or corresponding provisions of future laws) or any other Federal or state
insolvency law, or a Partner's filing an answer consenting to or acquiescing in
any such petition, (b) the making by a Partner of any assignment for the benefit
of its creditors or the admission by a Partner in writing of its inability to
pay its debts as they mature, or (c) the expiration of sixty (60) days after the
filing of an involuntary petition under Title 11 of the United States Code (or
corresponding provisions of future laws), seeking an

796300.10
                                       -2-

<PAGE>

application for the appointment of a receiver for the assets of a Partner,or an
involuntary petition seeking liquidation, reorganization, arrangement or
readjustment of its debts under any other Federal or state insolvency law,
provided that the same shall not have been vacated, set aside or stayed within
such 60-day period.

          "Capital Account" shall mean the capital account maintained by the
Partnership for each Partner as described in Section 3.4 hereof.

          "Capital Cash Flow" shall have the meaning provided in Section 8.2
hereof.

          "Capital Contribution" shall mean, when used in respect of a Partner,
the initial capital contribution of such Partner as set forth in Section 3.1
hereof and any other amounts of money or the fair market value of other property
contributed by such Partner to the capital of the Partnership pursuant to the
terms of this Agreement, including the Capital Contribution made by any
predecessor holder of the Partnership Interest of such Partner.

          "Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time, and any successor statute.

          "Contributing Partner" shall have the meaning provided in Section
3.2(B)hereof.

          "Depreciation" shall mean for any fiscal year or portion thereof of
the Partnership an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such period for
Federal income tax purposes, except that if the Gross Asset Value of an asset
differs from its adjusted basis for Federal income tax purposes at the beginning
of such period, Depreciation shall be an amount that bears the same relationship
to such beginning Gross Asset Value as the depreciation, amortization or cost
recovery deduction in such period for Federal income tax purposes bears to such
beginning adjusted tax basis; provided, however, that if the adjusted basis for
Federal income tax purposes of an asset at the beginning of such period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.

          "General Partner" means Acadia Realty Trust or any successor entity.

          "Gross Asset Value" means, with respect to any Partnership asset, the
asset's adjusted basis for Federal income tax purposes, except as follows:

          (i) The initial Gross Asset Value of any asset contributed by a
      Partner to the Partnership shall be the gross fair market value of such
      asset, as determined by the General Partner;

796300.10
                                       -3-

<PAGE>

          (ii) The Gross Asset Value of all Partnership assets shall be adjusted
      to equal their respective gross fair market value, as determined by the
      General Partner, as of the following times: (a) the acquisition of an
      additional interest in the Partnership by any new or existing Partner in
      exchange for more than a de minimis Capital Contribution; (b) the
      distribution by the Partnership to a Partner of more than a de minimis
      amount of Partnership property as consideration for an interest in the
      Partnership; and (c) the liquidation of the Partnership within the meaning
      of Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that
      adjustments pursuant to clauses (a) and (b) above shall be made only if
      the General Partner reasonably determines that such adjustments are
      necessary or appropriate to reflect the relative economic interests of the
      Partners in the Partnership;

          (iii) The Gross Asset Value of any Partnership asset distributed to
      any Partner shall be adjusted to equal the gross fair market value of such
      asset on the date of distribution as determined by the General Partner;
      and

          (iv) The Gross Asset Values of Partnership assets shall be increased
      (or decreased) to reflect any adjustments to the adjusted basis of such
      assets pursuant to Code Sections 734(b) or 743(b), but only to the extent
      that such adjustments are taken into account in determining Capital
      Accounts pursuant to Regulations Section 1.704- 1(b)(2)(iv)(m) and
      paragraph (vi) of the definition of Profits and Losses and Section 7.3(G)
      hereof; provided, however, that Gross Asset Values shall not be adjusted
      pursuant to this paragraph (iv) to the extent the General Partner
      determines that an adjustment pursuant to paragraph (ii) above is
      necessary or appropriate in connection with a transaction that would
      otherwise result in an adjustment pursuant to this paragraph (iv).

      If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (i), (ii) or (iv) above, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.

          "Limited Partner" shall mean the Persons listed as limited partners on
Annex A or any Person (i) who becomes a Limited Partner pursuant to the terms
and conditions of this Agreement, and (ii) who holds a Partnership Interest.
"Limited Partners" means all such Persons.

          "Nonrecourse Deductions" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

          "Operating Cash Flow" shall have the meaning provided in Section 8.1
hereof.

796300.10
                                       -4-

<PAGE>

          "OP Units" shall mean those units of common Partnership Interest
issued prior to the date hereof and any additional units of common Partnership
Interest issued pursuant to this Agreement.

          "Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).

          "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i)(2).

          "Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i).

          "Partners" shall mean, collectively, the General Partner and each
Limited Partner, or any additional or successor partners of the Partnership.
Reference to a Partner shall be to any one of the Partners.

          "Partnership Interest" shall mean the ownership interest of a Partner
in the Partnership at any particular time, including the right of such Partner
to any and all benefits to which such Partner may be entitled as provided in
this Agreement, and to the extent not inconsistent with this Agreement, under
the Act, together with the obligations of such Partner to comply with all of the
terms and provisions of this Agreement and of the Act; provided, however, that
in the event the General Partner issues classes of Partnership Interests to
Limited Partners pursuant to Section 3.2(B) hereof other than the OP Units, the
term Partnership Interests shall mean with respect to each class of Partnership
Interests, a fractional, undivided share of the Partnership Interests of all
Partners in such class.

          "Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-3(b)(3) and 1.704-2(d).

          "Percentage Interest" shall mean with respect to a Partner holding a
Partnership Interest of any class issued hereunder, its interest in such class
determined by dividing the Partnership Interests of such class owned by such
Partner by the total number of Partnership Interests of such class then
outstanding multiplied by the aggregate Percentage Interest allocable to such
class of Partnership Interests. For such time or times as the Partnership shall
at any time have outstanding more than one class of Partnership Interests, the
Percentage Interest attributable to each class of Partnership Interests shall be
determined as set forth in Section 3.2(C) hereof.

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

796300.10
                                       -5-

<PAGE>

          "Preferred Units" shall mean those units of preferred Partnership
Interest issued prior to the date hereof and any additional units of preferred
Partnership Interest issued pursuant to this Agreement.

          "Profits" and "Losses" shall mean for each fiscal year or portion
thereof an amount equal to the Partnership's items of taxable income or loss for
such year or period, determined in accordance with section 703(a) of the Code
with the following adjustments:

          (i) any income which is exempt from Federal income tax and not
      otherwise taken into account in computing Net Profits or Net Losses shall
      be added to (or subtracted from) taxable income (or loss);

          (ii) any expenditures of the Partnership described in Code Section
      705(a)(2)(B) or treated as Section 705(a)(2)(B) expenditures under
      Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
      account in computing Profits or Losses, will be subtracted from (or added
      to) taxable income (or loss);

          (iii) in the event that the Gross Asset Value of any Partnership asset
      is adjusted pursuant to the definition of Gross Asset Value contained in
      this Section 2, the amount of such adjustment shall be taken into account
      as gain or loss from the disposition of such asset for purposes of
      computing Profits and Losses;

          (iv) gain or loss resulting from any disposition of Partnership assets
      with respect to which gain or loss is recognized for Federal income tax
      purposes shall be computed by reference to the Gross Asset Value of the
      property disposed of, notwithstanding that the adjusted tax basis of such
      property differs from its Gross Asset Value;

          (v) in lieu of the depreciation, amortization and other cost recovery
      deductions taken into account in computing such taxable income or loss,
      there shall be taken into account Depreciation for such fiscal year or
      other period;

          (vi) to the extent an adjustment to the adjusted tax basis of any
      Partnership asset pursuant to Code Section 734(b) is required pursuant to
      Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
      determining Capital Accounts as a result of a distribution other than in
      complete liquidation of a Partner's Partnership Interest, the amount of
      such adjustment shall be treated as an item of gain (if the adjustment
      increases the basis of the asset) or loss (if the adjustment decreases the
      basis of the asset) from the disposition of the asset and shall be taken
      into account for purposes of computing Profits and Losses; and

          (vii) any items specifically allocated pursuant to Section 7.3 or
      Section 7.4 hereof shall not be considered in determining Profits or
      Losses.

796300.10
                                       -6-

<PAGE>

          "Real Estate Investment Trust" shall mean such term as defined in
Section 856 of the Code.

          "Regulations" shall mean the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).

          "REIT Requirements" is defined in Section 5(C) hereof.

          "Unit Certificates" is defined in Section 3.2(A) hereof.

          3.    Capital.
                -------

          3.1    Initial Capital. The Partners have previously made the Capital
Contributions set forth on Annex B:

          3.2    Issuance of Partnership Interests.

          A.    Outstanding Partnership Interests; Certificates. The aggregate
total of all Partnership Interests outstanding as of the date of this Agreement
is set forth on Annex A. Such Partnership Interests may, but shall not be
required to be, represented by certificates ("Unit Certificates") indicating
each Partner's Partnership Interests. In the event the General Partner issues a
class of Partnership Interests other than OP Units, the Unit Certificates
representing Partnership Interests of such class shall indicate the class,
terms, preferences and other restrictions or rights of such class of Partnership
Interests.

          B.    Additional Issuances of Partnership Interests. From time to
time, the General Partner, subject to the provisions of this Section 3.2(B) and
Section 3.2(D), shall cause the Partnership to issue additional Partnership
Interests (i) to existing or newly-admitted Partners (including itself) in
exchange for the contribution by a Partner (the "Contributing Partner") of
additional Capital Contributions to the Partnership, or (ii) to the General
Partner upon the issuance by the General Partner of (x) additional common shares
of beneficial interest in the General Partner ("Common Shares") not in
connection with the exchange of OP Units as provided in Section 3.8 hereof, or
(y) other capital shares, whether common or preferred (together with Common
Shares, the "Securities") provided that any net proceeds received by the General
Partner as a result of the issuance of such additional Securities are
contributed to the Partnership as additional Capital Contributions, in
accordance with Section 3.3(B) hereof (it being understood that the General
Partner may issue Common Shares in connection with the General Partner's 1993
Share Option Plan, the General Partner's Restricted Share Plan and employee
incentive plans that may, from time to time, be in effect, without receiving any
proceeds and that the issuance of such shares shall nonetheless entitle the
General Partner to additional OP Units).

796300.10
                                       -7-

<PAGE>

          The number of Partnership Interests issued to the Contributing Partner
under clause (i) of this Section 3.2(B) shall be equal to either (a) such amount
as may be fixed by agreement between the General Partner, in the General
Partner's sole discretion, and the Contributing Partner or (b) the quotient
(rounded to the nearest whole number) arrived at by dividing (x) the Gross Asset
Value of the property contributed as additional Capital Contributions (net of
any debt to which such property is subject or assumed by the Partnership in
connection with such contribution) by (y) the Market Price (as hereinafter
defined). The number of OP Units issued to the General Partner under clause (ii)
of this Section 3.2(B) shall be equal to the number of Common Shares issued. As
used in this Section 3.2(B), "Market Price" means the average, for the most
recent twenty (20) trading days for the Common Shares preceding the date on
which such OP Units are to be issued pursuant to this Section 3.2(B), of the
last reported sale price per Common Share at the close of trading on each such
date as reported by the Wall Street Journal (New York Edition) or such other
reputable stock price reporting service as may be selected by the General
Partner.

          Any additional Partnership Interests which may be issued may be OP
Units or other Partnership Interests in one or more classes, or one or more
series of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties which may be senior, pari passu or junior to OP Units,
all as shall be determined by the General Partner in its sole and absolute
discretion subject to Delaware law, including, without limitation (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests; (ii) the right of each such
class or series of Partnership Interests to share in Partnership distributions;
and (iii) the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership; provided that no such additional
Partnership Interests shall be issued to the General Partner unless either
(A)(1) the additional Partnership Interests are issued in connection with the
issuance of shares of Securities by the General Partner, which Securities have
designations, preferences and other rights such that the economic interests
attributed to such Securities are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner in accordance with this Section 3.2(B), and (2) subject to
any exceptions set forth in this Section 3.2(B), the General Partner shall make
a Capital Contribution to the Partnership in an amount equal to the proceeds
raised in connection with the issuance of such shares of the General Partner, or
(B) the additional Partnership Interests are issued to all the Partners in
proportion to their respective Percentage Interests.

          C.    Percentage Interest Adjustments. In the event that the
Partnership issues additional Partnership Interests (including additional
classes of Partnership Interests, (but excluding OP Units issued upon the
redemption of Preferred Units), the General Partner shall allocate to such
additional Partnership Interests a Percentage Interest in the Partnership equal
to a fraction, the numerator of which is equal to either (a) such amount as may
be fixed by agreement between the General Partner, in the General Partner's
sole discretion, and the Contributing Partner or (b) the amount of cash, if
any, plus the Gross Asset Value of the

796300.10
                                       -8-

<PAGE>

property, if any, contributed as additional Capital Contributions (net of any
debt to which such property is subject or assumed by the Partnership in
connection with such contribution) with respect to such additional Partnership
Interests and the denominator of which is equal to the fair market value (as
determined by the General Partner as of the date of such contribution taking
into account such contribution) of all the Partnership Interests for all
outstanding classes of Partnership Interests (including such additional
Partnership Interests). To the extent that any such issuance of additional
Partnership Interests results in an overall decrease (the "Percentage Decrease")
in the aggregate Percentage Interests in the Partnership represented by all of
the Partnership Interests that were outstanding before the issuance of the
additional Partnership Interests, the Percentage Decrease shall be allocated
among the classes of Partnership Interests outstanding prior to the issuance of
the additional Partnership Interests in accordance with such classes' respective
Percentage Interests in the Partnership as determined prior to the issuance of
the additional Partnership Interests. Similarly, to the extent that a redemption
by the General Partner of any Partnership Interests for cash results in an
overall increase (the "Percentage Increase") in the aggregate Percentage
Interests in the Partnership represented by the remaining Partnership Interests
outstanding after the redemption (the "Remaining Interests"), the Percentage
Increase shall be allocated among the classes of Remaining Interests by
multiplying the Percentage Increase by a fraction equal to the aggregate
pre-redemption Percentage Interests of all Remaining Interests of the particular
class divided by the aggregate pre-redemption Percentage Interests of all
Remaining Interests of all classes. Upon the redemption of any Preferred Units
for OP Units, the aggregate Percentage Interest allocated to that class of
Preferred Units shall be reduced by the total Percentage Interests attributable
to the redeemed Preferred Units (the "Preferred Redemption Percentage"), and the
aggregate Percentage Interest allocated to the OP Units shall be increased by
that Preferred Redemption Percentage.

          D.    From time to time, the General Partner shall cause the
Partnership to issue additional general Partnership Interests to the General
Partner in connection with the issuance by the General Partner of additional
Common Shares in exchange for OP Units as provided in Section 3.8 hereof. The
amount of general Partnership Interests issued under this Section 3.3(D) shall
be equal to the amount of OP Units exchanged for Common Shares (subject to the
anti-dilution protections set forth in Section 3.8).

          E.    If the Common Shares (or any other class of Securities of the
General Partner for which a class of Partnership Interests may be redeemed)
undergoes any split or reverse split, then without further action or consent by
the General Partner or any Limited Partner, each corresponding class of
Partnership Interests that is redeemable for Securities shall be split or
combined in accordance with the same ratio used to split or combine the
Securities. For example, if the Common Shares undergo a reverse 2 for 1 split
(i.e. every two shares of old Common Shares are converted into one share of new
Common Shares) then the corresponding class of Partnership Interests that are
redeemable for such Common Shares shall undergo a similar reverse split (i.e.
every two old OP Units shall be converted into one new OP Unit). Similarly, if
any class of Partnership Interests into which another class of

796300.10
                                       -9-

<PAGE>

Partnership Interests is convertible undergoes any split or reverse split, then
without further action or consent by the General Partner or any Limited Partner
the latter class of Partnership Interests shall be split or combined in
accordance with the same ratio used to split or combine the first class of
Partnership Interests.

          3.3 Additional Capital.

          A.    No Partner shall be assessed or, except as provided for in
Section 3.3(B) below, required to contribute additional funds or other property
to the Partnership. Any additional funds or other property required by
the Partnership, as determined by the General Partner in its sole discretion,
may, at the option of the General Partner and without an obligation to do so
(except as provided for in Section 3.3(B) below), be contributed by the
General Partner as additional Capital Contributions. If and as the General
Partner or any other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive additional Partnership Interests
as provided for in Section 3.2(B) above. The General Partner shall also have
the right (but not the obligation) to raise any additional funds required for
the Partnership by causing the Partnership to borrow the necessary funds from
third parties on such terms and conditions as the General Partner shall deem
appropriate in its sole discretion. If the General Partner elects to cause the
Partnership to borrow the additional funds, it may cause one or more of the
Partnership's assets to be encumbered to secure the loan. Except as provided
for in Section 3.3(C) below, no Limited Partner shall have the right to
contribute additional Capital Contributions to the Partnership without the
prior written consent of the General Partner.

          B.    (i) The net proceeds of any and all funds raised by or through
the General Partner through the issuance of additional Securities shall be
contributed to the Partnership as additional Capital Contributions, and in such
event the General Partner shall be issued additional Partnership Interests
pursuant to Section 3.2(B) above.

              (ii) If the Partnership requires funds at any time or from time to
time in excess of funds available to the Partnership through borrowings and
prior or additional Capital Contributions, the General Partner may, but shall
not be required to, borrow such funds from a financial institution or other
lender or through public debt offerings and lend such funds to the Partnership
on the same terms and conditions as are applicable to the General Partner.

          C.    So long as a dividend reinvestment plan is in effect for the
holders of the Common Shares, each Limited Partner shall have the right to
reinvest any or all cash distributions payable to it from time to time pursuant
to this Agreement by having some or all (as the Limited Partner elects) of such
distributions contributed to the Partnership as additional Capital
Contributions, and in such event the Partnership shall issue to each such
Limited Partner additional OP Units pursuant to Section 3.2(B) above. The
General Partner shall create and administer a reinvestment program to effect the
foregoing in substantial

796300.10
                                      -10-

<PAGE>

conformance with any dividend reinvestment program available from time to time
to holders of the Common Stock.

          3.4    Capital Accounts. A separate capital account("Capital Account")
shall be maintained for each Partner.

          A.    To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's distributive share of Profits
and any items in the nature of income or gain which are specifically allocated
pursuant to Section 7.3 or Section 7.4 hereof, and the amount of any Partnership
liabilities assumed by such Partner or which are secured by any Partnership
property distributed to such Partner.

          B.    To each Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Losses and any items in the nature of expenses or losses
which are specifically allocated pursuant to Section 7.3 or Section 7.4 hereof,
and the amount of any liabilities of such Partner assumed by the Partnership or
which are secured by any property contributed by such Partner to the
Partnership.

          C.    In the event all or a portion of a Partnership Interest is
transferred in accordance with the terms of this Agreement (including a transfer
of OP Units in exchange for Common Shares of the General Partner, pursuant to
Section 3.8), the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Partnership Interest.

          D.    In determining the amount of any liability for purposes of
Sections 3.4(A) and 3.4 (B) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.

          E.    This Section 3.4 and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Partnership, or the Partners) are computed
in order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributed to any Partner pursuant to Section 14 hereof upon the
dissolution of the Partnership or would otherwise not have a material adverse
effect on any Partner or any Partner's Capital Account. The General Partner also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the

796300.10
                                      -11-

<PAGE>

Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b) (2) (iv) (g), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b), provided, that such
adjustments or modifications, to the extent they may be made in the discretion
of the General Partner, shall not, either singly or in the aggregate, have a
material adverse effect on any Partner or any Partner's Capital Account.

          3.5    Interest on and Return of Capital.

          A.    No Partner shall be entitled to any interest on its Capital
Account or on its contributions to the capital of the Partnership.

          B.    Except as expressly provided for in this Agreement, not Partner
shall have the right to demand or to receive the return of all or any part of
his capital contributions to the Partnership and there shall be no priority of
one Partner over the other as to the return of capital contributions or
withdrawals or distributions of profits and losses. No Partner shall have the
right to demand or receive property other than cash in return for the
contributions of such Partner to the Partnership.

          3.6    Negative Capital Accounts. No Partner shall be required to pay
to the Partnership any deficit or negative balance which may exist in its
Capital Account.

          3.7    Limit on Contributions and Obligations of Partners. Neither the
Limited Partners nor the General Partner shall be required to make any
additional advance or contributions to or on behalf of the Partnership or to
endorse any obligations of the Partnership.

          3.8    Conversion of OP Units. Subject to the further provisions of
this Section 3.8, the General Partner hereby grants to each Limited Partner the
right to exchange any or all of the OP Units held by that Partner for Common
Shares, with one OP Unit being exchangeable for one Common Share. Such right
may be exercised by a Limited Partner at any time and from time to time upon
not less than ten (10) days prior written notice to the General Partner or at
such times as may be otherwise agreed to by the Limited Partner, on the one
hand, and the Partnership or the General Partner, on the other hand. The
General Partner shall at all times reserve and keep available out of its
authorized but unissued Common Shares, solely for the purpose of effecting the
exchange of OP Units for Common Shares, such number of Common Shares as shall
from time to time be sufficient to effect the conversion of all outstanding OP
Units not owned by the General Partner. No Limited Partner shall, by virtue of
being the holder of one or more OP Units, be deemed to be a shareholder of or
have any other interest in the General Partner. The exchange of OP Units for
Common Shares described in this Section 3.8 may be effected by the contribution
of Common Shares from the General Partner to the Partnership and the redemption
by the Partnership of OP Units held by a Limited Partner. In the event of any
change in the outstanding Common Shares by reason of any share

796300.10
                                      -12-

<PAGE>

dividend, split, recapitalization, merger, consolidation, combination, exchange
of shares or other similar corporate change, the number of OP Units held by each
Partner shall be proportionately adjusted so that one OP Unit remains
exchangeable for one Common Share without dilution. In the event the General
Partner issues any Common Shares in exchange for OP Units pursuant to this
Section 3.8, any such OP Units so acquired by the General Partner shall
immediately thereafter be canceled by the Partnership and the Partnership shall
issue to the General Partner new OP Units pursuant to Section 3.2(B)(ii) hereof.
Notwithstanding the foregoing provisions of this Section 3.8, a Limited Partner
shall not have the right to exchange OP Units for Common Shares if (i) in the
opinion of counsel for the General Partner, the General Partner would, as a
result thereof, no longer qualify (or it would be likely that the General
Partner no longer would qualify) as a Real Estate Investment Trust; (ii) such
exchange would, in the opinion of counsel for the General Partner, constitute or
be likely to constitute a violation of applicable securities laws; or (iii) such
exchange would result in a Limited Partner exceeding the ownership limitation
provisions in the Declaration of Trust of the General Partner, as such
provisions shall then be in effect. If the General Partner is unable to issue
Common Shares in accordance with this Section 3.8, it shall cause the
Partnership to redeem the requested OP Units for cash for an amount equal to the
Market Price (as defined in Section 3.2(B)) calculated as if one OP Unit equaled
one Common Share (subject to the anti-dilution protections set forth in this
Section 3.8).

          No fractional Common Shares shall be issued in return for OP Units. If
more than one OP Unit shall be requested to be redeemed at the same time by the
same Limited Partner, the number of full Common Shares that shall be issuable
upon the redemption thereof shall be computed on the basis of the aggregate
number of Common Shares represented by the OP Units so presented. If any
fraction of a Common Share would, except for the provisions of this Section 3.8,
be issuable on the redemption of any OP Units (or specified portion thereof),
the General Partner shall pay an amount in cash equal to the Market Price
(determined as of the trading day immediately preceding the date upon the
closing of the conversion of the OP Units is to occur), multiplied by such
fraction.

          4.    Principal Office. The principal office of the Partnership shall
be located at the principal office of the General Partner, or at such other
place as the General Partner may designate after giving written notice of such
designation to the other Partners.

          5. Purpose and Powers of the Partnership.
             -------------------------------------

          A.    The purposes of the Partnership shall be to acquire, purchase,
own, operate, manage, develop, redevelop, construct, improve, invest in,
finance, refinance, sell, lease and otherwise deal with real property and
assets related thereto, and interests therein (including, without limitation,
debt), whether directly or indirectly, alone or in association with others.
The purposes of the Partnership include, but are not limited to:

796300.10
                                      -13-

<PAGE>

          (i)    acquiring, developing, operating, leasing and managing real
      property and conducting any other lawful business relating thereto;

          (ii)    mortgaging, exchanging, selling, encumbering or otherwise
      disposing of all or any part of a real property or any interest therein;

          (iii)    constructing, reconstructing, altering, modifying and
      subtracting from or adding to a real property or any part thereof;

          (iv)    organizing and holding partnership interests in partnerships
      owning or otherwise having an interest in, whether directly or indirectly,
      one or more real properties; and

          (v)    in general, the making of any investments or expenditures, the
      borrowing and lending of money and the taking of any and all actions which
      are incidental or related to any of the purposes recited above.

          It is agreed that each of the foregoing is an ordinary part of the
Partnership's business and affairs. Property may be acquired subject to, or by
assuming, the liens, encumbrances, and other title exceptions which affect such
property. The Partnership may also be a partner, general or limited, in
partnerships, general or limited, and joint ventures created to accomplish all
or any of the foregoing.

          B.    The Partnership purposes may be accomplished by taking any
action which is not prohibited under the Act and which is related to the
acquisition, ownership, development, improvement, operation, management,
financing, leasing, exchanging, selling or otherwise encumbering or disposing
of all or any portion of the assets of the Partnership, or any interest therein.

          C.    Notwithstanding anything to the contrary contained in this
Agreement, for so long as Acadia Realty Trust is a Partner, the Partnership
shall operate in such a manner and the Partnership shall take or omit to take
all actions as may be necessary (including making appropriate distributions from
time to time), so as to permit Acadia Realty Trust (i) to continue to qualify as
a Real Estate Investment Trust under Sections 856 through 860 of the Code so
long as such requirements exist and as such provisions may be amended from time
to time, or corresponding provisions of succeeding law (the "REIT
Requirements"), and (ii) to minimize its exposure to the imposition of an excise
tax under Section 4981(a) of the Code or a tax under Section 857(b) (5) of the
Code, so long as such taxes may be imposed and as such provisions may be amended
from time to time, or corresponding provisions of succeeding law, each of (i)
and (ii) to at all times be determined (a) as if Acadia Realty Trust's sole
asset is its Partnership Interest, and (b) without regard to the action or
inaction of Acadia Realty Trust with respect to distributions (by way of
dividends or otherwise) and the timing thereof. In addition, the Partnership
shall take no action with respect to a sale, exchange or other disposition of
any

796300.10
                                      -14-

<PAGE>

property owned by the Partnership with respect to which a material issue exists
as to whether such sale, exchange or other disposition would cause Acadia Realty
Trust to incur a prohibited transaction tax under Section 857(b) (6) of the
Code.

          D.    Without the consent of all of the Limited Partners affected
thereby, the General Partner may not change its policy of holding its assets and
conducting its business solely through the Partnership or structure any
transactions described in Section 5(E) or 5(F) in a manner which will change the
General Partner's policy of holding its assets and conducting its business
through the Partnership (or the Surviving Partnership (defined below), if
applicable)), if the result of such transaction is the recognition of gain for
federal income tax purposes by such Limited Partners.

          E.    Whether or not Section 5(D) hereof is applicable, the General
Partner shall not, unless Section 5(F) is applicable, engage in any merger,
consolidation or other combination with or into another person, sale of all or
substantially all of its assets or any reclassification, recapitalization or
similar transaction (each a "Termination Transaction"), unless such Termination
Transaction is one in connection with which each Limited Partner either will
receive, or will have the right to elect to receive, for each OP Unit held by
such Limited Partner, an amount of cash, securities, or other property equal to
the product of the number of Common Shares into which such OP Unit is
convertible (or in the case of a Series A Preferred Unit, the number of OP Units
into which such Series A Preferred Unit is convertible) and the greatest amount
of cash, securities or other property paid to a holder of one Common Share in
consideration of one Common Share pursuant to the terms of the Termination
Transaction; provided that; if, in connection with the Termination Transaction,
a purchase, tender or exchange offer shall have been made to and accepted by the
holders of the outstanding Common Shares, each holder of OP Units (but not
Series A Preferred Units or any other class of Partnership Interests that is not
directly redeemable for Common Shares) shall receive, or shall have the right to
elect to receive, the greatest amount of cash, securities, or other property
which such holder would have received had it exercised its exchange right (as
set forth in Section 3.8) and received Common Shares in exchange for its OP
Units immediately prior to the expiration of such purchase, tender or exchange
offer and had thereupon accepted such purchase, tender or exchange offer and
then such Termination Transaction shall have been consummated.

          F.    Whether or not Section 5(D) hereof is applicable, the General
Partner may merge, or otherwise combine its assets, with another entity without
satisfying the requirements of Section 5(E) hereof if: (i) immediately after
such merger or other combination, substantially all of the assets directly or
indirectly owned by the surviving entity, other than OP Units held by such
General Partner, are owned directly or indirectly by the Partnership or another
limited partnership or limited liability company which is the survivor of a
merger, consolidation or combination of assets with the Partnership (in each
case, the "Surviving Partnership"); (ii) the Limited Partners own a percentage
interest of the Surviving Partnership based on the relative fair market value of
the net assets of the Partnership (as determined

796300.10
                                      -15-

<PAGE>

pursuant to Section 5(G)) and the relative fair market value of the other net
assets of the Surviving Partnership (as determined pursuant to Section 5(G))
immediately prior to the consummation of such transaction; (iii) the rights,
preferences and privileges of each class of Limited Partners in the Surviving
Partnership are at least as favorable as those in effect immediately prior to
the consummation of such transaction and as those applicable to any other
limited partners or non-managing members of the Surviving Partnership; and (iv)
such rights of the Limited Partners include the right to exchange their
interests in the Surviving Partnership for at least one of: (A) the
consideration available to such Limited Partners pursuant to Section 5(E), or
(B) if the ultimate controlling person of the Surviving Partnership has publicly
traded common equal securities, such common equity securities, with an exchange
ratio based on the relative fair market value of such securities (as determined
pursuant to Section 5(G)) and the Common Shares.

          G.    In connection with any transaction permitted by Section 5(E) or
5(F), the relative fair market values shall be reasonably determined by the
General Partner in good faith as of the time of such transaction and, to the
extent applicable, shall be no less favorable to the Limited Partners than the
relative values reflected in the terms of such transactions.

          6.    Term. The term of the Partnership shall continue until the
Partnership is terminated upon the occurrence of an event described in
Section 14.1 below.

          7. Allocations.
             -----------

          7.1    Profits. After giving effect to the special allocations set
forth in Sections 7.3 and 7.4 hereof, Profits for any fiscal year shall be
allocated among the Partners in proportion to their respective Percentage
Interests.

          7.2 Losses.

          A.    After giving effect to the special allocations set forth in
Sections 7.3 and 7.4 hereof, Losses for any fiscal year shall be allocated among
the Partners in proportion to their respective Percentage Interests.

          B.    The Losses allocated pursuant to Section 7.2(A) hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Limited Partner to have an Adjusted Capital Account Deficit at the end of any
fiscal year. All Losses in excess of the limitations set forth in this Section
7.2(B) shall be allocated to the General Partner.

          7.3    Special Allocations. Subject to Section 7.6 hereof, the
following special allocations shall be made in the following order:

          A.    Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding any other provision of this
Section 7, if there

796300.10
                                      -16-

<PAGE>

is a net decrease in Partnership Minimum Gain during any fiscal year, each
Partner shall be specially allocated items of Partnership income and gain for
such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal
to such Partner's share of the net decrease in Partnership Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g). The items to be so
allocated shall be determined in accordance with Regulations Section 1.704-
2(f)(6) and 1.704-2(j)(2). This Section 7.3(A) is intended to comply with
minimum gain chargeback requirements in Section 1.704-2(f) of the Regulations
and shall be interpreted consistently therewith.

          B.    Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this
Section 7, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Partnership fiscal year,
each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt determined in accordance with
Regulations Section 1.704-2(i) (5) shall be specially allocated items of
Partnership income and gain for such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2 (i) (4). The
items to be so allocated shall be determined in accordance with Regulations
Sections 1.704-2(i) (4) and 1.704-2(i) (2). This Section 7.3(B) is intended to
comply with the minimum gain chargeback requirement in Regulations Section
1.704-2(i) (4) and shall be interpreted consistently therewith.

          C.    Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described in
Regulations Section 1.704-1(b) (2) (ii) (d) (4), Section 1.704-1(b)(2) (ii)
(d) (5), or Section 1.704-1(b) (2) (ii) (d) (6), items of Partnership income
and gain shall be specially allocated to each such Partner in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Partner as quickly as possible,
provided that an allocation pursuant to this Section 7.3(C) shall be made only
if and to the extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for this Section 7 have been
tentatively made, as if this Section 7.3(C) were not in the Agreement.

          D. Gross Income Allocation. In the event any Partner has an Adjusted
Capital Account Deficit at the end of any Partnership fiscal year, each such
Partner shall be specifically allocated items of Partnership income and gain
in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 7.3 (D) shall be made only if and to the
extent that such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Section 7 have been made as if
Section 7.3(C) hereof and this Section 7.3(D) were not in the Agreement.

          E.    Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year shall be allocated among the Partners in accordance with their respective
Percentage Interests.

796300.10
                                      -17-

<PAGE>

          F.    Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any fiscal year 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 Regulations Section 1.704-2(i) (1).

          G.    Section 754 Adjustments. The Partnership shall make a timely
election under Section 754 such that the General Partner may adjust the tax
basis of the Partnership assets pursuant to Section 743(b), if appropriate, upon
an exchange of OP Units for Common Shares. In addition, to the extent an
adjustment to the adjusted tax basis of any Partnerships asset pursuant to Code
Sections 734(b) or 743(b) is required, pursuant to Regulations Section
1.704-1(b) (2) (iv) (m) to be taken into account in determining Capital Accounts
as a result of a distribution to a Partner in complete liquidation of his
interest in the Partnership, the amount of such adjustment to Capital Accounts
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be specifically allocated to the Partner in accordance with such
Partner's Percentage Interest in the event that Regulations Section 1.704-1(b)
(2) (iv) (m) (2) applies, or the Partners to whom such distribution was made in
the event that Regulations Section 1.704-1(b) (2) (iv) (m) (4) applies.

          H.    Allocations with Respect to Partnership Interests other than OP
Units. In the event the Partnership issues additional classes of Preferred Units
or other classes of Partnership Interests other than OP Units, then the General
Partner shall determine, in its sole discretion, the Profits and Losses
attributable to each class (subject to the requirement that the Profits
attributed to any class must bear a reasonable relationship to the amount of
cash distributions to that class) and shall allocate the Profits and Losses of
each class of Partnership Interests among the Partners in such class in
proportion to their respective percentage interests in such class, after giving
effect to any and all special allocations set forth in Sections 7.3 and 7.4
above.

          7.4    Curative Allocations. The allocations set forth in Sections
7.2(B), 7.3(A), 7.3(B), 7.3(C), 7.3(D), 7.3(E), 7.3(F) and 7.3(G) hereof (the
"Regulatory Allocations") are intended to comply with certain requirements of
the Regulations under Sections 704(b) and 514(c) (9) (E) of the Code. It is the
intent of the Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss, or deduction
pursuant to this Section 7.4. Therefore, notwithstanding any other provision of
this Section 7 (other than the Regulatory Allocations and Section 7.6), the
General Partner shall make such offsetting special allocations of Partnership
income, gain, loss, or deduction in whatever manner it determines appropriate so
that, after such offsetting allocations are made, each Partner's Capital Account
balance is, to the extent possible, equal to the Capital Account balance such
Partner would have had if the Regulatory Allocations were not part of the
Agreement and all Partnership items were allocated pursuant to Sections 7.1 and
7.2(A), and

796300.10
                                      -18-

<PAGE>

so that, to the greatest extent possible, such allocations comply with the
Regulations under Code Section 514(c) (9) (E). In exercising its discretion
under this Section 7.4, the General Partner shall take into account future
Regulatory Allocations under Section 7.3 (A) and 7.3(B) that, although not yet
made, are likely to offset other Regulatory Allocations previously made under
Sections 7.3(E) and 7.3(F).

          7.5 Other Allocation Rules.

          A.    For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly or other basis, as determined by the General
Partner using any permissible method under Code Section 706 and the Regulations
thereunder.

          B.    The Partners are aware of the income tax consequences of the
allocations made by this Section 7 and hereby agree to be bound by the
provisions of this Section 7 in reporting their shares of Partnership income and
loss for income tax purposes.

          C.    Solely for purposes of determining a Partner's proportionate
share of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Regulations Section 1.752-3(a) (3), the Partners' interests in
Partnership Profits are equal to their respective Percentage Interests.

          7.6 Tax Allocations: Code Section 704(c).

          A.    Notwithstanding any other provision herein to the contrary,
income, gain, loss, and deduction with respect to any property contributed to
the capital of the Partnership shall, solely for tax purposes, be allocated
among the Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes and
its initial Gross Asset Value in accordance with Code Section 704(c) and
Regulations Section 1.704-3 using the "traditional method" unless otherwise
determined by the General Partner and the Contributing Partner.

          B.    In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to the definition of "Gross Asset Value" contained in Section
2 hereof, 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 Gross Asset Value in
the same manner as set forth in Section 7.6A above.

          C.    Allocations pursuant to this Section 7.6 are solely for purposes
of federal, state, and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or share of Profits,
Losses, other items, or distributions pursuant to any provision in this
Agreement.

796300.10
                                      -19-

<PAGE>

          8. Cash Available for Distribution.
             -------------------------------

          8.1    Operating Cash Flow. As used in this Agreement, "Operating Cash
Flow" shall mean and be defined as all cash receipts of the Partnership from
whatever source (but excluding Capital Cash Flow and proceeds of Capital
Contributions) during the period in question in excess of all items of
Partnership expense (including prepaid expense, financing costs and similar
items but excluding non-cash expenses such as depreciation and costs and
expenses paid with Capital Contributions) and other cash needs of the
Partnership, including, without limitation, amounts paid by the Partnership as
principal on debts and advances, during such period, capital expenditures and
any reserves (as reasonably determined by the General Partner) established or
increased during such period provided that the expenses listed in Section 8.2
shall not be considered expenses under this Section 8.1. In the discretion of
the General Partner, reserves may include cash held for future acquisitions.
Operating Cash Flow shall be distributed to or for the benefit of the Partners
not less frequently than annually, and shall be distributed (i) first, to
holders of any class of Preferred Units in accordance with their Percentage
Interests in an amount equal to all preferential distributions on such Preferred
Units as set forth in the Unit Certificate for such class and at the times set
forth therein, and (ii) thereafter, to the extent of the remaining amount, to
and among the other Partners in accordance with their respective Percentage
Interests; or

          8.2    Capital Cash Flow. As used in this Agreement, "Capital Cash
Flow" shall mean and be defined as collectively (a) gross proceeds realized in
connection with the sale of any assets of the Partnership, (b) gross financing
or refinancing proceeds, (c) gross condemnation proceeds (excluding condemnation
proceeds applied to restoration of remaining property) and (d) gross insurance
proceeds (excluding rental insurance proceeds or insurance proceeds applied to
restoration of property), less (a) closing costs, (b) the cost to discharge any
Partnership financing encumbering or otherwise associated with the asset(s) in
question, (c) the establishment of reserves (as determined by the General
Partner, and which may include cash held for future acquisitions), and (d) other
expenses of the Partnership then due and owing. Subject to Section 14.2 below,
if applicable, Capital Cash Flow shall be distributed to or for the benefit of
the Partners not less frequently than annually and in any event as provided in
the Unit Certificate and shall be distributed first to the holders of Preferred
Units in the order of their preference and next to the other Partners, in
accordance with the respective Percentage Interests of the Partners on the date
of such distribution.

          8.3    Consent to Distributions. Each of the Partners hereby consents
to the distributions provided for in this Agreement. The General Partner shall
determine, in accordance with the terms of this Agreement and the Unit
Certificates, the amounts to be distributed to the Partners from time to time.

796300.10
                                      -20-

<PAGE>

          8.4    Distributions to General Partner's Shareholders. To the extent
available after providing for the preferences and the rights of the Partners,
Operating Cash Flow and Capital Cash Flow shall be distributed to the General
Partner in the amount necessary to satisfy the payment of distributions to the
General Partner's shareholders as such distributions are determined by the
General Partner.

          8.5    Additional Classes of Partnership Interests. Notwithstanding
the foregoing provisions of this Article 8, in the event the Partnership issues
additional classes of Partnership Interests other than OP Units, then the
General Partner shall determine, in its sole discretion (subject to Section
7.3(H)), the amount of distributions of Operating Cash Flow and Capital Cash
Flow attributable to each class in accordance with the Unit Certificates and
shall distribute such Operating Cash Flow and Capital Cash Flow to each class of
Partnership Interests among the Partners in such class in proportion to their
respective Percentage Interests in such class or otherwise as required pursuant
to the terms of such Partnership Interests.

          9. Management of Partnership.
             -------------------------

          9.1    General Partner. The General Partner shall be the sole manager
of the Partnership business, and shall have the right and power to make all
decisions and take any and every action with respect to the property, the
business and affairs of the Partnership and shall have all the rights, power and
authority generally conferred by law, or necessary, advisable or consistent with
accomplishing the purposes of the Partnership. All such decisions or actions
made or taken by the General Partner hereunder shall be binding upon all of the
Partners and the Partnership. The powers of the General Partner to manage the
Partnership business shall include, without limitation, the power and authority
to:

          (i)    operate any business normal or customary for the owner of or
      investor in real properties;

          (ii)    perform any and all acts necessary or appropriate to the
      operation of the Partnership assets, including, but not limited to,
      applications for rezoning, objections to rezoning of other property and
      the establishment of bank accounts in the name of the Partnership;

          (iii)    procure and maintain with responsible companies such
      insurance as may be available in such amounts and covering such risks as
      are deemed appropriate by the General Partner;

          (iv)    take and hold all real, personal and mixed property of the
      Partnership in the name of the Partnership or in the name of a nominee;

          (v)    execute and deliver leases on behalf of and in the name of the
      Partnership;

796300.10
                                      -21-

<PAGE>

          (vi)    borrow money, finance and refinance the assets of the
      Partnership or any part thereof or interest therein and in connection
      with such borrowing, execute and deliver documents that evidence and
      secure the loans which permit the holders of the loans to confess
      judgment against the Partnership;

          (vii)    coordinate all accounting and clerical functions of the
      Partnership and employ such accountants, lawyers, property managers,
      leasing agents and other management or service personnel as may from time
      to time be required to carry on the business of the Partnership;

          (viii)    acquire, encumber, sell, ground lease or otherwise dispose
      of any or all of the assets of the Partnership, or any part thereof or
      interest therein; and

          (ix)    organize one or more partnerships or corporations which are
      controlled, directly or indirectly, by the Partnership and make any
      capital contributions required pursuant to the partnership agreements of
      any such partnerships.

          9.2    Limitations on Powers and Authorities of Partners.
Notwithstanding the powers of the General Partner set forth in Section 9.1
above, no Partner shall have the right or power to do any of the following:

          (i)    do any act in contravention of this Agreement, or any amendment
      hereto; or

          (ii)    do any act which would make it impossible to carry on the
      ordinary business of the Partnership, except to the extent that such act
      is specifically permitted by the terms hereof (it being understood and
      agreed that, except as hereafter provided in this Section 9.2, a sale of
      any or all of the assets of the Partnership, for example, would be an
      ordinary part of the Partnership's business and affairs and is
      specifically permitted hereby; or

          9.3    Limited Partners. The Limited Partners shall have no right or
authority to act for or to bind the Partnership and no Limited Partner shall
participate in the conduct or control of the Partnership's affairs or business;
provided, however, that the exercise of the Limited Partners' rights under this
Agreement shall not be considered to be participation in such conduct or
control.

          9.4    Liability of General Partner. The General Partner shall not be
liable or accountable, in damages or otherwise, to the Partnership or to any
other Partner for any error of judgment or for any mistakes of fact or law or
for anything which it may do or refrain from doing hereafter in connection with
the business and affairs of the Partnership except (i) in the

796300.10
                                      -22-

<PAGE>

case of fraud, willful misconduct (such as an intentional breach of fiduciary
duty or an intentional breach of this Agreement) or gross negligence, and (ii)
for other breaches of this Agreement, but the liability of the General Partner
under this clause (ii) shall be limited to its interest in the Partnership as
more particularly provided for in Section 9.8 below. The General Partner shall
not have any personal liability for the return of any Limited Partner's capital.

          9.5    Indemnity. The Partnership shall indemnify and shall hold the
General Partner (and the officers and directors thereof) harmless from any loss
or damage, including without limitation reasonable legal fees and court costs,
incurred by it by reason of anything it may do or refrain from doing hereafter
for and on behalf of the Partnership or in connection with its business or
affairs; provided, however, that (i) the Partnership shall not be required to
indemnify the General Partner (or any officer or director thereof) for any loss
or damage which it might incur as a result of its fraud, willful misconduct or
gross negligence in the performance of its duties hereunder and (ii) this
indemnification shall not relieve the General Partner of its proportionate part
of the obligations of the Partnership as a Partner. The right of indemnification
set forth in this Section 9.5 shall be in addition to any rights to which the
person or entity seeking indemnification may otherwise be entitled and shall
inure to the benefit of the successors and assigns or any such person or entity.
No Partner shall be personally liable with respect to any claim for
indemnification pursuant to this Section 9.5, but such claim shall be satisfied
solely out of assets of the Partnership. Notwithstanding the foregoing
provisions of this Section 9.5, the General Partner shall be entitled to
reimbursement by the Partnership for any amounts paid by it in satisfaction of
indemnification obligations owed by the General Partner to present or former
directors of the General Partner or its predecessors, as provided for in or
pursuant to the Articles of Incorporation and By-Laws of the General Partner.

          9.6    Other Activities of Partners and Agreements with Related
Parties. The General Partner shall devote its full-time efforts in furtherance
of the Partnership business and shall conduct all of its activities
exclusively through the Partnership and shall not conduct or engage in any
way in any other business; provided, however, that the General Partner may
enter into or conduct business through a wholly owned subsidiary or otherwise
if such business is in connection with, or incidental to, the management
of the business of the Partnership. Except as may otherwise be agreed to in
writing, each Limited Partner, and its affiliates, shall be free to engage in,
to conduct or to participate in any business or activity whatsoever, including,
without limitation, the acquisition, development, management and exploitation
of real and personal property (other than property of the Partnership), without
any accountability, liability or obligation whatsoever to the Partnership or to
any other Partner, even if such business or activity competes with or is
enhanced by the business of the Partnership. The General Partner, in the
exercise of its power and authority under this Agreement, may contract and
otherwise deal with or otherwise obligate the Partnership to entities in which
the General Partner or any one or more of the officers, directors or
shareholders of the General Partner may have an ownership or other financial
interest, whether direct or indirect; provided, however, that without the
approval of a majority of the disinterested trustees of the General

796300.10
                                      -23-

<PAGE>

Partner, the General Partner will not (i) acquire from or sell to any trustee,
officer or employee of the General Partner or the Partnership, or any person in
which a trustee, officer or employee of the General Partner or the Partnership
owns more than a 1% interest, or acquire from or sell to any affiliate of any of
the foregoing, any of the assets or other property of the General Partner, (ii)
make any loan to or borrow from any of the foregoing persons, (iii) engage in
any other transaction with any of the foregoing persons or (iv) dispose of any
of the initial 31 properties set forth on Schedule B hereto; provided further
that the foregoing shall not affect , or be deemed a waiver by the Limited
Partners of, the General Partner's fiduciary obligations to the Partnership.

          9.7 Other Matters Concerning the General Partner.

          A.    The General Partner shall be protected in relying, acting or
refraining from acting on any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.

          B.    The General Partner may exercise any of the powers granted or
perform any of the duties imposed by this Agreement either directly or through
agents. The General Partner may consult with counsel, accountants, appraisers,
management consultants, investment bankers and other consultants selected by it,
each of whom may serve as consultants for the Partnership. An opinion by any
consultant on a matter which the General Partner believes to be within its
professional or expert competence shall be full and complete protection as to
any action taken or omitted by the General Partner based on the opinion and
taken or omitted in good faith. The General Partner shall not be responsible for
the misconduct, negligence, acts or omissions of any consultant or contractor of
the Partnership or of the General Partner, and shall assume no obligations other
than to use due care in the selection of all consultants and contractors.

          C.    No mortgagee, grantee, creditor or any other person dealing with
the Partnership shall be required to investigate the authority of the General
Partner or secure the approval of or confirmation by any Limited Partner of any
act of the General Partner in connection with the conduct of the Partnership
business.

          D.    The General Partner may retain such persons or entities as it
shall determine (subject to Section 9.6, including the General Partner or any
entity in which the General Partner shall have an interest or with which it is
affiliated) to provide services to or on behalf of the Partnership. The General
Partner shall be entitled to reimbursement from the Partnership for its
out-of-pocket expenses (subject to Section 9.6, including, without limitation,
amounts paid or payable to the General Partner or any entity in which the
General Partner shall have an interest or with which it is affiliated) incurred
in connection with Partnership business. Such expenses shall be deemed to
include those expenses required in connection with the administration of the
Partnership such as the maintenance of Partnership books and records,

796300.10
                                      -24-

<PAGE>

management of the Partnership property and assets and preparation of information
respecting the Partnership needed by the Partners in the preparation of their
individual tax returns.

          9.8 Partner Exculpation.

          A.    Except for fraud, willful misconduct and gross negligence, no
Partner shall have any personal liability whatever, whether to the Partnership
or to the other Partner, for the debts or liabilities of the Partnership or its
obligations hereunder, and the full recourse of the other Partner shall be
limited to the interest of that Partner in the Partnership. To the fullest
extent permitted by law, no officer, director or shareholder of the General
Partner shall be liable to the Partnership for money damages except for (i)
active and deliberate dishonesty established by a final judgment or (ii) actual
receipt of an improper benefit or profit in money, property or services. Without
limitation of the foregoing, and except for fraud, willful misconduct and gross
negligence, no property or assets of any Partner, other than its interest in the
Partnership, shall be subject to levy, execution or other enforcement procedures
for the satisfaction of any judgment (or other judicial process) in favor of any
other Partner(s) and arising out of, or in connection with, this Agreement. This
Agreement is executed by the officers of each Partner solely as officers of the
same and not in their own individual capacities. No advisor, trustee, director,
officer, partner, employee, beneficiary, shareholder, participant or agent of
any Partner (or of any Partner of a Partner) shall be personally liable in any
matter or to any extent under or in connection with this Agreement, and the
Partnership, each Partner and their respective successors and assigns shall look
solely to the interest of the other Partner in the Partnership for the payment
of any claim or for any performance hereunder.

          9.9    General Partner Expenses and Liabilities.

          A.    All costs and expenses incurred by the General Partner in
connection with its activities as the General Partner hereunder, all costs and
expenses incurred by the General Partner in connection with its continued
corporate existence, qualification as a Real Estate Investment Trust under the
Code and otherwise, and all other liabilities incurred or suffered by the
General Partner in connection with the pursuit of its business and affairs as
contemplated hereunder and in connection with its activities as the General
Partner hereunder, shall be paid (or reimbursed to the General Partner, if paid
by the General Partner) by the Partnership.

          B.    Notwithstanding any provisions to the contrary set forth in this
Agreement, the amount of any distributions, payments or reimbursements pursuant
to this Agreement to the General Partner shall be reduced by any amount derived
by the General Partner from any investments owned directly by the General
Partner (including without limitation amounts derived from its ownership of
those subsidiaries described in Section 9.6).

796300.10
                                      -25-

<PAGE>

          C.    Notwithstanding anything contained herein to the contrary, if
the proceeds actually received and thereafter contributed to the Partnership
by the General Partner pursuant to any additional issuance as described in
Section 3.2(B) 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 a
Capital Contribution to the Partnership in the amount of the gross proceeds of
such issuance and the Partnership shall be deemed simultaneously to have
reimbursed the General Partner pursuant to this Section 9.9 for the amount of
such underwriter's discount or other expenses.

          10.    Banking. The funds of the Partnership shall be kept in accounts
designated by the General Partner and all withdrawals therefrom shall be made on
such signature or signatures as shall be designated by the General Partner.

          11. Accounting.
              ----------

          11.1    Fiscal Year. The fiscal year of the Partnership shall end on
the last day of December of each year, unless another fiscal year end is
selected by the General Partner.

          11.2    Books of Account. The Partnership books of account shall be
maintained at the principal office designated in Section 4 above or at such
other locations and by such person or persons as may be designated by the
General Partner. The Partnership shall pay the expense of maintaining its books
of account. Each Partner shall have, during reasonable business hours and upon
reasonable prior notice, access to the books of the Partnership and in addition,
at its expense, shall have the right to copy such books. The General Partner, at
the expense of the Partnership, shall cause to be prepared and distributed to
the Partners annual financial data sufficient to reflect the status and
operations of the Partnership and its assets and to enable each Partner to file
its federal income tax return.

          11.3    Method of Accounting. The Partnership books of account shall
be maintained and kept, and its income, gains, losses and deductions shall be
accounted for, in accordance with sound principles of accounting consistently
applied, or such other method of accounting as may be adopted hereafter by the
General Partner. All elections and options available to the Partnership for
Federal or state income tax purposes shall be taken or rejected by the
Partnership in the sole discretion of the General Partner.

          11.4    Section 754 Election. In case of a distribution of property
made in the manner provided in Section 734 of the Code (or any similar provision
enacted in lieu thereof), or in the case of a transfer of any interest in the
Partnership permitted by this Agreement made in the manner provided in Section
743 of the Code (or any similar provision enacted in lieu thereof), the General
Partner, on behalf of the Partnership, may, in its sole discretion, file an
election under Section 754 of the Code (or any similar provision enacted in lieu
thereof) in accordance with the procedures set forth in the applicable
Regulations.

796300.10
                                      -26-

<PAGE>

          11.5    Tax Matters Partner. The General Partner is hereby designated
the Tax Matters Partner (hereinafter referred to as the "TMP") of the
Partnership and shall have all the rights and obligations of the TMP under the
Code.

          11.6    Administrative Adjustments. If the TMP receives notice of a
Final Partnership Administrative Adjustment (the "FPAA") or if a request for an
administrative adjustment made by the TMP is not allowed by the United States
Internal Revenue Service (the "IRS") and the IRS does not notify the TMP of the
beginning of an administrative proceeding with respect to the Partnership's
taxable year to which such request relates (or if the IRS so notifies the TMP
but fails to mail a timely notice of an FPAA), the TMP may, but shall not be
obligated to, petition a Court for readjustment of partnership items. In the
case of notice of an FPAA, if the TMP determines that the United States District
Court or Claims Court is the most appropriate forum for such a petition, the TMP
shall notify each person who was a Partner at any time during the Partnership's
taxable year to which the IRS notice relates of the approximate amount by which
its tax liability would be increased (based on such assumptions as the TMP may
in good faith make) if the treatment of partnership items on his return was made
consistent with the treatment of partnership items on the Partnership's return,
as adjusted by the FPAA. Unless each such person deposits with the TMP, for
deposit with the IRS, the approximate amount of his increased tax liability,
together with a written agreement to make additional deposits if required to
satisfy the jurisdictional requirements of the Court, within thirty days after
the TMP's notice to such person, the TMP shall not file a petition in such
Court. Instead, the TMP may, but shall not be obligated to, file a petition in
the United States District Tax Court.

          12. Transfers of Partnership Interests.
              ----------------------------------

          A.    General Partner. In no event may the General Partner at any time
assign, sell, transfer, pledge, hypothecate or otherwise dispose of all or any
portion of its Partnership Interest, except by operation of law and in a manner
consistent with the rights of other Partners.

          B. Limited Partner.
             ---------------

          (i) No Limited Partner or substituted Limited Partner shall, without
      the prior written consent of the General Partner (which consent may be
      given or withheld in the sole discretion of the General Partner), sell,
      assign, distribute or otherwise transfer (a "Transfer") all or any part of
      his interest in the Partnership except by operation of law, gift (outright
      or in trust) or by sale, in each case to or for the benefit of a Permitted
      Transferee (as defined below), except for (a) pledges or other collateral
      transfers effected by a Limited Partner to secure the repayment of a loan
      and (b) the exchange of OP Units for Common Shares, pursuant to Section
      3.8 above. For purposes of this Section 12(B)(i), the term "Permitted
      Transferee" means (i) any partner or other equity owner of a Limited
      Partner; (ii)

796300.10
                                      -27-

<PAGE>

an equity owner of any partner or other equity owner of a Limited Partner; (iii)
members of the Immediate Family (as defined below) of any equity owner of a
Limited Partner (or any equity owner thereof) and trusts for the benefit of one
or more members of the Immediate Family of the Limited Partner (or any equity
owner thereof) created for a state and/or gift tax purposes and/or (iv) any
public charity, public foundation or charitable institution as defined in
Section 501(C)(3) of the Code or (v) any entity entirely owned and controlled by
the Limited Partner or by any of the persons or entities described in clauses
(i) through (iv). For purposes of this Section 12(B)(i), the term "Immediate
Family" means, with respect to any natural person, such natural person's spouse,
parents, parents-in-law, descendants, nephews, nieces, brothers, sisters,
brothers-in-law, sisters-in-law and children-in-law. A Limited Partner shall
notify the General Partner of any Transfer of beneficial interest or other
interest which occurs without a transfer of record ownership, as well as any
pledge or other collateral transfer. No part of the interest of a Limited
Partner shall be subject to the claims of any creditor, any spouse for alimony
support, or to legal process, and may not be voluntarily or involuntarily
alienated or encumbered except as may be specifically provided for in this
Agreement. A Limited Partner shall not be permitted to retire or withdraw from
the Partnership except as expressly permitted by this Agreement.

          (ii) An assignee, legatee, distributee or other transferee (whether by
      conveyance, will or the laws of intestacy, operation of law or otherwise)
      (a "Transferee") of all or any portion of a Limited Partner's interest in
      the Partnership shall be entitled to receive Profits, Losses and
      distributions hereunder attributable to such interest acquired by reason
      of such Transfer, from and after the effective date of the Transfer of
      such interest; provided, however, anything in this Agreement to the
      contrary notwithstanding, (a) no Transferee shall be considered a
      substituted Limited Partner until such Transfer has been consented to by
      the General Partner and (b) the Partnership and the General Partner shall
      be entitled to treat the transferor of such interest as the absolute owner
      thereof in all respects, and shall incur no liability for the allocation
      of Profits and Losses or distributions which are made to such transferor
      until such time as the written instrument of Transfer has been received by
      the General Partner and the "effective date" of the Transfer has passed.
      The "effective date" of any Transfer shall be the last day of the month
      set forth on the written instrument of Transfer or such other date
      consented to in writing by the General Partner as the "effective date."

          C.    Admission Adjustments. The General Partner shall, when
necessary, cause this Agreement to be amended from time to time to reflect the
addition or withdrawal of Partners, including the corresponding adjustments to
Percentage Interests in accordance with Section 3.2(C).

          13.    Death, Legal Incompetency, Etc. of a Limited Partner. The
death, legal incompetency, insolvency, dissolution or bankruptcy of a Limited
Partner shall not dissolve or terminate the Partnership. Upon the death or
incapacity of an individual Limited Partner, such individual Limited Partner's
interest in the Partnership shall be transferred either by will, the

796300.10
                                      -28-

<PAGE>

laws of intestacy or otherwise to the legal representative or successor of such
individual Limited Partner.

          14.    Termination, Liquidation and Dissolution of Partnership.
                 -------------------------------------------------------

          14.1    Termination Events. The Partnership shall be dissolved and its
affairs wound up in the manner hereinafter provided upon the earliest to occur
of the following events:

          (i)    December 31, 2080; or

          (ii)    the agreement of those Partners holding at least ninety-five
      percent (95%) of the Percentage Interests of all of the Partners entitled
      to vote, determining that the Partnership should be dissolved;

          (iii) the General Partner shall hold in excess of ninety-five percent
      (95%) of the Percentage Interests of all of the Partners; or

          (iv)    the entry of a final judgment, order or decree of a court of
      competent jurisdiction adjudicating as bankrupt either the Partnership or
      the General Partner, and the expiration without appeal of the period, if
      any, allowed by applicable law to appeal therefrom.

          14.2 Method of Liquidation. Upon the happening of any of the events
specified in Section 14.1 above, the General Partner (or if there be no General
Partner, a liquidating trustee selected by those Limited Partners holding in the
aggregate more than fifty percent (50%) of the Percentage Interests held by all
Limited Partners entitled to vote) shall immediately commence to wind up the
Partnership's affairs and shall liquidate the assets of the Partnership as
promptly as possible, unless the General Partner, or the liquidating trustee,
shall determine that an immediate sale of Partnership assets would cause undue
loss to the Partnership, in which event the liquidation may be deferred to a
reasonable time. The Partners shall continue to share Operating Cash Flow,
Capital Cash Flow, Profits and Losses during the period of liquidation in the
same proportions as before dissolution. The proceeds from liquidation of the
Partnership, including repayment of any debts of Partners to the Partnership,
shall be applied in the order of priority as follows:

          A.    Debts of the Partnership, including repayment of principal and
interest on loans and advances made by the General Partner pursuant to Section
3.3 above; then

          B.    To the establishment of any reserves deemed necessary or
appropriate by the General Partner, or by the person(s) winding up the affairs
of the Partnership in the event there is no remaining General Partner of the
Partnership, for any contingent or unforeseen liabilities or obligations of the
Partnership. Such reserves established hereunder shall be held

796300.10
                                      -29-

<PAGE>

for the purpose of repaying any such contingent or unforeseen liabilities or
obligations and, at the expiration of such period as the General Partner, or
such person(s) deems advisable, the balance of such reserves shall be
distributed in the manner provided hereinafter in this Section 14.2 as though
such reserves had been distributed contemporaneously with the other funds
distributed hereunder; then

          C.    Then, to the Partners in accordance with their respective
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods.

          14.3    Date of Termination. The Partnership shall be terminated when
all notes received in connection with such disposition have been paid and all
of the cash or property available for application and distribution under
Section 14.2 above (including reserves) shall have been applied and distributed
in accordance therewith.

          15.    Power of Attorney. Each Limited Partner hereby irrevocably
constitutes and appoints the President of the General Partner, with full power
of substitution, its true and lawful attorney, for him and in his name, place
and stead and for his use and benefit to do the following and for no other
purpose and provided the taking of any action authorized under this Section will
not result in any liability to the Limited Partners, to sign, swear to,
acknowledge, file and record:

          (i)    this Agreement, and subject to Section 16 below, amendments to
      this Agreement;

          (ii)    any certificates, instruments and documents (including assumed
      and fictitious name certificates) as may be required by, or may be
      appropriate under, the laws of the State of Delaware or any other State or
      jurisdiction in which the Partnership is doing or intends to do business,
      in order to discharge the purposes of the Partnership or otherwise in
      connection with the use of the name or names used by the Partnership;

          (iii)    any other instrument which may be required to be filed or
      recorded by the Partnership on behalf of the Partners under the laws of
      any State or by any governmental agency in order for the Partnership to
      conduct its business;

          (iv)    any documents which may be required to effect the continuation
      of the Partnership, the admission of a substitute or additional Partner,
      or the dissolution and termination of the Partnership, provided such
      continuation, admission or dissolution and termination is not in violation
      of any provision of this Agreement; and

796300.10
                                      -30-

<PAGE>

          (v)    any documents which may be required or desirable to have the
      General Partner appointed, and act as, the "Tax Matters Partner" as
      described in the Code.

          The foregoing grant of authority is a special power of attorney
coupled with an interest, is irrevocable and shall survive the death or
incapacity of any individual Limited Partner, and shall survive the delivery of
any assignment by a Limited Partner of the whole or any portion of his interest
in the Partnership.

          16. Amendment of Agreement.
              ----------------------

          A.    (i) Amendments to this Agreement may only be proposed by the
General Partner.

                (ii) (a) The General Partner shall submit any proposed amendment
      to the Limited Partners.

                     (b) The General Partner shall seek the written vote of the
                Partners on the proposed amendment or shall call a meeting to
                vote thereon and to transact any other business that it may deem
                appropriate.

                     (c) For purposes of obtaining a written vote, the General
                Partner may require a response within a reasonable specified
                time, but not less than fifteen (15) days, and failure to
                respond in such time period shall constitute a vote which is
                consistent with the General Partner's recommendation with
                respect to the proposal.

                     (d) Except as provided in Section 16(B) or 16(C), a
                proposed amendment shall be adopted and be effective as an
                amendment hereto if it is approved by the General Partner and it
                receives the consent of Partners holding at least a majority of
                the Percentage Interests of the Partners (including Partnership
                Interests held by the General Partner).

          B.    (i) Notwithstanding anything to the contrary contained in
Section 16(A), the General Partner shall have the power, without the consent
of the Limited Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:

                     (a) to add to the obligations of the General Partner or
                surrender any right or power granted to the General Partner or
                any Affiliate of the General Partner for the benefit of the
                Limited Partners;

                     (b) to reflect the admission, substitution, termination, or
                withdrawal of Partners in accordance with this Agreement (which
                may be effected through the amendment or replacement of Annex
                A);

796300.10
                                      -31-

<PAGE>

                     (c) to set forth the designations, rights, powers, duties,
                and preferences of the holders of any additional Partnership
                Interests issued pursuant to Section 3.2 hereof;

                     (d) to reflect a change that does not adversely affect the
                Limited Partners in any material respect, or to cure any
                ambiguity, correct or supplement any provision in this Agreement
                not inconsistent with law or with other provisions, or make
                other changes with respect to matters arising under this
                Agreement that will not be inconsistent with law or with the
                provisions of this Agreement; and

                     (e) to satisfy any requirements, conditions, or guidelines
                contained in any order, directive, opinion, ruling or regulation
                of a federal or state agency or contained in federal or state
                law.

                (ii) The General Partner shall promptly provide notice to the
      Limited Partners when any action under this Section 16(B) is taken.

          C.    Notwithstanding Sections 16(A) and 16(B) hereof, this Agreement
shall not be amended with respect to any Partner adversely affected without
the consent of such Partner(s) adversely affected if such amendment would
adversely affect such Partner and:

                (i) convert a Limited Partner's interest in the Partnership into
      a General Partner Interest;

                (ii) modify the limited liability of a Limited Partner;

                (iii) alter rights of the Partner to receive distributions
      pursuant to Section 8 or the allocations specified in Section 7 (except as
      permitted pursuant to Sections 3.2, 7, 8 and Section 14.1(B)(i) hereof);

                (iv) alter rights of the Partner to convert OP Units pursuant to
      Section 3.8;

                (v) further limit the rights of a Limited Partner to transfer
      its interest in the Partnership other than as set forth in Section 12; or

                (v) amend Sections 3.6; 3.7; 5(D) through (G), inclusive; or
      this Section 16(C).

          17. Miscellaneous.
              -------------

          17.1    Notices. Any notice, election or other communication provided
for or required by this Agreement shall be in writing and shall be deemed to
have been given when delivered by hand or by telecopy or other facsimile
transmission, on the first business day after sent by overnight courier (such as
Federal Express), or on the second business day after

796300.10
                                      -32-

<PAGE>

deposit in the United States Mail, certified or registered, return receipt
requested, postage prepaid, properly addressed to the Partner to whom such
notice is intended to be given at the address for the Partner set forth on the
signature pages of this Agreement, or at such other address as such person may
have previously furnished in writing to the Partnership and each Partner.

          17.2    Modifications. Except as otherwise provided in this Agreement,
no change or modification of this Agreement shall be valid or binding upon the
Partners, nor shall any waiver of any term or condition in the future, unless
such change or modification or waiver shall be in writing and signed by all of
the Partners, except as provided to the contrary in this Agreement.

          17.3    Successors and Assigns. Any person acquiring or claiming an
interest in the Partnership, in any manner whatsoever, shall be subject to and
bound by all of the terms, conditions and obligations of this Agreement to which
his predecessor-in-interest was subject or bound, without regard to whether such
person has executed a counterpart hereof or any other document contemplated
hereby. No person, including the legal representative, heir or legatee of a
deceased Partner, shall have any rights or obligations greater than those set
forth in the Partnership or become a Partner thereof except as this Agreement,
and no person shall acquire an interest in expressly permitted by and pursuant
to the terms of this Agreement. Subject to the foregoing, and the provisions of
Section 12 above, this Agreement shall be binding upon and inure to the benefit
of the Partners and their respective successors, assigns, heirs, legal
representatives, executors and administrators.

          17.4    Duplicate Originals. For the convenience of the Partners, any
number of counterparts hereof may be executed, and each such counterpart shall
be deemed to be an original instrument, and all of which taken together shall
constitute one agreement.

          17.5    Construction. The titles of the Sections and subsections
herein have been inserted as a matter of convenience of reference only and
shall not control or affect the meaning or construction of any of the terms or
provisions herein.

          17.6    Governing Law. This Agreement shall be governed by the laws of
the State of Delaware. Except to the extent the Act is inconsistent with the
provisions of this Agreement, the provisions of such Act shall apply to the
Partnership.

          17.7    Other Instruments. The parties hereto covenant and agree that
they will execute such other and further instruments and documents as, in the
opinion of the General Partner, are or may become necessary or desirable to
effectuate and carry out the Partnership as provided for by this Agreement.

796300.10
                                      -33-

<PAGE>

          17.8    General Partner with Interest as Limited Partner. If the
General Partner ever has an interest as a Limited Partner in the Partnership,
the General Partner shall, with respect to such interest, enjoy all of the
rights and be subject to all of the obligations and duties of a Limited Partner.

          17.9    Legal Construction. 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, such invalidity, illegality or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

          17.10    Gender. Whenever the context shall so require, all words
herein in any gender shall be deemed to include the masculine, feminine or
neuter gender, all singular words shall include the plural, and all plural
words shall include the singular.

          17.11    Prior Agreements Superceded. This Agreement supercedes any
prior understandings or written or oral agreements amongst the Partners, or
any of them, respecting the within subject matter and contains the entire
understanding amongst the Partners with respect thereto.

          17.12    No Third Party Beneficiary. The terms and provisions of this
Agreement are for the exclusive use and benefit of the General Partner and the
Limited Partners and shall not inure to the benefit of any other person or
entity.

          17.13    Purchase for Investment. Each Partner represents, warrants
and agrees that it has acquired and continues to hold its interest in the
Partnership for its own account for investment only and not for the purpose of,
or with a view toward, the resale or distribution of all any part thereof, nor
with a view toward selling or otherwise distributing such interest or any part
thereof at any particular time or under any predetermined circumstances
provided, however, that in no event shall the exercise of a Partner's conversion
rights under this Agreement be deemed a violation of this covenant. Each Partner
further represents and warrants that it is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for itself, particularly
real estate investments, and that it has a sufficiently high net worth that it
does not anticipate a need for the funds it has invested in the Partnership in
what it understands to be a highly speculative and illiquid investment.

          17.14    Waiver. No consent or waiver, express or implied, by any
Partner to or of any breach or default by any other Partner in the performance
by such other Partner of its obligations hereunder shall be deemed or construed
to be a consent to or waiver of any other breach or default in the performance
by such other Partner of the same or any other obligations of such Partner
hereunder. Failure on the part of any Partner to complain of any act or failure
to act on the part of any other Partner or to declare any other Partner in
default, irrespective of how long such failure continues, shall not constitute
a waiver by such Partner of its rights hereunder.

796300.10
                                      -34-

<PAGE>

          17.15    Time of Essence. Time is hereby expressly made of the essence
with respect to the performance by the parties of their respective obligations
under this Agreement.

796300.10
                                      -35-

<PAGE>

          IN WITNESS WHEREOF, this Agreement has been executed and sworn to as
of the day and year first above written by the General Partner and the Limited
Partner.

                                     GENERAL PARTNER:
                                     ---------------

                                     ACADIA REALTY TRUST, a Maryland Real Estate
                                     Investment Trust

                                     By:  /s/ Kenneth F. Bernstein
                                         ______________________________________
                                            Name:  Kenneth F. Bernstein
                                            Title: President

                                     LIMITED PARTNERS:
                                     ----------------

                                     /s/ Marvin L. Slomowitz
                                     __________________________________________

                                     /s/ L & J Realty Company
                                     __________________________________________

                                     /s/ Ross Dworman
                                     __________________________________________

                                     /s/ Kenneth F. Bernstein
                                     __________________________________________

796300.10
                                      -36-

<PAGE>

                                     RD Woonsocket, Inc.
                                     RD Abington, Inc.
                                     RD Missouri, Inc.
                                     RD Merrilville, Inc.
                                     RD Elmwood, Inc.
                                     RD Village, Inc.
                                     RD Marley, Inc.
                                     RD Hobson, Inc.
                                     RD Townline, Inc.
                                     RD Whitegate, Inc.

                                     By:  /s/ Kenneth F. Bernstein
                                          _____________________________________
                                          Name:  Kenneth F. Bernstein
                                          Title: President

                                      RD Properties, L.P. II
                                      RD Properties, L.P. III
                                      RD Properties, L.P. IV

                                      By:  /s/ Ross Dworman
                                           ____________________________________
                                           Name:  Ross Dworman
                                           Title: General Partner

                                      RD Properties, L.P. V

                                      By: RD New York LLC, General Partner

                                           By:  /s/ Kenneth B. Bernstein
                                                _______________________________
                                                Name:  Kenneth B. Bernstein
                                                Title: Member

796300.10
                                      -37-

<PAGE>

                                       RD Crossroads Associates, L.P.

                                       By: RD Crossroads, Inc., General Partner

                                           By:  /s/ Kenneth F. Bernstein
                                                _______________________________
                                                Name:  Kenneth F. Bernstein
                                                Title: President

                                        RD Soundview Associates, L.P.

                                        By:  RD Soundview Associates, Inc.,
                                             General Partner

                                            By:  /s/ Kenneth F. Bernstein
                                                 ______________________________
                                                 Name:  Kenneth F. Bernstein
                                                 Title: President

                                         RD Smithtown Associates, L.P.

                                         By:  RD Smithtown Associates, Inc.,
                                              General Partner

                                             By:  /s/ Kenneth F. Bernstein
                                                  _____________________________
                                                  Name:  Kenneth F. Bernstein
                                                  Title: President

                                          Homkor Colony, L.P.

                                          By:  Homkor Columbia, L.L.C.,
                                               General Partner

                                          By:  /s/ James Wise
                                               ________________________________
                                               Name:  James Wise
                                               Title: Manager

796300.10
                                      -38-

<PAGE>

                                           Marley Associates Limited Partnership

                                           By:  RD Marley, Inc., General Partner

                                               By:  /s/ Kenneth F. Bernstein
                                                    ___________________________
                                                    Name:  Kenneth F. Bernstein
                                                    Title: President

                                           RD Bloomfield Associates Limited
                                           Partnership II

                                           By:  RD Bloomfield, Inc., its
                                                General Partner

                                                By: /s/ Kenneth F. Bernstein
                                                    ___________________________
                                                    Name:  Kenneth F. Bernstein
                                                           Title:  President

                                            G.O. Associates Limited Partnership

                                            By:  RD G.O. Properties, Inc.,
                                                 individually and as General
                                                 Partner of G.O. Associates
                                                 Limited Partnership

                                                 By:  /s/ Kenneth F. Bernstein
                                                      __________________________
                                                      Name: Kenneth F. Bernstein
                                                      Title: President

                                            Columbia VGH Investors

                                            By:  /s/ Ross Dworman
                                                 ______________________________
                                                 Name:  Ross Dworman
                                                 Title:  Managing Partner

796300.10
                                      -39-

<PAGE>

                                             Great Universal Capital Corp.

                                             By:  /s/ Mark Krugman
                                                  _____________________________
                                                  Name:  Mark Krugman
                                                  Title: Vice President

                                             Evan Frazier Realty LLC

                                             By:  /s/ Kenneth F. Bernstein
                                                  _____________________________
                                                  Name:  Kenneth F. Bernstein
                                                  Title: Member

                                             RD Greenbelt, Inc.

                                             By:  /s/ Kenneth F. Bernstein
                                                  _____________________________
                                                  Name:  Kenneth F. Bernstein
                                                  Title: President

                                             KAL Partners L.P.

                                             By:  /s/ Gregory Manocherian
                                                  _____________________________
                                                  Name:  Gregory Manocherian
                                                  Title: General Partner

                                             /s/ Michael A. Young
                                             __________________________________

                                             /s/ Mindy White
                                             __________________________________

796300.10
                                      -40-

<PAGE>

                                             S & J Roth Revocable Trust

                                             By:  /s/ Stephen Roth
                                                  _____________________________
                                                  Name:  Stephen Roth
                                                  Title: Trustee

                                             Rabinowitz Family 1991 Trust

                                             By:  /s/ Martin J. Rabinowitz
                                                  _____________________________
                                                  Name:  Martin J. Rabinowitz
                                                  Title: Trustee

                                             Rabinowitz Family 1986 Trust

                                             By: /s/ Steven M. Rabinowitz, Esq.
                                                 ______________________________
                                                 Name: Steven M. Rabinowitz,Esq.
                                                 Title: Trustee

                                             /s/ Perry Kamerman
                                             __________________________________

                                             /s/ Joel Braun
                                             __________________________________

                                             /s/ Eric Newberg
                                             __________________________________

                                             /s/ Robert Masters
                                             __________________________________

796300.10
                                      -41-

<PAGE>

                                     ANNEX A

<TABLE>
<CAPTION>

                                                                                                                    Percentage
                                                    Percentage                                Percentage         Interest of all
                                                    Interest of                               Interest of          Partnership
Name of Partner                    OP Units          OP Units         Preferred Units       Preferred Units         Interests
---------------                    --------         ----------        ---------------       ---------------     ---------------

General Partner
---------------

<S>                              <C>                <C>              <C>                    <C>                  <C>
Company                          25,419,215

Limited Partners
----------------

Marvin L. Slomowitz                 821,000
L & J Realty Company                  2,000
Ross Dworman                        628,113
Kenneth F. Bernstein                285,369
RD Woonsocket, Inc.                   7,540
RD Abington, Inc.                     3,684
RD Missouri, Inc.                     2,883
RD Merrilville, Inc.                  7,799
RD Elmwood, Inc.                      5,205
RD Village, Inc.                      9,545
RD Marley, Inc.                       6,807
RD Hobson, Inc.                       5,189
RD Townline, Inc.                     5,036
RD Whitegate, Inc.                    1,650
RD Properties, L.P. II              986,695
RD Properties, L.P. III           1,287,396
RD Properties, L.P. IV              944,988
RD Properties, L.P. V             2,257,792
RD Crossroads
Associates, L.P.                    844,400
</TABLE>

796300.10
                                      -42-

<PAGE>
<TABLE>
<CAPTION>

                                                                                                                    Percentage
                                                    Percentage                                Percentage         Interest of all
                                                    Interest of                               Interest of          Partnership
Name of Partner                    OP Units          OP Units         Preferred Units       Preferred Units         Interests
---------------                    --------         ----------        ---------------       ---------------     ----------------

<S>                                <C>              <C>               <C>                   <C>                  <C>
RD Soundview
Associates L.P.                     632,400
RD Smithtown
Associates L.P.                     764,267
Homkor Colony, L.P.                  31,333
RD Marley Associates
L.P.                                673,860
RD Bloomfield
Associates Limited
Partnership II                      712,933
G.O. Associates
Limited Partnership                  38,877
Columbia VGH
Investors                            96,048
Great Universal Capital
Corp.                               220,300
Evan Frazier Realty
LLC                                 294,434
RD Greenbelt, Inc.                   55,011
KAL Partners L.P.                   102,068
Michael A. Young                     34,005
Mindy White                          17,029
S & J Roth Revocable
Trust                                25,517
Rabinowitz Family
1991 Trust                           21,247
Rabinowitz Family
1986 Trust                           21,247
Perry Kamerman                       50,000
</TABLE>

796300.10
                                      -43-

<PAGE>

<TABLE>
<CAPTION>

                                                                                                                    Percentage
                                                    Percentage                                Percentage         Interest of all
                                                    Interest of                               Interest of          Partnership
Name of Partner                    OP Units          OP Units         Preferred Units       Preferred Units         Interests
---------------                    --------         ----------        ---------------       ---------------     ----------------

<S>                                <C>              <C>               <C>                   <C>                  <C>
Joel Braun                             6,667
Eric Newberg                           8,000
Robert Masters                         4,667
                                 -----------
         TOTALS                   37,342,216              100%                                        100%                 100%

</TABLE>

796300.10
                                      -44-

<PAGE>

                                     ANNEX B

Partner                                       Capital Contribution
-------                                       --------------------
The Company                                   $136,500,000
Marvin Slomowitz                              The properties set forth on
                                              "Schedule B -- The Properties" in
                                              accordance with the terms and
                                              subject to the conditions
                                              contained in the several
                                              purchase and sale agreements,
                                              dated as of June 3, 1993, by and
                                              between the Partnership
                                              and Marvin Slomowitz.
L & J Realty Company                          (1)
Ross Dworman                                  (1)
Kenneth F. Bernstein                          (1)
RD Woonsocket, Inc.                           (1)
RD Abington, Inc.                             (1)
RD Missouri, Inc.                             (1)
RD Merrilville, Inc.                          (1)
RD Elmwood, Inc.                              (1)
RD Village, Inc.                              (1)
RD Marley, Inc.                               (1)
RD Hobson, Inc.                               (1)
RD Townline, Inc.                             (1)
RD Whitegate, Inc.                            (1)
RD Properties, L.P. II                        (1)
RD Properties, L.P. III                       (1)
RD Properties, L.P. IV                        (1)
RD Properties, L.P. V                         (1)
RD Crossroads Associates, L.P.                (1)
RD Soundview Associates L.P.                  (1)

796300.10
                                      -45-

<PAGE>

Partner                                       Capital Contribution
-------                                       --------------------

RD Smithtown Associates L.P.                  (1)
Homkor Colony, L.P.                           (1)
RD Marley Associates L.P.                     (1)
RD Bloomfield Associates Limited              (1)
Partnership II
G.O. Associates Limited Partnership           (1)
Columbia VGH Investors                        (1)
Great Universal Capital Corp.                 (1)
Evan Frazier Realty LLC                       (1)
RD Greenbelt, Inc.                            (1)
KAL Partners L.P.                             (1)
Michael A. Young                              (1)
Mindy White                                   (1)
S & J Roth Revocable Trust                    (1)
Rabinowitz Family 1991 Trust                  (1)
Rabinowitz Family 1986 Trust                  (1)
Perry Kamerman                                (1)
Joel Braun                                    (1)
Eric Newberg                                  (1)
Robert Masters                                (1)

(1)      The properties and/or other assets contributed directly or indirectly
         by the Limited Partner to the Partnership in accordance with the terms
         and conditions in the Contribution and Share Purchase Agreement dated
         as of April 15, 1998 between, among others, the Partnership and the
         Limited Partner and/or its affiliate.

796300.10
                                      -46-

<PAGE>

909738.9
                                       46EXHIBIT 10.1(d)

                   FIRST AND SECOND AMENDMENTS TO THE AMENDED
                  AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
                          OF THE OPERATING PARTNERSHIP

                               FIRST AMENDMENT TO
                    AMENDED & RESTATED PARTNERSHIP AGREEMENT
                    ----------------------------------------

                  THIS FIRST AMENDMENT, dated as of November 15, 1999, to the
Amended and Restated Partnership Agreement, dated as of March 22, 1999, (the
"Partnership Agreement"), of ACADIA REALTY LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Partnership"). Capitalized terms used herein but not
defined herein shall have the meanings given such terms in the Partnership
Agreement.

                                   BACKGROUND
                                   ----------

                  Since the date of the Partnership Agreement, certain Limited
Partners have (i) converted their OP Units to Common Shares of the General
Partner and (ii) transferred their OP Units to a new Limited Partner.

                  The General Partner, pursuant to the exercise of such
authority and in accordance with Section 12(C) of the Partnership Agreement, has
determined to execute this First Amendment to the Partnership Agreement to
evidence the changes to the ownership of OP Units due to the conversion and
transfer of such OP Units.

                  NOW, THEREFORE, the parties hereto, for good and sufficient
consideration and intending to be legally bound, hereby amend the Partnership
Agreement as follows:

                  1.    Annex "A" of the Partnership Agreement is hereby amended
and restated to reflect (i) changes to the ownership of OP Units due to the
conversion and transfer of certain OP Units and (ii) the admission of Cheerful
Corporation as a new Limited Partner as of ________, 1999 whose authorized
signature appears on the signature page hereto, which Limited Partner shall have
such number of OP Units as is set forth opposite such Limited Partner's name on
Annex "A". Annex "B" of the Partnership Agreement is hereby amended and restated
to reflect the Capital Contribution made by the new Limited Partner.

                  2.    By execution of this First Amendment to the Partnership
Agreement, the new Limited Partner agrees to be bound by each and every term of
the Partnership Agreement as amended hereby from and after the date hereof.

                  3.    This First Amendment may be executed in counterparts,
each of which shall constitute an original, but all together shall constitute
one and the same document.

                  4.    Except as expressly set forth in this First Amendment,
the Partnership Agreement is hereby ratified and confirmed in each and every
respect.

                            [SIGNATURE PAGE FOLLOWS]

894180.1

<PAGE>

                  IN WITNESS WHEREOF, this First Amendment to the Limited
Partnership Agreement is executed and delivered as of the date first written
above.

                                   ACADIA REALTY TRUST

                                   By:    /s/ Kenneth F. Bernstein
                                          ___________________________________
                                          Name:  Kenneth F. Bernstein
                                          Title: President

                                   ACADIA REALTY LIMITED PARTNERSHIP

                                   By: Acadia Realty Trust, its General Partner

                                          By: /s/ Kenneth F. Bernstein
                                              ___________________________
                                              Name:  Kenneth F. Bernstein
                                              Title: President

                                   NEW LIMITED PARTNER:

                                   CHEERFUL CORPORATION

                                   By: ______________________________________
                                       Name:
                                       Title:

894180
                                       2

<PAGE>
                                                          AMENDED AND RESTATED
                                                       AS OF NOVEMBER 15, 1999

                                    ANNEX "A"
                                    ---------

<TABLE>
<CAPTION>
                                                                                                         Percentage
                                                  Percentage                          Percentage        Interest of all
                                                  Interest of                         Interest of        Partnership
Name of Partner                    OP Units       OP Units       Preferred Units     Preferred Units      Interests
---------------                    ---------      ----------     ---------------     ---------------    --------------

General Partner
---------------

<S>                              <C>              <C>            <C>                 <C>                 <C>
Company                          24,719,215

Limited Partners
----------------

Marvin L. Slomowitz                 121,000

L & J Realty Company                  2,000

Ross Dworman                        533,400

Kenneth F. Bernstein                261,691

RD Woonsocket, Inc.                   7,540

RD Abington, Inc.                     3,684

RD Missouri, Inc.                     2,883

RD Merrilville, Inc.                  7,799

RD Elmwood, Inc.                      5,205

RD Village, Inc.                      9,545

RD Marley, Inc.                       6,807

RD Hobson, Inc.                       5,189

RD Townline, Inc.                     5,036

RD Whitegate, Inc.                    1,650

RD Properties, L.P. II              986,695

RD Properties, L.P. III           1,287,396

RD Properties, L.P. IV              944,988

RD Properties, L.P. V             2,257,792

894180.1
                                       A-1

<PAGE>

                                                                                                         Percentage
                                                  Percentage                          Percentage        Interest of all
                                                  Interest of                         Interest of        Partnership
Name of Partner                    OP Units       OP Units       Preferred Units     Preferred Units      Interests
---------------                    ---------      ----------     ---------------     ---------------    --------------

RD Crossroads
Associates, L.P.                    844,400

RD Soundview
Associates L.P.                     632,400

RD Smithtown
Associates L.P.                     764,267

Homkor Colony, L.P.                  31,333
RD Marley Associates
L.P.                                673,860

RD Bloomfield
Associates Limited
Partnership II                      712,933

G.O. Associates
Limited Partnership                  38,877

Columbia VGH Investors               96,048

Great Universal Capital
Corp.                               220,300

Evan Frazier Realty
LLC                                 294,434

RD Greenbelt, Inc.                   55,011

KAL Partners L.P.                   102,068

Michael A. Young                     34,005

Mindy White                          17,029

S & J Roth Revocable
Trust                                25,517

Rabinowitz Family
1991 Trust                           21,247

Rabinowitz Family
1986 Trust                           21,247

894180.1
                                       A-2

<PAGE>

                                                                                                         Percentage
                                                  Percentage                          Percentage        Interest of all
                                                  Interest of                         Interest of        Partnership
Name of Partner                    OP Units       OP Units       Preferred Units     Preferred Units      Interests
---------------                    ---------      ----------     ---------------     ---------------    --------------

Perry Kamerman                       50,000

Joel Braun                            6,667

Eric Newberg                          8,000

Robert Masters                        4,667

Cheerful Corporation                118,391

     TOTALS                      35,942,216             100%                                100%               100%

</TABLE>

894180.1
                                      A-3
<PAGE>

                                                            AMENDED AND RESTATED
                                                         AS OF NOVEMBER 15, 1999

                                    ANNEX "B"
                                    ---------

Partner                                                Capital Contribution
-------                                                --------------------
The Company                                            $136,500,000

Marvin Slomowitz                                       The properties
                                                       set forth on "Schedule B
                                                       -- The Properties" in
                                                       accordance with the terms
                                                       and subject to the
                                                       conditions contained in
                                                       the several purchase and
                                                       sale agreements, dated as
                                                       of June 3, 1993, by and
                                                       between the Partnership
                                                       and Marvin Slomowitz.

L & J Realty Company                                   (1)

Ross Dworman                                           (1)

Kenneth F. Bernstein                                   (1)

RD Woonsocket, Inc.                                    (1)

RD Abington, Inc.                                      (1)

RD Missouri, Inc.                                      (1)

RD Merrilville, Inc.                                   (1)

RD Elmwood, Inc.                                       (1)

RD Village, Inc.                                       (1)

RD Marley, Inc.                                        (1)

RD Hobson, Inc.                                        (1)

RD Townline, Inc.                                      (1)

RD Whitegate, Inc.                                     (1)

RD Properties, L.P. II                                 (1)

RD Properties, L.P. III                                (1)

RD Properties, L.P. IV                                 (1)

RD Properties, L.P. V                                  (1)

894180.1
                                       B-1

<PAGE>

Partner                                                Capital Contribution
-------                                                --------------------

RD Crossroads Associates, L.P.                         (1)

RD Soundview Associates L.P.                           (1)

RD Smithtown Associates L.P.                           (1)

Homkor Colony, L.P.                                    (1)

RD Marley Associates L.P.                              (1)

RD Bloomfield Associates Limited
Partnership II                                         (1)

G.O. Associates Limited Partnership                    (1)

Columbia VGH Investors                                 (1)

Great Universal Capital Corp.                          (1)

Evan Frazier Realty LLC                                (1)

RD Greenbelt, Inc.                                     (1)

KAL Partners L.P.                                      (1)

Michael A. Young                                       (1)

Mindy White                                            (1)

S & J Roth Revocable Trust                             (1)

Rabinowitz Family 1991 Trust                           (1)

Rabinowitz Family 1986 Trust                           (1)

Perry Kamerman                                         (1)

Joel Braun                                             (1)

Eric Newberg                                           (1)

Robert Masters                                         (1)

Cheerful Corporation                                   N/A

(1)    The properties and/or other assets contributed directly or indirectly by
       the Limited Partner to the Partnership in accordance with the terms and
       conditions in the Contribution and Share Purchase Agreement dated as of
       April 15, 1998 between, among others, the Partnership and the Limited
       Partner and/or its affiliate.

894180.1
                                       B-2
<PAGE>

(2)    The properties and/or other assets contributed directly or indirectly by
       the Limited Partner to the Partnership in accordance with the terms and
       conditions in the Agreement of Contribution dated as of November 8, 1999
       between, among others, the Partnership and the Limited Partner.

894180.1
                                      B-3

                               SECOND AMENDMENT TO
                    AMENDED & RESTATED PARTNERSHIP AGREEMENT
                    ----------------------------------------

         THIS SECOND AMENDMENT, dated as of November 18, 1999, to the Amended
and Restated Partnership Agreement, dated as of March 22, 1999, as amended by
the First Amendment dated as of November 15, 1999 (collectively, the
"Partnership Agreement"), of ACADIA REALTY LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Partnership"). Capitalized terms used herein but not
defined herein shall have the meanings given such terms in the Partnership
Agreement.

                                   BACKGROUND
                                   ----------

         The Partnership is a party to a certain Agreement of Contribution dated
as of November 8, 1999 (the "Contribution Agreement") pursuant to which, among
other things, the Partnership has agreed to acquire partnership interests in
Pacesetter/Ramapo Associates, a New York limited partnership, in consideration
for, among other things, Preferred Units in the Partnership. Pursuant to Section
3.2(B) of the Partnership Agreement, the General Partner of the Partnership has
the power and authority to issue additional Partnership Interests to Persons in
exchange for additional Capital Contributions.

         The General Partner, pursuant to the exercise of such authority and in
accordance with Section 12(C) of the Partnership Agreement, has determined to
execute this Second Amendment to the Partnership Agreement to evidence the
issuance of additional Partnership Interests and the admission of the other
signatories hereto (the "Pacesetter Partners") as Limited Partners of the
Partnership.

         NOW, THEREFORE, the parties hereto, for good and sufficient
consideration and intending to be legally bound, hereby amend the Partnership
Agreement as follows:

         1.    Annex "A" of the Partnership Agreement is hereby amended and
restated to reflect the admission as Limited Partners on the date hereof of the
Pacesetter Partners whose authorized signatures appear on the signature page
hereto, each of whom shall have such number of Preferred Units as is set forth
opposite such signatory's name on Annex "A". Annex "B" of the Partnership
Agreement is hereby amended and restated to reflect the Capital Contributions
made by the Pacesetter Partners.

         2.    The Preferred Units issued hereby shall have the rights,
preferences, privileges and designations set forth in Annex "C" which is hereby
incorporated into the Partnership Agreement.

892155.2

<PAGE>

         3.    By execution of this Second Amendment to the Partnership
Agreement, each of the Pacesetter Partners agrees to be bound by each and every
term of the Partnership Agreement as amended hereby from and after the date
hereof.

         4.    This Second Amendment may be executed in counterparts, each of
which shall constitute an original, but all together shall constitute one and
the same document.

         5.    Except as expressly set forth in this Second Amendment, the
Partnership Agreement is hereby ratified and confirmed in each and every
respect.

                            [SIGNATURE PAGE FOLLOWS]

                                       2

892155.2

<PAGE>

         IN WITNESS WHEREOF, this First Amendment to the Limited Partnership
Agreement is executed and delivered as of the date first written above.

                                       ACADIA REALTY TRUST

                                       By: /s/ Kenneth F. Bernstein
                                           ____________________________________
                                           Name:  Kenneth F. Bernstein
                                           Title: President

                                       ACADIA REALTY LIMITED PARTNERSHIP

                                       By: Acadia Realty Trust,
                                           its General Partner

                                              By: /s/ Kenneth F. Bernstein
                                                  _____________________________
                                                  Name:  Kenneth F. Bernstein
                                                  Title: President

                                       PACESETTER PARTNERS:

                                       /s/ Jay A. Kaiser
                                       ________________________________________

                                       /s/ H. Robert Holmes
                                       ________________________________________

                                       /s/ Steve Bollerman
                                       ________________________________________

                                       AMCAP INCORPORATED

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       LENNOX SECURITIES, INC.

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       3
892155.2

<PAGE>

                                                            AMENDED AND RESTATED
                                                         AS OF NOVEMBER 18, 1999

                                    ANNEX "A"
                                    ---------
<TABLE>
<CAPTION>
                                                                                                             Percentage
                                                    Percentage                          Percentage         Interest of all
                                                    Interest of                         Interest of          Partnership
Name of Partner                      OP Units        OP Units       Preferred Units    Preferred Units        Interests
---------------                      --------       -----------     ---------------    ---------------     ----------------
<S>                                 <C>             <C>             <C>                <C>                 <C>

General Partner
---------------

Company                             24,719,215

Limited Partners
----------------

Marvin L. Slomowitz                    121,000

L & J Realty Company                     2,000

Ross Dworman                           533,400

Kenneth F. Bernstein                   261,691

RD Woonsocket, Inc.                      7,540

RD Abington, Inc.                        3,684

RD Missouri, Inc.                        2,883

RD Merrilville, Inc.                     7,799

RD Elmwood, Inc.                         5,205

RD Village, Inc.                         9,545

RD Marley, Inc.                          6,807

RD Hobson, Inc.                          5,189

RD Townline, Inc.                        5,036

RD Whitegate, Inc.                       1,650

RD Properties, L.P. II                 986,695

RD Properties, L.P. III              1,287,396

RD Properties, L.P. IV                 944,988

RD Properties, L.P. V                2,257,792

                                      A-1

892155.2

<PAGE>

                                                                                                             Percentage
                                                    Percentage                          Percentage         Interest of all
                                                    Interest of                         Interest of          Partnership
Name of Partner                      OP Units        OP Units       Preferred Units    Preferred Units        Interests
---------------                      --------       -----------     ---------------    ---------------     ----------------

RD Crossroads Associates, L.P.         844,400

RD Soundview Associates L.P.           632,400

RD Smithtown Associates L.P.           764,267

Homkor Colony, L.P.                     31,333

RD Marley Associates L.P.              673,860

RD Bloomfield Associates
Limited Partnership II                 712,933

G.O. Associates Limited
Partnership                             38,877

Columbia VGH Investors                  96,048

Great Universal Capital Corp.          220,300

Evan Frazier Realty LLC                294,434

RD Greenbelt, Inc.                      55,011

KAL Partners L.P.                      102,068

Michael A. Young                        34,005

Mindy White                             17,029

S & J Roth Revocable Trust              25,517

Rabinowitz Family 1991 Trust            21,247

Rabinowitz Family 1986 Trust            21,247

892155.2
                                      A-2

<PAGE>

                                                                                                             Percentage
                                                    Percentage                          Percentage         Interest of all
                                                    Interest of                         Interest of          Partnership
Name of Partner                      OP Units        OP Units       Preferred Units    Preferred Units        Interests
---------------                      --------       -----------     ---------------    ---------------     ----------------

Perry Kamerman                          50,000

Joel Braun                               6,667

Eric Newberg                             8,000

Robert Masters                           4,667

Cheerful Corporation                   118,391

Jay A. Kaiser

H. Robert Holmes

Steve Bollerman

AmCap Incorporated

Lennox Securities, Inc.

     TOTALS                         35,942,216         100%                                100%                  100%

</TABLE>

                                      A-3

892155.2

<PAGE>

                                                            AMENDED AND RESTATED
                                                         AS OF NOVEMBER 18, 1999

                                    ANNEX "B"
                                    _________

Partner                                       Capital Contribution
-------                                       --------------------

The Company                                   $136,500,000

Marvin Slomowitz                              The properties set forth on
                                              "Schedule B -- The Properties"
                                              in accordance with the terms
                                              and subject to the conditions
                                              contained in the several purchase
                                              and sale agreements, dated as
                                              of June 3, 1993, by and between
                                              the Partnership and Marvin
                                              Slomowitz.

L & J Realty Company                          (1)

Ross Dworman                                  (1)

Kenneth F. Bernstein                          (1)

RD Woonsocket, Inc.                           (1)

RD Abington, Inc.                             (1)

RD Missouri, Inc.                             (1)

RD Merrilville, Inc.                          (1)

RD Elmwood, Inc.                              (1)

RD Village, Inc.                              (1)

RD Marley, Inc.                               (1)

RD Hobson, Inc.                               (1)

RD Townline, Inc.                             (1)

RD Whitegate, Inc.                            (1)

RD Properties, L.P. II                        (1)

RD Properties, L.P. III                       (1)

RD Properties, L.P. IV                        (1)

RD Properties, L.P. V                         (1)

                                      B-1

892155.2

<PAGE>

Partner                                       Capital Contribution
-------                                       --------------------

RD Crossroads Associates, L.P.                (1)

RD Soundview Associates L.P.                  (1)

RD Smithtown Associates L.P.                  (1)

Homkor Colony, L.P.                           (1)

RD Marley Associates L.P.                     (1)

RD Bloomfield Associates
Limited Partnership II                        (1)

G.O. Associates
Limited Partnership                           (1)

Columbia VGH Investors                        (1)

Great Universal Capital Corp.                 (1)

Evan Frazier Realty LLC                       (1)

RD Greenbelt, Inc.                            (1)

KAL Partners L.P.                             (1)

Michael A. Young                              (1)

Mindy White                                   (1)

S & J Roth Revocable Trust                    (1)

Rabinowitz Family 1991 Trust                  (1)

Rabinowitz Family 1986 Trust                  (1)

Perry Kamerman                                (1)

Joel Braun                                    (1)

Eric Newberg                                  (1)

Robert Masters                                (1)

Cheerful Corporation                          N/A

Jay A. Kaiser                                 (2)

H. Robert Holmes                              (2)

Steve Bollerman                               (2)

                                      B-2

892155.2

<PAGE>

Partner                                       Capital Contribution
-------                                       --------------------

AmCap Incorporated                            (2)

Lennox Securities, Inc.                       (2)

(1)      The properties and/or other assets contributed directly or
         indirectly by the Limited Partner to the Partnership in accordance
         with the terms and conditions in the Contribution and Share Purchase
         Agreement dated as of April 15, 1998 between, among others, the
         Partnership and the Limited Partner and/or its affiliate.

(2)      The properties and/or other assets contributed directly or
         indirectly by the Limited Partner to the Partnership in accordance
         with the terms and conditions in the Agreement of Contribution dated
         as of November 8, 1999 between, among others, the Partnership and the
         Limited Partner.

                                      B-3

892155.2

<PAGE>

909738.9
                                       47

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]