SOUTHEAST ACQUISITIONS I L P, PRES14A, 1997-04-11

SOUTHEAST ACQUISITIONS I L P
PRES14A, 1997-04-11
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )

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Check the appropriate box:

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Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement

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Souteast Acquisitions I, L.P.
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
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SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA
19087
(610) 964-7254

April __, 1997

Dear Limited Partner:

Southeast Acquisitions, Inc., General Partner of Southeast Acquisitions
I, L.P. (the "Partnership") is soliciting your vote on certain alternative
amendments to the Partnership Agreement.

The enclosed Proxy Statement discusses the alternative amendments in
further detail. We encourage you to read the Proxy Statement and then vote your
Units by filling out the enclosed proxy card and returning it to D.F. King &
Co., Inc. in the enclosed, postage paid, business reply envelope. If you have
any questions concerning these proposals, please call the General Partner at
(610) 964-7254.

The enclosed Proxy Statement has been mailed by certified mail to the
record holders of Limited Partnership Units. Thank you for your consideration of
these proposals.

Very truly yours,

SOUTHEAST ACQUISITIONS, INC.
General Partner of Southeast Acquisitions I, L.P.

------------------------------------------------
Arthur W. Mullin
President
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SOUTHEAST ACQUISITIONS I, L.P.

NOTICE OF SPECIAL MEETING OF
THE LIMITED PARTNERS ON JUNE 11, 1997

To the Limited Partners of Southeast Acquisitions I, L.P.:

A special meeting (the "Special Meeting") of the limited partners (the
"Limited Partners") of Southeast Acquisitions I, L.P. (the "Partnership") will
be held at 250 King of Prussia Road, Radnor, PA 19087 on Wednesday, June 11,
1997 at 2:00 p.m. Eastern Daylight Savings Time, or at any adjournment thereof,
to consider and vote upon alternative amendments (the "Alternative Amendments")
to the Partnership Agreement (the "Partnership Agreement"). ONLY ONE OF THE
ALTERNATIVE AMENDMENTS CAN BE ADOPTED.

The First Alternative Amendments would: (i) substitute Southern
Management Group of Tennessee, LLC, a Tennessee Limited Liability Company (the
"New General Partner") for Southeast Acquisitions, Inc. (the "General Partner")
as the new General Partner of the Partnership; (ii) extend the term of the
Partnership from its current expiration date of December 31, 1997 to December
31, 2000; (iii) authorize new commissions and new management fees for the New
General Partner; and (iv) modify the Partnership Agreement to require that,
except in the liquidation of the Partnership, a majority in interest of the
Limited Partners must consent to a sale or disposition at one time of 60% or
more of the real estate acreage held by the Partnership as of April 24, 1997
unless the sale or disposition returns to the Limited Partners at least the
original Acquisition Cost of the assets sold or disposed of.

The Second Alternative Amendments would: (i) extend the term of the
Partnership from its current expiration date of December 31, 1997 to December
31, 2000 with Southeast Acquisitions, Inc. remaining as General Partner; (ii)
authorize new commissions, payable to the General Partner on the sale or sales
of the Property, effective as of the date the Second Alternative Amendments are
adopted, and new management fees for the General Partner, effective following
December 31, 1997; and (iii) delete from the Partnership Agreement the
requirement that, under certain circumstances, a majority in interest of the
Limited Partners must consent to a sale or disposition at one time of all or
substantially all the assets of the Partnership.

The accompanying proxy statement (the "Proxy Statement") describes the
Alternative Amendments. The Proxy Statement also contains as exhibits copies of
the Partnership Agreement and the proposed Alternative Amendments.

Only Limited Partners of record as of the close of business on April
24, 1997 are entitled to notice of, and to vote at, the Special Meeting. Such
Partners may vote at the Special Meeting either in person or by proxy. If you
cannot attend the Special Meeting, please complete, sign, date, and return the
accompanying proxy card in the enclosed stamped and self-addressed envelope so
that the proxyholders may vote the Units that you hold as a Limited Partner
pursuant to your instructions. If you attend the Special Meeting, you may revoke
your proxy and vote such Units in person.

Very truly yours,

SOUTHEAST ACQUISITIONS, INC.,
General Partner

April __, 1997
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SOUTHEAST ACQUISITIONS I, L.P.

PROXY STATEMENT

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

SPECIAL MEETING OF THE LIMITED PARTNERS
TO BE HELD ON JUNE 11, 1997

Southeast Acquisitions I, L.P. (the "Partnership") will hold a special meeting
of its limited partners (the "Limited Partners") at 2:00 p.m. on Wednesday,
June 11, 1997, Eastern Daylight Savings Time, or at any adjournment thereof
(the "Special Meeting") to consider and vote upon alternative amendments (the
"Alternative Amendments") to the Partnership Agreement (the "Partnership
Agreement"). ONLY ONE OF THE ALTERNATIVE AMENDMENTS CAN BE ADOPTED.

The First Alternative Amendments would: (i) substitute Southern Management
Group of Tennessee, LLC, a Tennessee Limited Liability Company (the "New
General Partner") for Southeast Acquisitions, Inc. (the "General Partner") as
the new General Partner of the Partnership; (ii) extend the term of the
Partnership from its current expiration date of December 31, 1997 to December
31, 2000; (iii) authorize new commissions, payable to the New General Partner
or an Affiliate on the sale or sales of the Property, and new management fees
for the New General Partner, both to be effective as of the date the First
Alternative Amendments are adopted and the New General Partner signs the
Partnership Agreement; and (iv) modify the Partnership Agreement to require
that a majority in interest of the Limited Partners must consent to a sale
or disposition at one time of 60% or more of the real estate acreage held by
the Partnership as of April 26, 1997 unless in connection with a liquidation of
the Partnership pursuant to the Partnership Agreement or in the event that the
net proceeds of such sale, when distributed in accordance with the Partnership
Agreement, will be sufficient to provide the Limited Partners with
distributions equal to the Acquisition Cost of the assets sold.

The Second Alternative Amendments would: (i) extend the term of the Partnership
from its current expiration date of December 31, 1997 to December 31, 2000,
with Southeast Acquisitions, Inc. remaining as General Partner; (ii) authorize
new commissions, payable to the General Partner or an Affiliate on the sale or
sales of the Property, effective as of the date the Second Alternative
Amendments are adopted and new management fees for the General Partner,
effective following December 31, 1997; and (iii) delete from the Partnership
Agreement the requirement that a majority in interest of the Limited Partners
must consent to a sale or disposition at one time of all or substantially all
the assets of the Partnership unless in connection with a liquidation of the
Partnership under the Partnership Agreement or in the event that the net
proceeds of such sale, when distributed in accordance with the Partnership
Agreement will be sufficient to provide the Limited Partners with distributions
equal to the Unpaid Cumulative Return plus their Adjusted Capital
Contributions.

The Partnership will mail this Proxy Statement (this "Proxy
Statement") on or about April 24, 1997.

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The Amendments present both new opportunities and additional risks for
the Partnership. See "Risk Factors to be Considered".

YOU MAY VOTE IN FAVOR OF OR AGAINST OR ABSTAIN FROM VOTING WITH RESPECT
TO ONE OR BOTH OF THE ALTERNATIVE AMENDMENTS. HOWEVER, YOU MUST VOTE EITHER FOR
OR AGAINST, OR ABSTAIN FROM VOTING WITH RESPECT TO ALL THE AMENDMENTS CONTAINED
IN EACH OF THE ALTERNATIVE AMENDMENTS. YOU MAY NOT VOTE TO APPROVE, DISAPPROVE
OR ABSTAIN FROM VOTING WITH RESPECT TO LESS THAN ALL THE AMENDMENTS CONTAINED IN
EACH ALTERNATIVE AMENDMENTS.

IF YOU VOTE IN FAVOR OF BOTH ALTERNATIVE AMENDMENTS, YOUR VOTE WILL BE
COUNTED AS A VOTE FIRST FOR THE FIRST ALTERNATIVE AMENDMENTS AND ONLY AS A VOTE
FOR THE SECOND ALTERNATIVE AMENDMENTS IF THE FIRST ALTERNATIVE AMENDMENTS ARE
NOT ADOPTED.

IF YOU RETURN A SIGNED PROXY CARD WITHOUT INDICATING HOW YOU WISH TO
VOTE ON EITHER OF THE ALTERNATIVE AMENDMENTS, YOUR VOTE WILL BE COUNTED AS A
VOTE FIRST FOR THE FIRST ALTERNATIVE AMENDMENTS AND ONLY AS A VOTE FOR THE
SECOND ALTERNATIVE AMENDMENTS IF THE FIRST ALTERNATIVE AMENDMENTS ARE NOT
ADOPTED.

IF THE FIRST ALTERNATIVE AMENDMENTS RECEIVE THE AFFIRMATIVE VOTE OF A
MAJORITY IN INTEREST OF THE UNITS, THE FIRST ALTERNATIVE AMENDMENTS WILL BE
ADOPTED, AND ANY VOTE IN FAVOR OF THE SECOND ALTERNATIVE AMENDMENTS WILL BE
DISREGARDED.

IF THE FIRST ALTERNATIVE AMENDMENTS DO NOT RECEIVE THE AFFIRMATIVE VOTE
OF A MAJORITY IN INTEREST OF THE UNITS, VOTES IN FAVOR OF THE SECOND ALTERNATIVE
AMENDMENTS WILL BE COUNTED. IF THE SECOND ALTERNATIVE AMENDMENTS RECEIVE THE
AFFIRMATIVE VOTE OF A MAJORITY IN INTEREST OF THE UNITS, THE SECOND ALTERNATIVE
AMENDMENTS WILL BE ADOPTED.

IF NEITHER THE FIRST ALTERNATIVE AMENDMENTS NOR THE SECOND ALTERNATIVE
AMENDMENTS RECEIVE THE AFFIRMATIVE VOTE OF A MAJORITY IN INTEREST OF THE UNITS,
THE GENERAL PARTNER WILL CONTINUE TO ACT AS GENERAL PARTNER OF THE PARTNERSHIP
IN ACCORDANCE WITH THE PARTNERSHIP AGREEMENT.

THE BOARD OF DIRECTORS OF THE GENERAL PARTNER HEREBY SOLICITS YOUR
PROXY ON BEHALF OF THE PARTNERSHIP FOR USE AT THE SPECIAL MEETING.

Only Limited Partners of record as of the close of business on April
24, 1997 (the "Record Date") are entitled to notice of, and to vote at, the
Special Meeting. Such Limited Partners may vote at the Special Meeting either
in person or by proxy. If you cannot attend the Special Meeting, which will be
held at 250 King of Prussia Road, Radnor, PA 19087, you may use the proxy card
(the "Proxy Card") accompanying this proxy statement to instruct the
proxyholders concerning how to vote the Units that you hold as a Limited
Partner.

The Partnership has engaged D.F. King & Co., Inc., 77 Water Street, New
York, NY

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10005, Telephone No. (800) 829-6551; Fax No. (212) 809-8839 (the "Information
Agent") to distribute the attached letter from the General Partner, the
attached notice of the Special Meeting, this Proxy Statement, and the Proxy
Card to the Limited Partners and other interested persons. To request
additional copies of these documents, please contact the Information Agent at
the address set forth above. If you cannot attend the Special Meeting, please
send your completed Proxy Card to the Information Agent at the address set
forth above. Even if you plan to attend the Special Meeting, it is important
that you return your completed Proxy Card to the Information Agent. If you
have any questions concerning these proposals, please call the General Partner
at (610) 964-7254.

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TABLE OF CONTENTS

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SUMMARY........................................................................ 7

The Alternative Amendments................................... 7
Risk Factors................................................. 8
History of the Partnership................................... 9
The General Partner.......................................... 9
The New General Partner...................................... 10
The Property................................................. 11
Voting....................................................... 12

RISK FACTORS................................................................... 13

FIRST ALTERNATIVE AMENDMENTS.......................................... 13

No Assurance of Improved Return.............................. 13
Conflict of Interest......................................... 13
Age of Principal Member of New General Partner............... 14
Capitalization of New General Partner........................ 14
Risk in Extension of Time.................................... 14
Risk in Modification of Requirement that Limited Partners
Consent to Sale of All or Substantially All the
Assets of the Partnership........................... 14

SECOND ALTERNATIVE AMENDMENTS......................................... 14

No Assurance of Improved Return.............................. 15
Conflict of Interest......................................... 15
Capitalization of General Partner............................ 15
Risk in Extension of Time.................................... 15
Risk in Elimination of Requirement that Limited Partners
Consent to Sale of All or Substantially All the
Assets of the Partnership........................... 15

HISTORY OF THE PARTNERSHIP..................................................... 16

Public Offering.............................................. 16
Purchase of Property......................................... 16
Distributions ............................................... 16
Investment Objectives........................................ 16
General Partner's Right to Sell Property; Reserves .......... 16
Rights of the Limited Partners on Dissolution................ 17

THE GENERAL PARTNER............................................................ 17

Directors and Officers....................................... 17
Former Management/Consulting Relationship.................... 18
Current Management........................................... 19
Plans of Current Management if New General Partner
is Not Approved..................................... 20
</TABLE>

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<TABLE>
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THE PROPERTY.................................................................................. 21

Background.................................................................. 21
Real Estate Market Conditions............................................... 22
Recent Developments......................................................... 21
Appraisal................................................................... 22

THE ALTERNATIVE AMENDMENTS.................................................................... 23

Reasons for the Alternative Amendments............................................... 23

Differences Between the Alternative Amendments....................................... 24

FIRST ALTERNATIVE AMENDMENTS......................................................... 25

Substitution of New General Partner......................................... 25
Extension of Partnership Term............................................... 26
Authorization of Fees and Commissions for New General Partner............... 27
Modification of Requirement that Limited Partners Consent to Sale of All or
Substantially All the Assets of the Partnership.................... 28

SECOND ALTERNATIVE AMENDMENTS........................................................ 28

Extension of Partnership Term............................................... 28
Authorization of Fees and Commissions for General Partner................... 29
Elimination of Requirement that Limited Partners Consent to Sale
of All or Substantially All the Assets of the Partnership.......... 30

VOTING........................................................................................ 31

Eligible Units.............................................................. 31
Legal Opinion............................................................... 31
Required Vote............................................................... 31
Abstentions/Broker Non-Votes................................................ 32
Dissenters' Rights ......................................................... 32
Proxies..................................................................... 32
Revocation of Proxies....................................................... 32
Information Agent........................................................... 32
Solicitations by the General Partner........................................ 33

OWNERSHIP OF UNITS............................................................................ 33

EXPERTS....................................................................................... 33

AVAILABLE INFORMATION......................................................................... 34
</TABLE>

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................................ 34

APPENDIX I: DEFINED TERMS................................................................ I-1

EXHIBIT A: PARTNERSHIP AGREEMENT........................................................ A-1

EXHIBIT B: AMENDMENTS TO PARTNERSHIP AGREEMENT.......................................... B-1
First Alternative Amendments........................................ B-2
Second Alternative Amendments....................................... B-5

EXHIBIT C: AGREEMENT BETWEEN SOUTHERN MANAGEMENT
GROUP OF TENNESSEE, R.W. SORENSON AND THE
PARTNERSHIP.................................................................. C-1
</TABLE>

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SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
INFORMATION APPEARING ELSEWHERE IN THIS PROXY STATEMENT AND INCORPORATED HEREIN
BY REFERENCE.

THE ALTERNATIVE AMENDMENTS

A special meeting (the "Special Meeting") of the limited partners (the "Limited
Partners") of Southeast Acquisitions I, L.P. (the "Partnership") will be held at
250 King of Prussia Road, Radnor, PA 19087 on Wednesday, June 11, 1997 at 2:00
p.m., Eastern Daylight Savings Time, or at any adjournment thereof, to consider
and vote upon alternative amendments (the "Alternative Amendments") to the
Partnership Agreement (the "Partnership Agreement"). ONLY ONE OF THE ALTERNATIVE
AMENDMENTS CAN BE ADOPTED.

FIRST ALTERNATIVE AMENDMENTS

SECOND ALTERNATIVE AMENDMENTS

The Second Alternative Amendments would: (i) extend the term of the Partnership
from its current expiration date of December 31, 1997 to December 31, 2000 with
Southeast Acquisitions, Inc. remaining as General Partner; (ii) authorize new
commissions, payable to the General Partner on the sale or sales of the
Property, effective as of the date the Second Alternative Amendments are
adopted, and new management fees for the General Partner, effective following
December 31, 1997; and (iii) delete from the Partnership Agreement the
requirement that, under certain circumstances, a majority in interest of the
Limited Partners must consent to a sale or disposition at one time of all or
substantially all the assets of the Partnership.

REASONS FOR THE ALTERNATIVE AMENDMENTS

As part of its responsibility to explore the options for marketing and
selling the Property, and in response to requests from a number of Limited
Partners for alternatives, the General Partner is offering the Limited Partners
the opportunity to vote to extend the expiration of the term of the Partnership
pursuant to either of the two Alternative Amendments.

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The First Alternative Amendments present an extended time period which
may provide greater opportunity and latitude to dispose of the Property,
although there is no assurance that this will be accomplished within such
extended time period. It also would provide new management with real estate
experience in the market where the Partnership has its Property to oversee the
process. The new fees and commissions are necessary to induce the New General
Partner to assume the role of New General Partner for the proposed term, if
approved by vote of the Limited Partners.

Under the Second Alternative Amendments, the General Partner is
willing to offer the Limited Partners the option of it continuing as the
General Partner for the same extended term as proposed for the New General
Partner and on similar terms and conditions, if the Limited Partners decide
they wish to extend the term of the Partnership but retain current management.
The General Partner is also prepared to extend its term upon receipt of
additional fees and commissions. The principal difference in the compensation
payable to the General Partner and the New General Partner is that no
management fees would be payable to the General Partner until after the
expiration of the current term.

In light of the current valuation of the Property, it is highly
unlikely that any sale of the Property will result in a net sales price which
would return to the Limited Partners a distribution equal to the Unpaid
Cumulative Return plus their Adjusted Capital Contributions. As a result, under
the current Partnership Agreement either the General Partner or New General
Partner, if it is substituted for the General Partner, would have to obtain the
consent to any sale of the Property in its entirety or any sale of a portion of
the Property which, in the judgment of the General Partner or New General
Partner, as the case may be, would amount to a sale of all or substantially all
the assets of the Partnership. There is presently no definition of "all or
substantially all the assets of the Partnership" in the Partnership Agreement.

In the case of both the First and Second Alternative Amendments either
modifying or eliminating the requirement that a majority in interest of the
Limited Partners consent to a sale of all or substantially all the assets of the
Partnership is designed to facilitate potential sales of all or a portion of the
Property which could be jeopardized as a result of the time and complexity
involved in obtaining Limited Partners' consent to the transaction. (See "THE
ALTERNATIVE AMENDMENTS - Reasons for the Amendments" below)

DIFFERENCES BETWEEN THE ALTERNATIVE AMENDMENTS

The terms of the First Alternative Amendments and the Second Alternative
Amendments are similar, with three principal exceptions: (i) under the First
Alternative Amendments, the New General Partner would be substituted for the
existing General Partner for the new term of the Partnership Agreement, while
under the Second Alternative Amendments, the existing General Partner would
continue in that capacity for the new term; (ii) under the First Alternative
Amendments, management fees for the New General Partner would commence as of the
adoption of the First Alternative Amendments, while the Second Alternative
Amendments only permit the current General Partner to begin receiving such fees
following the expiration of the current term of the Partnership Agreement; and
(iii) under the First Alternative Amendments the requirement that a majority in
interest of the Limited Partners consent to a sale of all or substantially all
the assets of the Partnership under certain circumstances would be modified to
only require such consent if 60 percent or more of the real estate acreage of
the Partnership as of April 24, 1997 is sold at one time at a price which would
fail to return to the Limited Partners the Acquisition Cost of the assets sold,
while under the Second Alternative Amendments, the requirement that Limited
Partners consent to sales of all or substantially all the assets of the
Partnership would be eliminated entirely.

RISK FACTORS

The Alternative Amendments present both opportunities and risks for the
Partnership.

The principal risks inherent in the adoption of the First Alternative
Amendments relate to there being no assurance of an improved return if they are
adopted, potential conflicts of interest for the New General Partner, the
potential death or disability of the principal member of the New General
Partner, minimal capitalization of the New General Partner, possible decrease in
value of the Property if the term of the Partnership is extended and possible
sales of the Property at a low price without consent of the Limited Partners.
(See "RISK FACTORS - First Alternative Amendments" below)

If the General Partner remains as General Partner for the same
extended period pursuant to the Second Alternative Amendments, there are also
risks associated with there being no assurance of an improved return, potential
conflicts of interest for the General Partner, limited

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capitalization of the General Partner, possible decrease in value of the
Property if the term of the Partnership is extended and possible sales of the
Property at a low price without consent of the Limited Partners. (See "RISK
FACTORS- Second Alternative Amendments" below)

HISTORY OF THE PARTNERSHIP

The Partnership was formed on December 5, 1986, as a Delaware limited
partnership. It terminates upon disposition of all its property or the
occurrence of certain other events specified in the Partnership Agreement. The
term of the Partnership expires on December 31, 1997, at which time, if the
Partnership is still in existence, it will be dissolved unless the term is
extended.

PURCHASE OF PROPERTY

On January 2, 1987, the Partnership acquired 202.72 acres of unimproved
land (the "Property") near Columbia, South Carolina for a purchase price of
$3,275,046. This was the only property acquired by the Partnership.

INVESTMENT OBJECTIVES

The Partnership's primary business objective has been and continues to
be to realize appreciation in the value of the Property by holding the Property
for investment and eventual sale, although there has never been any assurance
that this will be attained within the term of the Partnership.

The Partnership has been marketing the Property for a number of years.
The General Partner has had the objective either to sell the Property in a
single sale or divide it into parcels to be sold separately. The timing and
manner of sale has been and remains within the discretion of the General
Partner. (See "HISTORY OF THE PARTNERSHIP" below)

THE GENERAL PARTNER

The General Partner is an indirect wholly owned subsidiary of The
Fidelity Mutual Life Insurance Company, in Rehabilitation ("Fidelity Mutual"). A
number of the officers and directors of the General Partner are employees of or
consultants to Fidelity Mutual.

On November 6, 1992, Fidelity Mutual's Board of Directors entered into
a voluntary agreement with the Commonwealth of Pennsylvania's Department of
Insurance to place Fidelity Mutual into a State directed Rehabilitation. The
Rehabilitation is still in progress. The Partnership is a separate entity from
Fidelity Mutual, with all of its reserve funds and assets held in completely
segregated accounts.

OFFICERS

The officers of the General Partner most directly involved in the
management of the General Partner are:

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Arthur W. Mullin. Age 50. Mr. Mullin was elected a Director of the
General Partner in 1993. Mr. Mullin has also served as the President and
Treasurer of the General Partner since 1993. Mr. Mullin, originally retained as
a consultant to Fidelity Mutual in 1993, was appointed Senior Vice President and
Director of Real Estate for Fidelity Mutual the same year and served in that
capacity until 1995. Mr. Mullin resumed his consulting relationship with
Fidelity Mutual in 1995. Mr. Mullin received a B.S. in Political Science and
M.S. in Education from St. Joseph's University. (See "THE GENERAL PARTNER -
Current Management" below)

James W. Kelican, Jr., Age 49. Mr. Kelican was elected a Director of
the General Partner in 1994. He has also served as a Vice President of the
General Partner since 1994. Mr. Kelican has held the position of Senior Vice
President, Real Estate for Fidelity Mutual since 1993. Mr. Kelican is a graduate
of Drexel University and holds the Certified Property Manager (CPM(R))
designation from the Institute of Real Estate Management of the National
Association of Realtors. (See "THE GENERAL PARTNER - Current Management" below)

FORMER MANAGEMENT/CONSULTING RELATIONSHIP

Ms. Deborah J. Dillon has been involved with the General Partner from
the Partnership's inception until the end of 1996, first as Vice President, then
as President from 1988 to 1993 and finally as a consultant from 1993 through
1996. Ms. Dillon was also a director of the General Partner from 1988 to 1993.
As an officer of the General Partner at the time of the acquisition of the
Property by the Partnership, Ms. Dillon was instrumental in the Partnership's
purchase of the Property.

NEW GENERAL PARTNER

Under the First Alternative Amendments, Southeast Acquisitions, Inc.
would be removed as the General Partner of the Partnership and Southern
Management Group of Tennessee, LLC. ("SMGT") would be substituted as the New
General Partner, effective as of the date a majority in interest of the Units
votes to approve the First Alternative Amendments and the New General Partner
signs the Partnership Agreement.

SMGT is a Tennessee Limited Liability Company whose members are Richard
W. Sorenson, who owns a 51% interest in the company, and Southeast Venture
Corporation, Inc., a Tennessee corporation ("SVC") which owns 49% of SMGT.

Mr. Sorenson, age 71, has over 35 years experience in several real
estate disciplines, including land acquisition and development, development of
office buildings, shopping centers, warehouses and medical facilities. All of
these activities occurred in the Southeastern United

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States. Mr. Sorenson is a graduate of the Northwestern University Business
School with a major in real estate.

The other member of the New General Partner is SVC. SVC is a Nashville,
Tennessee based full service real estate corporation involved in real estate
brokerage, property management and development of office buildings, hospitals,
medical buildings and other medical facilities. SVC was formed in 1992. SVC
personnel include civil engineers, architects and other real estate
professionals whose services will be utilized by SMGT in the management and
marketing of the Property if SMGT is appointed the New General Partner. A more
detailed description of these professionals' qualifications is provided below.
(See "THE ALTERNATIVE AMENDMENTS - First Alternative Amendments" below).

For eleven years, Mr. Sorenson has worked with Deborah Dillon, the
former President of and consultant to the General Partner.

Ms. Dillon has agreed to advise and consult with the New General
Partner concerning the Property on a continuing basis for which she will be
compensated by the New General Partner solely from a percentage of real estate
commissions earned by the New General Partner in connection with sales of
Partnership property (See" THE ALTERNATIVE AMENDMENTS - First Alternative
Amendments" below).

THE PROPERTY

BACKGROUND

The Property consists of a 202.72 acre parcel of unimproved land
located near Columbia, South Carolina. It was acquired by the Partnership on
January 2, 1987 for a purchase price of $3,275,046. Since that time the Property
has been held for sale by the Partnership. Despite various expressions of
interest in acquiring all or a portion of the Property since its acquisition, no
portion of the Property has yet been sold.

RECENT DEVELOPMENTS

A letter of intent had been submitted to the Partnership on +/- 10
acres of the Property during November, 1996, and a request had been made to
discuss entering into an option agreement for the remainder of the Property.
Neither expressions of interest led to the submission of a formal offer by the
prospective purchasers.

An agreement had been signed by the Partnership granting Holmes-Smith
Development Company the exclusive right to sell the Property which expired on
December 31, 1996. The General Partner has held meetings with local real estate
marketing and development professionals to identify the best candidate to
represent the Partnership locally. Based upon the outcome of the proxy process,
the General Partner will either select new local representation for the Property
or apprise the New General Partner of the discussions held with area firms.

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REAL ESTATE MARKET CONDITIONS

Absorption of industrial sites by end users has been extremely slow
along the I-77 Business Corridor. Absorption in the Northpoint Business Park has
averaged one lot per year since opening in 1988. Based on recent history, the
remaining lots in Northpoint Business Park and the Sony Park should be
sufficient to meet the near-term demand for industrial property in northern
Richland County.

VOTING

The General Partner has established the close of business on April 24,
1997, as the Record Date for determining the Limited Partners entitled to notice
of, and to vote at, the Special Meeting and at any adjournment thereof. On that
date, the Partnership had issued and outstanding 4,225 Units. No matters other
than the Alternative Amendments and certain procedural matters may be discussed
or voted upon at the Special Meeting.

REQUIRED VOTE. For either of the Alternative Amendments to take effect,
the Limited Partners must vote more than 50% of the total number of outstanding
Units eligible to be voted in favor of one of the Alternative Amendments.

VOTING BY PROXY. To vote by proxy, a Limited Partner must complete,
sign, date, and deliver the Proxy Card to the Information Agent before the
Special Meeting. Unless indicated to the contrary on the Proxy Card, the
directions given on the Proxy Card will be for all of the Units that such
Limited Partner may vote.

REVOCATION OF A PROXY. A Limited Partner may revoke its proxy at any
time prior to the proxyholder's voting of the Units to which such proxy applies
by: (i) submitting a later dated proxy to the Information Agent, (ii) attending
the Special Meeting and delivering a written notice of revocation of the proxy
to the representative of the Information Agent present at the Special Meeting or
(iii) delivering a written notice of revocation of the proxy to the Information
Agent at its address set forth herein which the Information Agent receives on or
before June 10, 1997.

QUESTIONS. If you have any questions concerning the Alternative
Amendments please call the General Partner at (610) 964-7254.

DELIVERY OF PROXY CARDS. Limited Partners should deliver their Proxy
Cards to the Information Agent at the address set forth below:

D. F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
TELEPHONE NO. (800) 829-6551
FACSIMILE NO. (212) 809-8839

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<PAGE> 16
RISK FACTORS

The Alternative Amendments present both opportunities and risks for the
Partnership. The following outlines the principal risks inherent in the adoption
of each Alternative Amendments.

FIRST ALTERNATIVE AMENDMENTS

The following risk factors should be considered in connection with the
First Alternative Amendments:

NO ASSURANCE OF IMPROVED RETURN

There is no assurance that the New General Partner, or any alternative
General Partner, will be able to realize a better return on the Partnership
Property than the General Partner. Moreover, approval of additional fees for the
New General Partner will also be a factor which could reduce any potential
return to the Unit holders if the New General Partner is approved.

The New General Partner has not previously engaged in business.
Although the personnel who will comprise the management of the New General
Partner have experience in real estate matters, none has had any experience in
acting as the General Partner of a public real estate limited partnership.

The General Partner has not engaged in a comprehensive search for a
successor General Partner.

CONFLICT OF INTEREST

The New General Partner will be able to receive 50% of the maximum 10%
commission to be paid in respect to a sale of all or a portion of the
Property and will also be able to be the exclusive agent for the sale of the
Property.

It is possible that the New General Partner would be in a conflict of
interest in a desire to realize a commission upon an immediate sale of the
Property rather than holding it for a more extended period if it were in the
best interests of the Partnership.

It also may be that the New General Partner would wish to delay an
immediate sale of the Property if the sales proceeds at the time would not be
sufficient to result in any distribution to the New General Partner.

The New General Partner's exclusive agency and participation in future
commissions upon sale of the Property could also have an adverse effect on the
local brokerage community's willingness to participate in the sale of the
Property.

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<PAGE> 17
AGE OF PRINCIPAL MEMBER OF NEW GENERAL PARTNER

Mr. Sorenson, the individual member of the New General Partner, is
expected to be actively involved in the marketing and sale of the Property,
along with the principal officers and key employees of SVC. Mr. Sorenson is 71
years old. The operating agreement of the New General Partner provides that in
the event of the death or disability of Mr. Sorenson, SVC will become the
managing member of the New General Partner. In such event, the Limited
Partners, if they did not elect to replace the New General Partner, would have
to rely on the officers and key employees of SVC to manage the Partnership. (See
"FIRST ALTERNATIVE AMENDMENTS - Substitution of New General Partner" below.)

CAPITALIZATION OF NEW GENERAL PARTNER

The New General Partner will have minimal capitalization, and there is
no assurance that, in the event claims are brought against the New General
Partner, that the New General Partner would have sufficient assets to satisfy
any such claims.

RISK IN EXTENSION OF TIME

If the expiration date of the Partnership Agreement is extended to
December 31, 2000, there can be no assurance that eventual sale or sales of the
Property will be for a higher sales price than could be achieved by the General
Partner prior to the expiration of the current term on December 31, 1997 or in
the course of the subsequent dissolution and liquidation of the Partnership
assets pursuant to the Partnership Agreement. Moreover, it is always possible
that the Property could decrease in value during any such extended term.

RISK IN MODIFICATION OF REQUIREMENT THAT LIMITED PARTNERS CONSENT TO SALE OF ALL
OR SUBSTANTIALLY ALL OF THE ASSETS OF THE PARTNERSHIP

By adding a definition of "all or substantially all the assets of the
Partnership", to mean 60% of the real property acreage held by the Partnership
as of April 24, 1997, the New General Partner will have no restrictions on the
sales price that it may obtain for parcels of the Property amounting to less
than 60% of the acreage held by the Partnership as of April 24, 1997, other than
general limitations imposed by its overall fiduciary duty with respect to the
Partnership and its assets. The elimination of this provision could not only
result in a combination of sales of parcels of the Property which would fail to
return to the Limited Partners the Unpaid Cumulative Return plus their Adjusted
Capital Contributions, but also such sales could potentially be below the most
recent appraised value discussed below under the heading "THE PROPERTY -
Appraisal". In addition, even if a sale constituted 60% or more of the assets
of the Partnership, Limited Partners consent would only be required if such
sale were below the Acquisition Cost of such assets rather than below an amount
which would return to the Limited Partners the Unpaid Cumulative Return plus
their Adjusted Capital Contributions.

SECOND ALTERNATIVE AMENDMENTS

The following risk factors should be considered in connection with the
Second Alternative Amendments.

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<PAGE> 18
NO ASSURANCE OF IMPROVED RETURN

Although the General Partner is prepared to continue as General Partner
of the Partnership for the same extended term as proposed for the New General
Partner, the additional fees for the General Partner provided for in the Second
Alternative Amendments following the expiration of the current term of the
Partnership will also reduce any potential return to the Unit holders.

CONFLICT OF INTEREST

The General Partner will have the same potential conflicts of interest
with respect to the sale of the Property as the New General Partner would have
if the First Alternative Amendments were adopted (See RISK FACTORS -- FIRST
ALTERNATIVE AMENDMENTS - Conflict of Interest).

CAPITALIZATION OF GENERAL PARTNER

The General Partner has limited capitalization. Although the General
Partner presently intends to maintain its current capitalization, it has the
right to reduce such capitalization. There is no assurance that, whether or not
the General Partner retains its current capitalization, in the event claims are
brought against the General Partner, the General Partner would have sufficient
assets to satisfy such claims.

RISK IN EXTENSION OF TIME

The same risk factors relating to an extension of the term of the
Partnership which are applicable if the First Alternative Amendments were
adopted are also applicable if the Second Alternative Amendments were adopted.
(See RISK FACTORS -- FIRST ALTERNATIVE AMENDMENTS - Risk in Extension of Time).

RISK IN ELIMINATION OF REQUIREMENT THAT LIMITED PARTNERS CONSENT TO SALE OF ALL
OR SUBSTANTIALLY ALL THE ASSETS OF THE PARTNERSHIP

By eliminating the requirement in the Partnership Agreement that, under
certain circumstances, a majority in interest of the Limited Partners consent to
a sale of all or substantially all of the Partnership's assets, the General
Partner will have no restrictions on the sales price that it may obtain for all
or a portion of the Property other than general limitations imposed by its
overall fiduciary duty to the Partnership and its assets. The elimination of
this provision could not only result in a sale or sales which would fail to
return to the Limited Partners the Unpaid Cumulative Return plus their Adjusted
Capital Contributions but also could result in the sale of the Property, or
parcels thereof, at below its most recent appraised value discussed below under
the heading "THE PROPERTY - Appraisal".

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<PAGE> 19
HISTORY OF THE PARTNERSHIP

PUBLIC OFFERING

The Partnership's public offering of 4,225 units of limited partnership
interest (the "Units") commenced on May 14, 1987 and terminated on June 5, 1987.
As of the close of the offering, the Partnership had raised $4,225,000 through
the sale of 4,225 Units.

PURCHASE OF PROPERTY

DISTRIBUTIONS

As of the date of this Proxy Statement, there had been no distributions
made to Unit holders.

INVESTMENT OBJECTIVES

GENERAL PARTNER'S RIGHT TO SELL PROPERTY; RESERVES

The General Partner has broad powers to manage the business and affairs
of the Partnership and to sell the Property consistent with its fiduciary duty
under the Partnership Agreement. However, the General Partner may not sell or
dispose of all or substantially all the assets of the Partnership at one time
without the consent of a majority in interest of the Limited Partners unless in
connection with a liquidation of the Partnership or in the event that the net
proceeds of the sale will be sufficient to return the Limited Partners' Adjusted
Capital Contributions plus their Unpaid Cumulative Return.

In the General Partner's opinion the Partnership's cash reserves will
be sufficient for an additional three years. However, if additional expenses
are incurred, or should the Partnership decide to construct a "stub" road into
the Property, the cash reserves may be inadequate to cover the Partnership's
operating expenses. If the reserves are exhausted, the Partnership may have to
dispose of a portion of the Property, or incur indebtedness, on unfavorable
terms.

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<PAGE> 20
RIGHTS OF THE LIMITED PARTNERS ON DISSOLUTION

On dissolution of the Partnership, the General Partner is required to
liquidate the assets of the Partnership and apply and distribute the proceeds
thereof: (i) to the payment of all debts and liabilities of the Partnership in
accordance with their terms; (ii) to the establishment, for such period as the
General Partner deems reasonably necessary, of such reserves as the General
Partner deems reasonably necessary to provide for contingent and unforeseen
liabilities or obligations of the Partnership; and (iii) to the partners in
accordance with the Partnership Agreement's priority of distribution provision.

In a liquidation, the General Partner may sell the Property at the best
available price without consent of the Limited Partners even if the net proceeds
of the sale will not be sufficient to return the Limited Partners' Adjusted
Capital Contributions plus their Unpaid Cumulative Return. However, if the
General Partner determines that an immediate sale of part or all of the
Partnership assets would cause undue loss to the Partners, the General Partner,
in order to avoid such loss, may, to the extent not then prohibited by
applicable law, defer liquidation of and withhold from distribution for a
reasonable time any assets of the Partnership except those necessary to satisfy
the Partnership's debts and obligations.

THE GENERAL PARTNER

DIRECTORS AND OFFICERS

The directors and officers of the General Partner are:

Arthur W. Mullin. Age 50. Mr. Mullin was elected a Director of the
General Partner in 1993. Mr. Mullin has also served as the President and
Treasurer of the General Partner since 1993. Mr. Mullin, originally retained as
a consultant to Fidelity Mutual in 1993, was appointed Senior Vice President and
Director of Real Estate for Fidelity Mutual the same year and served in that
capacity until 1995. Mr. Mullin resumed his consulting relationship with
Fidelity Mutual in 1995. Mr. Mullin received a B.S. in Political Science and
M.S. in Education from St. Joseph's University. Information concerning Mr.
Mullin's background in real estate is contained under the heading "THE GENERAL
PARTNER - Current Management" below.

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<PAGE> 21
James W. Kelican, Jr., Age 49. Mr. Kelican was elected a Director of
the General Partner in 1994. He has also served as a Vice President of the
General Partner since 1994. Mr. Kelican has held the position of Senior Vice
President, Real Estate for Fidelity Mutual since 1993. Mr. Kelican is a graduate
of Drexel University and holds the Certified Property Manager (CPM(R))
designation from the Institute of Real Estate Management of the National
Association of Realtors. Information concerning Mr. Kelican's background in real
estate is contained under the heading "THE GENERAL PARTNER - Current Management"
below.

William S. Taylor, Age 51. Mr. Taylor was a Director of the General
Partner from 1993 to 1994. Mr. Taylor was reelected a Director of the General
Partner in 1995. Mr. Taylor was also elected Vice President of the General
Partner in 1995. Mr. Taylor is the Deputy Insurance Commissioner for
Liquidations, Rehabilitations and Special Funds for the Commonwealth of
Pennsylvania and has had an oversight role in the Rehabilitation of Fidelity
Mutual. Mr. Taylor has a B.A. in Economics from Elizabethtown College and an
M.A. in Governmental Administration from the University of Pennsylvania.

Margaret M. Tamasitis, Age 51. Ms. Tamasitis has been the Assistant
Secretary of the General Partner since 1988. Ms. Tamasitis is also a Second Vice
President of Fidelity Mutual in the Controller's office. Ms. Tamasitis received
her B.S. in Accounting from Temple University.

Robert Bixler, Age 54. Mr. Bixler has been the Secretary of the General
Partner since 1988. He also served as General Counsel to the General Partner
from 1994 to 1996. He is also Vice President and Associate Counsel of Fidelity
Mutual. Mr. Bixler received his A.B. degree in Economics from Temple University
and his J.D. degree from Temple University Law School.

FORMER MANAGEMENT/CONSULTING RELATIONSHIP

Following her resignation as President in 1993, Ms. Dillon acted as the
General Partner's Director of Operations under a performance-based consulting
agreement with the General Partner (the "Consulting Agreement") until the end of
1996. Under the Consulting Agreement Ms. Dillon was paid a nominal consulting
fee and was granted certain rights to participate in any potential profits of
the General Partner. No compensation was earned by or paid to Ms. Dillon
pursuant to the profit sharing provisions of the Consulting Agreement.

During her period as a consultant, Ms. Dillon was the principal advisor
to the officers and directors of the General Partner with respect to the
management and operations of the Partnership and marketing of the Property.
Pursuant to the terms of the Consulting Agreement, Ms. Dillon terminated the
Consulting Agreement effective December 31, 1996.

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<PAGE> 22
CURRENT MANAGEMENT

The current management of the General Partner, led by Mr. Mullin and
Mr. Kelican who are assisted by several other professionals, oversee the
management, marketing and disposition of the Property in addition to all other
Partnership issues. Together the management team has over 75 years experience in
working with all types of real estate, including vacant and developable land.

Mr. Mullin was a commercial banker for First Pennsylvania Bank from
1973 to 1981. In this capacity, he was involved with land development as the
banker to a land development subsidiary of a major utility and to a major
industrial developer in the Philadelphia suburbs. Each of these companies held
widely diverse properties in suburban, rural and agrarian areas.

After holding a position as a commercial banker for Meritor Savings
Bank from 1981 to 1985, Mr. Mullin also worked briefly for Merrill Lynch Capital
Markets during 1985 and, in that capacity, facilitated a number of evaluations
for corporate clients of their commercial real estate holdings.

Mr. Mullin joined Kaiser Steel Corporation ("Kaiser") in 1986 as its
Senior Vice President and Chief Financial Officer. In that capacity, he
evaluated the development prospects for the thousands of acres that Kaiser owned
throughout Southern California and formulated development plans for certain
portions of its holdings, while selling off other holdings to either users or
developers.

Since 1990, Mr. Mullin has been a principal in KMR Management, Inc., a
management consulting firm whose primary focus has been troubled businesses.
Assistance to these businesses has been in a variety of areas, including advice
on redeployment of real estate assets and strategizing with respect to land held
for development.

Since 1993, the most significant client Mr. Mullin has consulted for
has been Fidelity Mutual and its numerous real estate subsidiaries, including
the General Partner. On a combined basis, Fidelity Mutual, either directly or
indirectly through subsidiaries, partnerships or ventures, is involved with
thousands of acres of land in various stages of development. Mr. Mullin has
personally been involved in major decisions involving these properties, which
are located in the Northeast, Southeast and Southwest sections of the United
States.

Mr. Kelican began his real estate career in the early seventies with
Latimer & Buck, Inc., a Philadelphia commercial real estate mortgage banking
firm. He held several positions, including Assistant Controller and Assistant
Vice President, with responsibility for real estate asset management. During
this period he was involved with a variety of general real estate and land
development projects.

From 1980 to 1984, Mr. Kelican worked for Cigna Investments where he
was a Senior Real Estate Asset Manager, and, subsequently, the Director of
Mortgage Administration. His responsibilities extended to selected markets on a
nationwide basis.

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<PAGE> 23
In 1984 Mr. Kelican became Senior Vice President of GMAC Realty
Advisors, Inc./Mortgage and Realty Trust, where he was responsible for all
aspects of the company's real estate asset management until July, 1993.

Mr. Kelican was employed by Fidelity Mutual in July, 1993. He became a
Vice President and Director of the General Partner in early 1994. He has been
responsible for land and land development assets in Arizona, Colorado,
Connecticut, Florida, Georgia, Pennsylvania, Tennessee and Texas owned by
Fidelity Mutual either directly, or indirectly through subsidiaries,
partnerships or ventures.

Since receiving Ms. Dillon's notice of the termination of her
consulting relationship with the General Partner in 1996, the management of the
General Partner has been considering a wide range of management alternatives for
the Property, including, but not limited to, investigating possible local
representation, talking with firms who might fill the consulting role previously
performed by Ms. Dillon and interviewing Richard W. Sorenson, a member of the
proposed New General Partner who had been proposed to the Partnership as a
possible successor General Partner by Ms. Dillon. Mr. Sorenson was previously
known to management of the General Partner as a result of dealings between Mr.
Sorenson and the General Partner and its affiliates.

During 1996, management of the General Partner commissioned an
appraisal of the Property in an ongoing effort to assess its current market
value and the best ways to market and sell the Property. The results of the
appraisal are discussed below under the heading "THE PROPERTY-Appraisal".

Mr. Mullin and Mr. Kelican recently inspected the Property and met with
individuals associated with the management and marketing of the Property. They
also conferred with local real estate professionals with respect to the recent
appraisal and the valuation and potential disposition of the Property.

PLANS OF CURRENT MANAGEMENT IF NEW GENERAL PARTNER NOT APPROVED

THE FOLLOWING DESCRIPTION OF THE GENERAL PARTNER'S INTENTIONS WITH
RESPECT TO MANAGEMENT AND MARKETING THE PROPERTY REPRESENTS ITS CURRENT PLANS
WITH RESPECT THERETO. HOWEVER, THERE IS NO ASSURANCE THAT THESE PLANS WILL BE
IMPLEMENTED OR THAT, IF IMPLEMENTED, THEY WILL RESULT IN A SALE OR SALES OF THE
PROPERTY.

If the Second Alternative Amendments are approved by a majority in
interest of the Unit holders or neither Alternative Amendments are approved,
current management will pursue a joint strategy of marketing both smaller
parcels of the Property as well as the Property in its entirety to determine the
optimal near term realizable value which can be achieved.

<PAGE> 24
THE PROPERTY

BACKGROUND

Columbia is the capital of the State of South Carolina and lies
generally at the geographic center of the state. Columbia is approximately 215
miles east of Atlanta, Georgia, 95 miles south of Charlotte, North Carolina, 105
miles southeast of Greenville, South Carolina and 110 miles northwest of
Charleston, South Carolina.

The Property is located in the southwest quadrant of the intersection
of I-77 and Killian Road, in Richland County, just north of Columbia. I-77 is a
direct route from Columbia, through Charlotte, North Carolina, to the Midwest
and the Great Lakes region. The location and favorable tax laws make South
Carolina an attractive site for interstate commerce. The portion of I-77 north
of Columbia was completed in the mid-1980's and is referred to as the I-77
Business Corridor.

Traditionally, the growth in Columbia has been concentrated in the area
surrounding Fort Jackson and the US-1 corridor. The completion of I-77 gave the
local economic development alliance another industrial corridor. I-77 provides a
direct route to Charlotte and opened the northern portion of Richland County,
which is still primarily rural, for development. Undeveloped land in northern
Richland County is readily available. As a result of the completion of I-77 and
the availability of developable land in a `business-friendly' environment, a
number of firms purchased land in the area. IBM and Sony, or their affiliates,
purchased land in the 1980's along I-77 (IBM still holds +/-1600 acres and Sony
owns +/-320 acres)

RECENT DEVELOPMENTS

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<PAGE> 25
REAL ESTATE MARKET CONDITIONS

Undeveloped land intended for industrial use is abundant in northern
Richland County. The South Carolina Department of Commerce has provided
information on approximately 5,000 acres of available industrial sites in the
I-77 Business Corridor within +/-5 miles of the Partnership's Property. The
properties in the area having the largest potential effect on the market for
industrial sites are the Barnett site, the IBM site, the Sony site and
Northpoint Business Park.

The Barnett site is +/-1,000 acres, served by all utilities, with
minimum site sizes of 50 acres currently being offered at $10,000 per acre. The
IBM site is +/-1,600 acres, with portions served with gas, water and rail,
which has recently been offered at $9,000 per acre, based on a purchase of the
entire tract. Each of these properties would require additional improvements
prior to being marketed as business parks. The Northpoint Business Park is an
established business park with a number of existing facilities, an existing
infrastructure, and +/-380 acres remaining available for sale. Northpoint is
served by all utilities and currently offers sites in excess of 5 acres starting
at $25,000 per acre.

A potential significant event which will affect the marketing of
industrial sites in the I-77 corridor is a proposed association recently
announced between Sony, the Central Carolina Economic Development Alliance, and
Richland County. With this relationship between the land owner and the
development alliance, they will be able to present an alternative to the
Northpoint Business Center. It is expected that developed sites, not less than
10 acres, will be offered starting at $22,000 per acre.

A sale of +/-105 acres in November 1994 to Bose Corporation for a
manufacturing facility was made at $16,000 per acre. Bose had, in the past, been
presented with the Partnership's property for consideration. Other than the Bose
sale, a sale further south on I-77 to Bi-Lo, Inc. (+/-83 acres for $21,000 per
acre), and a few sales in Northpoint Business Center over the past five years,
there has been little activity in the vicinity of the Property.

Absorption of industrial sites by end users has been extremely slow
along the I-77 Business Corridor. Absorption in the Northpoint Business Park has
averaged one lot per year since opening in 1988. Based on recent history, the
remaining lots in Northpoint Business Park and the Sony park should be
sufficient to meet the near-term demand for industrial property in northern
Richland County.

APPRAISAL

The General Partner had the Property appraised in 1996. The findings of
the appraiser have been supported by the information gathered as a result of
conversations and meetings with the appraiser, brokers and developers in the
area, the South Carolina Department of Commerce,

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<PAGE> 26
and others. The appraiser established a current value of $2,800,000 ($13,800 per
acre) as of 9/30/96. This value translates to $665 per Unit.

The appraiser evaluated a bulk sale (which is the value described
above) and a phased sell out of the Property. Without addressing the cost of any
improvements necessary to facilitate the sale of building lots (which may be
possible with public funding for the construction of improvements to the
property), assuming a 15% `profit', and using a 15% discount rate, the
appraiser's estimate of the present value of the cash flow is approximately $1.4
million. Using the appraiser's schedule of absorption and lot sales, eliminating
the 15% profit component, and using a 10% discount rate, the present value of
the Property is $2.3 million. The appraiser's assumption of absorption is one or
two ten acre lot(s) per year for fourteen years at a price of $25,000 per acre.

The table below details various valuations of the Property during the
term of the Partnership. The first value is the acquisition cost of the
Property, the second and third values are the appraised values of the Property
performed in 1992 and 1996, and the last value is the current book value of the
Property. The current book value reflects the write-down of $996,645 taken in
December 1996, as a provision for loss on land.

<TABLE>
<CAPTION>
Acquisition (1/87) Appraisal (1992) Appraisal (1996) Book Value (12/96)
------------------ ---------------- ---------------- ------------------
<S> <C> <C> <C>
$3,275,046 (+/-202 acres) $4,055,000 (+/-202 acres) $2,800,000 (+/-202 acres) $2,520,000 (+/-202 acres)
$16,213/acre $20,074/acre $13,861/acre $12,475/acre
</TABLE>

The General Partner has reviewed the conclusions of the 1996 appraisal,
met with the appraiser, had discussions with local real estate professionals and
developers, and believes that the appraisal is a reasonable approximation of the
current value of the Property.

THE APPRAISED VALUE DOES NOT REFLECT COSTS, EXPENSES AND COMMISSIONS
WHICH WOULD BE INCURRED IN CONNECTION WITH A SALE OF THE PROPERTY.

THE ALTERNATIVE AMENDMENTS

REASONS FOR THE ALTERNATIVE AMENDMENTS

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<PAGE> 27
The First Alternative Amendments present an extended time period which
may provide greater opportunity and latitude to dispose of the Property,
although there is no assurance that this will be accomplished within such
extended time period. It also would provide new management with real estate
experience in the market where the Partnership has its Property to oversee the
process. The new fees and commissions are necessary to induce the New General
Partner to assume the role of New General Partner for the proposed term, if
approved by vote of the Limited Partners.

In light of the current valuation of the Property, it is highly
unlikely that any sale of the Property will result in a net sales price which
would return to the Limited Partners a distribution equal to the Unpaid
Cumulative Return plus their Adjusted Capital Contributions. As a result, under
the current Partnership Agreement either the General Partner or New General
Partner, if is substituted for the General Partner, would have to obtain the
consent to any sale of the Property in its entirety or any sale of a portion of
the Property which, in the judgment of the General Partner or New General
Partner, as the case may be, would amount to a sale of all or substantially all
the assets of the Partnership. There is presently no definition of "all or
substantially all the assets of the Partnership" in the Partnership Agreement.

In the case of both the First and Second Alternative Amendments,
modifying or eliminating the requirement that a majority in interest of the
Partners consent to a sale of all or substantially all the assets of the
Partnership is designed to facilitate potential sales of all or a portion of the
Property which could be jeopardized as a result of the time and complexity
involved in obtaining Limited Partners' consent to the transaction.

DIFFERENCES BETWEEN THE ALTERNATIVE AMENDMENTS

The terms of the First Alternative Amendments and the Second
Alternative Amendments are similar, with three principal exceptions: (i) under
the First Alternative Amendments, the New General Partner would be substituted
for the existing General Partner for the new term of the Partnership Agreement,
while under the Second Alternative Amendments, the existing General Partner
would continue in that capacity for the new term; (ii) under the First
Alternative Amendments, management fees for the New General Partner would
commence as of the adoption of the First Alternative Amendments, while the
Second Alternative Amendments only permit the current General Partner to begin
receiving such fees following the expiration of the current term of the
Partnership Agreement; and (iii) under the First Alternative Amendments the
requirement that a majority in interest of the Limited Partners consent to a
sale of all or substantially all the assets of the Partnership under certain
circumstances would be modified to only require such consent if 60 percent or
more of the real estate acreage of the Partnership as of April 24, 1997
is sold at one time at a price which would fail to return to the Limited
Partners the Acquisition Cost of the assets sold, while under the Second
Alternative Amendments, the requirement that Limited Partners' consent to sales
of all or substantially all the assets of the Partnership would be eliminated
entirely.

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<PAGE> 28
FIRST ALTERNATIVE AMENDMENTS

SUBSTITUTION OF NEW GENERAL PARTNER

Southeast Acquisitions, Inc. would be removed as the General Partner of
the Partnership and SMGT would be substituted as the New General Partner
effective as of the date a majority in interest of the Units votes to approve
the First Alternative Amendments and the New General Partner signs the
Partnership Agreement.

SMGT is a Tennessee Limited Liability Company whose members are Richard
W. Sorenson, who owns a 51% interest in the company, and Southeast Venture
Corporation, a Tennessee corporation ("SVC") which owns 49% of SMGT.

Mr. Sorenson, a resident of Atlanta, Georgia, recently visited
Columbia, South Carolina to inspect the Property. In prior years, he has
completed real estate transactions and developed projects in Columbia and other
areas in South Carolina.

Mr. Sorenson was President of Phoenix Investment Company ("Phoenix"), a
publicly owned, Atlanta based real estate development and investment firm from
1965 to 1970. Simultaneously with his employment at Phoenix, he was President of
First Atlanta Realty Fund, a publicly owned real estate investment trust. During
his tenure with the trust, he served as a Trustee of the National Association of
Real Estate Investment Trusts.

Following his departure from Phoenix in 1970, Mr. Sorenson became Vice
President of Cousins Properties in Atlanta, Georgia, where he was responsible
for development of office buildings, shopping centers and apartments until 1971.
Until forming Southeast Venture Companies ("SV") in 1979, Mr. Sorenson was an
independent real estate developer.

Mr. Sorenson was co-founder of SV in 1979. In 1992, substantially all
of the assets of SV were sold to SVC. Mr. Sorenson is a graduate of the
Northwestern University Business School with a major in real estate.

The other member of the New General Partner is SVC. SVC is a Nashville,
Tennessee-based full service real estate corporation involved in real estate
brokerage, property management and development of office buildings, hospitals,
medical buildings and other medical facilities. SVC was formed in 1992. Its
personnel include civil engineers, architects and other real estate
professionals whose services will be utilized by the New General Partner.
The officers and key employees of SVC include the following:

Paul J. Plummer, Age 47. Mr. Plummer serves as director of project
management services for SVC. Mr. Plummer is responsible for management, team
structuring, cost control and scheduling of large scale projects for SVC
including office buildings, medical centers, commercial office buildings,
commercial land ventures and build-to-suit projects. Before joining SV in 1986,
Mr. Plummer served as a partner and director of design for the Nashville-based
architecture and engineering firm of Gresham, Smith and Partners. In that
capacity he was responsible for the design and planning of over 15 major
projects throughout the United States and Saudi Arabia. Mr. Plummer earned his
bachelor of architecture degree from the University of Kentucky and is a member
of the American Institute of Architects.

Wood S. Caldwell, Age 44. Mr. Caldwell is responsible for all site
development activities on behalf of commercial and health care clients of SVC,
including managing all design consultants, permitting, scheduling, budgeting and
construction management. He contributes to SVC's development team in the areas
of land planning, zoning, permitting, engineering and construction. Before
joining SV in 1985, Mr. Caldwell served as a professional engineer for Gresham,
Smith and Partners. As the prime site design engineer for Gresham, Smith and
Partners, Mr. Caldwell produced and coordinated site development plans for over
50 separate medical facilities in over 40 different communities throughout the
southeast, Mr. Caldwell earned his bachelor of engineering degree from the
Vanderbilt University School of Engineering.

Axson E. West, Age 43. Mr. West serves as vice president of brokerage
services for SVC, specializing in office and industrial leasing, improved
property sales and land disposition for several commercial and residential
projects. Mr. West has sold real estate and real estate securities since 1980
and, since joining SV in 1988, he has been responsible for the disposition of
land encompassing industrial, office and retail developments. Mr. West is
director of the Nashville Board of Realtors and president elect of the board's
commercial investment division. He received his bachelor of arts degree from
Vanderbilt University and is a Certified Commercial Investment Member, a
designation of the Commercial Investment Real Estate Institute.

Cameron W. Sorenson, Age 35. Mr. Sorenson serves as director of
vertical development for SVC. He is primarily responsible for providing
development and project management for the clients of SVC. Prior to assuming
these responsibilities, Mr. Sorenson was project director for two large scale
land development ventures for SVC. Prior to joining SV in 1987, Mr. Sorenson was
with Trust Company Bank in Atlanta, as an officer in the National Division,
managing a credit portfolio in excess of $150 million. He received his bachelor
of science degree in finance from the MacIntyre School of Business at the
University of Virginia. Cameron Sorenson is the son of Richard W. Sorenson, the
individual, majority member of the New General Partner.

25
<PAGE> 29
Neither SMGT nor any of its members owns directly or indirectly any
Units.

For eleven years, Mr. Sorenson has worked with Deborah Dillon, the
former President and consultant of the General Partner. (See "THE GENERAL
PARTNER - Former Management/Consulting Relationship" above).

Ms. Dillon has agreed to advise and consult with the New General
Partner concerning the Property on a continuing basis for which she will be
compensated by the New General Partner solely from a percentage of real estate
commissions earned by the New General Partner in connection with sales of
Partnership property. Ms. Dillon does not directly or indirectly own any Units.

SMGT and Mr. Sorenson have entered into an agreement with the
Partnership to substitute SMGT as the New General Partner of the Partnership
upon approval of a majority in interest of the Unit holders. The agreement
provides that, following such approval, SMGT will execute the Partnership
Agreement, thereby agreeing to be bound by all the terms and conditions of the
Partnership. Under the agreement, SMGT and Mr. Sorenson have agreed to indemnify
the Partnership from and against any costs and expenses incurred by the
Partnership in accordance with the substitution in the event that SMGT defaults
under the agreement. The Partnership has also agreed to indemnify Mr. Sorenson
against his costs and expenses if the Partnership defaults under the agreement
by refusing to allow SMGT to assume the position of New General Partner if an
affirmative vote of the Units approves SMGT as the New General Partner. Under
the agreement, SMGT has also agreed to be substituted as general partner of two
other limited partnerships in which the General Partner also acts as general
partner, if the limited partners of such partnerships approve such substitution.
SMGT's potential substitution as the New General Partner of the Partnership is
not dependent upon its substitution as general partner in any of the other
partnerships.

SMGT HAS REPRESENTED TO THE PARTNERSHIP THAT THE FOLLOWING DESCRIPTION
OF ITS INTENTIONS WITH RESPECT TO MANAGEMENT AND MARKETING THE PROPERTY IF IT IS
APPOINTED THE NEW GENERAL PARTNER REPRESENTS ITS CURRENT PLANS WITH RESPECT
THERETO. HOWEVER, THERE IS NO ASSURANCE THAT ALL OR ANY OF THESE PLANS WILL BE
IMPLEMENTED, OR THAT, IF IMPLEMENTED, THEY WILL RESULT IN A SALE OR SALES OF THE
PROPERTY.

If the First Alternative Amendments are adopted, the New General
Partner intends first to conduct an extensive site analysis using the services
of SVC's professionals. This analysis will include site specific evaluation of
topography, floodplain, soils, and drainage to be utilized to develop a
comprehensive plan for development as an industrial park. This plan will include
viable options for road, utility, and sewer placement, among other factors
relevant to an industrial park. In addition, an audit of competing parks will be
undertaken to assist in drafting comprehensive park covenants. After this work
has been completed but prior to formulating a marketing plan, the New General
Partner would spend time with State Department of Commerce officials as well as
non-competing local brokers to clarify current marketing opportunities. Once
this data has been collected, all information will be compiled to develop a
detailed marketing strategy which will include possible parcel size, locations
and pricing. Brokers will then be interviewed to assist with marketing efforts.

EXTENSION OF PARTNERSHIP TERM

The term of the Partnership would be extended by 3 years from December
31, 1997 to December 31, 2000. This additional period may give the Partnership
more latitude and flexibility to negotiate a favorable sale or sales agreements
to maximize the value of the Property to the Partnership. However, there can be
no guarantee that the Partnership will be able to realize

26
<PAGE> 30
a better sale price during such extended period than it would during the period
prior to the expiration of the current term or in the course of the subsequent
dissolution and liquidation of the Partnership assets pursuant to the
Partnership Agreement. Moreover, there is also a risk that the Property will
decrease in value during any such extended term.

The Partnership currently has a termination date of December 31, 1997.
At that point in time, if the term is not extended, the Partnership will
dissolve and any distributions will be made in accordance with a liquidation.
Pursuant to the Partnership Agreement, all distributions in a liquidation will
be made in the following priority: first to any debts or obligations of the
Partnership (there currently are none); next to a reserve, as determined by the
General Partner, to facilitate the liquidation of all the Partnership's assets;
and, finally, to the partners.

AUTHORIZATION OF FEES AND COMMISSIONS FOR NEW GENERAL PARTNER

As part of the First Alternative Amendments, the Partnership Agreement
will also be amended to provide the following fees and commissions for the New
General Partner:

(i) Management Fees

Under the existing Partnership Agreement, the General Partner was
entitled to receive a management fee of $8,100 per year but not in excess of a
total of $64,800 during the term of the Partnership. The General Partner has
received the entire $64,800 in fees. This amendment would approve additional
fees for the New General Partner at the same annual rate as originally
authorized. The fees would commence as of the date of adoption of the First
Alternative Amendments and the execution of the Partnership Agreement by the New
General Partner and continue through the end of the extended Partnership term.

The effect of the First Alternative Amendments would be that the
Partnership would pay a management fee to the New General Partner of $4,504 in
1997 (assuming approval of the First Alternative Amendments on June 11, 1997,
the date of the Special Meeting), $8,100 in 1998, $8,100 in 1999 and $8,100 in
2000; provided that if all of the Property were sold prior to December 31, 2000,
the Partnership would only pay the New General Partner a pro rata portion of the
applicable annual fee to the date of such sale.

(ii) Commissions

The Partnership Agreement does not currently limit the amount of the
commissions to be paid by the Partnership in connection with a sale of
Partnership property. The only existing limitation on the General Partner's
right to receive commissions is provided in Section 4.3(c)(i) of the Partnership
Agreement which states that "neither the General Partner nor any such Affiliate
shall be given an exclusive right to sell or exclusive employment to sell the
Property for the Partnership."

The Amendments would delete Section 4.3(c)(i) from the Partnership
Agreement and expressly provide that the General Partner or an Affiliate would
have the right to be given an

27
<PAGE> 31
exclusive right to sell or exclusive employment to sell the Property. The
Amendments would also provide that total compensation paid to all persons,
including the New General Partner for the sale of Partnership Property shall be
limited to a competitive real estate commission or disposition fee not to exceed
10% of the contract price of the sale of the Property, provided that the New
General Partner its Affiliates would only be entitled to up to 50% of any such
compensation.

MODIFICATION OF REQUIREMENT THAT LIMITED PARTNERS CONSENT TO SALE OF ALL OR
SUBSTANTIALLY ALL THE ASSETS OF THE PARTNERSHIP

The Partnership Agreement currently provides in Section 4.3(b)(i):

"(b) Without the Consent of a majority in interest of
the Limited Partners, the General Partner shall not have the
authority to:

(i) sell or otherwise dispose of at one time
all or substantially all the assets of the
Partnership, except that the General Partner may sell
the Property without such consent (A) in connection
with the liquidation of the Partnership under Section
6.3 or (B) if the net proceeds of such sale, when
distributed in accordance with Section 3.1, will be
sufficient to provide the Limited Partners with
distributions equal to the Unpaid Cumulative Return
plus their Adjusted Capital Contributions."

There is presently no definition of "all or substantially all the
assets of the Partnership" in the Partnership Agreement. As a result, there is
continuing uncertainty as to whether a vote of Limited Partners is required for
certain Property sales. This uncertainty can lead to the possible delay, or
even loss of a sale since the General Partner may be forced to obtain a vote of
Limited Partners in order to resolve the uncertainty. The First Alternative
Amendments would add a definition of "all or substantially all the assets of
the Partnership" to mean 60% or more of the real estate acreage held by the
Partnership as of April 24, 1997.

The effect of adding the definition would be to permit the New General
Partner to sell the Property in a combination of sales amounting to less than
60% of the acreage of the Partnership as of April 24, 1997 with no limitation as
to price, other than general limitations imposed by its fiduciary duty to the
Partnership and its assets, without obtaining the consent of a majority in
interest of the Limited Partners. The modification of the Partnership Agreement
could not only result in sales of parcels of the Property which, if the parcels
sold constituted less than 60% of the real estate acreage held by the
Partnership as of April 24, 1997, would fail to return to the Limited Partners
the Unpaid Cumulative Return plus their Adjusted Capital Contributions, but such
sales could also potentially be below the recent appraised value discussed above
under the heading "THE PROPERTY - Appraisal".

The additional modification of Section 4.3(b) would delete the phrase
"Unpaid Cumulative Return plus their Adjusted Capital Contributions" and insert
"Acquisition Cost of the assets sold."

"Acquisition Cost" will be defined in the First Alternative Amendments
as "with respect to a Partnership asset, the price originally paid by the
Partnership to acquire the asset, including the value of any mortgages or liens
on the asset assumed by the Partnership at the time of acquisition, excluding
points and prepaid interest."

The effect of adding this definition is that, even if a sale or
disposition of a portion of the Property constituted 60% or more of the assets
of the Partnership, Limited Partners' consent to the sale or disposition would
only be required if such sale were below an amount which would return to the
Limited Partners the Acquisition Cost of such assets rather than below an amount
which would return to the Limited Partners the Unpaid Cumulative Return plus
their Adjusted Capital Contributions.

SECOND ALTERNATIVE AMENDMENTS

EXTENSION OF PARTNERSHIP TERM

The term of the Partnership would be extended by 3 years from December
31, 1997 to December 31, 2000. The extended termination date is identical to
that proposed for the New General Partner under the First Alternative
Amendments. This additional period may give the Partnership more latitude and
flexibility to negotiate a favorable sale or sales agreements to

28
<PAGE> 32
maximize the value of the Property to the Partnership. However, there can be no
assurance that the Partnership will be able to realize a higher sales price than
could be achieved by the General Partner during the period prior to the
expiration of the current term or in the course of the subsequent dissolution
and liquidation of the Partnership assets pursuant to the Partnership Agreement.
There is also a risk that the Property could decrease in value during any such
extended term.

For the plans of the General Partner with respect to the Property if
the Second Alternative Amendments are adopted See "THE GENERAL PARTNER - Plans
of General Partner if New General Partner Not Approved", above.

AUTHORIZATION OF FEES AND COMMISSIONS FOR GENERAL PARTNER

Under the Second Alternative Amendments, the Partnership Agreement will
also be amended to provide that the General Partner will be entitled to
commissions as described below payable to the General Partner on the sale or
sales of the Property effective as of the adoption of the Second Alternative
Amendments and new management fees for the General Partner, commencing on
January 1, 1998. The fee and commission structure is identical to that proposed
for the New General Partner under the First Alternative Amendments, except that
fees may not be earned by the General Partner prior to the expiration of the
current term of the Partnership Agreement on December 31, 1997.

(i) Management Fees

Under the existing Partnership Agreement, the General Partner was
entitled to receive a management fee of $8,100 per year but not in excess of a
total of $64,800 during the term of the Partnership. The General Partner has
received the entire $64,800 in fees. The Second Alternative Amendment would
approve additional fees for the General Partner at the same annual rate as
originally authorized. The fees would commence as of January 1, 1998 and
continue through the end of the extended Partnership term.

The effect of the Second Alternative Amendments would be that the
Partnership would pay a management fee to the General Partner of $0 in 1997,
$8,100 in 1998, $8,100 in 1999 and $8,100 in 2000; provided that if the Property
were sold in its entirety prior to December 31, 2000, the Partnership would only
pay the General Partner a pro rata portion of such fee to the date of such sale.

29
<PAGE> 33
(ii) Commissions

The Partnership Agreement does not limit the amount of the commissions
to be paid by the Partnership in connection with a sale of Partnership property.
The only existing limitation on the General Partner's right to receive
commissions is provided in 4.3(c)(i) which states that "neither the General
Partner nor any such Affiliate shall be given an exclusive right to sell or
exclusive employment to sell the Property for the Partnership."

The Second Alternative Amendments would delete Section 4.3(c)(i) from
the Partnership Agreement and expressly provide that the General Partner or an
Affiliate would have the right to be given an exclusive right to sell or
exclusive employment to sell the Property. The Amendments would also provide
that total compensation paid to all persons, including the General Partner for
the sale of Partnership Property shall be limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract price on the
sale of the Property, provided that the General Partner and its Affiliates would
only be entitled to up to 50% of any such compensation.

ELIMINATION OF REQUIREMENT THAT LIMITED PARTNERS CONSENT TO SALE OF ALL OR
SUBSTANTIALLY ALL THE ASSETS OF THE PARTNERSHIP

The Partnership Agreement currently provides in Section 4.3(b)(i):

"(b) Without the Consent of a majority in interest of
the Limited Partners, the General Partner shall not have the
authority to:

The Second Alternative Amendments would delete this subsection
4.3(b)(i) in its entirety.

The effect of the deletion would be to permit the General Partner to
sell the Property in one or more sales without limitation as to price, other
than general limitations imposed by its fiduciary duty to the Partnership and
its assets, without obtaining the consent of a majority in interest of the
Limited Partners. The deletion of this provision could not only result in a sale
which would fail to return to the Limited Partners the Unpaid Cumulative Return
plus their Adjusted Capital Contributions, but also could result in the sale of
all or a portion of the Property

30
<PAGE> 34
at below its most recent appraised value discussed above under the heading "THE
PROPERTY - Appraisal".

VOTING

ELIGIBLE UNITS

The presence, in person or by proxy, of Limited Partners holding more
than 50% of the total number of outstanding Units that Limited Partners hold
will constitute a quorum at the Special Meeting. An assignee of Units that the
General Partner has not admitted to the Partnership as a Limited Partner,
however, will be unable to vote at the Special Meeting. Such assignee's Units
will also not be considered outstanding for purposes of determining whether a
quorum exists at the Special Meeting or whether the Limited Partners approve
one of the Alternative Amendments. Additional Units acquired by a Limited
Partner with respect to which the General Partner has not admitted such Limited
Partner to the Partnership will also not be considered outstanding for purposes
of the Special Meeting and the Limited Partner will be unable to vote such
Units.

The General Partner has admitted to the Partnership as Limited Partners
all assignees of Units as of the Record Date. As of the Record Date, there were
4,225 Units that Limited Partners held that were eligible to vote at the Special
Meeting.

LEGAL OPINION

Before the Special Meeting the Partnership will obtain an opinion from
legal counsel that: (i) the consent of the Limited Partners as to the
designation of the New General Partner under the First Alternative Amendments is
permitted by the Delaware Revised Uniform Limited Partnership Act, and (ii) such
consent will not impair the limited liability of the Limited Partners nor
adversely affect the classification of the Partnership as a partnership for
federal income tax purposes.

REQUIRED VOTE

For either of the Alternative Amendments to take

31
<PAGE> 35
effect, the Limited Partners must vote more than 50% of the total number of
outstanding Units in favor of one of the Alternative Amendments at the Special
Meeting.

Limited Partners will possess one vote for each Unit eligible to be
voted that they hold.

ABSTENTIONS/BROKER NON-VOTES

With respect to the Alternative Amendments, abstentions and broker
non-votes will have the same effect as a vote against approval because more than
50% of the total number of outstanding eligible Units must approve an
Alternative Amendment, rather than just a majority of those eligible Units
present at the Special Meeting.

DISSENTERS' RIGHTS

Section 17-212 of the Delaware Revised Uniform Limited Partnership Act
provides that a partnership agreement may provide for contractual appraisal
rights for a partnership interest in a limited partnership held by any class,
group of partners, or partnership interests in connection with the amendment of
a partnership agreement. Dissenters' rights granted to holders of corporate
securities by state statute are not provided to limited partners under the
Delaware Revised Uniform Limited Partnership Act. The Partnership Agreement
does not provide for contractual appraisal rights in connection with the
Alternative Amendments. Therefore, Limited Partners who oppose the Alternative
Amendments will not have the right to dissent and demand payment in cash for
the fair value of their Units.

PROXIES

Proxyholders will vote the eligible Units represented by valid proxies
at the Special Meeting in accordance with the directions given on the Proxy
Card and this Proxy Statement concerning voting with respect to the Alternative
Amendments. Moreover, the proxyholders intend to vote such Units on any
procedural matters coming before the Special Meeting in accordance with their
best judgment. Unless indicated to the contrary thereon, the directions given on
a Limited Partner's Proxy Card will be for all of such Limited Partner's
eligible Units.

If a Limited Partner signs and returns a Proxy Card without giving any
directions on how to vote on the Alternative Amendments, the Proxyholder will
vote such Limited Partner's eligible Units, first for the approval of the
First Alternative Amendments and only as a vote for the Second Alternative
Amendments if the First Alternative Amendments are not adopted.

REVOCATION OF PROXIES

A Limited Partner may revoke its proxy at any time prior to the
proxyholder's voting of the Units to which such proxy applies by: (i) submitting
a later dated proxy to the Information Agent, (ii) attending the Special Meeting
and delivering a written notice of revocation of the proxy to the representative
of the Information Agent present at the Special Meeting, or (iii) delivering a
written notice of revocation of the proxy to the Information Agent at the
address set forth herein, which the Information Agent receives on or before
June 10, 1997.

INFORMATION AGENT

The Information Agent may also participate in the solicitation of
proxies. The Partnership has retained the Information Agent to distribute the
attached letter from the General Partner, the attached notice of the Special
Meeting, this Proxy Statement, and the Proxy Card (the "Proxy Materials") and to
collect and tabulate completed Proxy Cards. Pursuant to the requirements of the
Partnership Agreement, the Information Agent has mailed these documents by
certified mail to each Limited Partner as of the Record Date at his record
mailing address. As a result, the Information Agent has also distributed the
Proxy Materials to various banks, brokerage firms,

<PAGE> 36
and other custodians, nominees, and fiduciaries that may hold Units on behalf of
their beneficial holders (collectively, the "Nominee Holders"). The Partnership
will also reimburse Nominee Holders for the reasonable expenses that they incur
when forwarding the Proxy Materials to the beneficial owners of the Units. The
Partnership will pay the Information Agent a fee of approximately $3,300 for
such services and reimburse it for its out-of-pocket expenses. The Partnership
will also reimburse Nominee Holders for the reasonable expenses that they incur
when forwarding the attached letter from the General Partner and the Proxy
Materials to the beneficial owners of the Units.

SOLICITATIONS BY THE GENERAL PARTNER

The directors, officers, and employees of the General Partner may
solicit proxies for the Alternative Amendments by mail, personal interview,
telephone, facsimile transmission, or other means. They will receive no
additional compensation therefor.

OWNERSHIP OF UNITS

The following table sets forth certain information regarding the
beneficial ownership of the Units and the capital stock of the General Partner
(the "SEA Shares"), respectively, as of April 10, 1997 by: (i) all persons who
are beneficial owners of 5% or more of the Units or the SEA Shares,
respectively, (ii) all directors and executive officers of the General Partner,
and (iii) all directors and executive officers of the General Partner as a
group. The General Partner does not itself own any Units but does hold a
partnership interest as a general partner. The disclosure that no other person
is the beneficial owner of 5% or more of the Units other than as set forth below
is based upon the Partnership not having received any Schedules 13D or 13G to
the contrary on or before April 10, 1997. Unless stated otherwise, the persons
named below possess sole voting and investment power with respect to the
securities set forth opposite their names.

<TABLE>
<CAPTION>
Units SEA Shares
----------------- -----------------
Name and Address of Beneficial Owner Number Percent Number Percent
- ------------------------------------ ------ ------- ------ -------
<S> <C> <C> <C> <C>
Fidelity Enterprises, Inc. 100 100%
250 King of Prussia Road
Radnor, Pennsylvania 19087

Dollar General Retirement Trust 250 5.92%
NA-0404
400 First American Center
Nashville, Tennessee 37237
</TABLE>

EXPERTS

The financial statements of the Partnership at December 31, 1996 and
1995 and for each of the three years in the period ended December 31, 1996
incorporated herein by reference have been audited by Ernst & Young, LLP,
independent auditors, as set forth in their report thereon incorporated by
reference herein in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing. Representatives of the firm of
Ernst & Young LLP are expected to be present in person or by telephone at the
Special Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.

33
<PAGE> 37
AVAILABLE INFORMATION

The Partnership is subject to the informational requirements of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements, and other information that the Partnership has filed with the
Commission may be inspected and copied at the public reference facilities that
the Commission maintains at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549 and at the Commission's regional offices located at Room 3190, Northwest
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and 7 World
Trade Center, 13th Floor, New York, New York 10048. In addition, such reports,
proxy statements, and other information concerning the Partnership may be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549 at prescribed rates. The Partnership's reports, proxy statements, and
other information filed with the Commission may also be inspected at the
offices of the New York Stock Exchange at 20 Broad Street, New York, New York
10005. They are also available through the Commission's Web site at
http:\\www.sec.gov.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Partnership hereby incorporates herein by reference the Financial
Information (as hereinafter defined) appearing in: (i) the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1996 and (ii) the
Partnership's periodic reports filed with the Commission under the Exchange Act
after the date hereof but on or before the Special Meeting. The Partnership also
hereby incorporates herein by reference any current reports filed with the
Commission after the date hereof but on or before the Special Meeting. Any
statement contained herein or in a document incorporated by reference herein,
however, shall be deemed to be modified or superseded for the purposes of this
Proxy Statement to the extent that a statement contained in a subsequently dated
document that is considered part of this Proxy Statement is inconsistent
therewith. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement. The term "Financial Information" shall mean any financial statements,
supplementary financial information, and management discussion and analysis of
financial condition and results of operations.

Upon request and without charge, the Partnership will send to any
Limited Partner a copy of any document incorporated herein by reference,
excluding any exhibits to such document. Any such request should be made to the
General Partner at the address or telephone number set forth on the back cover
page of this Proxy Statement. The General Partner will fulfill each such request
by mailing the requested document to the requesting Limited Partner by first
class mail within one business day after receiving the request.

34
<PAGE> 38
APPENDIX I

DEFINED TERMS

<PAGE> 39
APPENDIX I

DEFINED TERMS

SOUTHEAST ACQUISITIONS, I, L.P.

This appendix lists all of the defined terms in the Proxy Statement and
indicates the page on which the Proxy Statement or the Partnership included as
Exhibit A to the Proxy Statement defines them.

DEFINED TERMS PAGE
- ----------------------------------------------------------
Acquisition Cost..................................... 28
Adjusted Capital Contributions....................... Partnership Agmt. Pg. A-20
Affiliate............................................ Partnership Agmt. Pg. A-20
Alternative Amendments............................... 1
Commission........................................... 34
Consulting Agreement................................. 18
Exchange Act......................................... 34
Fidelity Mutual...................................... 9
Financial Information................................ 34
General Partner...................................... 1
Information Agent.................................... 3
Kaiser............................................... 19
Limited Partners..................................... 1
New General Partner.................................. 1
Nominee Holders...................................... 33
Partnership Agreement................................ 1
Partnership.......................................... 1
Phoenix.............................................. 25
Property............................................. 9
Proxy Card........................................... 2
Proxy Materials...................................... 32
Proxy Statement...................................... 1
Record Date.......................................... 2
SEA Shares........................................... 33
SMGT................................................. 10
Special Meeting...................................... 7
SV................................................... 25
SVC.................................................. 10
Units................................................ 16
Unpaid Cumulative Return............................. Partnership Agmt. Pg. A-23

1
<PAGE> 40
EXHIBIT B

ALTERNATIVE AMENDMENTS
<PAGE> 41
FIRST ALTERNATIVE AMENDMENTS
SEA I

FIRST AMENDMENT TO
RESTATED LIMITED PARTNERSHIP AGREEMENT OF
SOUTHEAST ACQUISITIONS I, L.P.

This FIRST AMENDMENT (this "Amendment"), dated as of June 11, 1997 is
to the Restated Limited Partnership Agreement (the "Partnership Agreement") of
Southeast Acquisitions I, L.P. (the "Partnership"), dated June 4, 1987, by
and between SOUTHEAST ACQUISITIONS, INC., a Delaware corporation, as general
partner (the "General Partner") and the Persons admitted as limited partners
pursuant to the Partnership Agreement.

WHEREAS, a special meeting (the "Meeting") of the Limited Partners was
duly held on June 11, 1997; and

WHEREAS, at the Meeting a majority in interest of the Limited Partners
have voted to adopt the following Amendments to the Partnership Agreement.

NOW, THEREFORE, the Amendments are adopted and are effective as of June
11, 1997.

1. Southeast Acquisitions, Inc. is hereby removed as the General
Partner of the Partnership, and Southern Management Group of Tennessee, LLC, a
Tennessee Limited Liability Company, is substituted therefor as successor
General Partner of the Partnership. On and after the date of this Amendment,
except as the context may otherwise require, all references to the General
Partner in the Partnership Agreement shall mean Southern Management Group of
Tennessee, LLC.

2. Section 1.3 is amended in its entirety to read as follows:

"1.3. TERM. The Partnership shall exist for a term ending December
31, 2000, at which time it shall be dissolved, unless sooner
dissolved or terminated as provided in this Agreement (the "Term")."

3. Section 1.4 is hereby amended in its entirety to read as follows:

"1.4. PLACE OF BUSINESS. The principal place of business of the
Partnership shall be at 301 South Perimeter Park Drive, Suite 115,
Nashville, TN 37211, or at another location selected by the General
Partner, who shall give notice of any change to the Limited
Partners. The Partnership may have such additional offices or places
of business as the General Partner may determine."

B-1
<PAGE> 42
4. The first sentence of Section 2.1 is amended in its entirety to read
as follows:

"2.1. GENERAL PARTNER. The General Partner is Southern Management
Group of Tennessee, LLC, a Tennessee Limited Liability Company,
301 South Perimeter Park Drive, Suite 115, Nashville, Tennessee".

5. Section 4.2(a) is amended by adding at the end of the Section the
following:

"(xi) Reserve to itself or an Affiliate or enter into a contract for
the exclusive right to sell or exclusive employment to sell property
for the Partnership."

6. Section 4.3(b) is hereby amended in its entirety to read as follows:

"(b) Without the Consent of a majority in interest of the Limited
Partners, the General Partner shall not have the authority to:

(i) sell or otherwise dispose of at one time all or
substantially all the assets of the Partnership, except that
the General Partner may sell such assets without such consent
(A) in connection with the liquidation of the Partnership
under Section 6.3 or (B) if the net proceeds of such sale,
when distributed in accordance with Section 3.1, will be
sufficient to provide the Limited Partners with distributions
equal to the Acquisition Cost of the assets sold."

7. Section 4.3(c)(i) is deleted in its entirety and clauses 4.3(c)(ii)
through (iv) are hereby renumbered 4.3(c)(i) through (iii) respectively.

8. Section 4.5(a) is amended in its entirety as follows:

"4.5. COMPENSATION OF GENERAL PARTNER. (a) For the services and
activities to be performed by the General Partner in connection with
the administration and management of the Partnership and the
Property from June 11, 1997 to the end of the Term, the General
Partner shall receive a management fee of $8,100 per year (prorated
for a portion of a year) during the Term of the Partnership. The
management fee shall be paid to the General Partner for such
services on conclusion of each calendar quarter. If the Partnership
does not have sufficient cash to pay the management fee for any
quarter, such fee shall be accrued (without interest) as a debt of
the Partnership, payable out of Sale or Financing proceeds prior to
any Partner receiving his distributions in accordance with the
Agreement."

9. A new Section 4.5(d) shall be added to the Partnership Agreement as
follows:

B-2
<PAGE> 43
estate commission or disposition fee not to exceed 10% of the
contract price for the sale of the property. The commission or
disposition fee shall be paid upon sale of the property prior to any
distribution to the Partners in accordance with this Agreement;
provided that the amount of any such commission or disposition fee
paid to the General Partner shall reduce any distribution to which
it would otherwise be entitled pursuant to this Agreement."

10. Section 11.1 is amended by adding the following definition as the
first definition in the Section:

"Acquisition Cost" with respect to a Partnership asset means the
price originally paid by the Partnership to acquire the asset,
including the value of any mortgages or liens on the asset assumed
by the Partnership at the time of acquisition, excluding points and
prepaid interest"

and by adding the following definition following the definition of
"Agreement":

"all or substantially all the assets of the Partnership" means 60%
or more of the real estate acreage held by the Partnership as of
April 24, 1997."

11. Except as amended hereby, the Partnership Agreement shall remain in
full force and effect.

12. Terms not defined herein which are defined in the Partnership
Agreement shall have the same meanings herein.

13. This Amendment and the rights and obligations of the Partners
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
therein, without application of the principles of conflicts of laws of such
state.

IN WITNESS WHEREOF, this Amendment has been executed by the parties set
forth below as of the date first above written.

GENERAL PARTNER SOUTHEAST ACQUISITIONS, INC.

By____________________________
Name:
Title:

SUCCESSOR GENERAL PARTNER SOUTHERN MANAGEMENT GROUP
OF TENNESSEE, LLC.

By____________________________
Name:
Title:

LIMITED PARTNERS LIMITED PARTNERS

By____________________________
Name:
Title:

B-3
<PAGE> 44
SECOND ALTERNATIVE AMENDMENTS
SEA I

FIRST AMENDMENT TO
RESTATED LIMITED PARTNERSHIP AGREEMENT OF
SOUTHEAST ACQUISITIONS I, L.P.

WHEREAS, a special meeting (the "Meeting") of the Limited Partners was
duly held on June 11, 1997; and

WHEREAS, at the Meeting a majority in interest of the Limited Partners
have voted to adopt the following Amendments to the Partnership Agreement.

NOW, THEREFORE, the Amendments are adopted and are effective as of June
11, 1997.

1. Section 1.3 is amended in its entirety to read as follows:

"1.3. TERM. The Partnership shall exist for a term ending December
31, 2000, at which time it shall be dissolved, unless sooner
dissolved or terminated as provided in this Agreement (the "Term")."

2. Section 1.4 is hereby amended in its entirety to read as follows:

"1.4. PLACE OF BUSINESS. The principal place of business of the
Partnership shall be at 250 King of Prussia Road, Radnor, PA, 19087
or at another location selected by the General Partner, who shall
give notice of any change to the Limited Partners. The Partnership
may have such additional offices or places of business as the
General Partner may determine."

3. Section 4.2(a) is amended by adding at the end of the section the
following:

"(ix) Reserve to itself or an Affiliate or enter into a contract for
an exclusive right to sell or exclusive employment to sell property
for the Partnership."

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<PAGE> 45
4. Section 4.3(b) is hereby amended in its entirety to read as follows:

"(b) Without the consent of a majority in interest of the Limited
Partners, the General Partner shall not have the authority to elect
to dissolve the Partnership."

5. Section 4.3(c)(i) is deleted in its entirety and clauses 4.3(c)(ii)
through (iv) are hereby renumbered 4.3(c)(i) through (iii) respectively.

6. Section 4.5(a) is amended in its entirety as follows:

"4.5. COMPENSATION OF GENERAL PARTNER. (a) For the services and
activities to be performed by the General Partner in connection with
the administration and management of the Partnership and the
Property from January 1, 1998 to the end of the Term, the General
Partner shall receive a management fee of $8,100 per year (prorated
for a portion of a year) during the Term of the Partnership. The
management fee shall be paid to the General Partner for such
services on conclusion of each calendar quarter. If the Partnership
does not have sufficient cash to pay the management fee for any
quarter, such fee shall be accrued (without interest) as a debt of
the Partnership, payable out of Sale or Financing proceeds prior to
any Partner receiving their distributions in accordance with the
Agreement."

7. A new Section 4.5(d) shall be added to the Partnership Agreement as
follows:

"(d) The General Partner or its Affiliates may receive up to
one-half of the competitive real estate commission or disposition
fee (that real estate or brokerage commission or disposition fee
paid for the purchase or sale of property which is reasonable,
customary and competitive in light of the size, type and location of
the property) with respect to sales of Partnership property
following June 11, 1997 which are not under contract as of such
date. The total compensation paid to all Persons for the sale of
Partnership property shall be limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract
price for the sale of the property. The commission or disposition
fee shall be paid upon sale of the property prior to any
distribution to the Partners in accordance with this Agreement;
provided that the amount of any such commission or disposition fee
paid to the General Partner shall reduce any distribution to which
it would otherwise be entitled pursuant to this Agreement."

8. Except as amended hereby, the Partnership Agreement shall remain in
full force and effect.

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<PAGE> 46
9. Terms not defined herein which are defined in the Partnership
Agreement shall have the same meanings herein.

10. This Amendment and the rights and obligations of the Partners
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
therein, without application of the principles of conflicts of laws of such
state.

IN WITNESS WHEREOF, this Amendment has been executed by the parties set
forth below as of the date first above written.

GENERAL PARTNER SOUTHEAST ACQUISITIONS, INC.

By____________________________
Name:
Title:

LIMITED PARTNERS LIMITED PARTNERS

By____________________________
Name:
Title:

B-6
<PAGE> 47
EXHIBIT A

PARTNERSHIP AGREEMENT
<PAGE> 48
TABLE OF CONTENTS

Page
----

INTRODUCTION .......................................................... A-1

ARTICLE I ORGANIZATION .................................... A-1
1.1 Continuation .................................... A-1
1.2 Name ............................................ A-1
1.3 Term ............................................ A-1
1.4 Place of Business ............................... A-1
1.5 Registered Office and Registered Agent .......... A-1
1.6 Business ........................................ A-1

ARTICLE II PARTNERS AND CAPITAL ............................ A-2
2.1 General Partner ................................. A-2
2.2 Units ........................................... A-2
2.3 Capital Contributions of Limited
Partners ..................................... A-2
2.4 Limited Partners ................................ A-2
2.5 Partnership Capital ............................. A-2
2.6 Liability of Partners ........................... A-2
2.7 Capital Accounts ................................ A-2

ARTICLE III DISTRIBUTIONS, TAXABLE INCOME AND TAX LOSS ...... A-3
3.1 Cash Distributions .............................. A-3
3.2 Taxable Income and Tax Loss ..................... A-3
3.3 Allocations and Distributions Among Partners .... A-4
3.4 Income Offset ................................... A-4
3.5 Syndication Expenses ............................ A-5
3.6 Minimum Gain Chargeback ......................... A-5
3.7 Recharacterization of Fees ...................... A-5
3.8 Other Allocations ............................... A-5

ARTICLE IV MANAGEMENT ...................................... A-5
4.1 Exclusive Management Rights of General Partner .. A-5
4.2 Authority of General Partner .................... A-5
4.3 Restrictions on Authority of General Partner .... A-6
4.4 Duties and Obligations of the General Partner ... A-7
4.5 Compensation of General Partner ................. A-8
4.6 Partnership Expenses ............................ A-8
4.7 Other Business of Partners ...................... A-9
4.8 Limitation on Responsibility of General Partner;
Indemnification .............................. A-10

ARTICLE V SUCCESSOR AND ADDITIONAL GENERAL PARTNERS:
WITHDRAWAL OF GENERAL PARTNER ................ A-10
5.1 Successor or Additional General Partner ......... A-10
5.2 Bankruptcy, Death, Dissolution or Incompetence
of General Partner ........................... A-11
5.3 Liability of Withdrawn General Partner .......... A-11
5.4 Restrictions on Transfer of General Partner's
Interest ..................................... A-11
5.5 Consent of Limited Partners to Successor or
Additional General Partners .................. A-12
5.6 Valuation of Interest of General Partner ........ A-12
ARTICLE VI DISSOLUTION AND LIQUIDATION ..................... A-12
6.1 Events Causing Dissolution ...................... A-12
6.2 Capital Contribution on Dissolution ............. A-13
6.3 Liquidation ..................................... A-13
6.4 Time Limitation ................................. A-14
ARTICLE VII TRANSFERABILITY OF UNITS ........................ A-14
7.1 Restrictions on Transfers ....................... A-14
7.2 Assignees and Substituted Limited Partners ...... A-14
ARTICLE VIII BOOKS AND RECORDS; BANKING ...................... A-15
8.1 Books and Records ............................... A-15
8.2 Accounting and Fiscal Year ...................... A-15
8.3 Bank Accounts and Investments ................... A-15
8.4 Reports ......................................... A-15
8.5 Depreciation and Elections ...................... A-16
8.6 Designation of Tax Matters Partner .............. A-16
ARTICLE IX MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS .. A-16
9.1 Meetings ........................................ A-16
9.2 Voting Rights of Limited Partners ............... A-17
ARTICLE X MISCELLANEOUS ................................... A-18
10.1 Appointment of General Partner as
Attorney-in-Fact ............................. A-18
10.2 Amendments ...................................... A-18
10.3 Security Interest and Right of Setoff ........... A-19
10.4 Ownership by Limited Partner of Interest in
General Partner or Affiliates ................ A-19
10.5 Parties Bound ................................... A-19
10.6 Governing Law; Construction ..................... A-20
ARTICLE XI DEFINITIONS ..................................... A-20
11.1 Defined Terms ................................... A-20
<PAGE> 49
RESTATED LIMITED PARTNERSHIP AGREEMENT
OF SOUTHEAST ACQUISITIONS I, L.P.

This Restated Limited Partnership Agreement is made as of the 4th day of
June 1987, by Southeast Acquisitions, Inc., a Delaware corporation, as general
partner, F M Initial, Inc., as the initial limited partner, and the Persons who
on or after the execution of this Agreement are admitted as limited partners of
the Partnership.

INTRODUCTION

On December 5, 1986, Southeast Acquisitions, Inc., as general partner, and
F M Initial, Inc. ("FMI"), as initial limited partner, formed a Delaware limited
partnership (the "Partnership") named Southeast Acquisitions I, L.P. by the
filing of a certificate of limited partnership in the Office of the Secretary of
State of Delaware. The parties hereto desire to effect the withdrawal of FMI as
initial limited partner of the Partnership, the admission of the Persons listed
on Schedule "A" hereto as limited partners of the Partnership and the amendment
of the agreement among the Partners to read in its entirety as set forth in
Articles I through XI hereof. To accomplish this, the parties agree that:

1. The Persons identified on Schedule "A" hereto are hereby admitted as
limited partners of the Partnership.

2. FMI hereby withdraws as a limited partner of the Partnership and is
released from all its obligations to the Partnership as the initial
limited partner. The Partnership shall promptly return FMI's capital
contribution as initial limited partner.

3. The agreement among the Partners of the Partnership is hereby
amended to read in its entirety as set forth in Articles I through XI
hereof.

ARTICLE I
ORGANIZATION

1.1. CONTINUATION. The Partners hereby agree to continue the Partnership as
a limited partnership under the Delaware Revised Uniform Limited Partnership
Act.

1.2. NAME. The name of the Partnership shall be Southeast Acquisitions I,
L.P., or such other name as may be selected by the General Partner, who shall
give notice of any change to the Limited Partners.

1.3. TERM. The Partnership shall exist for a term ending December 31, 1997,
at which time it shall be dissolved, unless sooner dissolved or terminated as
provided in this Agreement.

1.4. PLACE OF BUSINESS. The principal place of business of the Partnership
shall be at 259 Radnor-Chester Road, Radnor, Pennsylvania 19087, or at another
location selected by the General Partner, who shall give notice of any change to
the Limited Partners. The Partnership may have such additional offices or
places of business as the General Partner may determine.

1.5. REGISTERED OFFICE AND REGISTERED AGENT. The Partnership's registered
office in the State of Delaware and its registered agent at such office shall be
determined by the General Partner.

1.6. BUSINESS. The business of the Partnership is to acquire, hold,
maintain, develop, operate, improve, lease, finance, refinance, sell, dispose
of, borrow money in connection with, and to otherwise deal with, the Property
and to engage in any other activities related or incidental thereto. The
Partnership shall not engage in any other business or activity.

A-1
<PAGE> 50
ARTICLE II

PARTNERS AND CAPITAL

2.1. GENERAL PARTNER. The General Partner is Southeast Acquisitions, Inc., a
Delaware corporation, 259 Radnor-Chester Road, Radnor, Pennsylvania 19087. The
General Partner has contributed $1,000 to the capital of the Partnership. Except
as set forth in Section 6.2, the General Partner shall not be required to make
any additional Capital Contribution to the Partnership.

2.2. UNITS. The Partnership intends to offer and sell 4,225 Units of limited
partnership interest and to admit as Limited Partners the Persons who contribute
cash to the capital of the Partnership as the purchase price for the Units. The
General Partner may authorize the sale of fractional Units, in which event the
payment for (and the rights and other obligations attributable to) each
fractional Unit will be the pro rata portion of those indicated for a whole
Unit.

2.3. CAPITAL CONTRIBUTIONS OF LIMITED PARTNERS. Each Limited Partner shall
make a Capital Contribution of $1,000 as the purchase price for each Unit which
he purchases from the Partnership. The Capital Contributions of the Limited
Partners shall be made in cash. Except as required by the Act, each Unit shall
be fully paid and non-assessable, and no assessments for payments by the Limited
Partners will be made by the General Partner.

2.4. LIMITED PARTNERS. The Limited Partners shall be the Persons identified
from time to time as Limited Partners on the records of the Partnership and
shall be admitted as Limited Partners when their admission is consented to by
the General Partner and shown on the records of the Partnership.

2.5. PARTNERSHIP CAPITAL. No Partner shall be paid interest on any Capital
Contribution. The Partnership shall not redeem or repurchase any Units. No
Partner shall have the right to reduce, withdraw, or receive any return of, his
Capital Contribution, except as provided in Article III and Section 6.3. No
Partner shall have the right to bring an action for partition against the
Partnership.

2.6. LIABILITY OF PARTNERS. (a) No Limited Partner, as such, shall be liable
for the debts, liabilities, contracts or any other obligations of the
Partnership. A Limited Partner shall be liable only to make his Capital
Contribution and shall not be required to lend any funds to the Partnership or,
after his Capital Contribution has been paid, to make any further Capital
Contribution to the Partnership or to repay to the Partnership, any Partner or
any creditor of the Partnership any portion of any negative balance of his
Capital Account. However, in accordance with Delaware law, a Limited Partner
may, under certain circumstances, be required to return to the Partnership, for
the benefit of Partnership creditors, amounts previously distributed to him. If
any court of competent jurisdiction holds that any Limited Partner is obligated
to make any such return, such obligation shall be the obligation of the Limited
Partner and not of the General Partner.

(b) The General Partner shall have no personal liability for the repayment
of the Capital Contribution of any Limited Partner or to repay to the
Partnership any portion or all of any negative amount of its Capital Account,
except as provided in Section 6.2.

2.7. CAPITAL ACCOUNTS. (a) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions, such Partner's distributive share
of Taxable Income, and any items in the nature of income or gain that are
specially allocated pursuant to Sections 3.4 and 3.6, and the amount of any
Partnership liabilities that are assumed by such Partner or that are secured by
any Partnership property distributed to such Partner.

(b) To each Partner's Capital Account there shall be debited distributions
to such Partner pursuant to this Agreement, such Partner's distributive share of
Tax Loss, any items in the nature of expenses or losses that are specially
allocated pursuant to Section 3.5, and the amount of any liabilities of such
Partner that are assumed by the Partnership or that are secured by any property
contributed by such Partner to the Partnership.

(c) If any Interest in the Partnership is transferred in accordance with
this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.

(d) The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Treasury Regulation Section 1.704-1(b),
and shall be interpreted and applied in a manner

A-2
<PAGE> 51
consistent with such regulation. If the General Partner determines that it is
prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto, are computed in order to comply with such regulation, the
General Partner may make such modification, provided that it is not likely to
have a material effect on the distribution to any Partner pursuant to Section
6.3(a) on the liquidation of the Partnership or of a Partner's interest therein.
The General Partner shall adjust the amounts debited or credited to Capital
Accounts with respect to (i) any property contributed to the Partnership or
distributed to the Partners, and (ii) any liabilities that are secured by such
contributed or distributed property or that are assumed by the Partnership or
the General Partner, in the event the General Partner determines such
adjustments are necessary or appropriate pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv). The General Partner also shall make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Treasury Regulation Section 1.704-1(b).

ARTICLE III
DISTRIBUTIONS, TAXABLE INCOME AND TAX LOSS

3.1. CASH DISTRIBUTIONS. Cash distributions for any calendar quarter shall
be distributed within 60 days following the close of such calendar quarter (or
more frequently in the discretion of the General Partner) in the following order
of priority:

(a) 99% to the Limited Partners (in proportion to their Units) and 1%
to the General Partner until the Limited Partners have received an amount
equal to the Unpaid Cumulative Return;

(b) 99% to the Limited Partners (in proportion to their Units) and 1%
to the General Partner until the Limited Partners have received aggregate
distributions under this Section 3.1(b) in a total amount equal to
$4,225,000;

provided, however, that amounts distributed in connection with the liquidation
of the Partnership or a Partner's Interest (within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)) shall be distributed in accordance with
the Partner's positive Capital Account as adjusted for all operations and
transactions preceding such distribution.

3.2. TAXABLE INCOME AND TAX LOSS. (a) Taxable Income and Tax Loss of the
Partnership shall be determined and allocated for each fiscal year of the
Partnership as of the end of such year. Notwithstanding anything to the contrary
in this Section 3.2, for each fiscal year at least 1% of the Partnership's
Taxable Income or Tax Loss, as the case may be, shall be allocated to the
General Partner.

(b) Taxable Income for a fiscal year not arising from a Sale shall be
allocated in the following order of priority:

(i) Taxable Income shall be allocated to each Partner in an
amount equal to the amount of cash distributed to him for that year.
If the Taxable Income available to be so allocated is less than the
amount of cash distributed to all Partners for such year, then such
Taxable Income shall be allocated to the Partners in proportion to
their respective shares of such cash.

(ii) Taxable Income shall be allocated to each Partner in an
amount equal to the negative amount, if any, of his Capital Account.
If the Taxable Income available to be so allocated is less than the
sum of all Partners' negative Capital Accounts, then such Taxable
Income shall be allocated to the Partners in proportion to the
respective negative amounts of their Capital Accounts.

(iii) Any remaining Taxable Income shall be allocated in the same
proportions that cash distributions equal to such remaining Taxable
Income would be distributed pursuant to Section 3.1 (without regard
to the final proviso thereof).

(c) Tax Loss not arising from a Sale shall be allocated 99% to the
Limited Partners (in proportion to their Units) and 1% to the General
Partner.

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<PAGE> 52
(d) Taxable Income arising from a Sale shall be allocated in the
following order of priority:

(i) Taxable Income shall be allocated to each Partner in an
amount equal to the negative amount, if any, of his Capital Account.
If the Taxable Income available to be so allocated is less than the
sum of all Partners' negative Capital Accounts, then such Taxable
Income shall be allocated to the Partners in proportion to the
respective negative amounts of their Capital Accounts.

(ii) An amount of Taxable Income equal to the excess of (A) the
Sale proceeds that would be distributed to the Partners with respect
to such Sale pursuant to Section 3.1 (without regard to the final
proviso thereof) over (B) the aggregate Capital Accounts (as adjusted
to reflect the allocation of Taxable Income pursuant to subparagraph
(i) above) of all Partners shall be allocated among all Partners in
proportion to their respective shares of such excess.

(e) Tax Loss arising from a Sale shall be allocated in the following
order of priority:

(i) Tax Loss shall be allocated to each Partner in an amount
equal to the positive amount, if any, of his Capital Account. If the
Tax Loss available to be so allocated is less than the sum of all
Partners' positive Capital Accounts, then such Tax Loss shall be
allocated to the Partners in proportion to the respective positive
amounts of their Capital Accounts.

(ii) Any remaining Tax Loss shall be allocated 99% to the Limited
Partners and 1% to the General Partner.

3.3. ALLOCATIONS AND DISTRIBUTIONS AMONG PARTNERS.

(a) Except as provided in Section 3.3(b) and 3.3(d), Taxable Income
and Tax Loss not arising from a Sale allocable to the Limited Partners
shall be allocated, and cash distributions not arising from a Sale or
Financing distributable to the Limited Partners shall be distributed, to
the Persons recognized (in accordance with Section 7.2(d) in the case of a
transfer of Units) as the holders of Units as of the last day of the
fiscal period for which such allocation or distribution is to be made.

(b) Taxable Income or Tax Loss not arising from a Sale for a fiscal
year allocable to any Unit which has been transferred during such year
shall be divided and allocated between the transferor and the transferee
based on the number of quarterly periods that each was recognized (in
accordance with Section 7.2(d)) as the holder of the Unit, without regard
to whether Partnership operations during particular quarterly periods of
such fiscal year produced profits or losses or cash distributions.

(c) (i) Taxable Income or Tax Loss arising from a Sale allocable to
the Limited Partners shall be allocated, and all Sale or Financing
proceeds distributable to the Limited Partners shall be distributed, to
the Persons recognized (in accordance with Section 7.2(d) in the case of a
transfer of Units) as the holders of Units as of the date of such Sale or
Financing, except that (ii) Taxable Income or Tax Loss which is
attributable to, and Sale proceeds which represent, Sale proceeds not
received by the Partnership as cash on a Sale but later received as a
result of an installment or other deferred sale, shall be allocated or
distributed, as the case may be to the Persons recognized (in accordance
with Section 7.2(d) in the case of a transfer of Units) as the holders of
Units as of the date such Sale proceeds are received by the Partnership.

(d) Any amounts withheld pursuant to Section 4.2(c) shall be treated
as amounts distributed to the Partners pursuant to Section 3.1 for all
purposes under this Agreement. Amounts treated as distributed to a Partner
pursuant to this Section 3.3(d) shall reduce the amounts otherwise
distributed to such Partner pursuant to Section 3.1.

3.4. INCOME OFFSET. (a) If any Partners unexpectedly receive any
adjustments, allocations, or distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4) or (5) or (6), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), Taxable Income shall be specially allocated to each
such Partner in an amount and manner sufficient to eliminate the deficit
balances in their Capital Accounts

A-4
<PAGE> 53
created thereby as quickly as possible. Any special allocations of items of
income or gain pursuant to this Section 3.4 shall be taken into account in
computing subsequent allocations of Taxable Income pursuant to this Article III,
so that the net amount of any items so allocated and the Taxable Income, Tax
Loss, and all other items allocated to each Partner pursuant to this Article III
shall, to the extent possible, be equal to the net amount that would have been
allocated to each such Partner pursuant to this Article III if such unexpected
adjustments, allocations or distributions had not occurred.

3.5. SYNDICATION EXPENSES. Syndication Expenses shall be specially allocated
to the Limited Partners in proportion to their Units.

3.6. MINIMUM GAIN CHARGEBACK. In the event of a net decrease in Partnership
"minimum gain" (within the meaning of Section 1.704-1(b)(4)(iv)(C) of the
Treasury Regulations) during any fiscal year of the Partnership, all Partners
with a deficit Capital Account balance at the end of such year (excluding from
each Partner's deficit Capital Account balance any amount that such Partner is
obligated to restore hereunder) will be allocated, before any other allocation,
Taxable Income for such year (and, if necessary, subsequent taxable years) in
the amount and in the proportions needed to eliminate such deficits as quickly
as possible.

3.7. RECHARACTERIZATION OF FEES. Any fees paid to the General Partner or any
of its Affiliates which are disallowed as deductible expenses by the Internal
Revenue Service shall constitute special allocations of gross income to the
General Partner for income tax purposes.

3.8. OTHER ALLOCATIONS. Any allocations not otherwise provided for shall be
divided among the Partners in the same proportions as they share Taxable Income
or Tax Loss, as the case may be, for the period.

ARTICLE IV
MANAGEMENT

4.1. EXCLUSIVE MANAGEMENT RIGHTS OF GENERAL PARTNER. Subject to this
Agreement, the General Partner shall have complete authority over and exclusive
control and management of the business and affairs of the Partnership. The
Limited Partners, as such, shall not take part in, or at any time interfere in
any manner with, the management, conduct or control of the Partnership's
business or operations and shall have no right or authority to act for or bind
the Partnership. Except as expressly provided elsewhere in this Agreement, the
Limited Partners have no right to remove the General Partner, to compel the
General Partner's withdrawal from the Partnership or to elect other General
Partners.

4.2. AUTHORITY OF GENERAL PARTNER. (a) Subject only to this Agreement and
the Act, in connection with the management of the Partnership, the General
Partner shall have and may exercise all of the rights, powers and privileges of
a general partner of a partnership without limited partners, including without
limitation the right, if, as and when the General Partner may deem necessary or
appropriate for the business of the Partnership, on behalf of, and at the
expense of, the Partnership to:

(i) Acquire, through purchase, lease, exchange or otherwise, or
otherwise make investments in, any real or personal property.

(ii) Operate, maintain, develop, improve, finance, refinance,
own, grant options with respect to, sell, convey, assign, mortgage,
exchange or lease and have constructed any real estate and any
personal property.

(iii) Execute any agreements, contracts, documents,
certifications and other instruments, and any deeds, leases,
mortgages, mortgage notes, bills of sale, contracts or other
instruments purporting to convey, exchange or encumber the real or
personal property of the Partnership.

(iv) Borrow money and issue evidences of indebtedness and secure
the same by mortgage, pledge or other lien on any properties or other
assets of the Partnership.

(v) Prepay in whole or in part, refinance, recast, increase,
modify or extend any mortgage affecting the Property and in
connection therewith execute any extensions, consolidations,
modifications or renewals of mortgages on the Property.

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<PAGE> 54
(vii) Engage in any kind of activity and perform and carry out
contracts of any kind.

(viii) Deal with, or otherwise engage in business with, any Person who
has dealt with or engaged in business with or may in the future deal with
or engage in business with the General Partner or any Affiliate of the
General Partner. No such dealing or engaging in business may involve any
direct or indirect payment by the Partnership of any rebate or any
reciprocal arrangement which would have the effect of circumventing any
restriction set forth herein on dealings with the General Partner or any
Affiliate of the General Partner.

(ix) Pay to an Affiliate of the General Partner, in compensation for
services rendered in evaluating, selecting and acquiring the Property, an
Acquisition Fee of $50,000.

(x) Execute a Dealer Manager Agreement with First Radnor Equities, Inc.
(an Affiliate of the General Partner) pursuant to which said firm will
assist the Partnership in the sale of Units and be paid selling commissions
and allowances therefor and be indemnified against certain liabilities.

(b) Any Person dealing with the Partnership or the General Partner may rely
on a certificate signed by the General Partner as to:

(i) the identity of any General Partner or Limited Partner;

(ii) the existence or non-existence of any facts which constitute a
condition precedent to acts by the General Partner or in any other manner
germane to the affairs of the Partnership;

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

(iv) any act or failure to act by the Partnership or as to any other
matter involving the Partnership or any Partner.

(c) The General Partner may withhold income taxes as required by, and
otherwise comply with and take actions necessary as a result of, provisions of
the Code or any state tax law requiring withholding.

4.3. RESTRICTIONS ON AUTHORITY OF GENERAL PARTNER. (a) Without the Consent
of all the Limited Partners the General Partner shall not have the authority to:

(i) do any act in contravention of this Agreement.

(ii) possess Partnership property, or assign its rights in specific
Partnership property, for other than a Partnership purpose.

(iii) admit a Person as a General Partner, except as provided in this
Agreement.

(iv) admit a Person as a Limited Partner, except as provided in this
Agreement.

(v) knowingly perform any act that would subject any Limited Partner
to liability as a general partner in any jurisdiction.

(b) Without the Consent of a majority in interest of the Limited Partners,
the General Partner shall not have the authority to:

(i) sell or otherwise dispose of at one time all or substantially all
the assets of the Partnership, except that the General Partner may sell the
Property without such consent (A) in connection with the liquidation of the
Partnership under Section 6.3 or (B) if the net proceeds of such sale, when
distributed in accordance with Section 3.1, will be sufficient to provide
the Limited Partners with distributions equal to the Unpaid Cumulative
Return plus their Adjusted Capital Contributions.

(ii) elect to dissolve the Partnership.

(c) Other than as authorized in this Agreement or the Prospectus, the
General Partner is prohibited from entering into any agreements, contracts or
arrangements on behalf of the Partnership with the General Partner or any
Affiliate of the General Partner, including the following:

(i) neither the General Partner nor any such Affiliate shall be given
an exclusive right to sell or exclusive employment to sell the Property for
the Partnership.

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(ii) neither the General Partner nor any such Affiliate shall enter
into an agreement or contract with the Partnership for the development of
the Property or the construction of improvements on the Property.

(iii) the Partnership shall not lend money to the General Partner or
any such Affiliate.

(iv) neither the General Partner nor any such Affiliate shall lend
money to the Partnership if interest rates and other finance charges and
fees in connection with such loan are in excess of the amounts charged by
unrelated banks on comparable loans for the same purpose in the locality of
the Property or make loans with a prepayment charge or penalty. Neither the
General Partner nor any Affiliate thereof shall provide Financing to the
Partnership. "Financing" is indebtedness encumbering Partnership
properties, the principal amount of which is scheduled to be paid over a
period of not less than 48 months, and not more than 50 percent of the
principal amount of which is scheduled to be paid during the first 24
months.

(d) No rebates or give-ups may be received by the General Partner or any
Affiliate of the General Partner, nor may the General Partner or any such
Affiliate participate in any reciprocal business arrangements which would have
the effect of circumventing any of the provisions of this Agreement.

(e) Any agreement, contract or arrangement between the Partnership and the
General Partner or any Affiliate of the General Partner shall be subject to the
following conditions:

(i) Any such agreements, contracts or arrangements shall be fully and
promptly disclosed to all Partners, if not previously disclosed, in one of
the reports provided for in Section 8.4, stating the compensation to be
paid by the Partnership.

(ii) Any such agreements, contracts or arrangements shall be
terminable by either party, without penalty, on 60 days' prior written
notice.

(f) The General Partner shall not on behalf of the Partnership acquire any
property in exchange for Units in the Partnership.

(g) The General Partner shall not sell or lease the Property to the General
Partner or any Affiliate of the General Partner.

(h) The General Partner shall not directly or indirectly pay or award any
commissions or other compensation to any Person engaged by a potential Limited
Partner for investment advice as an inducement to such adviser to advise the
purchase of the Units; provided, however, that this clause shall not prohibit
the normal sales commissions payable to a registered broker-dealer or other
properly licensed Person for selling the Units.

(i) The Partnership shall not invest in limited partnerships, general
partnerships or joint ventures.

(j) Reinvestment of cash flow from operations shall not be allowed.
Reinvestment of Sale or Financing proceeds resulting from a disposition or
refinancing will not take place.

4.4. DUTIES AND OBLIGATIONS OF THE GENERAL PARTNER. (a) The General Partner
shall take all action which may be necessary or appropriate for the continuation
of the Partnership's valid existence as a limited partnership under the laws of
the State of Delaware.

(b) The General Partner shall devote to the Partnership such time as may be
necessary for the proper performance of its duties hereunder, but the officers
and directors of the General Partner shall not be required to devote their full
time to the performance of such duties.

(c) The General Partner shall use its best efforts to maintain at all times
a net worth (which may be aggregated with the net worth of additional General
Partners admitted pursuant to Section 5.1(b)) at a level sufficient to assure
that the Partnership will be classified for federal income tax purposes as a
partnership and not as an association taxable as a corporation.

(d) The General Partner shall at all times conduct its affairs and the
affairs of the Partnership and all of its Affiliates in such a manner that
neither the Partnership nor any Partner nor any Affiliate of any Partner will
have any personal liability under any mortgage on any of the Property, except
that the

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General Partner or an Affiliate thereof may (but shall not be required to) incur
such personal liability it in the opinion of the General Partner it would be in
the best interests of the Limited Partners to incur such personal liability.

(e) The General Partner shall prepare or have prepared and shall file on or
before the due date (or any extension thereof) any federal, state or local tax
returns required to be filed by the Partnership. The General Partner shall cause
the Partnership to pay any taxes payable by the Partnership.

(f) The General Partner shall obtain and keep in force during the term
hereof such public liability insurance in favor of the Partnership with such
insurers and in such amounts as the General Partner deems advisable, but in
amounts not less (and with deductible amounts not greater) than those
customarily maintained with respect to properties comparable to the
Partnership's Property.

(g) The General Partner shall be under a fiduciary duty to conduct the
affairs of the Partnership in the best interests of the Partnership and of the
Limited Partners, including the safekeeping and use of all Partnership funds and
assets and the use thereof for the exclusive benefit of the Partnership. Neither
the General Partner nor any Affiliate of the General Partner shall enter into
any transaction with the Partnership unless the transaction is permitted
hereunder or is entered into principally for the benefit of the Partnership in
the ordinary course of Partnership business. The General Partner shall have
fiduciary responsibility for the safekeeping and use of all funds and assets of
the Partnership, whether or not in the General Partner's possession or control.
The General Partner shall not employ, or permit another to employ, such funds or
assets in any manner except for the exclusive benefit of the Partnership. The
Limited Partners may not contract away the fiduciary duty owed to them by the
General Partner under the common law.

(h) The General Partner shall use its best efforts to assure that the
Partnership will not be deemed an investment company as such term is defined in
the Investment Company Act of 1940.

(i) The General Partner shall use at least 85% of the Limited Partners'
Capital Contributions for Investment in Property.

4.5. COMPENSATION OF GENERAL PARTNER. (a) For the services and activities
to be performed by the General Partner in connection with the administration and
management of the Partnership and the Property, the General Partner shall
receive a management fee of $8,100 per year, but not in excess of a total of
$64,800 during the term of the Partnership. The management fee shall be paid to
the General Partner for such services on conclusion of each calendar quarter. If
the Partnership does not have sufficient cash to pay the management fee for any
quarter or if the Partnership's Reserves are less than $21,125, such fee shall
be accrued (without interest) as a debt of the Partnership, payable out of Sale
or Financing proceeds after the Limited Partners have received distributions in
a total amount equal to the aggregate amount paid by them to the Partnership for
their Units.

(b) The General Partner shall not in its capacity as General Partner
receive any salary, fees, profits or distributions except those to which it may
be entitled under Article III or IV.

(c) The Partnership shall not pay, directly or indirectly, a commission or
fee (except as permitted under Articles III or IV) to the General Partner or any
Affiliate thereof in connection with the reinvestment or distribution of the
proceeds of the resale, exchange, or refinancing of the Property.

4.6. PARTNERSHIP EXPENSES. (a) The General Partner shall bear, and shall
pay or reimburse the Partnership for, all Organizational Expenses in excess of
13.8% of the gross proceeds to the Partnership from the sale of the Units. The
Partnership shall bear, and shall pay, or reimburse the General Partner or its
Affiliates for, the actual cost of all other Organizational Expenses.

(b) All expenses of the Partnership shall be billed directly to and paid by
the Partnership. The General Partner may be reimbursed for the actual cost of
goods and materials used for or by the Partnership and obtained from entities
unaffiliated with the General Partner. The General Partner may be reimbursed for
the administrative services necessary to the prudent operation of the
Partnership provided that the reimbursement shall be at the lower of the General
Partner's actual cost or the amount the Partnership would be required to pay to
independent parties for comparable administrative services in the same
geographic location. Costs of the General Partner may only be charged to the
Partnership

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to the extent that such costs are directly attributable to services rendered to
the Partnership. Subject to (and only in accordance with) the foregoing, the
Partnership shall pay (or reimburse the General Partner for) the actual cost of
all expenses related to the administration and operation of the Partnership,
including without limitation:

(i) all costs of personnel involved in the business of the Partnership
(but not the salaries and compensation of the executive officers and
directors, as such, of the General Partner or its Affiliates);

(ii) all taxes and assessments applicable to the Partnership;

(iii) legal, appraisal, audit, accounting and other professional fees;

(iv) printing and other expenses and taxes incurred in connection with
the issuance, distribution, transfer, registration and recording of
documents evidencing ownership of Units;

(v) fees and expenses paid to independent contractors, mortgage
bankers, brokers, leasing agents, consultants, insurance brokers and other
agents;

(vi) expenses of organizing, revising, amending, converting, modifying
or terminating the Partnership;

(vii) costs incurred in selling or financing the Property, including
the cost of preparation and dissemination of the informational material and
documentation relating to potential sale, financing or other disposition of
the Property;

(viii) costs incurred in connection with any litigation in which the
Partnership is involved or proceedings conducted by any regulatory agency,
including legal and accounting fees incurred in connection therewith;

(ix) costs of any computer equipment or services used for or by the
Partnership;

(x) costs of any accounting, statistical or bookkeeping services or
equipment necessary for the maintenance of the books and records of the
Partnership;

(xi) costs of investor communications and relations and regulatory and
tax reports; and

(xii) such other related expenses as are necessary to the prudent
operation of the Partnership.

(c) Reimbursement under Section 4.6(b) shall be at the lower of the cost to
the General Partner or its Affiliates or the amount the Partnership would be
required to pay independent parties for comparable goods or materials or
services in the same geographic location. No reimbursement shall be permitted
for services for which the General Partner or its Affiliates are entitled to
compensation by way of a separate fee. The following shall be excluded from
allowable reimbursements: (i) rent or depreciation, utilities, capital
equipment and other similar administrative items of the General Partner or its
Affiliates, and (ii) salaries, fringe benefits, travel expenses and other
similar administrative items incurred by or allocated to any Controlling Persons
of the General Partner or its Affiliates. In the Partnership's annual report to
the Limited Partners, there shall be provided a breakdown of reimbursements made
to the General Partner and its Affiliates.

4.7. OTHER BUSINESS OF PARTNERS. Any Partner may engage independently or
with others in other business ventures of every nature and description,
including, without limitation, the rendering of advice or services of any kind
to others and the making or management of other investments, including
investments in real estate. Nothing in this Agreement shall be deemed to
prohibit the General Partner or any Affiliate of the General Partner from
dealing, or otherwise engaging in business with, Persons transacting business
with the Partnership or from providing services relating to the purchase, sale,
financing, management, development or operation of real property and receiving
compensation therefor, not involving any rebate or reciprocal arrangement which
would have the effect of circumventing any restriction set forth herein on
dealing with the General Partner or any Affiliate of the General Partner.
Neither the Partnership nor any Partner shall have any right by virtue of this
Agreement or the partnership relationship created hereby in or to such other
ventures or activities or to the income or proceeds derived therefrom, and the
pursuit of such ventures, even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper.

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4.8. LIMITATION ON RESPONSIBILITY OF GENERAL PARTNER; INDEMNIFICATION. (a)
The General Partner and its Affiliates shall have no liability to the
Partnership or to any Partner for any loss suffered by the Partnership which
arises out of any action or inaction of the General Partner or its Affiliates if
the General Partner or its Affiliates, in good faith, determined that such
course of conduct was in the best interest of the Partnership and such course of
conduct did not constitute negligence or misconduct of the General Partner or
its Affiliates. The General Partner and its Affiliates shall be indemnified by
the Partnership against any losses, judgments, liabilities, expenses and amounts
paid in settlement of any claims sustained by them in connection with the
Partnership, provided that the same were not the result of negligence or
misconduct on the part of the General Partner or its Affiliates, and provided
further that for such indemnification to be made, the General Partner must have
made a good faith determination that the course of conduct involved was in the
best interests of the Partnership. Such indemnification shall be made from the
assets of the Partnership and no Partner shall be personally liable therefor.

(b) Notwithstanding the above, the General Partner and its Affiliates and
any Person acting as a broker-dealer shall not be indemnified for any losses,
liabilities or expenses arising from or out of an alleged violation of federal
or state securities laws unless (i) there has been a successful adjudication on
the merits of each count involving alleged securities law violations as to the
particular indemnitee and court approval of indemnification of litigation costs,
or (ii) such claims have been dismissed with prejudice on the merits by a court
of competent jurisdiction as to the particular indemnitee and the court has
approved indemnification of litigation costs or (iii) a court of competent
jurisdiction approves a settlement of the claims against a particular indemnitee
and indemnification of settlement and related costs. In any claim for
indemnification for federal or state securities law violations, the party
seeking indemnification shall place before the court the position of the
Securities and Exchange Commission and applicable state securities commissions
with respect to the issue of indemnification for securities law violations.

(c) The Partnership shall not incur the cost of that portion of any
insurance, other than public liability insurance, which insures any party
against any liability the indemnification of which is herein prohibited.

(d) The provision of advances from Partnership funds to the General Partner
and its Affiliates for legal expenses and other costs incurred as a result of
any legal action initiated against the General Partner by a Limited Partner of
the Partnership is prohibited. The provision of advances from Partnership funds
to a General Partner and its Affiliates for legal expenses and other costs
incurred as a result of a legal action is permissible if the following three
conditions are satisfied: (i) the legal action relates to the performance of
duties or services by the General Partner or its Affiliates on behalf of the
Partnership; and (ii) the legal action is initiated by a third party who is not
a Limited Partner of the Partnership; and (iii) the General Partner or its
Affiliates undertake to repay the advanced funds to the Partnership in cases in
which they would not be entitled to indemnification under this Section 4.8 and
such undertaking is secured by a full recourse note from the recipient of the
advance.

(e) Notwithstanding the definition of "Affiliate" in Article XI, for the
purposes of this Section 4.8, the term "Affiliates" shall mean any Person
performing services on behalf of the Partnership within the scope of the General
Partner's authority who: (1) directly or indirectly controls, is controlled by,
or is under common control with the General Partner; or (2) owns or controls 10%
or more of the outstanding voting securities of the General Partner or (3) is an
officer or director of the General Partner or (4) if the General Partner is an
officer, director, partner or trustee, is any company for which the General
Partner acts in any such capacity.

ARTICLE V

SUCCESSOR AND ADDITIONAL GENERAL PARTNERS;
WITHDRAWAL OF GENERAL PARTNER

5.1. SUCCESSOR OR ADDITIONAL GENERAL PARTNER. (a) With the Consent of at
least a majority in interest of the Limited Partners (or such larger number of
the Limited Partners as may be required by law), the General Partner may at any
time designate one or more Persons to be its successors as General Partner or to
be additional General Partners, in each case with such participation in the
General Partner's

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Interest as the General Partner and such successor or additional General
Partners may agree on, provided that the Interests of the Limited Partners shall
not be affected thereby. Each such designee shall become a successor or
additional General Partner on satisfying the conditions of Section 10.2(a).

(b) Except in connection with a transfer to a successor or additional
General Partner pursuant to Section 5.1(a), no General Partner shall have any
right to retire or withdraw voluntarily from the Partnership or to sell,
transfer or assign its Interest, except that (i) it may substitute in its stead
as General Partner any entity which has, by merger, consolidation or otherwise,
acquired substantially all of its assets or stock and continued its business or
(ii) it may admit to the Partnership an additional General Partner or Partners
to enable the aggregate net worth of the General Partners to comply with Section
4.4(c), such additional General Partner or Partners to have such participation
in the General Partner's Interest as the General Partner and such additional
General Partner or Partners may agree on, provided that the Interests of the
Limited Partners shall not be affected thereby. Each such successor or
additional General Partner shall be admitted as such to the Partnership on
satisfying the conditions of Section 10.2(a).

(c) Any voluntary withdrawal by a sole General Partner from the Partnership
or any sale, transfer or assignment by such General Partner of its Interest
shall be effective only on the admission in accordance with Section 5.1(a) of a
successor or additional General Partner, as the case may be.

5.2. BANKRUPTCY, DEATH, DISSOLUTION OR INCOMPETENCE OF GENERAL PARTNER. (a)
In the event of the bankruptcy, death or dissolution of a General Partner or the
adjudication that a General Partner is incompetent, the business of the
Partnership shall be continued with Partnership property if such General Partner
is not then the sole General Partner. In such event, the remaining General
Partner or General Partners shall continue the business of the Partnership and
shall immediately (i) give Notification to the Limited Partners of such event
and (ii) make such amendments to this Agreement and execute and file for
recordation such amendments or other documents or instruments as are necessary
to reflect the termination of the Interest of the bankrupt, deceased, dissolved
or incompetent General Partner and such General Partner having ceased to be a
General Partner.

(b) On such bankruptcy, death, dissolution or adjudication of incompetence
of a General Partner, such General Partner shall immediately cease to be a
General Partner and its Interest as a General Partner in the Partnership shall
terminate; provided, however, that such termination shall not affect any rights
or liabilities of such General Partner which matured prior to such event, or the
value, if any, at the time of such event of the Interest of such General
Partner.

5.3. LIABILITY OF WITHDRAWN GENERAL PARTNER. Any General Partner who
voluntarily or involuntarily for any reason (including bankruptcy, death,
dissolution or adjudication of incompetence) withdraws from the Partnership or
sells, transfers or assigns its Interest shall be and remain liable for all
obligations and liabilities incurred by it as General Partner prior to the time
such withdrawal, sale, transfer or assignment becomes effective as provided in
Section 5.1, but it shall be free of any obligation or liability incurred on
account of the activities of the Partnership from and after the time such
withdrawal, sale, transfer or assignment so becomes effective.

5.4. RESTRICTIONS ON TRANSFER OF GENERAL PARTNER'S INTEREST. (a)
Notwithstanding anything to the contrary in this Article V, a General Partner's
Interest shall at all times be subject to the same restrictions applicable to
Units set forth in Sections 7.1(a), 7.1(b), 7.1(d), 7.2(d) and 7.2(e).

(b) Notwithstanding Sections 5.1 and 5.5 (providing for Consent by Limited
Partners in advance of the event as to which such Consent is required) the
Consent of the Limited Partners pursuant to Sections 5.1 and 5.5 shall not be
effective if within 30 days after the time of the operation of Section 5.1 and
Section 5.5 counsel satisfactory to a majority in interest of the Limited
Partners has delivered to the Partnership an opinion to the effect that the
giving of the Consent of the Limited Partners pursuant to Section 5.1 by express
consent of a majority in interest of the Limited Partners, or that the giving of
the Consent in advance of the event specified in Section 5.1(b), is not
permitted by the Act or by the applicable laws of such other jurisdictions in
which the Partnership is then formed or qualified, or will impair the limited
liability of the Limited Partners or will adversely affect the classification of
the Partnership as a partnership for federal income tax purposes.

(c) No assignee or transferee of all or any part of the Interest of a
General Partner shall have any right to become a General Partner except as
provided in this Article V.

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5.5. CONSENT OF LIMITED PARTNERS TO SUCCESSOR OR ADDITIONAL GENERAL
PARTNERS. Subject to Sections 5.1 and 5.4, each of the Limited Partners by the
execution of this Agreement hereby Consents to the admission of any Person as a
successor or additional General Partner to which there has at the time been
express Consent of a majority in interest of the Limited Partners pursuant to
Section 5.1. On receipt pursuant to Section 5.1 of the Consent of a majority in
interest of the Limited Partners to such admission, subject to Section 5.4, such
admission shall, without any further Consent or approval of the Limited
Partners, be an act of all the Limited Partners.

5.6. VALUATION OF INTEREST OF GENERAL PARTNER. In the event of the
termination of a General Partner's Interest pursuant to Section 5.2 or the
removal of a General Partner pursuant to Section 9.2, the general partner
Interest of such General Partner (the "terminated General Partner") shall be
appraised by two independent appraisers, one selected by the terminated General
Partner and one by the Limited Partners. If two appraisers are unable to agree
on the value of the terminated General Partner's Interest, they shall jointly
appoint a third independent appraiser whose determination shall be final and
binding. For purposes of this Section, the independent appraiser selected by the
Limited Partners shall be a qualified MAI appraiser selected by vote of a
majority in interest of the Limited Partners within 120 days after the event
requiring appraisal of such Interest. If the Limited Partners fail to choose an
appraiser in the manner and during the time period set forth in the previous
sentence, such appraiser shall be selected in the following manner: A list of
three qualified MAI appraisers shall be obtained from the American Institute of
Real Estate Appraisers and one of said three appraisers shall be selected by
random number and proposed for selection by the Limited Partners. Such appraiser
shall be deemed selected by the Limited Partners unless objected to in writing
by a majority in interest of the Limited Partners within 45 days after
Notification thereof is sent by a General Partner. The Partnership shall then
pay the terminated General Partner the value of its general partner Interest as
so determined. Payment shall be made by delivery of a promissory note, such
delivery to be as soon as practicable after such determination. If the
termination is voluntary, the terminated General Partner shall receive a
non-interest bearing unsecured promissory note payable, if at all, from
distributions which the terminated General Partner otherwise would have received
under this Agreement if it had not voluntarily terminated. If the termination or
removal is involuntary, the terminated General Partner shall receive an interest
bearing promissory note payable in five equal annual installments of principal,
the first of which shall be paid one year after such determination; the unpaid
portion of such principal shall bear simple interest from the date of such
determination at a floating rate of interest equal to 1% in excess of the prime
rate of the Philadelphia National Bank, such interest to accrue and be paid
annually in addition to each such annual installment. Any amounts received
pursuant to this Section 5.6 shall constitute complete and full discharge for
all amounts owing to the terminated General Partner on account of its general
partner Interest in the Partnership. The costs of the appraisal shall be borne
equally by the terminated General Partner and the Partnership. The Partnership
shall make such special allocations of Taxable Income and Tax Loss as are
appropriate to enable it to make any payments to be made under this Section 5.6.

ARTICLE VI

DISSOLUTION AND LIQUIDATION

6.1. EVENTS CAUSING DISSOLUTION. The Partnership shall terminate on the
happening of any of the following events:

(i) the bankruptcy, death, dissolution or adjudication of incompetence
of a sole General Partner;

(ii) the sale or other disposition of all the Partnership's interest
in the Property and the collection or other disposition of any purchase
money obligations received by the Partnership in connection with the
disposition of the Property;

(iii) the election by the General Partner pursuant to Section
4.3(b)(ii), or the vote by the Limited Partners pursuant to Section
9.2(ii), to dissolve the Partnership; or

(iv) the happening of any other event causing the dissolution of the
Partnership under applicable law.

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Dissolution of the Partnership shall be effective on the day on which the event
occurs giving rise to the dissolution, but the Partnership shall not terminate
until the Partnership's certificate of limited partnership has been cancelled
and the assets of the Partnership have been distributed as provided in Section
6.3. Notwithstanding the dissolution of the Partnership, prior to the
termination of the Partnership, the business of the Partnership and the affairs
of the Partners, as such, shall continue to be governed by this Agreement.

6.2. CAPITAL CONTRIBUTION ON DISSOLUTION. (a) On dissolution and
termination of the Partnership the General Partner shall contribute to the
capital of the Partnership an amount equal to (and shall in no event be
obligated to contribute more than) the lesser of (i) any negative amount of its
Capital Account existing after the distributions and allocations required by
Article III and Section 6.3 or (ii) 1.01% of the Capital Contributions made by
the Limited Partners. Any amount so contributed by the General Partner shall be
distributed to the Limited Partners in proportion to the then positive balances
in their Capital Accounts.

(b) On dissolution and termination of the Partnership, if the Limited
Partners do not receive distributions under Section 6.3 which together with the
cumulative distributions to them under Section 3.1 (the "Total") total at least
$4,225,000 plus the Cumulative Annual Return (the "Required Amount"), then the
General Partner shall contribute to the capital of the Partnership an amount
equal to the lesser of (x) cumulative distributions to the General Partner under
Sections 3.1 and 6.3 or (y) the difference between such Total and the Required
Amount, such amount to be distributed to the Limited Partners in proportion to
their Units.

6.3. LIQUIDATION. (a) On dissolution of the Partnership, the General
Partner shall liquidate the assets of the Partnership and apply and distribute
the proceeds thereof:

(i) to the payment of all debts and liabilities of the Partnership in
accordance with their terms;

(ii) to the establishment, for such period as the General Partner
deems reasonably necessary, of such reserves as the General Partner deems
reasonably necessary to provide for contingent and unforeseen liabilities
or obligations of the Partnership; and

(iii) to the Partners in accordance with Section 3.1.

(b) Notwithstanding the foregoing, if the General Partner determines that
an immediate sale of part or all of the Partnership assets would cause undue
loss to the Partners, the General Partner, in order to avoid such loss, may, to
the extent not then prohibited by applicable law, defer liquidation of and
withhold from distribution for a reasonable time any assets of the Partnership
except those necessary to satisfy the Partnership's debts and obligations.

(c) The General Partner shall cause the cancellation of the Partnership's
certificate of limited partnership following the liquidation and distribution of
all the Partnership's assets.

(d) No Limited Partner shall have the right to receive any property other
than cash.

6.4. TIME LIMITATION. Any capital contribution by the General Partner
pursuant to Section 6.2 and any liquidating distribution pursuant to Section 6.3
shall be made no later than the later of (i) the end of the taxable year during
which such liquidation occurs or (ii) 90 days after the date of such
liquidation.

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ARTICLE VII

TRANSFERABILITY OF UNITS

7.1. RESTRICTIONS ON TRANSFERS. (a) No sale or exchange of any Units may be
made if the Units sought to be sold or exchanged, when added to the total of all
other Units sold or exchanged within a period of 12 consecutive months prior
thereto, would, in the opinion of counsel for the Partnership, result in the
Partnership being considered to have been terminated within the meaning of
Section 708 of the Code. The General Partner shall give Notification to all
Limited Partners if sales or exchanges should be suspended for such reason. Any
deferred sales or exchanges shall be made (in chronological order to the extent
practicable) as of the first day of a calendar quarter after the end of any such
12-month period, subject to this Article VII.

(b) No transfer or assignment of any Unit may be made if counsel for the
Partnership is of the opinion that such transfer or assignment would be in
violation of any state securities laws (including any investment suitability
standards) applicable to the Partnership.

(c) No purported sale, assignment or transfer by a Limited Partner of any
Unit after which (i) any transferor or transferee, other than an individual
retirement account, would hold less than five Units, or (ii) an individual
retirement account transferor or transferee would hold less than two Units, will
be permitted or recognized (except that the General Partner, in its discretion,
may waive this requirement for transfers by gift, inheritance or family
dissolution or transfers to Affiliates of the transferor).

(d) No transfer or assignment of any Unit shall be made if it would result
in the Partnership being treated as an association taxable as a corporation for
tax purposes. The General Partner, in its sole discretion, may, on behalf of the
Partnership, impose any restrictions on transfers or assignments of Units as it
deems appropriate to give effect to the preceding sentence. In connection
therewith, the General Partner shall be permitted to amend this Agreement
without the consent of the Limited Partners.

7.2. ASSIGNEES AND SUBSTITUTED LIMITED PARTNERS. (a) If a Limited Partner
dies, his executor, administrator or trustee, or, if he is adjudicated
incompetent or insane, his committee, guardian or conservator, or, if he becomes
bankrupt, the trustee or receiver of his estate, shall have all the rights of a
Limited Partner for the purpose of settling or managing his estate and such
power as the decedent, incompetent or bankrupt possessed to assign all or any
part of his Units and to join with the assignee thereof in satisfying conditions
precedent to such assignee becoming a Substituted Limited Partner.

(b) The Partnership need not recognize for any purpose any assignment of
any Units unless there has been filed with the Partnership a duly executed and
acknowledged counterpart of the instrument making such assignment signed by both
the transferor and the transferee and such instrument evidences the written
acceptance by the assignee of all of the provisions of this Agreement and
represents that such assignment was made in accordance with all applicable laws
and regulations (including investment suitability requirements).

(c) Any Limited Partner who assigns all his Units shall cease to be a
Limited Partner of the Partnership, except that unless and until a Substituted
Limited Partner is admitted in his stead, such assigning Limited Partner shall
retain the statutory rights of an assignor of a limited partnership interest
under the Act.

(d) Any Person who is an assignee of any Units and who has satisfied the
requirements of Section 7.2(b) shall become a Substituted Limited Partner when
such Person has paid all reasonable legal fees and filing costs, if any, in
connection with his substitution as a Limited Partner and has been reflected in
the records of the Partnership as a Limited Partner. Notwithstanding the time at
which such legal fees and filing costs have been paid and notwithstanding
whether any assignee of a Unit has become a Substituted Limited Partner, an
assignee of a Unit shall, (i) for the purposes of Sections 3.3(a), 3.3(b) and
3.3(c)(ii), be recognized as a holder of the Unit as of the first day of the
calendar quarter following the calendar quarter in which the Partnership
receives the instrument of assignment provided for in Section 7.2(b), and (ii)
for the purposes of Section 3.3(c)(i), be recognized as a holder of the Unit as
of the date specified by the parties in the instrument of assignment provided
for in Section 7.2(b), if the Partnership receives such instrument of assignment
prior to the date of the Sale or Financing, or, if such instrument

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of assignment is not so received or no date is specified therein, the first day
of the calendar quarter following the calendar quarter in which the Partnership
receives the instrument of assignment provided for in Section 7.2(b).
Notwithstanding the foregoing, the rights of an assignee of a Unit who does not
become a Substituted Limited Partner shall be limited to receipt of his share of
distributions, Taxable Income and Tax Loss as determined under Article III.

(e) Any Person who is the assignee of all or any of the Units of a Limited
Partner, but who does not become a Substituted Limited Partner and desires to
make a further assignment of any such Units, shall be subject to all the
provisions of this Article VII to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of his Units.

(f) There shall be no restrictions on the assignment of Units except as
provided in this Article VII.

ARTICLE VIII

BOOKS AND RECORDS; BANKING

8.1. BOOKS AND RECORDS. (a) The books and records of the Partnership shall
be maintained at the principal office of the Partnership and shall be available
for examination there by any Partner or his duly authorized representatives at
any reasonable time. Any Partner or his duly authorized representative, on
paying the costs of assembly, duplication and mailing, shall be entitled to a
copy of the list of the names and addresses of the Limited Partners and the
number of Units owned by each.

(b) The Partnership's independent public accountants shall audit all annual
financial statements of the Partnership, which statements will be prepared in
accordance with generally accepted accounting principles, and shall prepare for
execution by the General Partner, or shall review, all tax returns of the
Partnership.

8.2. ACCOUNTING AND FISCAL YEAR. The books of the Partnership shall be kept
on the accrual basis. The fiscal year of the Partnership shall end December 31
in each year.

8.3. BANK ACCOUNTS AND INVESTMENTS. The bank accounts of the Partnership
shall be maintained in such banking institutions as the General Partner may
determine, and withdrawals shall be made on such signature or signatures as the
General Partner may determine. All deposits and other funds not needed in the
operation of the business or not yet invested may be invested in United States
government securities, certificates of deposit of United States banks with
assets of at least $100,000,000, commercial paper rated A or better by Moody's
Investors Service, Inc., and money market funds having assets in excess of
$100,000,000. The funds of the Partnership shall not be commingled with the
funds of any other Person.

8.4. REPORTS. (a) Within 60 days after the end of each calendar quarter,
the General Partner shall send to each Person who was a Limited Partner during
such quarter certain unaudited reports, including: (i) a balance sheet, (ii) a
profit and loss statement, (iii) a cash flow statement, (iv) a statement
describing any new agreement, contract or arrangement required to be reported by
Section 4.3(e)(i) and the amount of all fees and other compensation and
distributions and reimbursed expenses paid by the Partnership for such quarter
to the General Partner or any Affiliate of the General Partner, and (v) a report
of the significant activities of the Partnership during such quarter. No
quarterly report need be sent for the fourth calendar quarter of the year. The
various reports required pursuant to this Section 8.4(a) may be sent earlier
than or separately from any of the other reports required pursuant to this
Section 8.4(a), and the information required to be contained in any of the
reports required pursuant to this Section 8.4(a) may be contained in more than
one report.

(b) Within 75 days after the end of each calendar year, the General Partner
shall send to each Person who was a Limited Partner during such year such tax
information as shall be necessary for the preparation by such Limited Partner of
his federal income tax return, and required state income and other tax returns
with regard to jurisdictions in which the Partnership is formed or qualified or
owns property.

(c) Within 120 days after the end of each calendar year, the General
Partner shall send to each Person who was a Limited Partner during such year (i)
a balance sheet as of the end of such year and

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statements of income, partners' equity and changes in financial position for
such year, all of which shall be prepared in accordance with generally accepted
accounting principles and accompanied by an auditor's report containing an
opinion of the Partnership's independent public accountants (ii) a cash flow
statement (which need not be audited), (iii) a report summarizing the fees and
other remuneration and reimbursed expenses (including a breakdown of such
expenses) from the Partnership for such year to the General Partner or any
Affiliate of the General Partner and services performed, which shall be verified
by the independent public accountants in accordance with generally accepted
auditing standards (the cost of such verification to be reimbursable only to the
extent that, when added to the reimbursement for administrative services, it
does not exceed the competitive rate for such services), (iv) a statement (which
need not be audited) showing the distributions made to the Limited Partners for
such year, and (v) Commencing not later than the start of the second full
calendar year after the termination of the public offering of Units, the
Partnership will provide the Limited Partners with a report of the value of each
Unit at the end of each year. Such report may be based on a valuation provided
by an Affiliate of the General Partner. Such report shall be sent to the Limited
Partners within 120 days following the close of each year.

(d) Within 60 days after the end of each calendar quarter in which a Sale
or Financing occurs, the General Partner shall send to each Person who was a
Limited Partner at the time of such Sale or Financing a report as to the nature
of such Sale or Financing and as to the Taxable Income or Tax Loss and Sale or
Financing proceeds arising from such Sale or Financing.

(e) Within 60 days of the end of each fiscal period for which Form 10-Q
under the Securities Exchange Act of 1934 is filed with the Securities and
Exchange Commission, the General Partner shall send the financial information
required by such Form 10-Q to any Person who was a Limited Partner during such
period.

(f) If the Securities and Exchange Commission promulgates rules which allow
a reduction in reporting requirements, the Partnership may cease preparing and
filing certain of the aforementioned reports if the General Partner determines
such action to be in the best interests of the Partnership.

8.5. DEPRECIATION AND ELECTIONS. With respect to the depreciable assets of
the Partnership, the Partnership may elect to use, so far as permitted by the
Code, any depreciation method which is appropriate in the opinion of the General
Partner.

8.6. DESIGNATION OF TAX MATTERS PARTNER. The General Partner is hereby
designated as the "tax matters partner" under the Code, to manage administrative
tax proceedings conducted at the Partnership level by the Internal Revenue
Service with respect to Partnership matters. Any Partner has the right to
participate in such administrative proceedings relating to the determination of
partnership items at the Partnership level. Expenses of such administrative
proceedings undertaken by the tax matters partner will be paid out of
Partnership assets. Each Limited Partner who elects to participate in such
proceedings will be responsible for any expenses incurred by him in connection
with such participation. Further, the cost of any adjustments to a Limited
Partner and the cost of any resulting audits or adjustments of a Limited
Partner's tax return, will be borne solely by the affected Limited Partner.

ARTICLE IX

MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS

9.1. MEETINGS. (a) Meetings of the Limited Partners for any purpose may be
called by the General Partner and shall be called by the General Partner on
receipt of a request in writing signed by the holders of 10% or more of the
outstanding Units. Notice of any such meeting shall be delivered personally or
sent by certified mail to the Limited Partners within ten days after receipt of
such a request. Such request shall state the purpose of the proposed meeting and
the matters proposed to be acted on. Such meeting shall be held at the principal
office of the Partnership. In addition, the General Partner may, and on receipt
of a request in writing signed by the holders of 10% or more of the outstanding
Units shall, submit any matter (on which the Limited Partners are entitled to
act) to the Limited Partners for a vote by written Consent without a meeting.

(b) A notice of any such meeting shall be either delivered personally or
sent by certified mail, not less than 15 days or more than 60 days before the
date of the meeting, to each Limited Partner at his record

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mailing address. Such notice shall be in writing, shall state the place, date,
hour and purpose of the meeting, shall indicate that it is being issued at or by
the direction of the Partner or Partners calling the meeting and shall include a
detailed statement of the action proposed, including a verbatim statement of the
wording of any resolution proposed for adoption by the Limited Partners and of
any proposed amendment to this Agreement. If a meeting is adjourned to another
time or place, and if any announcement of the adjournment of time or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting. The presence in person or by proxy of the holders of a majority of the
Units shall constitute a quorum at all meetings of the Limited Partners;
provided, however, that if there be no such quorum, holders of a majority in
interest of Limited Partners so present or represented may adjourn the meeting
from time to time without further notice until a quorum has been obtained. No
notice of the time, place or purpose of any meeting of Limited Partners need be
given to any Limited Partner who attends in person or is present by proxy
(except when a Limited Partner attends a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business on
the ground that the meeting is not lawfully called or convened), or to any
Limited Partner entitled to such notice who, in a writing executed and filed
with the records of the meeting, either before or after the time thereof, waives
such notice.

(c) For the purpose of determining the Limited Partners entitled to vote at
any meeting of the Partnership or any adjournment thereof, the General Partner
may fix, in advance, a date as the record date for such determination of Limited
Partners. Such date shall be not more than 50 days nor less than ten days before
any such meeting.

(d) Each Limited Partner may authorize any Person or Persons to act for him
by proxy or written consent in all matters in which a Limited Partner is
entitled to participate, whether by waiving notice of any meeting, or voting or
participating at a meeting. Every proxy or written consent must be signed by the
Limited Partner or his attorney-in-fact. No proxy or written consent shall be
valid after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy or written consent. Every proxy or written consent shall
be revocable at the pleasure of the Limited Partner executing it. Every proxy or
written consent shall specify a choice between approval and disapproval of each
matter to be acted on at the meeting.

(e) At each meeting of Limited Partners, the General Partner shall appoint
such officers and adopt such rules for the conduct of the meeting as the General
Partner deems appropriate.

9.2. VOTING RIGHTS OF LIMITED PARTNERS. After termination of the offering
of the Units,the holders of a majority of the outstanding Units without the
concurrence of the General Partner, may:

(i) amend this Agreement, subject to Section 10.2(b); provided that
such amendment (a) shall not in any manner allow the Limited Partners to
take part in the control of the Partnership's business and (b) shall not,
without the Consent of the General Partner, alter the rights, powers or
duties of the General Partner as set forth in Article IV, the interest of
the General Partner in Taxable Income, Tax Loss, or distributions, or any
of the provisions of Section 5.6 or 6.2;

(ii) dissolve the Partnership;

(iii) remove the General Partner and elect a replacement; or

(iv) subject to Section 4.3(b)(i), approve or disapprove a sale of all
or substantially all of the assets of the Partnership.

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ARTICLE X

MISCELLANEOUS

10.1. APPOINTMENT OF GENERAL PARTNER AS ATTORNEY-IN-FACT. (a) Each Limited
Partner, including each Substituted Limited Partner, by the execution or
acceptance of this Agreement, irrevocably constitutes and appoints the General
Partner his true and lawful attorney-in-fact with full power and authority in
his name, place and stead to execute, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents as may be necessary or
appropriate to carry out this Agreement, including but not limited to:

(i) all certificates and other instruments (including counterparts of
this Agreement), and any amendment thereof, which General Partner deems
appropriate to form, qualify or continue the Partnership as a limited
partnership (or a partnership in which the Limited Partners will have
limited liability comparable to that provided by the Act) in the
jurisdictions in which the Partnership may conduct business or in which
such formation, qualification or continuation is, in the opinion of the
General Partner, necessary or desirable to protect the limited liability of
the Limited Partners;

(ii) all amendments to this Agreement adopted in accordance with the
terms hereof and all instruments which the General Partner deems
appropriate to reflect a change or modification of the Partnership in
accordance with this Agreement;

(iii) all conveyances and other instruments which the General Partner
deems appropriate to reflect the dissolution and termination of the
Partnership in accordance with this Agreement; and

(iv) all statements or other instruments which the General Partner
deems necessary or appropriate to comply with or minimize tax withholding
obligations under the law of any state.

(b) The appointment by all Limited Partners of the General Partner as
attorney-in-fact shall be deemed to be a power coupled with an interest, in
recognition of the fact that each of the Partners under this Agreement will be
relying on the power of the General Partner to act as contemplated by this
Agreement in any filing and other action by it on behalf of the Partnership, and
shall survive the bankruptcy, death, adjudication of incompetence or insanity,
or dissolution of any Person hereby giving such power and the transfer or
assignment of all or any part of the Units of such Person; provided, however,
that in the event of the transfer by a Limited Partner of all his Units, the
power of attorney of a transferor Limited Partner shall survive such transfer
only until such time as the transferee has been admitted to the Partnership as a
Substituted Limited Partner and all required documents and instruments have been
duly executed, filed and recorded to effect such substitution.

10.2. AMENDMENTS. (a) Each additional General Partner and successor General
Partner shall become a party hereto by signing such number of counterpart
signature pages to this Agreement or the Partnership's certificate of limited
partnership (or a power of attorney to the General Partner therefor) and such
other instruments, and in such manner, as the General Partner may determine. By
so signing, each additional General Partner or successor General Partner shall
be deemed to have adopted, and to have agreed to be bound by all the provisions
of, this Agreement. Each Limited Partner and Substituted Limited Partner on his
admission to the Partnership as contemplated hereby and reflection in the
records of the Partnership as a Limited Partner shall be deemed to have adopted,
and to have agreed to be bound by all the provisions of, this Agreement and to
have authorized the General Partner to execute (should the General Partner deem
it advisable) a counterpart of this Agreement on his behalf.

(b) In addition to the amendments otherwise authorized herein, amendments
may be made to this Agreement from time to time by the General Partner with the
Consent of a majority in interest of the Limited Partners; provided, however,
that without the Consent of the Partners to be adversely affected by the
amendment, this Agreement may not be amended so as to (i) convert a Limited
Partner's Interest into a general partner's Interest; (ii) modify the limited
liability of a Limited Partner; or (iii) alter the interest of a Partner in
Taxable Income, Tax Loss, or distributions.

(c) In addition to the amendments otherwise authorized herein, amendments
may be made to this Agreement from time to time by the General Partner, without
the consent of any of the Limited Partners, (i) to add to the representations,
duties or obligations of the General Partner or surrender any right or

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power granted to the General Partner herein, for the benefit of the Limited
Partners; (ii) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Agreement which will not be inconsistent with the provisions of this Agreement;
(iii) to delete or add any provision of this Agreement required to be so deleted
or added by the staff of the Securities and Exchange Commission or other federal
agency or by a state securities commissioner or similar official, which addition
or deletion is deemed by such Commission, agency, commissioner or official to be
for the benefit or protection of the Limited Partners; (iv) to take such action
as may be necessary (if any) to cause the assets of the Partnership not to come
within the definition of plan assets under the Employee Retirement Income
Security Act of 1974; (v) to give effect to any action permitted pursuant to
Section 7.1(d); and (vi) to make technical changes to the Partnership's tax
allocation provisions to conform such provisions to the requirements of the Code
and the Treasury Regulations; provided, however, that no amendment shall be
adopted pursuant to this Section 10.2(c) unless, in the opinion of the General
Partner, the adoption thereof (A) is for the benefit of or not adverse to the
interests of the Limited Partners; (B) is consistent with Section 4.2; (C) does
not affect distributions or the allocation of Taxable Income or Tax Loss (except
as otherwise provided herein) among the Limited Partners or between the Limited
Partners as a class and the General Partner; and (D) does not affect the limited
liability of the Limited Partners or the status of the Partnership as a
partnership for federal income tax purposes.

(d) If this Agreement is amended as a result of adding or substituting a
Limited Partner or increasing the investment of a Limited Partner, the amendment
to this Agreement shall be signed by or otherwise adopted in accordance with
applicable Delaware law by the General Partner and by the Person to be
substituted or added, or the Limited Partner increasing his investment in the
Partnership, and, if a Limited Partner is to be substituted, by the assigning
Limited Partner. If this Agreement is amended to reflect the designation of an
additional General Partner, the amendment to this Agreement shall be signed by
the other General Partner or General Partners and by such additional General
Partner. If this Agreement is amended to reflect the withdrawal of a General
Partner when the business of the Partnership is being continued, the amendment
to this Agreement shall be signed by the withdrawing General Partner (and such
General Partner hereby agrees to do so) and by the remaining or successor
General Partner or General Partners.

(e) In making any amendments, there shall be prepared and filed for
recordation by the General Partner such documents and certificates as are
required to be prepared and filed under the Act and under the laws of the other
jurisdictions under the laws of which the Partnership is then formed or
qualified.

10.3. SECURITY INTEREST AND RIGHT OF SETOFF. As security for any
withholding tax or other liability or obligation to which the Partnership may be
subject as a result of any act or status of any Limited Partner or to which the
Partnership becomes subject with respect to the Interest of any Limited Partner,
the Partnership shall have (and each Limited Partner hereby grants to the
Partnership) a security interest in all distributions distributable to such
Limited Partner to the extent of the amount of such withholding tax or other
liability or obligation. The Partnership shall have a right of setoff against
any such distributions in the amount of such withholding tax or other liability
or obligation.

10.4. OWNERSHIP BY LIMITED PARTNER OF INTEREST IN GENERAL PARTNER OR
AFFILIATES. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate of
the General Partner if such ownership by itself or in conjunction with the stock
or other interest owned by other Limited Partners would, in the opinion of
counsel for the Partnership, jeopardize the classification of the Partnership as
a partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners and prospective
Limited Partners as is required to establish compliance with this Section 10.4.

10.5. PARTIES BOUND. Except as otherwise expressly provided in this
Agreement, all provisions of this Agreement shall bind, benefit, and be
enforceable by or against, the heirs, executors, administrators, personal
representatives, successors and permitted assigns of the parties hereto. None of
the provisions of this Agreement shall be for the benefit of or enforceable by
any creditor of the Partnership or any creditor (other than the Partnership) of
any Partner.

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10.6. GOVERNING LAW; CONSTRUCTION. This Agreement and the rights and obligations
of the Partners shall be governed by and construed and enforced in accordance
with the laws of Delaware applicable to contracts made and to be performed
therein, without application of the principles of conflict of laws of such
state. Captions in this Agreement have been inserted only as a matter of
convenience and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof. The invalidity of any portion
of this Agreement shall not affect the validity of the remainder. As required by
the context, the use of the singular shall be construed to include the plural
and vice versa, and the use of any gender shall be construed to include all
genders.

ARTICLE XI

DEFINITIONS

11.1. DEFINED TERMS. The following terms shall have the meanings specified
in this Article XI unless the context otherwise requires.

"Acquisition Expenses" means expenses, including but not limited to, legal
fees and expenses, travel and communications expenses, costs of appraisals,
nonrefundable option payments on property not acquired, accounting fees and
expenses, title insurance and miscellaneous expenses related to selection and
acquisition of investments, whether or not acquired.

"Acquisition Fees" means the total of all fees and commissions paid by any
party in connection with the purchase or development of property by the
Partnership, whether designated as real estate commissions, acquisition fees,
finders' fees, selection fees, Development Fees, nonrecurring management fees,
or any other fees of a similar nature, however designated; provided that
Acquisition Fees shall not include Development Fees paid to parties not
affiliated with the General Partner in connection with the actual development of
the Property. "Acquisition Fees" shall include the $50,000 fee referred to in
Section 4.2(a)(ix).

"Act" means the Delaware Revised Uniform Limited Partnership Act.

"Adjusted Capital Contributions" means an amount equal to $4,225,000
reduced by an amount equal to all distributions (other than distributions of
operational cash flow) made to the Limited Partners under Section 3.1(b), but in
no event less than zero.

"Affiliate" or "Affiliated Person" of a specified Person means (i) any
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the specified Person, (ii)
any Person owning or controlling 10% or more of the outstanding voting
securities of the specified Person, (iii) any officer, director, partner of the
specified Person, and (iv) if the specified Person is an officer, director or
partner, any company for which such Person acts in any such capacity.

"Agreement" means this Restated Limited Partnership Agreement, as
originally executed and as amended from time to time, as the context requires.
Words such as "herein," "hereof," "hereto," "hereby" and "hereunder," when used
with reference to this Agreement, refer to this Agreement as a whole.

"Capital Account" of any Partner means the capital account of such Partner
that is established on the books of the Partnership and adjusted pursuant to
Section 2.7.

"Capital Contribution" means the total amount of money (and the initial
Gross Asset Value of any property other than money) contributed to the
Partnership (prior to the deduction of any selling commissions, selling
allowances or selling expenses) by any Partner or all the Partners (or the
predecessor holders of the Interests of any Partner or Partners).

"Closing Date" means the date on which subscriptions for all 4,225 Units
are accepted by the General Partner, and the subscribers therefor are admitted
as Limited Partners.

"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute. Any reference herein to a particular provision
of the Code shall mean, where appropriate, the corresponding provision in any
successor statute.

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"Consent" means either (i) the consent given by vote at a meeting called
and held in accordance with Section 9.1, or (ii) a written consent given
pursuant to this Agreement or (iii) the act of granting such consent, as the
context may require.

"Controlling Person" means any Person, whatever the title, performing
functions for the General Partner or any Affiliate thereof similar to those of
the chairman or member of the board of directors or executive management, such
as the president, vice president or senior vice president, corporate secretary
or treasurer, senior management (such as the vice president of an operating
division who reports directly to executive management), or any Person holding a
5% or more equity interest in the General Partner or having the power to direct
or cause the direction of the General Partner, whether through the ownership of
voting securities, by contract, or otherwise.

"Cumulative Annual Return" means an amount equal to 10% per year simple
interest on the Adjusted Capital Contributions of the Limited Partners,
calculated from the earlier of (i) the end of the calendar quarter in which the
Capital Contributions are made or (ii) the Closing Date.

"Development Fee" means a fee payable to anyone, including the General
Partner or an Affiliate, for the packaging of the Partnership's property,
including negotiating and approving plans, and undertaking to assist in
obtaining zoning and necessary variances and necessary financing for the
specific property, either initially or at a later date.

"Financing" means any mortgage financing, refinancing or borrowing secured
by the Property.

"Front-End Fees" means fees and expenses paid by any Person for any
services rendered during the Partnership's organizational or acquisition phase,
including Organizational and Offering Expenses, Acquisition Fees, Acquisition
Expenses and any other similar fees, however designated.

"General Partner" means Southeast Acquisitions, Inc., a Delaware
corporation, and, as herein provided, any additional General Partner or any
successor to any General Partner.

"Interest" means the entire 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 a Partner may be entitled as provided in this
Agreement, together with the obligations of such Partner to comply with this
Agreement. Reference to a majority or specified percentage in interest of the
Limited Partners means Limited Partners whose combined Units represent over 50%
or at least such specified percentage, respectively, of the Units of all Limited
Partners.

"Investment in Property" means the amount of Limited Partners' Capital
Contributions actually paid or allocated to the purchase, development,
construction or improvement of the Property, (including the purchase of the
Property, working capital reserves allocable thereto (not in excess of 5%), and
other cash payments such as interest and taxes, but excluding Front-End Fees).

"Limited Partners" means the Persons admitted to the Partnership pursuant
to Sections 2.2, 2.4 and 7.2.

"Notification" or "Notice" means a writing, containing the information
required by this Agreement to be communicated to any Person, sent by registered,
certified or regular mail to such Person at his last known mailing address;
however, any written communication containing such information sent to such
Person and actually received by such Person shall constitute Notification or
Notice for all purposes of this Agreement.

"Organizational and Offering Expenses" means all expenses incurred in
connection with the formation of the Partnership, the registration and
qualification of the Units under federal and state securities laws and the
offering and sale of the Units, including the selling commissions and selling
allowances payable in connection with the sale of the Units.

"Partner" means any General Partner or Limited Partner.

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

"Property" means the real property described in Exhibit I hereto and all
improvements thereon and replacements or renewals thereof, together with all
personal property which is used in connection therewith, and includes any
interest of the Partnership therein.

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"Prospectus" means the Partnership's prospectus contained in the
Registration Statement filed with the Securities and Exchange Commission for the
registration of the Units under the Securities Act of 1933, in the final form in
which such Prospectus is filed with such Commission and as thereafter
supplemented pursuant to Rule 424 under such act. Any reference herein to "date
of the Prospectus" shall be deemed to refer to the date of the Prospectus in the
form filed pursuant to Rule 424(b) of such act.

"Reserves" means funds set aside or amounts allocated to reserves which
shall be maintained in amounts deemed sufficient by the General Partner for
working capital and to pay taxes, insurance, debt service, repairs, replacements
or renewals, or other costs or expenses, incident to the ownership or operation
of the Property.

"Sale" means any Partnership transaction (other than the receipt of Capital
Contributions) not in the ordinary course of its business, including, without
limitation, sales, exchanges or other dispositions of real or personal property,
condemnations, recoveries of damage awards and insurance proceeds (other than
business or rental interruption insurance proceeds), but excluding any
Financing.

"Sale or Financing proceeds," "Sale proceeds" or "Financing proceeds," mean
all cash receipts arising from a Sale or Financing, as the context requires,
less the following:

(i) the amount necessary for the payment of all debts and obligations
related to the particular Sale or Financing;

(ii) the amount of cash paid or to be paid in connection with such
Sale or Financing (which shall include, with regard to damage recoveries or
insurance or condemnation proceeds, cash paid or to be paid in connection
with repairs, replacements or renewals, in the discretion of the General
Partner, relating to the damage to or partial condemnation of the affected
property); and

(iii) the amount considered appropriate by the General Partner to pay
taxes, insurance, debt service, repairs, replacements or renewals, or other
costs or expenses of the Partnership (including costs of improvements or
additions in connection with the Property) or to provide for the purchase
of land or other interests in connection with the Property or to provide
Reserves.

"Substituted Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 7.2.

"Syndication Expenses" means all expenditures classified as syndication
expenses pursuant to Treasury Regulation Section 1.709-2(b). Syndication
Expenses shall be taken into account under this Agreement at the time they would
be taken into account under the Partnership's method of accounting if they were
deductible expenses.

"Taxable Income" or "Tax Loss" means, for each fiscal year or other period,
an amount equal to the Partnership's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a), and for this purpose,
all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss,
with the following adjustments:

(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Taxable Income or Tax
Loss pursuant hereto shall be added to such taxable income or loss;

(b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Treasury Regulation Section 1.704-1 (b)(2)(iv)(i), and not otherwise
taken into account in computing Taxable Income or Tax Loss pursuant hereto,
shall be subtracted from such taxable income or loss;

(c) Notwithstanding any other provisions of this Agreement, any items
which are specially allocated pursuant to Sections 3.4, 3.5 or 3.6 shall
not be taken into account in computing Taxable Income or Tax Loss.

"Taxable Income" and "Tax Loss" include, where the context requires, all
items of income, gain, loss, deduction or credit which enter into the
computation thereof.

A-22
<PAGE> 71
"Treasury Regulations" means the Income Tax Regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

"Unit" means the Interest of a Limited Partner attributable to a Capital
Contribution of $1,000.

"Unpaid Cumulative Return" means an amount, determined as of the date of
the Partnership's receipt of Sale or Financing proceeds, equal to the Cumulative
Annual Return as of such date less the sum of all distributions to the Limited
Partners before such date under Section 3.1 (a), but in no event less than zero.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

GENERAL PARTNER: SOUTHEAST ACQUISITIONS, INC.

By: /s/ Deborah D. Baker
--------------------

INITIAL LIMITED PARTNER: F M INITIAL, INC.

By: /s/ Anthony R. Balabon
----------------------

A-23
<PAGE> 72
EXHIBIT C

AGREEMENT BETWEEN SOUTHERN
MANAGEMENT GROUP OF TENNESSEE,
R. W. SORENSON AND THE PARTNERSHIP.
<PAGE> 73
AGREEMENT

THIS AGREEMENT is made as of this 1st day of April 1997, by and between
SOUTHERN MANAGEMENT GROUP OF TENNESSEE, LLC, a Tennessee Limited Liability
Company ("SMGT"), Richard W. Sorenson, individually ("Sorenson"), SOUTHEAST
ACQUISITIONS I, L.P. ("SEA I"), SOUTHEAST ACQUISITIONS II, L.P. ("SEA II"),
and SOUTHEAST ACQUISITIONS III, L.P. ("SEA III") (collectively the "SEA
Partnerships" and individually a "Partnership") by SOUTHEAST ACQUISITIONS,
INC. as General Partner of the SEA Partnerships (the "General Partner").

RECITALS

WHEREAS, Sorenson has formed SMGT as the prospective new General
Partner of the SEA Partnerships; and

WHEREAS, upon the requisite approval by the Unit holders of SEA I, SEA II,
and SEA III, SMGT has agreed to be substituted as the new General Partner, and
assume all the attendant responsibilities and obligations of the General Partner
of such of the SEA Partnerships as approve the substitution; and

WHEREAS, each of the SEA Partnerships will incur certain costs and
expenses in connection with the substitution of a new General Partner including,
without limitation, those relating to the solicitation of proxies; and

WHEREAS, SMGT and Sorenson are willing to indemnify the SEA Partnerships
against such costs and expenses upon a default by SMGT or Sorenson under this
Agreement; and

WHEREAS, each of the SEA Partnerships is willing to indemnify Sorenson and
SMGT against their costs and expenses relating to the substitution with respect
to its respective Partnership, if such Partnership defaults under this
Agreement.

NOW, THEREFORE, upon the premises set forth herein, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the parties hereto hereby agree as follows:

Section 1. Substitution of New General Partner.

(a) If a majority in interest of the Unit holders of SEA I votes to
approve the First Alternative Amendments to the Partnership Agreement for SEA I,
attached hereto and made a part hereof (with such changes as shall be approved
by all parties hereto and filed with the Proxy Statement relating thereto to be
mailed on or about April 24, 1997 (the "SEA I Proxy")) at the

C-1
<PAGE> 74

special Meeting of Limited Partners to be held on or about June 11, 1997 (or
such other date to which the Special Meeting may be reasonably postponed), SMGT
agrees to be substituted as the new General Partner of SEA I.

(b) If a majority in interest of the Unit holders of SEA II votes to
approve the First Alternative Amendments to the Partnership Agreement for SEA
II, attached hereto and made a part hereof (with such changes as shall be
approved by all parties hereto and filed with the Proxy Statement relating
thereto to be mailed on or about April 24, 1997 (the "SEA II Proxy")) at the
Special Meeting of Limited Partners to be held on or about June 10, 1997 (or
such other date to which the Special Meeting may be reasonably postponed), SMGT
agrees to be substituted as the new General Partner of SEA II.

(c) If a majority in interest of the Unit holders of SEA III votes to
approve the First Alternative Amendments to the Partnership Agreement for SEA
III, attached hereto and made a part hereof (with such changes as shall be
approved by all parties hereto and filed with the Proxy Statement relating
thereto to be mailed on or about April 24, 1997 (the "SEA III Proxy")) at the
Special Meeting of Limited Partners to be held on or about June 10, 1997 (or
such other date to which the Special Meeting may be reasonably postponed), SMGT
agrees to be substituted as the new General Partner of SEA III.

Section 2. Execution of Partnership Agreements.

Following each approval as set forth in Section 1(a) through (c) above,
SMGT will execute the relevant Partnership Agreement, as amended by the First
Alternative Amendments, as attached to the respective Proxy Statements as
Exhibits A and B thereto, thereby agreeing to be bound by all the terms and
conditions of such Partnership Agreement, as amended.

Section 3. Transfer of General Partner Interest

Upon execution of a Partnership Agreement by SMGT in accordance with
Section 2, the General Partner agrees to transfer to SMGT all of its interest as
General Partner of such Partnership. The General Partner represents that it has
the right to transfer such interest and that following such transfer and the
satisfaction of all the conditions to SMGT being substituted as a General
Partner set forth in the relevant Partnership Agreement, SMGT will be a duly
appointed General Partner of such Partnership with all rights and obligations of
the General Partner of such Partnership.

Section 4. Transfer of Books and Records.

No later than ten (10) business days after the execution of a Partnership
Agreement by SMGT in accordance with Section 2, the General Partner will deliver
to SMGT all of the books and records in its possession of each of the
Partnerships which has approved the substitution of SMGT as the new General
Partner, along with a transmittal letter listing such such books and records
being delivered; provided that the General Partner shall have the right to
retain a copy of all such books and records. The General Partner agrees to
cooperate with SMGT in the orderly

C-2
<PAGE> 75
transition of management and operation of such of the Partnerships as approve of
the substitution of SMGT as the new General Partner, including, without
limitation, making officers, employees and agents of the General Partner
available to SMGT at reasonable times and for reasonable periods at their
offices in Radnor, Pennsylvania and providing reasonable assistance to SMGT in
its preparation and filing of second quarter financial reports for such
Partnerships.

Section 5. Representations and Warranties

SMGT and Sorenson jointly and severally represent to the SEA Partnerships
and the General Partner that all of the information provided by them or their
affiliates to the General Partner or the SEA Partnerships and all statements
appearing in the SEA I Proxy, the SEA II Proxy and the SEA III Proxy
(individually a "Proxy Statement" and collectively the "Proxy Statements") based
on such information and in the light of the circumstances under which they were
made are not and, at the time the Proxy Statements are filed, will not be false
or misleading with respect to any material fact, or omit, or at the time the
Proxy Statements are filed, will omit to state any material fact necessary in
order to make the statements therein not false or misleading. SMGT and Sorenson
also undertake to provide to the Partnerships and the General Partner with any
information necessary to correct any such statement in the Proxy Statements
which becomes false or misleading prior to the Special Meetings referred to in
such Proxy Statements.

Each of the Partnerships represents to SMGT and Sorenson that all
statements appearing in the Proxy Statement relating to such Partnership, other
than statements based on materials or information provided by SMGT, Sorenson or
their affiliates, in the light of the circumstances under which they were made
are, and at the time such Proxy Statement is filed, will not be false or
misleading with respect to any material fact, or omit or, at the time such Proxy
Statement is filed, will omit to state any material fact necessary in order to
make the statements therein not false or misleading. Each of the Partnerships
undertakes to correct any such statement in the Proxy Statement relating to such
Partnership which becomes false or misleading prior to the Special Meeting
referred to in such Proxy Statement.

Section 6. Indemnity.

SMGT and Sorenson, as the principal member of SMGT, jointly and severally,
agree to indemnify the Partnerships from and against any and all claims,
liabilities, costs and expenses (including legal expenses) incurred by the
Partnerships in connection with the proposed substitution of SMGT as the new
General Partner, including, without limitation, the costs and expenses relating
to solicitation of proxies in connection with the substitution of SMGT for the
existing General Partner in the event that Sorenson or SMGT defaults under any
provision of this Agreement.

Each of the Partnerships hereby severally agrees to indemnify SMGT and
Sorenson from and against any and all claims, liabilities, costs and expenses
(including legal expenses) incurred by SMGT and Sorenson in connection with (i)
the proposed substitution of SMGT as the new

C-3
<PAGE> 76
General Partner of such Partnership, including, without limitation, the costs
and expenses relating to solicitation of proxies to substitute SMGT for the
existing General Partner, in the event that such Partnership defaults under any
provision of this Agreement; and (ii) actions of such Partnership prior to the
admission of SMGT as the new General Partner, including, without limitation, any
liabilities or obligations of such Partnership that arose prior to the admission
of SMGT as the new General Partner.

The General Partner hereby agrees to indemnify SMGT and Sorenson from and
against any and all claims, liabilities, costs and expenses (including legal
expenses) incurred by SMGT and Sorenson in connection with actions by the
General Partner prior to the admission of SMGT as the new General Partner of a
Partnership, including without limitation, any liabilities or obligations of the
General Partner that arose prior to the admission of SMGT as the New General
Partner of a Partnership.

Section 7. Miscellaneous.

(a) This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania applicable to contracts made and to be
performed therein. The invalidity of any portion of this Agreement shall not
affect the validity of the remainder. As required by the context, the use of the
singular shall be construed to include the plural and vice versa, and the use of
any gender shall be construed to include all genders.

(b) This Agreement constitutes the entire agreement of the parties hereto,
regarding the subject matter hereof, and all prior agreements, understandings,
representations and statements, oral or written, are hereby merged herein. In
the event of a conflict between the terms of this Agreement and any prior
written agreements, the terms of this Agreement shall prevail. This Agreement
may only be amended or modified by an instrument in writing, signed by the party
intending to be bound thereby.

(c) This Agreement may be executed in counterparts, all of which taken
together, shall constitute one and the same document.

C-4
<PAGE> 77
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

SOUTHERN MANAGEMENT GROUP OF TENNESSEE, LLC

By: /s/ Richard W. Sorenson
------------------------
Name: Richard W. Sorenson
Title: Member

RICHARD W. SORENSON
individually

/s/ Richard W. Sorenson
-----------------------

SOUTHEAST ACQUISITIONS I, L.P.
by: SOUTHEAST ACQUISITIONS, INC.,
General Partner

By: /s/ James W. Kelican, Jr.
--------------------------
Name:
Title:

SOUTHEAST ACQUISITIONS II, L.P.
by: SOUTHEAST ACQUISITIONS, INC.,
General Partner

By: /s/ James W. Kelican, Jr.
--------------------------
Name:
Title:

C-5

<PAGE> 78
SOUTHEAST ACQUISITIONS III, L.P.
by: SOUTHEAST ACQUISITIONS, INC.,
General Partner

By: /s/ James W. Kelican, Jr.
--------------------------
Name:
Title:

C-6

<PAGE> 79
The date of this Proxy Statement is set forth in the lower right hand corner of
this back cover page. Under no circumstances shall the information contained in
this Proxy Statement be considered unchanged as of any date subsequent to the
date hereof except with respect to information incorporated by reference herein
pursuant to a subsequently dated document.

Summary Table of Contents

Summary................................. 7
Risk Factors............................ 13
History of the Partnership.............. 16
The General Partner..................... 17
The Property............................ 21
The Alternative Amendments.............. 31
Voting.................................. 33
Ownership of Units...................... 33
Experts................................. 33
Available Information................... 34
Incorporation of Certain Documents
by Reference.......................... 34
Appendix: Defined Terms................. I-1
Exhibit A: Partnership Agreement........ A-1
Exhibit B: Amendments to
Partnership Agreement................. B-1
Exhibit C: Agreement between
Southern Management Group of
Tennessee, R.W. Sorenson and
the Partnership....................... C-1

SOUTHEAST ACQUISITIONS I, L.P.

General Partner:
Southeast Acquisitions, Inc.
250 King of Prussia Road
Radnor, Pennsylvania 19087
Telephone No. (610) 964-7254
Facsimile No. (610) 964-7269

Information Agent:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
Telephone No. (800) 829-6551
Facsimile No. (212) 809-8839

Proxy Statement

April __, 1997
<PAGE> 80
PROXY PROXY

SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA 19087
TELEPHONE (610) 964-7254

THIS PROXY IS SOLICITED BY THE GENERAL PARTNER ON BEHALF OF THE PARTNERSHIP

The undersigned hereby appoints Arthur W. Mullin and James W. Kelican,
Jr. as Proxyholders, each with full power of substitution and resubstitution,
and hereby authorizes either of them to represent and vote, as designated
below, all of the Units of the Partnership that the undersigned held as a
Limited Partner on April 24, 1997 the Record Date at the Special Meeting to be
held on June 11, 1997, and any adjournment thereof. Capitalized terms used but
not defined in this Proxy Card have the meanings given to them in the
Partnership's Proxy Statement for the Special Meeting.

1. PROPOSAL TO APPROVE FIRST ALTERNATIVE AMENDMENTS

/ / FOR approval of the First Alternative Amendments

/ / AGAINST approval of the First Alternative Amendments

/ / ABSTAIN from voting for approval of the First Alternative
Amendments

2. PROPOSAL TO APPROVE SECOND ALTERNATIVE AMENDMENTS

/ / FOR approval of the Second Alternative Amendments

/ / AGAINST approval of the Second Alternative Amendments

/ / ABSTAIN from voting for approval of the Second Alternative
Amendments

3. The Proxyholders are also authorized to vote upon procedural
matters coming before the Special Meeting in accordance with
their best judgment.

<PAGE> 81
(continued from other side)

THE PROXYHOLDERS WILL VOTE THE UNDERSIGNED'S UNITS IN THE MANNER DIRECTED
HEREON. YOU MAY VOTE IN FAVOR OF OR AGAINST OR ABSTAIN FROM VOTING WITH RESPECT
TO ONE OR BOTH OF THE ALTERNATIVE AMENDMENTS. IF YOU VOTE IN FAVOR OF BOTH
ALTERNATIVE AMENDMENTS, OR IF YOU RETURN A SIGNED PROXY CARD WITHOUT INDICATING
HOW YOU WISH TO VOTE ON EITHER OF THE ALTERNATIVE AMENDMENTS, YOUR VOTE WILL BE
COUNTED AS A VOTE FIRST FOR THE FIRST ALTERNATIVE AMENDMENTS AND ONLY FOR THE
SECOND ALTERNATIVE AMENDMENTS IF THE FIRST ALTERNATIVE AMENDMENTS ARE NOT
ADOPTED.

Please sign and date below. When Units are held by joint tenants, both
joint tenants should sign. When signing as administrator, attorney-in-fact,
executor, fiduciary, guardian, officer, trustee, or other person acting in a
representative capacity, please give your full title. If a corporation, an
authorized officer should sign in the name of the corporation. If a
partnership, a general partner should sign in the name of the partnership.

PLEASE MARK, SIGN, DATE, ---------------------------------------------
AND RETURN THIS PROXY Signature
CARD PROMPTLY USING
THE ENCLOSED ENVELOPE. ---------------------------------------------
Signature if held jointly

Dated: , 1997
------------------