SOUTHEAST ACQUISITIONS I L P, PRER14A, 1997-08-28

SOUTHEAST ACQUISITIONS I L P
PRER14A, 1997-08-28
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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<PAGE> 1

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. 2)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

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

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Southeast Acquisitions I, L.P.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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(3) Per unit price or other underlying value of transaction computed
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<PAGE> 2
SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA
19087

September 15, 1997

Dear Limited Partner:

Southeast Acquisitions, Inc., general partner (the "General Partner") of
Southeast Acquisitions I, L.P. (the "Partnership") is soliciting your vote on
two sets of alternative amendments to the Partnership agreement (the
"Alternative Amendments"). The sets of Alternative Amendments would make the
following modifications to the Partnership agreement:

First Alternative Amendments:

- Extend the Partnership until December 31, 2000
- Substitute a new general partner
- Authorize new fees, commissions and rights to sell Partnership
property for the new general partner
- Give the new general partner the exclusive right to sell Partnership
property
- Modify the Limited Partners' rights to consent to certain sales of
Partnership property

Second Alternative Amendments:

- Extend the Partnership until December 31, 2000
- Retain the General Partner
- Authorize new fees, commissions and rights to sell Partnership
property for the General Partner
- Give the General Partner the exclusive right to sell Partnership
property
- Eliminate the Limited Partners' rights to consent to certain sales of
Partnership property

Although only one of the sets of Alternative Amendments can be adopted, if
neither is adopted, the General Partner would continue to act as general partner
under the current terms of the Partnership agreement.

The General Partner recommends that you vote for either one of the sets of
Alternative Amendments.

The enclosed Proxy Statement discusses the two sets of 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,

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business reply envelope. If you have any questions concerning the sets of
Alternative Amendments, please call the General Partner at (610) 964-7178.

The enclosed Proxy Statement has been mailed by certified mail to the record
holders of 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 OCTOBER 29, 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 Thursday, October 29, 1997 at 2
p.m. Eastern Daylight Savings Time, or at any adjournment thereof, to consider
and vote upon two sets of alternative amendments (the "Alternative Amendments")
to the Restated Limited Partnership Agreement of Southeast Acquisitions I, L.P.
(the "Partnership Agreement"). ALTHOUGH ONLY ONE SET OF ALTERNATIVE AMENDMENTS
CAN BE ADOPTED, IF NEITHER IS ADOPTED, THE GENERAL PARTNER WILL CONTINUE TO ACT
AS GENERAL PARTNER UNDER THE CURRENT TERMS OF THE PARTNERSHIP AGREEMENT.

The First Alternative Amendments would:

- Extend the term of the Partnership from its current expiration
date of December 31, 1997 to December 31, 2000;

- Substitute Southern Management Group, 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;

- Authorize new commissions and new management fees for the New
General Partner;

- Give the New General Partner the exclusive right to sell the
Property; and

- 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 September 15, 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:

- 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;

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<PAGE> 5
- 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;

- Give the General Partner the exclusive right to sell the Property;
and

- Delete from the Partnership Agreement the requirement that, unless
in a liquidation or where the net proceeds provide Limited
Partners with distributions equal to the Unpaid Cumulative Return
plus their Adjusted Capital Contributions, 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.

You may vote in favor of or against or abstain from voting with respect to each
amendment contained in the proposed sets of alternative amendments. However, the
adoption of any amendment contained in a set of alternative amendments is
conditioned upon the adoption of all of the amendments within that set of
alternative amendments.

For example, a Limited Partner may vote "FOR" an individual proposal in the
First Alternative Amendments and "AGAINST" the remaining proposals. Because the
adoption of the entire set of amendments is conditional on each individual
proposal receiving more than 50% of the votes of all the Units, it is possible
that the Limited Partner's vote against (or abstention from voting on) such
remaining proposals could have the effect of a vote against all of the
proposals in the First Alternative Amendments if the proposals which the
Limited Partner votes against do not receive the required vote for passage.

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

The General Partner recommends that you vote for either one of the sets of
Alternative Amendments.

Only Limited Partners of record as of the close of business on September 15,
1997 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.
Even if you plan to 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 proxy holders 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

September 15, 1997

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SOUTHEAST ACQUISITIONS I, L.P.

PROXY STATEMENT

SPECIAL MEETING OF THE LIMITED PARTNERS
TO BE HELD ON OCTOBER 29, 1997

Southeast Acquisitions I, L.P. (the "Partnership") will hold a special meeting
of its limited partners (the "Limited Partners") at 250 King of Prussia Road,
Radnor, PA 19087 on Thursday, October 29, 1997 at 2 pm, Eastern Daylight
Savings Time, or at any adjournment thereof (the "Special Meeting") to consider
and vote upon two sets of alternative amendments (the "Alternative Amendments")
to the Restated Limited Partnership Agreement of Southeast Acquisitions I, L.P.
(the "Partnership Agreement"). ALTHOUGH ONLY ONE SET OF ALTERNATIVE AMENDMENTS
CAN BE ADOPTED, IF NEITHER IS ADOPTED, THE GENERAL PARTNER WILL CONTINUE TO ACT
AS GENERAL PARTNER UNDER THE CURRENT TERMS OF THE PARTNERSHIP AGREEMENT.

Under either set of Alternative Amendments, the term of the Partnership would
be extended to December 31, 2000. In addition, new fees, commissions and rights
would be authorized for the general partner, and the Limited Partners' rights
to consent to Partnership property sales would be modified or eliminated. Under
the first set of Alternative Amendments, a new general partner would be
substituted for the existing general partner for the new term, while under the
second set of Alternative Amendments the existing general partner would remain
in place. For a summary and a more detailed discussion of the Alternative
Amendments, See "THE ALTERNATIVE AMENDMENTS" below at p. 10 and p. 47.

RISK FACTORS

Adoption of either set of Alternative Amendments as well as the failure to
adopt either set of Alternative Amendments involves certain risks including
but not limited to:

First Alternative Amendments:

- Possible decrease in value of Property if Partnership term
extended.

- No assurance of improved return with New General Partner.

- Possible sales of Property at low price without consent of the
Limited Partners.

Second Alternative Amendments:

- Possible decrease in value of Property if Partnership term
extended.

- No assurance of improved return continuing with General Partner.

- Possible sales of Property at low price without consent of the
Limited Partners.

Neither Set of Alternative Amendments Adopted

- Timing of sale of Property by General Partner to obtain
commission

- Partnership Property may be liquidated following December 31,
1997 at below Property Acquisition Cost.

For a more detailed discussion of these and other risk factors see "RISK
FACTORS" below at page 29.

APPRAISAL RIGHTS

The Partnership Agreement does not provide for contractual appraisal rights in
connection with the Alternative Amendments. Therefore, in the event one of the
sets of Alternative Amendments is adopted, Limited Partners who opposed the
adoption of such set of Alternative Amendments will not have the right to
dissent and demand payment in cash for the fair value of their Units.

CONFLICTS OF INTEREST.

Adoption of either set of Alternative Amendments as well as the failure to
adopt either set of Alternative Amendments presents certain conflicts of
interest for the New General Partner and the General Partner, including:

First Alternative Amendments:

- Timing of sale of Property by New General Partner to obtain
commissions.
- Timing of sale of Property by New General Partner to obtain
distribution.
- Willingness of New General Partner to retain brokers.

Second Alternative Amendments:

- Timing of sale of Property by General Partner to obtain
commissions.
- Timing of sale of Property by General Partner to obtain
distribution.
- Willingness of General Partner to obtain brokers.

Neither Set of Alternative Amendments Adopted:

- Timing of sale of Property by General Partner to obtain
commission.

- Timing of sale of Property by General Partner to obtain
distribution.

For a more detailed description of these conflicts of interest see
"CONFLICTS OF INTEREST" below at page 32.

THE ALTERNATIVE AMENDMENTS

The first set of Alternative Amendments (the "First Alternative Amendments")
would:

- Extend the term of the Partnership from its current expiration
date of December 31, 1997 to December 31, 2000;

- 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;

- Give the New General Partner the exclusive right to sell the
Property; and

- 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 September 15, 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.

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The second set of Alternative Amendments (the "Second Alternative Amendments")
would:

- 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;

- 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;

- Give the General Partner the exclusive right to sell the Property;
and

- 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.

<PAGE> 8

The Partnership will mail this Proxy Statement (this "Proxy Statement") on or
about September 15, 1997.

You may vote in favor of or against or abstain from voting with respect to each
amendment contained in the proposed sets of Alternative Amendments. However, the
adoption of any amendment contained in a set of Alternative Amendments is
conditioned upon the adoption of all of the amendments within that set of
Alternative Amendments.

In order to be adopted, all of the amendments contained in a set of Alternative
Amendments must receive at least 50% of the votes of the Units eligible to vote.

In the event both sets of Alternative Amendments receive in excess of 50% of
the votes of Units eligible to vote, the set of Alternative Amendments
receiving the most votes in excess of 50% will be adopted.

In the event of an equal number of votes being cast which are sufficient for the
adoption of both the First Alternative Amendments and the Second Alternative
Amendments, the General Partner will by a random drawing select the set of
Alternative Amendments to be adopted.

If you return a signed proxy card without indicating how you wish to vote on
either the First Alternative Amendments or the Second Alternative Amendments,
your vote will be counted as a vote for both sets of Alternative Amendments.

If neither the First Alternative Amendments nor the Second Alternative
Amendments receives 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.

<PAGE> 9

The General Partner recommends that you vote for either one of the sets of
Alternative Amendments. The General Partner believes that the current value of
the Property is below an amount which would return to the Limited Partners the
Unpaid Cumulative Return plus their Adjusted Capital Contributions. The General
Partner further believes that, based on its discussions with real estate
professionals in this market, given more time, the Property could appreciate in
value and recommends that it is in the best interests of the Partnership to
extend the term of the Partnership by three years to provide additional time for
this to occur. The General Partner is presenting the Limited Partners with the
choice of either selecting a new general partner or continuing with the General
Partner for such period.

Only Limited Partners of record as of the close of business on September 15,
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. Even if you plan to attend the Special Meeting, which will be held
at 250 King of Prussia Road, Radnor, PA 19087, you should use the proxy card
(the "Proxy Card") accompanying this proxy statement to instruct the proxy
holders 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
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. Whether or not you plan to attend the Special Meeting, it is important
that you return your completed Proxy Card to the Information Agent at the
address set forth above. If you have any questions concerning these proposals,
please call the General Partner at (610) 964-7178.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY................................................................ 10
The Alternative Amendments..................................... 10
Risk Factors................................................... 11
Conflicts of Interest.......................................... 13
Reasons for and Benefits of each set of Alternative Amendments. 14
Differences Between the Alternative Amendments................. 17
Comparison of Fees and Commissions Under each set of
Alternative Amendments....................................... 17
Comparison of Plans of New General Partner and General Partner. 19
History of the Partnership..................................... 20
The Property................................................... 20
Investment Objectives.......................................... 21
The General Partner............................................ 21
The New General Partner........................................ 24
Voting......................................................... 27

RISK FACTORS........................................................... 29

FIRST ALTERNATIVE AMENDMENTS 29

Risk of Decrease in Property Value if Partnership Term Extended 29
No Assurance of Improved Return................................ 29
Possible Sales of Property at Low Price Without Consent
of Limited Partners if Consent Requirements Modified......... 29
Possible Death or Disability of Principal member of New
General Partner.............................................. 30
Minimal Capitalization of New General Partner.................. 30
New General Partner's Lack of Experience in Public Real Estate
Partnerships................................................. 30
Limited Cash Reserves.......................................... 30
New General Partner Not Required to Devote Full Time
to Partnership............................................... 30
Risk in Plans of New General Partner........................... 30

SECOND ALTERNATIVE AMENDMENTS....................................... 31

Risk of Decrease in Property Value if Partnership Term
Extended..................................................... 31
No Assurance of Improved Return................................ 31
Limited Capitalization of General Partner...................... 31
Possible Sales of Property at Low Price Without Consent of
Limited Partners if Consent Requirements Eliminated.......... 32
Risk in Rehabilitation of Ultimate Parent of General Partner... 32
Limited Cash Reserves.......................................... 32
Risk in Ms. Deborah Dillon Not Acting as Consultant............ 32
General Partner Not Required to Devote Full Time to
Partnership.................................................. 32
Risk in Plans of General Partner............................... 32

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED....................... 32

Possible Liquidation of Property at Below Acquisition Cost..... 32

CONFLICTS OF INTEREST.................................................. 32

FIRST ALTERNATIVE AMENDMENTS........................................ 32

Timing of Sale to Obtain Commission............................ 32
Timing of Sale to Obtain Distribution.......................... 32
Broker Participation........................................... 33

SECOND ALTERNATIVE AMENDMENTS....................................... 33

Timing of Sale to Obtain Commission............................ 33
Timing of Sale to Obtain Distribution.......................... 33
Broker Participation........................................... 33

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED....................... 33

Timing of Sale to Obtain Commissions........................... 33
Timing of Sale to Obtain Distribution.......................... 33

HISTORY OF THE PARTNERSHIP............................................. 34

Public Offering................................................ 34
Purchase of Property........................................... 34
Distributions/Annual Preferred Return.......................... 34
Investment Objectives.......................................... 36
General Partner's Right to Sell Property; Reserves............. 36
Rights of the Limited Partners on Dissolution.................. 37

THE GENERAL PARTNER.................................................... 37

Background..................................................... 37
Directors and Officers......................................... 39
Former Management/Consulting Relationship...................... 40
Current Management............................................. 41
Plans of Current Management if Second Alternative Amendments
are Adopted.................................................. 43
Plans of Current Management if Neither Set of Alternative
Amendments is Adopted........................................ 43

THE PROPERTY........................................................... 44

Background..................................................... 44
Recent Developments............................................ 44
Real Estate Market Conditions.................................. 44
Marketing of Property.......................................... 45
Appraisal...................................................... 46

THE ALTERNATIVE AMENDMENTS............................................. 47

Reasons For and Benefits of each set of Alternative Amendments. 47
Benefits of Adopting First Alternative Amendments.............. 48
Benefits of Adopting Second Alternative Amendments............. 49
Differences Between the Alternative Amendments................. 50

FIRST ALTERNATIVE AMENDMENTS........................................ 51

Substitution of New General Partner............................ 51
Independent Auditor's Report................................... 51
Extension of Partnership Term.................................. 55
Authorization of Fees and Commissions for New General Partner.. 55
Exclusive Right to Sell the Property........................... 57
Modification of Requirement That Limited Partners Consent to
Sale of All or Substantially All the Assets of the Partnership 57

SECOND ALTERNATIVE AMENDMENTS....................................... 59

Extension of Partnership Term.................................. 59
Authorization of Fees and Commissions for General Partner...... 59
Exclusive Right to Sell the Property........................... 61
Elimination of Requirement That Limited Partners Consent to
Sale of All or Substantially All the Assets of the Partnership 62

FEDERAL TAX CONSEQUENCES; LEGAL OPINION................................ 62

ELIGIBLE UNITS......................................................... 63

VOTING................................................................. 63

Record Date.................................................... 63
Vote Conditioned on Adoption of All of Amendments in Either
the First or Second Alternative Amendments................... 63
Required Vote.................................................. 64
Equal Number of Votes Cast..................................... 64
No Indication of Vote.......................................... 64
Neither Alternative Amendments Adopted......................... 64
Abstentions/Broker Non-Votes................................... 64
Appraisal Rights............................................... 64
Proxies........................................................ 65
Revocation of Proxies.......................................... 65
List of Limited Partners....................................... 65

INFORMATION AGENT...................................................... 65

SOLICITATIONS BY THE GENERAL PARTNER................................... 66

OWNERSHIP OF UNITS..................................................... 66

EXPERTS................................................................ 66

AVAILABLE INFORMATION.................................................. 67

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................ 67

APPENDIX I: GLOSSARY OF DEFINED TERMS.................................. 69

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

EXHIBIT B: ALTERNATIVE AMENDMENTS...................................... B-1

EXHIBIT C: AGREEMENT BETWEEN SOUTHERN MANAGEMENT GROUP, R.W. SORENSON
AND THE PARTNERSHIP.................................................. C-1

EXHIBIT D: LEGAL OPINION............................................... D-1
</TABLE>

<PAGE> 11
SUMMARY

THE FOLLOWING SUMMARY OF MATERIAL TERMS OF THIS PROXY STATEMENT IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE INFORMATION APPEARING ELSEWHERE IN THIS PROXY
STATEMENT.

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 Thursday October 29, 1997 at 2:00
p.m., Eastern Daylight Savings Time, or at any adjournment thereof, to consider
and vote upon two sets of alternative amendments (the "Alternative Amendments")
to the Restated Limited Partnership Agreement of Southeast Acquisitions I, L.P.
(the "Partnership Agreement"). ALTHOUGH ONLY ONE SET OF ALTERNATIVE AMENDMENTS
CAN BE ADOPTED, IF NEITHER IS ADOPTED, THE GENERAL PARTNER WILL CONTINUE TO
ACT AS GENERAL PARTNER UNDER THE CURRENT TERMS OF THE PARTNERSHIP AGREEMENT.

FIRST ALTERNATIVE AMENDMENTS

The first set of Alternative Amendments (the "First Alternative Amendments")
would:
- Extend the term of the Partnership from its current expiration
date of December 31, 1997 to December 31, 2000;

- Authorize new commissions and new management fees for the New
General Partner;

- Give the New General Partner the exclusive right to sell the
Property; and

- Modify the Partnership Agreement to require that, except in the
liquidation of the Partnership, a majority in interest of 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
September 15, 1997 unless the sale or disposition returns to the
Limited Partners at least the original Acquisition Cost of the
assets sold or disposed of.

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<PAGE> 12
SECOND ALTERNATIVE AMENDMENTS

The second set of Alternative Amendments (the "Second Alternative Amendments")
would:

- 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;

- 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;

- Give the General Partner the exclusive right to sell the Property;
and

- 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.

RISK FACTORS

Adoption of either set of Alternative Amendments as well as the failure to
adopt either set of Alternative Amendments involves certain risks including the
following:

FIRST ALTERNATIVE AMENDMENTS

- POSSIBLE DECREASE IN VALUE OF THE PROPERTY IF THE PARTNERSHIP TERM
IS EXTENDED.
Based on a 1996 appraisal (See "THE PROPERTY - Appraisal"
below), the estimated value of the Property has decreased to below
its Acquisition Cost. It is possible that the value of the
Property may decline further over the proposed extended
Partnership term.

- NO ASSURANCE OF IMPROVED RETURN.
There is no assurance that the New General Partner will be able
to achieve a better return during the proposed new term. Any
return may be negatively impacted by the cost of any improvements
to the Property, new fees and any possible continued decline of
the Property's value during the proposed extended Partnership
term.

11
<PAGE> 13
- POSSIBLE SALES OF PROPERTY AT LOW PRICE WITHOUT CONSENT OF LIMITED
PARTNERS.

Under the proposed modification of the Limited Partners' rights
to consent to sales of all or substantially all of the assets of
the Partnership in a single sale, the New General Partner will
have no restrictions on the sale price that it may obtain for
parcels of the Property amounting to less than 60% of the acreage
held by the Partnership as of September 15, 1997 other than
pursuant to its general fiduciary duties. This could result in
sales, without Limited Partners' consent, at below the most recent
appraised value of the Property.

- POSSIBLE DEATH OR DISABILITY OF PRINCIPAL MEMBER OF NEW GENERAL
PARTNER.
Mr. Sorenson, the individual member of the New General Partner,
is 71 years old. He is expected to play a key role in the
marketing and sale of the Property. In the event of his death or
disability, the Partnership would have to rely on employees and
other members of the New General Partner who individually are
not as experienced as Mr. Sorenson.

- MINIMAL CAPITALIZATION OF THE NEW GENERAL PARTNER.
The New General Partner will have minimal capitalization and
may not have sufficient assets to satisfy any future claims
brought against it.

- NEW GENERAL PARTNER'S LACK OF EXPERIENCE IN PUBLIC REAL ESTATE
PARTNERSHIPS.
Although management of the New General Partner has considerable
experience in real estate matters, including private partnerships,
none has any experience in managing public real estate limited
partnerships.

- LIMITED CASH RESERVES
The Partnership's cash reserves are projected to be sufficient
only through December 31, 2000, the expiration date of the new
Partnership term. However, it is possible that the reserves may
be exhausted at an earlier date. If the reserves are exhausted,
the Partnership may have to dispose of portions of the Property
or incur indebtedness on unfavorable terms.

- NEW GENERAL PARTNER NOT REQUIRED TO DEVOTE FULL TIME TO
PARTNERSHIP
The officers and employees of SMG are active in various
business activities other than SMG, and if SMG becomes the New
General Partner these outside activities would continue.
Although the Partnership Agreement allows the general partner and
its officers, directors and employees to have outside business
activities, these other activities will require the officers,
directors and employees of SMG to spend time on those projects
which might otherwise be spent on management of the Partnership
which could result in lost opportunities for the Partnership.

RISK IN PLANS OF NEW GENERAL PARTNER

- Although the New General Partner does not presently anticipate
incurring any material extraordinary costs or expenses chargeable
to the Partnership in its plan to market the Property, it is
possible that a contract for sale of a portion of the Property
could require the Partnership's construction of infrastructure or
other improvements. The Partnership would bear the cost of such
improvements. No such contracts are currently contemplated.

See "RISK FACTORS - First Alternative Amendments" below at
p. 29.

SECOND ALTERNATIVE AMENDMENTS

12
<PAGE> 14
- NO ASSURANCE OF IMPROVED RETURN.
There is no assurance that the General Partner will be able to
achieve a better return over the proposed new term. Any return may
be negatively impacted by the cost of any improvements to the
Property, new fees and any possible continued decline of the
Property's value over the proposed extended Partnership term.

- POSSIBLE SALES OF PROPERTY AT A LOW PRICE WITHOUT CONSENT OF
LIMITED PARTNERS.
Eliminating any rights the Limited Partners have to consent to
sales of all or substantially all of the assets of the Partnership
could result in sales of the Property at below its most recent
appraised value.

- LIMITED CAPITALIZATION OF GENERAL PARTNER
The General Partner has limited capitalization and may not
have sufficient assets to satisfy any future claims brought
against it.

- RISK IN REHABILITATION OF ULTIMATE PARENT OF GENERAL PARTNER
The ultimate parent company of the General Partner is in a
state directed Rehabilitation. It is possible that, pursuant to
the proposed Rehabilitation plan, a non affiliated investor would
reduce or reorganize management of the General Partner.

- LIMITED CASH RESERVES
The Partnership's cash reserves are projected to be sufficient
only through December 31, 2000, the expiration date of the new
Partnership term. However it is possible that the reserves may be
exhausted at an earlier date. If the reserves are exhausted, the
Partnership may have to dispose of portions of the Property or
incur indebtedness on unfavorable terms.

- RISK IN MS. DEBORAH DILLON NOT ACTING AS CONSULTANT.

Ms. Deborah Dillon, who has been involved with the acquisition
and marketing of the Property from the inception of the
Partnership through 1996 is no longer providing consulting
services for the General Partner but has agreed to act as a
consultant to the New General Partner.
[/R]

- GENERAL PARTNER NOT REQUIRED TO DEVOTE FULL TIME TO PARTNERSHIP

Under the Partnership Agreement, the General Partner is required
to devote to the Partnership such time as may be necessary for the
proper performance of its duties, but the officers, directors and
employees of the general partner are not required to devote their
full time to the management of the Partnership. The officers of
the General Partner manage properties owned by other partnerships
in which Southeast Acquisitions, Inc. also acts as general
partner, perform duties for the General Partner's ultimate parent,
Fidelity Mutual, and engage in other business activities. Time
spent by officers of the General Partner managing other
partnerships or working for Fidelity Mutual and engaging in other
business activities will not be available for the management of
the Partnership which could result in lost opportunities for the
Partnership.

RISK IN PLANS OF GENERAL PARTNER

Although the General Partner does not presently anticipate
incurring any material extraordinary costs or expenses chargeable
to the Partnership in its plan to market the Property, it is
possible that a contract for sale of a portion of the Property
could require the Partnership's construction of infrastructure or
other improvements. The Partnership would bear the cost of such
improvements. No such contracts are currently contemplated.

See "RISK FACTORS - Second Alternative Amendments" below at p. 31

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED

RISK OF LIQUIDATION OF PARTNERSHIP PROPERTY AT BELOW
ACQUISITION COST
Partnership Property may be liquidated following December 31,
1997 at below the Property's Acquisition Cost.

See "RISK FACTORS - Neither Set of Alternative Amendments Adopted"
below at p. 32.

CONFLICTS OF INTEREST

Each set of Alternative Amendments presents certain conflicts of interest for
the New General Partner and General Partner. The following summarizes the
conflicts of interest inherent in each set of Alternative Amendments.

FIRST ALTERNATIVE AMENDMENTS

- TIMING OF SALE TO OBTAIN COMMISSION
It is possible that the New General Partner would be
confronted with 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.

- TIMING OF SALE TO OBTAIN DISTRIBUTION
The New General Partner might wish to delay an immediate sale
of the Property which might be in the Partnership's best interests
if the sales proceeds at the time

13
<PAGE> 15
would not be sufficient to result in any distribution to the New
General Partner under the Partnership Agreement.

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

See "CONFLICTS OF INTEREST - First Alternative Amendments" below
at p.32.

SECOND ALTERNATIVE AMENDMENTS

- TIMING OF SALE TO OBTAIN DISTRIBUTION
The General Partner might 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 General Partner.

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

See "CONFLICTS OF INTEREST - Second Alternative Amendments" below at
p. 33.

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED

TIMING OF SALE TO OBTAIN COMMISSION
It is possible that the General Partner would be confronted
with 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.

See "CONFLICTS OF INTEREST - Neither set of Alternative Amendments
Adopted" below at p. 33.

REASONS FOR AND BENEFITS OF EACH SET OF ALTERNATIVE AMENDMENTS

As part of its fiduciary responsibility to protect the assets of the Partnership
and further the business objectives of the Partnership, the General Partner is
offering the Limited Partners the opportunity to vote to extend the term of the
Partnership pursuant to either of the two sets of Alternative Amendments.

14
<PAGE> 16

The General Partner believes that the current market value of the Property is
below an amount which would return to the Limited Partners the Unpaid
Cumulative Return plus their Adjusted Capital Contributions. This assessment is
based upon an appraisal performed in 1996 (See "THE PROPERTY - Appraisal"
below) and the General Partner's inspection of the Property and review of the
assumptions and conclusions of the appraisal with local real estate
professionals.

The General Partner further believes that, based on its discussions with real
estate professionals in this market, given more time, the Property could
appreciate in value and recommends that it is in the best interests of the
Partnership to extend the term of the Partnership by three years to provide
additional time for this to occur. The General Partner is presenting the Limited
Partners with the choice of either selecting a new general partner or continuing
with the General Partner for such period.

The main purpose for and benefit of either set of the Alternative Amendments is
to provide the Partnership with such extended opportunity to improve the price
the Partnership could obtain on the sale of its assets. This could improve the
return on the Limited Partners' investment, as the Partnership's original
business objectives will, in all likelihood, not be met within the existing term
or in a liquidation of the Partnership assets thereafter. There is no assurance
that the return to the Limited Partners will be improved by extending the term.

The General Partner decided to offer the Limited Partners an alternative to the
General Partner continuing for the extended term in the event some Limited
Partners would be concerned about either the conclusion of Ms. Deborah Dillon's
consulting relationship with the Partnership (See "THE GENERAL PARTNER - Former
Management, Consulting Relationship" below at p. 40) or the impact of Fidelity
Mutual's ownership interest in the General Partner (See "THE GENERAL PARTNER -
Background" below at p. 37) (See also "RISK FACTORS -- SECOND ALTERNATIVE
AMENDMENTS -- Risk in Rehabilitation of Ultimate Parent of General Partner"
below at p. 32).

BENEFITS OF ADOPTING FIRST ALTERNATIVE AMENDMENTS

- EXTENDED TIME TO IMPROVE PARTNERSHIP'S REALIZATION OF
ITS OBJECTIVES.

Under the First Alternative Amendments, the Partnership term
would be extended by 3 years, which would provide the New General
Partner additional time to improve the price the Partnership
could obtain on the sale of its assets so as to improve the
return on the Limited Partners' investment, as the Property is
currently valued at below its Acquisition Cost. However, there is
no assurance that purchasers will be found or that the
Partnership will be able to improve the return to the Limited
Partners within such extended time period (See "RISK FACTORS -
First Alternative Amendments" below).

- NEW MANAGEMENT.
The New General Partner presents an opportunity to elect new
management with considerable experience in the Southeastern United
States real estate market for those Limited Partners who wish to
extend the term of the Partnership with a general partner
unaffiliated with Fidelity Mutual. For the relationship between
Fidelity Mutual and the General Partner (See "THE GENERAL PARTNER
- Background" below).

15
<PAGE> 17

- ABILITY TO ACT QUICKLY ON PROSPECTIVE SALES.
In the case of the First Alternative Amendments, modifying 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 - Benefits of Adopting the First
Alternative Amendments" below at p. 48.

BENEFITS OF ADOPTING SECOND ALTERNATIVE AMENDMENTS

- EXTENDED TIME TO IMPROVE PARTNERSHIP'S REALIZATION OF ITS
INVESTMENT OBJECTIVES.
Under the Second Alternative Amendments, the Partnership term
would be extended by 3 years, which would provide the General
Partner additional time to improve the price the Partnership could
obtain on the sale of its assets so as to improve the return on
the Limited Partners' investment, as the Property is currently
valued at below its Acquisition Cost. However, there is no
assurance that purchasers will be found or that the Partnership
will be able to improve the return to the Limited Partners within
such extended time period (See "RISK FACTORS - Second Alternative
Amendments" below at p. 31).

- CONTINUITY OF MANAGEMENT
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. In
addition, new fees authorized by the Second Alternative Amendments
would not be payable to the General Partner until after the
expiration of the original Partnership term on December 31, 1997.

- ABILITY TO ACT QUICKLY ON PROSPECTIVE SALES.
In the case of the Second Alternative Amendments, 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 - Benefits of Adopting the Second
Alternative Amendments" below at p. 49.

16
<PAGE> 18
DIFFERENCES BETWEEN THE ALTERNATIVE AMENDMENTS

The terms of the First Alternative Amendments and the Second Alternative
Amendments are similar, with three principal exceptions:

DIFFERENT GENERAL PARTNERS
Under the First Alternative Amendments, the New General Partner would be
substituted for the General Partner for the new term of the Partnership
Agreement, while under the Second Alternative Amendments, the General Partner
would continue in that capacity for the new term.

TIMING OF FEES
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 on December 31, 1997.

MODIFICATION VERSUS ELIMINATION OF LIMITED PARTNERS' CONSENT

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% or more of the real estate acreage of the
Partnership as of September 15, 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.

COMPARISON OF FEES AND COMMISSIONS UNDER EACH SET OF ALTERNATIVE AMENDMENTS.

The following tables set forth a comparison of the commissions and management
fees to which the General Partner is entitled under the current Partnership
Agreement, the commissions and management fees to which the New General Partner
would be entitled under the First Alternative Amendments and the commissions and
management fees to which the General Partner would be entitled under the Second
Alternative Amendments.

17
<PAGE> 19
COMMISSIONS AND MANAGEMENT FEES PAID TO GENERAL PARTNER
UNDER PARTNERSHIP AGREEMENT TERMINATING DECEMBER 31, 1997

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR AMOUNT OF COMMISSION TOTAL MANAGEMENT TOTAL
COMMISSION FEE MANAGEMENT
FEE PAID
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1986- No limitation on amount None paid $8,100.00/annum $64,800.00
1997 of commission not to exceed
$64,800.00
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

PROPOSED COMMISSIONS AND MANAGEMENT FEES TO BE PAID TO THE NEW GENERAL PARTNER
UNDER FIRST ALTERNATIVE AMENDMENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR AMOUNT OF COMMISSION TOTAL MANAGEMENT TOTAL POSSIBLE
COMMISSION FEE MANAGEMENT
FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 Up to 50% of competitive Depends on sale $1,398 *
real estate commission or price of
disposition fee not to exceed Property
10% of contract price for
Property
- ---------------------------------------------------------------------------------------------
1998 Same as 1997 Same $8,100.00/
annum *
- ---------------------------------------------------------------------------------------------
1999 Same as 1997 Same $8,100.00/
annum *
- ---------------------------------------------------------------------------------------------
2000 Same as 1997 Same $8,100.00/
annum *
- --------------------------------------------------------------------------------------------------------------------------
$25,698 **
</TABLE>

- - * or pro rata portion of fee if the Property is sold before the end of the
year.

- - ** or lesser amount, depending on a pro rata reduction if the Property is
sold before 12/31/00

18
<PAGE> 20
PROPOSED COMMISSIONS AND MANAGEMENT FEES TO BE PAID TO GENERAL PARTNER
UNDER SECOND ALTERNATIVE AMENDMENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Year Amount of Commission Total Management Total Possible
Commission Fee Management
Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 Up to 50% of competitive Depends on sale None
real estate commission or price of
disposition fee not to exceed Property
10% of contract price for
Property
- -----------------------------------------------------------------------------------------------
1998 Same as 1997 Same $8,100.00/
annum *
- -----------------------------------------------------------------------------------------------
1999 Same as 1997 Same $8,100.00/
annum *
- -----------------------------------------------------------------------------------------------
2000 Same as 1997 Same $8,100.00/
annum *
- ----------------------------------------------------------------------------------------------------------------------------
$24,300**
</TABLE>

- - * or pro rata portion of fee if the Property is sold before the end of the
year.

- - ** or lesser amount, depending on a pro rata reduction if the Property is
sold before 12/31/00

COMPARISON OF PLANS OF NEW GENERAL PARTNER AND GENERAL PARTNER

The New General Partner and the General Partner have different plans with
respect to the marketing and sale of the Property.

THE FOLLOWING DESCRIPTION OF THE NEW GENERAL PARTNER'S AND THE GENERAL PARTNER'S
INTENTIONS WITH RESPECT TO MANAGEMENT AND MARKETING THE PROPERTY REPRESENTS
THEIR 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.

NEW GENERAL PARTNER PLANS IF FIRST ALTERNATIVE AMENDMENTS ARE ADOPTED

If the First Alternative Amendments are adopted, the New General Partner intends
first to conduct an extensive site analysis using the services of one of its
member'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, along with other factors
relevant to

19
<PAGE> 21

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.

Architects and engineers employed by SVC, one of the members of the New General
Partner, will perform the preliminary planning and estimating for site
improvements at no cost to the Partnership. No additional costs for
infrastructure or other improvements to the Property are currently planned
by the New General Partner.

It is possible that the New General Partner might enter into a contract for sale
of a portion of the Property which could require construction of infrastructure
or other improvements. The Partnership would bear the cost of such improvements.
No such contracts are currently contemplated.

GENERAL PARTNER'S PLANS IF SECOND ALTERNATIVE AMENDMENTS ARE ADOPTED

The General Partner does not presently anticipate incurring any material
extraordinary costs or expenses chargeable to the Partnership in its plan to
market the Property. However, it is possible that minor costs may be incurred to
secure the services of land professionals in the Columbia, South Carolina
marketplace to advise on marketing and sales efforts. In addition, a contract
for sale of a portion of the Property could require the Partnership's
construction of infrastructure or other improvements. The Partnership would bear
the cost of such improvements. No such contracts are currently contemplated.

GENERAL PARTNER'S PLANS IF NEITHER SET OF ALTERNATIVE AMENDMENTS IS ADOPTED

If neither set of Alternative Amendments is adopted, the General Partner will
implement its plans set forth above as if the Second Alternative Amendments were
adopted until the expiration of the current Partnership term on December 31,
1997 and then proceed to liquidate the assets of the Partnership in accordance
with the Partnership Agreement.

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 and its assets
liquidated unless the term is extended. (See "HISTORY OF THE PARTNERSHIP"
below.)

THE 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. 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. (See "THE PROPERTY"
below.)

20
<PAGE> 22
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 to return to the Limited Partners their capital
contributions and a 10% cumulative annual return, although there has never been
any assurance that this will be attained within the term of the Partnership.

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.

The following organizational chart shows the relationship between Fidelity
Mutual and the General Partner.

----------------------------------------------------------------
The Fidelity Mutual Life Insurance Company
(In Rehabilitation)
----------------------------------------------------------------

owns 100%

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

FML Holding Company, Inc.

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

owns 100%

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

Fidelity Enterprises, Inc.

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

owns 100%

-----------------------------------------------------------------
Southeast Acquisitions, Inc.
(General Partner of Southeast Acquisitions I, L.P.)
-----------------------------------------------------------------

21
<PAGE> 23

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"). The General Partner was immediately advised of the
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. Management of the General Partner has
been kept advised of the status of the Rehabilitation and the potential
consequences that might result from the approval of rehabilitation plans
submitted to the court with jurisdiction over the Rehabilitation.

Fidelity Mutual anticipates that it will file a revised plan of Rehabilitation
(the "Plan") within the next few months under which an outside investor may
acquire a controlling interest in a company which would acquire the assets of
Fidelity Mutual, including the General Partner. (See "THE GENERAL PARTNER -
Background" below at p. 37).

Although it is the present intention of Fidelity Mutual to maintain the current
staffing levels of the General Partner, it is possible that if the Plan is
approved and the sale to a new investor described above is consummated, such new
investor, who would indirectly control the General Partner, would reduce or
reorganize the management of the General Partner during the new Partnership term
proposed under the Second Alternative Amendments.

The following is an unaudited balance sheet of the General Partner.

SOUTHEAST ACQUISITIONS, INC.
UNAUDITED
BALANCE SHEET
JUNE 30, 1997

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 791
Mortgage Receivable $ 560,873
Investment in Southeast
Acquisitions I, II and III $ 0
----------
$ 561,664
==========
<CAPTION>

SHAREHOLDER'S INVESTMENT
<S> <C>

Common Stock (Per value $1
authorized 1,000 shares, issued
and outstanding 100 shares) $ 100
Paid-In Capital $1,556,955
Accumulated Deficit $ (995,391)
----------
$ 561,664
==========
</TABLE>

22
<PAGE> 24
OFFICERS

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

Arthur W. Mullin. Age 51. 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.

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.

Mr. Mullin and Mr. Kelican devote sufficient time to the affairs of the
Partnership as is required to manage the Partnership's business. The amount of
time each spends on Partnership matters varies depending on the needs of the
Partnership. Additional information concerning all the officers of the General
Partner is provided under the heading "THE GENERAL PARTNER - Current Management"
below.

FORMER MANAGEMENT/CONSULTING RELATIONSHIP

Ms. Deborah J. Dillon had 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.

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 until the end of 1996. (See "THE GENERAL
PARTNER - Former Management/Consulting Relationship" below). Ms. Dillon will
not resume her role as consultant to the Partnership if the Second Alternative
Amendments are adopted or if neither set of Alternative Amendments is adopted.
See Also "RISK FACTORS - Second Alternative Amendments" at page 32 below and
"THE GENERAL PARTNER - Former Management Consulting Relationship" at page 37
below.

<PAGE> 25

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, LLC. ("SMG") 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.

SMG was identified as the proposed New General Partner based on, among other
factors, the experience of its members in real estate transactions and markets
in the Southeastern United States and prior dealings between its members and
the General Partner and its Affiliates. See "THE ALTERNATIVE AMENDMENTS -
FIRST ALTERNATIVE AMENDMENTS - Substitution of New General Partner" below at p.
51 for more information on SMG and its management.

SMG 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 SMG.

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 States.

Mr. Sorenson graduated from 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 SMG in the management and
marketing of the Property if SMG is appointed the New General Partner. A more
detailed description of these professionals' qualifications is provided below.
(See "THE ALTERNATIVE AMENDMENTS-FIRST ALTERNATIVE AMENDMENTS - Substitution of
New General Partner" below at p. 51).

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

SMG will devote such time to the affairs of the Partnership as may be required
to manage the Partnership's business although the amount of time may vary,
depending on the needs of the Partnership.

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 -
Substitution of New General Partner" below at p. 51).

24
<PAGE> 26
The following is a balance sheet of the New General Partner audited
by Williams, Benator & Libby, LLP.

INDEPENDENT AUDITOR'S REPORT

Members
Southern Management Group, LLC
Nashville, Tennessee

We have audited the accompanying balance sheet of Southern Management Group,
LLC (a development stage enterprise) as of June 12, 1997. This financial
statement is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Southern Management Group, LLC as
of June 12, 1997 in conformity with generally accepted accounting principles.

/s/Williams, Benator & Libby, LLP

Atlanta, Georgia
June 13, 1997

BALANCE SHEET

SOUTHERN MANAGEMENT GROUP, LLC

(A Development Stage Enterprise)

June 12, 1997

<TABLE>
<S> <C>
ASSETS
Organization costs $ 1,500
Capitalized legal fees 14,054
-------
$15,554
=======

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 7,432
Due to members 8,022
-------
TOTAL CURRENT LIABILITIES 15,454

MEMBERS' EQUITY--Note B 100
-------
$15,554
=======
</TABLE>

See notes to balance sheet.

25
<PAGE> 27

NOTES TO BALANCE SHEET

SOUTHERN MANAGEMENT GROUP, LLC

(A Development Stage Enterprise)

June 12, 1997

NOTE A--DESCRIPTION OF COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Southern Management Group, LLC ("SMG") is a limited liability company formed
under the laws of the state of Tennessee. SMG plans to become the successor
general partner in certain publicly traded real estate limited partnerships and
manage the operations of those partnerships. At June 12, 1997, SMG was in the
development stage and was in the process of submitting required documentation in
connection with becoming the successor general partner in such partnerships.

The following accounting policies are presented to assist the reader in
understanding SMG's financial statements:

Income Taxes: As a limited liability company, all items of income, loss,
deduction, and credit are passed through to, and taken into account by,
SMG's members in computing their own taxable income.

Capitalized Legal Fees: Capitalized legal fees include organization costs,
which will be amortized on a straight-line basis over sixty months, and legal
fees incurred related to SMG's planned acquisition of successor general partner
interests in the above discussed limited partnerships, which will be included
in SMG's cost of its investment in these limited partnerships.

Estimates: The preparation of a balance sheet in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the balance
sheet. Actual results could differ from those estimates.

NOTE B--MEMBERS' EQUITY

SMG was formed in April 1997. Each member is entitled to a number of votes
equal to his percentage interest in SMG. Each member has identical powers,
preferences and rights. The Company provides limited liability to its members.
SMG has no stated termination date. However, upon the termination of a
member's interest, SMG's continued existence is dependent upon the consent of
a majority in interest of the remaining members.

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<PAGE> 28
VOTING

RECORD DATE. The General Partner has established the close of business on
September 15, 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 an 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.

VOTE CONDITIONED ON ADOPTION OF ALL OF AMENDMENTS IN EITHER THE FIRST OR SECOND
ALTERNATIVE AMENDMENTS. Limited Partners may vote in favor of or against or
abstain from voting with respect to each amendment contained in the proposed
sets of Alternative Amendments. However, the adoption of any amendment contained
in a set of Alternative Amendments is conditioned upon the adoption of all of
the amendments within that set of Alternative Amendments. In order to be
adopted, all of the amendments contained in a set of Alternative Amendments must
receive at least 50% of the votes of Units eligible to vote.

For example, a Limited Partner may vote "FOR" an individual proposal in the
First Alternative Amendments and "AGAINST" the remaining proposals. Because the
adoption of the entire set of amendments is conditional on each individual
proposal receiving more than 50% of the votes of all the Units, it is possible
that the Limited Partner's vote against (or abstention from voting on)
such remaining proposals could have the effect of a vote against all of the
proposals in the First Alternative Amendments if the proposals which the
Limited Partner votes against do not receive the required vote for passage.

REQUIRED VOTE. In the event both sets of Alternative Amendments received in
excess of 50% of the votes of Units eligible to vote, the set of Alternative
Amendments receiving the most votes in excess of 50% will be adopted.

NO INDICATION OF VOTE. If a Limited Partner returns a signed proxy card without
indicating how such Limited Partner wishes to vote on either the First
Alternative Amendments or the Second Alternative Amendments, the vote will be
counted as a vote for both sets of Alternative Amendments.

NEITHER ALTERNATIVE AMENDMENTS ADOPTED. If neither the First Alternative
Amendments nor the Second Alternative Amendments receives 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.

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<PAGE> 29

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 proxy holder's voting of the Units to which such proxy applies by: (i)
submitting a later dated proxy card 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, to be received by the
Information Agent on or before October 28, 1997.

APPRAISAL RIGHTS. The Partnership Agreement does not provide for contractual
appraisal rights in connection with either set of Alternative Amendments.
Therefore, in the event one of the sets of Alternative Amendments is adopted,
Limited Partners who oppose such set of Alternative Amendments will not have the
right to dissent and demand payment in cash for the fair value of their Units.

QUESTIONS. If you have any questions concerning either set of Alternative
Amendments please call the General Partner at (610) 964-7178.

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> 30

RISK FACTORS

Each set of Alternative Amendments as well as the failure to adopt either set of
Alternative Amendments presents risks for the Partnership. The following
outlines the principal risks inherent in the adoption of either set of
Alternative Amendments and the risks remaining if neither set of Alternative
Amendments is adopted.

FIRST ALTERNATIVE AMENDMENTS

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

- - RISK OF DECREASE IN PROPERTY VALUE IF PARTNERSHIP TERM EXTENDED

If the expiration date of the Partnership Agreement is
extended to December 31, 2000, there can be no assurance that the
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. The value of the Property has
fluctuated over the term of the Partnership and may continue to do so
(See "THE PROPERTY - Appraisal" below). Based on a 1996 appraisal, the
estimated value of the Property has declined to below the
Acquisition Cost, and it is possible that the value of the Property may
decline further over the additional three years proposed for the new
Partnership term resulting in a lower return to the Limited
Partners.

- - 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 Property than the General Partner could achieve within the current
term of the Partnership Agreement or in a liquidation of the
Partnership assets thereafter. Return on the Property may be negatively
influenced by additional costs and expenses which may be incurred in
improving the Property for marketing purposes (See "FIRST ALTERNATIVE
AMENDMENTS - Substitution of New General Partner" below), the approval
of additional fees provided for in the First Alternative Amendments and
the possibility that the value of the Property may decline further over
the new Partnership term (See "RISK FACTORS - Risk of Decrease in
Property Value if Partnership Term Extended" above).

- - POSSIBLE SALES OF PROPERTY AT LOW PRICE WITHOUT CONSENT OF LIMITED
PARTNERS IF CONSENT REQUIREMENTS MODIFIED

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 September 15, 1997,

29
<PAGE> 31

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 September 15, 1997,
other than general limitations imposed by its overall fiduciary duty
with respect to the Partnership and its assets. The amendment to 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.

- - POSSIBLE DEATH OR DISABILITY OF PRINCIPAL MEMBER OF NEW GENERAL PARTNER

Mr. Sorenson, the individual managing member of the New
General Partner, is expected to play a key role in the marketing and
sale of the Property, assisted by 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, who individually are not as
experienced as Mr. Sorenson, to manage the Partnership. (See "THE
ALTERNATIVE AMENDMENTS - FIRST ALTERNATIVE AMENDMENTS - Substitution
of New General Partner" below.)

- - MINIMAL 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, the New General Partner would have sufficient
assets to satisfy any such claims. (See "THE ALTERNATIVE AMENDMENTS -
FIRST ALTERNATIVE AMENDMENTS - Substitution of New General Partner"
below).

- - NEW GENERAL PARTNER'S LACK OF EXPERIENCE IN PUBLIC REAL ESTATE
PARTNERSHIPS

The New General Partner has not previously engaged in
business. Although the personnel who will comprise the management of
the New General Partner have considerable experience in real estate
matters, including private limited partnerships, none has had any
experience in acting as the general partner of a public real estate
limited partnership. The New General Partner has represented to the
General Partner that it will seek competent counsel to advise it on its
obligations as the general partner of a public limited partnership to
minimize the risks related to its inexperience in this field.

- - LIMITED CASH RESERVES

The Partnership's cash reserves are currently projected to be
sufficient through December 31, 2000, the expiration date of the
proposed new term of the Partnership. However, if unforeseen expenses
are incurred or the Partnership goes forward with infrastructure
improvements, (See "HISTORY OF THE PARTNERSHIP - General Partner's
Right to Sell Property; Reserves" below at p 36 and "FIRST ALTERNATIVE
AMENDMENTS - Substitution of New General Partner" below at p.54) the
reserves may be depleted at an earlier date. Unless sales of portions
of the Property occur prior to such date and portions of the proceeds
of such sales are reserved, if the reserves are depleted prior to the
end of the new Partnership term, the Partnership may have to dispose of
portions of the Property or incur indebtedness upon unfavorable terms.

- - NEW GENERAL PARTNER NOT REQUIRED TO DEVOTE FULL TIME TO PARTNERSHIP

The officers and employees of SMG are active in various
business activities other than SMG, and if SMG becomes the New General
Partner these outside activities would continue. Although the
Partnership Agreement allows the general partner and its officers,
directors and employees to have outside business activities, these
other activities will require the officers, directors and employees of
SMG to spend the time on those projects which might otherwise be spent
on management of the Partnership. If SMG as New General Partner were
not able to devote adequate time to the Partnership, opportunities for
selling the Property could be missed, and the amount realized from the
sale of the Property could be negatively affected. SMG currently
anticipates that, despite their other duties, its management will be
able to devote all the time required to carry out the duties of general
partner of the Partnership and that the risks associated with
management's limited time availability are low.

- - RISK IN PLANS OF NEW GENERAL PARTNER

Although the New General Partner does not presently anticipate
incurring any material extraordinary costs or expenses chargeable to
the Partnership in its plan to market the Property, it is possible that
a contract for sale of a portion of the Property could require the
Partnership's construction of infrastructure or other improvements. The
Partnership would bear the cost of such improvements. No such contracts
are currently contemplated.

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<PAGE> 32
SECOND ALTERNATIVE AMENDMENTS

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

- RISK OF DECREASE IN PROPERTY VALUE IF PARTNERSHIP TERM
EXTENDED

If the expiration date of the Partnership Agreement
is extended to December 31, 2000, there can be no assurance
that the 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. The value of the Property has
fluctuated over the term of the Partnership and may continue
to do so (See "THE PROPERTY - Appraisal" below). Based on a
1996 appraisal, the estimated value of the Property has
declined to below its Acquisition Cost, and it is
possible that the value of the Property may decline further
over the additional three years proposed for the new
Partnership term resulting in a lower return to the Limited
Partners.

- NO ASSURANCE OF IMPROVED RETURN

There is no assurance that the General Partner, or
any alternative general partner, will be able to realize a
better return on the Property than the General Partner would
be able to achieve within the current term of the Partnership
Agreement or in a liquidation of the Partnership assets
thereafter. Return on the Property may be negatively
influenced by additional costs and expenses which may be
incurred in improving the Property for marketing purposes (See
"THE GENERAL PARTNER - Current Management" below), the
approval of additional fees provided for in the Second
Alternative Amendments and the possibility that the value of
the Property may decline further over the new Partnership term
(See "RISK FACTORS - Risk of Decrease in Property Value if
Partnership Term Extended" above).

- LIMITED 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. (See "THE GENERAL PARTNER - Background" below).

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<PAGE> 33
- POSSIBLE SALES OF PROPERTY AT LOW PRICE WITHOUT CONSENT OF
LIMITED PARTNERS IF CONSENT REQUIREMENTS ELIMINATED

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".

- RISK IN REHABILITATION OF ULTIMATE PARENT OF GENERAL PARTNER

The ultimate parent company of the General Partner,
Fidelity Mutual, is in a state directed Rehabilitation. It is
possible that, pursuant to the proposed Rehabilitation plan, a
non-affiliated investor would, through its indirect control of
the General Partner, reduce or reorganize management of the
General Partner. As a result, the General Partner's management
might not have the same level of experience or familiarity
with the Property or be able to dedicate the same amount of
time to managing the Property as the current management.
(See "THE GENERAL PARTNER - Background" below)

- LIMITED CASH RESERVES

The Partnership's cash reserves are currently
projected to be sufficient through December 31, 2000, the
expiration date of the proposed new term of the Partnership.
However, if unforeseen expenses are incurred or the
Partnership goes forward with infrastructure improvements,
(See HISTORY OF THE PARTNERSHIP - General Partner's Right to
Sell Property; Reserves below at p 36 and FIRST ALTERNATIVE
AMENDMENTS - Substitution of New General Partner below at
p.54) the reserves may be depleted at an earlier date.
Unless sales of portions of the Property occur prior to such
date and portions of the proceeds of such sales are reserved,
if the reserves are depleted prior to the end of the new
Partnership term, the Partnership may have to dispose of
portions of the Property or incur indebtedness upon
unfavorable terms.

RISK IN MS. DEBORAH DILLON NOT ACTING AS CONSULTANT.

Ms. Deborah Dillon, who has been involved with
acquisition and marketing of the Property from the inception
of the Partnership through 1996 is no longer providing
consulting services for the General Partner but has agreed to
act as a consultant to the New General Partner. The management
of the General Partner intends to minimize this risk by
securing the services of other land experts in the Columbia,
South Carolina marketplace if it considers such services
necessary. (See "THE GENERAL PARTNER - Plans of Current
Management if Second Alternative Amendments Adopted" below).
(See also "THE GENERAL PARTNER Former Management/ Consulting
Relationship" and "THE ALTERNATIVE AMENDMENTS -- FIRST
ALTERNATIVE AMENDMENTS" - Substitution of New General Partner
below).

GENERAL PARTNER NOT REQUIRED TO DEVOTE FULL TIME TO
PARTNERSHIP

Under the Partnership Agreement, the general partner is
required to devote to the Partnership such time as may be
necessary for the proper performance of its duties, but the
officers, directors and employees of the general partner are
not required to devote their full time to the management of
the Partnership. The officers of the General Partner manage
properties owned by other partnerships in which Southeast
Acquisitions, Inc. also acts as general partner, perform
duties for the General Partner's ultimate parent, Fidelity
Mutual, and engage in other business activities. Time spent by
officers of the General Partner managing other partnerships,
working for Fidelity Mutual and engaging in other business
activities will not be available for the management of the
Partnership. If the General Partner were not able to devote
adequate time to the Partnership, opportunities for selling
the Property could be missed, and the amount realized from the
sale of the Properties could be negatively affected. The
General Partner currently anticipates that, despite their
other duties, its management will be able to devote all the
time required to carry out the duties of general partner of
the Partnership and that the risks associated with
management's limited time availability are low. (But See "RISK
FACTORS - SECOND ALTERNATIVE AMENDMENTS - Risk in
Rehabilitation of Ultimate Parent of General Partner" above)

RISK IN PLANS OF GENERAL PARTNER

Although the General Partner does not presently
anticipate incurring any material extraordinary costs or
expenses chargeable to the Partnership in its plan to market
the Property, it is possible that a contract for sale of a
portion of the Property could require the Partnership's
construction of infrastructure or other improvements. The
Partnership would bear the cost of such improvements. No such
contracts are currently contemplated.

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED

POSSIBLE LIQUIDATION OF PROPERTY AT BELOW ACQUISITION COST

If neither set of Alternative Amendments is adopted, the
General Partner will liquidate the assets of the Partnership
in accordance with the Partnership Agreement following the
expiration of the Partnership term on December 31, 1997. Based
on the current estimated value of the Property (see "THE
PROPERTY - Appraisal" below) it is probable that the Property
will have to be liquidated at below its Acquisition Cost.

CONFLICTS OF INTEREST

Each set of Alternative Amendments presents certain conflicts of interest for
the New General Partner and General Partner. The following describes the
conflicts of interest inherent in each set of Alternative Amendments.

FIRST ALTERNATIVE AMENDMENTS

- TIMING OF SALE TO OBTAIN COMMISSION

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 confronted with
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.

- TIMING OF SALE TO OBTAIN DISTRIBUTION

The New General Partner might wish to delay an
immediate sale of the Property which might be in the
Partnership's best interests if the sales proceeds at the time

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<PAGE> 34
would not be sufficient to result in any distribution to the
New General Partner under the Partnership Agreement.

- BROKER PARTICIPATION

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 New General
Partner's willingness to retain local brokers and upon the
local brokerage community's willingness to participate in the
sale of the Property.

No specific procedures are currently in place to address these potential
conflicts. However, in resolving any of the above-mentioned conflicts, if they
arose, the New General Partner would need to be guided by its general
fiduciary responsibility to the Partnership and the Limited Partners to
protect the assets of the Partnership.

SECOND ALTERNATIVE AMENDMENTS

- TIMING OF SALE TO OBTAIN COMMISSION

The General Partner is currently able to receive the
commission to be paid in respect to a sale of all or a portion
of the Property. It is possible that the General Partner would
be confronted with 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.

- TIMING OF SALE TO OBTAIN DISTRIBUTION

The General Partner might 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 General
Partner.

- BROKER PARTICIPATION

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

No specific procedures are currently in place to address these potential
conflicts. However, in resolving any of the above-mentioned conflicts, if they
arose, the General Partner would need to be guided by its general fiduciary
responsibility to the Partnership and the Limited Partners to protect the assets
of the Partnership.

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED

- TIMING OF SALE TO OBTAIN COMMISSION

- TIMING OF SALE TO OBTAIN DISTRIBUTION

The General Partner might 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 General Partner.

No specific procedures are currently in place to address these potential
conflicts. Given the short time prior to the expiration of the Partnership
term, the likelihood of such conflicts arising is remote. However, in resolving
any of the above-mentioned conflicts, if they arose, the General Partner would
need to be guided by its general fiduciary responsibility to the Partnership and
the Limited Partners to protect the assets of the Partnership.

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<PAGE> 35

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/ANNUAL PREFERRED RETURN

As of the date of this Proxy Statement, there have been no distributions made to
Unit holders although distributions would have been made during the Partnership
term if all or a portion of the Property had been sold.

The following table compares the Adjusted Capital Contributions with the
original investment objective of achieving a Cumulative Annual Return of 10%
per annum.

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<PAGE> 36

SOUTHEAST ACQUISITIONS I, L.P.
Adjusted Capital Contributions/Cumulative Annual Return

<TABLE>
<CAPTION>
1987 1988 1989
---- ---- ----
<S> <C> <C> <C>
Beg. Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000
Distributions Applied To Capital -- -- --
---------- ---------- ----------
Ending Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000

Beg. Cumulative Annual Return $ -- $ 246,458 $ 668,958
Annual Return (10%) $ 246,458 $ 422,500 $ 422,500
Distributions Against Cumulative Return $ -- $ -- $ --
---------- ---------- ----------
Ending Cumulative Annual Return $ 246,458 $ 668,958 $1,091,458

Adjusted Capital Contributions & $4,471,458 $4,893,958 $5,316,458
Cumulative Annual Return
</TABLE>

<TABLE>
<CAPTION>
1990 1991 1992
---- ---- ----
<S> <C> <C> <C>
Beg. Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000
Distributions Applied To Capital -- -- --
---------- ---------- ----------
Ending Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000

Beg. Cumulative Annual Return $1,091,458 $1,513,958 $1,936,458
Annual Return (10%) $ 422,500 $ 422,500 $ 422,500
Distributions Against Cumulative Return $ -- $ -- $ --
---------- ---------- ----------
Ending Cumulative Annual Return $1,513,958 $1,936,458 $2,358,958

Adjusted Capital Contributions & $5,738,958 $6,161,458 $6,583,958
Cumulative Annual Return
</TABLE>

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Beg. Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000
Distributions Applied To Capital -- -- --
---------- ---------- ----------
Ending Adjusted Capital Contributions $4,225,000 $4,225,000 $4,225,000

Beg. Cumulative Annual Return $2,358,958 $2,781,458 $3,203,958
Annual Return (10%) $ 422,500 $ 422,500 $ 422,500
Distributions Against Cumulative Return $ -- $ -- $ --
---------- ---------- ----------
Ending Cumulative Annual Return $2,781,458 $3,203,958 $3,626,458

Adjusted Capital Contributions & $7,006,458 $7,428,958 $7,851,458
Cumulative Annual Return
</TABLE>

35
<PAGE> 37
<TABLE>
<CAPTION>
Unaudited
---------
1996 6/30/97
----
<S> <C> <C>
Beg. Adjusted Capital Contributions $4,225,000 $4,225,000
Distributions Applied To Capital -- --
---------- ----------
Ending Adjusted Capital Contributions $4,225,000 $4,225,000

Beg. Cumulative Annual Return $3,626,458 $4,048,958
Annual Return (10%) $ 422,500 $ 209,514
Distributions Against Cumulative Return $ -- $ --
---------- ----------
End Cumulative Annual Return $4,048,958 $4,258,472

Adjusted Capital Contributions & $8,273,958 $8,483,472
Cumulative Annual Return
</TABLE>

INVESTMENT OBJECTIVES; MARKETING

The Partnership has been marketing the Property and expects that it will dispose
of the Property as conditions warrant. The Property may be sold in a single
sale or divided into parcels which will be sold separately. The timing and
manner of sale is determined by the General Partner. The General Partner has
the right to sell the Property, or portions thereof, without the consent of the
Limited Partners. However, the Limited Partners must consent to the sale of all,
or substantially all, of the Property if the net proceeds of the sale will not
be sufficient to return the Limited Partners' Adjusted Capital Contributions
plus the 10% Cumulative Annual Return.

Given that there have been very few large tract sales in this Columbia
sub-market, and those few that occurred during the past three years were for
prices well below what smaller size parcels were receiving, the General Partner
adopted a strategy in late 1995 to sell smaller parcels. During 1996 there was
only one party with whom serious discussions were held regarding a ten acre
parcel. These discussions did not result in a sale.

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 duties 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 from December 31, 1997. The basis used
by the General Partner for calculating the sufficiency of the cash reserves is
the Partnership's current reserves divided by the amount of the Partnership's
historical expenses, adjusted for permanent differences, with an allowance for
possible unexpected expenditures.

However, if additional expenses are incurred, or should the Partnership decide
to construct infrastructure improvements to the Property, the cash reserves may
be inadequate to cover the Partnership's

36
<PAGE> 38
operating expenses. However, no such infrastructure improvements are planned by
the General Partner at the present time. If the reserves are exhausted, the
Partnership may have to dispose of a portion of the Property, or incur
indebtedness, on unfavorable terms.

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

BACKGROUND

The following organizational chart shows the relationship between Fidelity
Mutual and the General Partner.

37
<PAGE> 39

------------------------------------------
The Fidelity Mutual Life Insurance
Company
(In Rehabilitation)
------------------------------------------

owns 100%

-----------------------------
FML Holding Company, Inc.
-----------------------------

owns 100%

------------------------
Fidelity Enterprises,
Inc.
------------------------

owns 100%

-------------------------------------------
Southeast Acquisitions, Inc.
(General Partner of Southeast
Acquisitions I, L.P.)
-------------------------------------------

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"). The General Partner was immediately advised of the
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. Management of the General Partner has
been kept advised of the status of the Rehabilitation and the potential
consequences that might result from the approval of Rehabilitation plans
submitted to the court with jurisdiction over the Rehabilitation.

Fidelity Mutual anticipates that it will file a revised Rehabilitation plan (the
"Plan") within the next few months and that the Plan will affect all Fidelity
Mutual's assets, including its ownership of the General Partner. Although the
capital stock of the General Partner will be subject to the Plan, none of the
assets of the Partnership will be subject to the Plan.

Under the Plan, all Fidelity Mutual's assets are to be transferred to a stock
life insurance company Fidelity Mutual currently owns. The Plan envisions that
this company will be 100% owned by another Fidelity Mutual subsidiary. This
subsidiary will sell in excess of 50% of its

38
<PAGE> 40
common stock to a non-affiliated investor, with the balance of the ownership
interest in the company remaining with the policy holders of Fidelity Mutual.
Following the sale of stock, the investor will have management control over such
company. The General Partner will be an indirect wholly owned subsidiary of the
company controlled by the new investor.

Although it is the present intention of Fidelity Mutual to maintain the current
staffing levels of the General Partner, it is possible that, if the Plan is
approved and the sale to a new investor described above is consummated, such new
investor, who would indirectly control the General Partner, might reduce or
reorganize the management of the General Partner during the new Partnership term
proposed under the Second Alternative Amendments.

The following is an unaudited balance sheet of the General Partner:

SOUTHEAST ACQUISITIONS, INC.
UNAUDITED
BALANCE SHEET
JUNE 30, 1997

ASSETS

Cash $ 791
Mortgage Receivable $ 560,873
Investment in Southeast
Acquisitions I, II & III $ 0
-----------
$ 561,664
===========
SHAREHOLDER'S INVESTMENT

Common Stock (Per value $1
authorized 1,000 shares, issued
and outstanding 100 shares) $ 100
Paid-In Capital $ 1,556,955
Accumulated Deficit $ (995,391)
-----------
$ 561,664
===========

DIRECTORS AND OFFICERS

The directors and officers of the General Partner are:

Arthur W. Mullin. Age 51. 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

39
<PAGE> 41
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.

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, which coincided with her
resignation as an officer of Fidelity Mutual shortly after the commencement of
the Rehabilitation, and was also prompted by a desire to return to Atlanta,
Georgia, Ms. Dillon

<PAGE> 42
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
because no sales of the Property were concluded during the term 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. The Consulting
Agreement expired by its terms on June 30, 1996 and was extended by mutual
consent through December 31, 1996. The Consulting Agreement was not renewed
further principally because Ms. Dillon informed the General Partner that other
business commitments had grown to the point that she did not believe that she
could spend the time necessary to adequately advise on managing the
Partnership's assets in the future at the level of compensation provided for in
the Consulting Agreement and that she had concerns regarding the continuity of
the management of the General Partner as a result of the Rehabilitation. Ms.
Dillon has agreed to advise the New General Partner if the First Alternative
Amendments are adopted. (See "FIRST ALTERNATIVE AMENDMENTS - New General
Partner" below.)

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.
The officers of the General Partner other than Mr. Mullin and Mr. Kelican are
not actively involved in the marketing, sale and management of the Property.

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
both a land development subsidiary of a major utility and to a major industrial
developer in the Philadelphia suburbs. Both 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

41
<PAGE> 43
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.

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 owned by Fidelity Mutual either
directly, or indirectly through subsidiaries, partnerships or ventures in the
states of Arizona, Colorado, Connecticut, Florida, Georgia, Pennsylvania,
Tennessee and Texas.

Beginning in mid 1995, in anticipation of the expiration date of Ms. Dillon's
Consulting Agreement in June of 1996, the management of the General Partner has
been considering a range of management alternatives for the Property. The
General Partner has investigated possible local representation, talked with
firms who might fill the consulting role performed by Ms. Dillon and interviewed
a number of candidates as potential successor General Partners, including
Richard W. Sorenson, a member of the proposed New General Partner who had been
proposed to the

42
<PAGE> 44
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 his
involvement in management, leasing, sales and equity participation in other real
estate investments with the General Partner or 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".

Officers of the General Partner most recently inspected the Property in October,
1996 and February, 1997 and met with local real estate professionals regarding
the Property. Meetings were held with Owen-Faulkner and Associates, The Keenan
Company, Walter Taylor Company, Holmes/Smith Development, Inc., the Central
Carolina Economic Development Alliance, Edens and Avant, Inc. and the South
Carolina Department of Commerce.

The officers of the General Partner other than Mr. Mullin and Mr. Kelican are
not actively involved in the marketing, sale or management of the Property.

THE FOLLOWING DESCRIPTION OF THE GENERAL PARTNER'S INTENTIONS WITH RESPECT TO
MANAGING 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.

PLANS OF CURRENT MANAGEMENT IF SECOND ALTERNATIVE AMENDMENTS ARE ADOPTED.

The General Partner has the objective either to sell the Property in a single
sale or divide it into parcels to be sold separately. If the Second Alternative
Amendments are adopted, 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. An agreement signed by the Partnership granting Holmes/Smith
Development, Inc. the exclusive right to sell the Property 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. If the First Alternative Amendments are not adopted, the
General Partner will either select new local representation for the Property or
continue with Holmes/Smith Development, Inc. Although it is possible that
construction of a stub road into the Property may be desirable at a later date,
no costs relating to infrastructure improvements or studies relating to the
Property are presently contemplated by the General Partner.

The General Partner does not presently anticipate incurring any material
extraordinary costs or expenses chargeable to the Partnership in its plan to
market the Property. However, it is possible that minor costs may be incurred to
secure the services of land professionals in Columbia, South Carolina
marketplace to advise on sales and marketing efforts. In addition, a contract
for sale of a portion of the Property could require the Partnership's
construction of infrastructure or other improvements. The Partnership would bear
the cost of such improvements. No such contracts are currently contemplated.

PLANS OF CURRENT MANAGEMENT IF NEITHER SET OF ALTERNATIVE AMENDMENTS IS
ADOPTED.

43
<PAGE> 45
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. There are currently no outstanding offers to purchase all or a
portion of the Property.

REAL ESTATE MARKET CONDITIONS

The marketing and ultimate value of the Property is affected by the prevailing
local market conditions. The following perspective of the current market
conditions is offered to present basic information about the current
expectations and competing properties in the marketplace.

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 potentially 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 a land owner and the development alliance, the
association will be able to present an alternative to the Northpoint

44
<PAGE> 46
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.

MARKETING OF PROPERTY

The Property was marketed under the supervision of the General Partner by the
Westminster Group, a regional real estate firm with its headquarters in Atlanta,
GA, pursuant to a listing agreement from August, 1988 until December, 1988. The
General Partner elected to not renew the listing agreement at its expiration in
December, 1988 because of deteriorating economic conditions and did not relist
the Property at that time.

In July, 1990, the General Partner permitted the Keenan Company to register a
client that was interested in purchasing a portion of the Property.

The South Carolina Department of Commerce has maintained the Property on its
list of available industrial sites since 1992 and as a result the Property has
been shown to a few large acreage purchasers during that time.

The Columbia real estate community has been aware of the Property's availability
for at least the past three (3) years, and the Property was exclusively marketed
by Holmes/Smith Development, Inc. during that period.

Since the expiration of the Holmes/Smith Development, Inc. agreement in
December, 1996, the General Partner has communicated directly with real estate
professionals involved in the Columbia, SC area regarding marketing the Property
and intends to relist the Property in the near future.

45
<PAGE> 47
APPRAISAL

The General Partner had the Property appraised in 1996. The appraiser who
conducted the appraisal was Owen-Faulker & Associates. The appraiser has no
relationship with the General Partner, the New General Partner or their
Affiliates. The findings of the appraiser have been supported by the information
gathered by the General Partner as a result of conversations and meetings with
the appraiser, brokers and developers in the area, the South Carolina Department
of Commerce, 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 dollars), 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 $2,300,000. 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 appraiser who conducted the 1992 appraisal was Southern Appraisal Service,
Inc. To the knowledge of current management of the General Partner, there was no
affiliation between the 1992 appraiser and the General Partner or its Affiliates
or the New General Partner or its Affiliates at the time the 1992 appraisal was
performed.

The 1996 and 1992 appraisals were prepared using essentially the same
assumptions and methodology, but differ as a result of changing market
conditions. In both cases, there were very few sales in the vicinity to be used
as comparable transactions and there was an abundance of land available for
development. There were sales in the area between 1992 and 1996 that enabled the
1996 appraiser to perform some additional analysis of the Property's value.

The 1992 appraiser utilized the sales comparison (market) approach to value the
Property. Because the Property is raw land it was deemed inappropriate to use
the cost or income approaches, which are two other prevailing methods of
valuation. Due to the lack of sales of developed business and industrial sites
in the area at that time, the 1992 appraiser felt that there was not enough data
to support a development approach with a discounted cash flow analysis.

46
<PAGE> 48
The 1996 appraiser also utilized the sales comparison approach, noting that the
cost and income approaches were inappropriate. Using the sales comparison
approach, the appraiser reconciled a value of $16,000 per acre for approximately
160 acres of the Property and $4,000 per acre for the approximately 40 acres of
the Property located within the 100 year flood plain. Because there were some
sales of developed land since 1992, the 1996 appraiser also analyzed the
Property's value if developed into a park. Since absorption of developed land in
the area has been slow, estimating the absorption for the Property was
difficult. The present value based on the appraiser's discounted cash flow
analysis was substantially less than the value determined by the sales
comparison approach, without considering the cost of the infrastructure
necessary to sell developed lots.

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. Copies of the appraisal may be obtained by
Limited Partners, at their expense, upon request to Margaret M. Tamasitis,
Secretary, Southeast Acquisitions, Inc., 250 King of Prussia Road, Radnor, PA
19087 (610) 964-7234.

THE APPRAISED VALUE DOES NOT REFLECT COSTS, EXPENSES AND COMMISSIONS WHICH WOULD
BE INCURRED IN CONNECTION WITH A SALE OF THE PROPERTY. MOREOVER, APPRAISALS ARE
ONLY AN APPROXIMATION OF CURRENT MARKET VALUE WHICH CAN ONLY BE ESTABLISHED BY
AN ACTUAL SALE.

THE ALTERNATIVE AMENDMENTS

REASONS FOR AND BENEFITS OF EACH SET OF ALTERNATIVE AMENDMENTS

The General Partner believes that the current market value of the Property is
below an amount which would return to the Limited Partners the Unpaid
Cumulative Return plus their Adjusted Capital Contributions. This assessment is
based upon an appraisal performed in 1996 (See "THE PROPERTY -- Appraisal"
above) and the General Partner's inspection of the Property and review of the
assumptions and conclusions of the appraisal with local real estate
professionals.

The General Partner further believes that, based on its discussions with real
estate professionals in this market, that, given more time, the Property could
appreciate in value and recommends that it is in the best interests of the
Partnership, to extend the term of the Partnership by three years to provide
additional time for this to occur. The General Partner is presenting the Limited
Partners with the choice of either selecting a new general partner or continuing
with the General Partner for such period.

47
<PAGE> 49

The main purpose for and benefit of either of the sets of Alternative Amendments
is to provide the Partnership with such an extended opportunity to improve the
price the Partnership could obtain on the sale of its assets. This could improve
the return on the Limited Partners' investment, as the Partnership's original
business objectives will, in all likelihood, not be met within the existing term
or in a liquidation of the Partnership assets thereafter. There is no assurance
that the return to the Limited Partners will be improved by extending the term.

The General Partner decided to offer the Limited Partners an alternative to the
General Partner continuing for the extended term in the event some Limited
Partners would be concerned about the conclusion of Ms. Deborah Dillon's
consulting relationship with the Partnership (See "THE GENERAL PARTNER - Former
Management/Consulting Relationship" and "RISK FACTORS - SECOND ALTERNATIVE
AMENDMENTS - Risk in Ms. Deborah Dillon not Acting as Consultant" above) and the
impact of Fidelity Mutual's ownership interest in the General Partner (See "THE
GENERAL PARTNER - Background" and "RISK FACTORS - SECOND ALTERNATIVE AMENDMENTS
- - Risk in Rehabilitation of Ultimate Parent of General Partner" above).

BENEFITS OF ADOPTING FIRST ALTERNATIVE AMENDMENTS

- EXTENDED TIME TO IMPROVE PARTNERSHIP'S REALIZATION OF ITS
INVESTMENT OBJECTIVES.

Under the First Alternative Amendments, the Partnership term
would be extended by 3 years to December 31, 2000, which would
provide the New General Partner additional time to improve the
price the Partnership could obtain on the sale of its assets, so
as to improve the return on the Limited Partners' investment. The
value of the Property has fluctuated over the Partnership term
(See "THE PROPERTY - Appraisal" below) and is currently valued at
below its Acquisition Cost. The extended time period would give
the New General Partner the chance to implement its marketing plan
to find prospective purchasers. However, there is no assurance
that purchasers will be found or that the Partnership will be able
to improve the return to the Limited Partners within such extended
time period (See "RISK FACTORS - First Alternative Amendments"
below).

- NEW MANAGEMENT.

The New General Partner has considerable experience in the
marketplace where the Property is located. The New General Partner
has no affiliation with Fidelity Mutual, the parent of the General
Partner. The New General Partner presents an opportunity to elect
new management for those Limited Partners who wish to extend the
term of the Partnership but may be concerned about the conclusion
of Ms. Dillon's consulting relationship with the General Partner
or the impact of the Rehabilitation of Fidelity Mutual on the
General Partner. For information on Ms. Dillon's former
relationship with the General Partner see "THE GENERAL PARTNER -
Former Management/Consulting Relationship" above and for the
relationship between Fidelity Mutual and the General Partner See
"THE GENERAL PARTNER - Background" above.

48
<PAGE> 50
- ABILITY TO ACT QUICKLY ON PROSPECTIVE SALES.

In the case of the First Alternative Amendments, modifying 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.

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, the New 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 New General Partner, would amount to a sale of all or
substantially all the assets of the Partnership.

BENEFITS OF ADOPTING SECOND ALTERNATIVE AMENDMENTS

- EXTENDED TIME TO IMPROVE PARTNERSHIP'S REALIZATION OF ITS
INVESTMENT OBJECTIVES.

Under the Second Alternative Amendments, the Partnership term
would be extended by 3 years to December 31, 2000, which would
provide the General Partner additional time to improve the price
the Partnership could obtain on the sale of its assets so as to
improve the return on the Limited Partners' investment. The value
of the Property has fluctuated over the partnership term (See "THE
PROPERTY - Appraisal" above) and is currently valued at below its
Acquisition Cost. The extended time period would give the General
Partner the chance to continue to market the Property. However
there is no assurance that purchasers will be found or that the
Partnership will be able to improve the return to the Limited
Partners within such extended time period (See "RISK FACTORS -
Second Alternative Amendments" above).

- CONTINUITY OF MANAGEMENT

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 only upon receipt of
additional fees, commission and rights to sell the Property.

49
<PAGE> 51
In addition to the benefit of continuity of management, new
fees would not be payable to the General Partner until after the
expiration of the original Partnership term on December 31, 1997.

- ABILITY TO ACT QUICKLY ON PROSPECTIVE SALES.

In the case of the Second Alternative Amendments, 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.

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, 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, 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.

DIFFERENCES BETWEEN THE ALTERNATIVE AMENDMENTS

The terms of the First Alternative Amendments and the Second Alternative
Amendments are similar, with three principal exceptions:

- DIFFERENT GENERAL PARTNERS

Under the First Alternative Amendments, the New General
Partner would be substituted for the General Partner for the new
term of the Partnership Agreement, while under the Second Alternative
Amendments, the General Partner would continue in that capacity for the
new term.

- TIMING OF FEES

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

<PAGE> 52
receiving such fees following the expiration of the current term of the
Partnership Agreement.

- MODIFICATION VERSUS ELIMINATION OF LIMITED PARTNERS CONSENT

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 September 15, 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.

FIRST ALTERNATIVE AMENDMENTS

SUBSTITUTION OF NEW GENERAL PARTNER

Southeast Acquisitions, Inc. would be removed as the General Partner of the
Partnership and SMG would be substituted as the New General Partner effective
as of the date the First Alternative Amendments are adopted and the New General
Partner signs the Partnership Agreement.

SMG was identified as the proposed New General Partner based on the experience
of its members in real estate transactions, their familiarity with the
marketplace in the Southeastern United States, prior dealings with the General
Partner and its Affiliates and intent to use the advisory services of Ms. Dillon
whose knowledge of the Property would provide some continuity to management of
the Property.

Although preliminary discussions were held with a number of candidates, the
General Partner has not engaged in a comprehensive search for a new general
partner. An extended search for other potential successor general partners was
not undertaken because of the evident qualifications of SMG, the willingness of
SMG to become a successor general partner, the difficulty an Affiliate of
the General Partner had experienced in attempting to locate a successor general
partner for another limited partnership and the reluctance of other candidates
to assume the risks of becoming general partner of the Partnership.

The following is a balance sheet of the New General Partner audited
by Williams, Benator & Libby, LLP.

INDEPENDENT AUDITOR'S REPORT

Members
Southern Management Group, LLC
Nashville, Tennessee

/s/Williams, Benator & Libby, LLP

Atlanta, Georgia
June 13, 1997

BALANCE SHEET

SOUTHERN MANAGEMENT GROUP, LLC

(A Development Stage Enterprise)

June 12, 1997

<TABLE>
<S> <C>
ASSETS
Organization costs $ 1,500
Capitalized legal fees 14,054
-------
$15,554
=======

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 7,432
Due to members 8,022
-------
TOTAL CURRENT LIABILITIES 15,454

MEMBERS' EQUITY--Note B 100
-------
$15,554
=======
</TABLE>

See notes to balance sheet.

NOTES TO BALANCE SHEET

SOUTHERN MANAGEMENT GROUP, LLC

(A Development Stage Enterprise)

June 12, 1997

NOTE A--DESCRIPTION OF COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies are presented to assist the reader in
understanding SMG's financial statements:

Income Taxes: As a limited liability company, all items of income, loss,
deduction, and credit are passed through to, and taken into account by,
SMG's members in computing their own taxable income.

NOTE B--MEMBERS' EQUITY

51
<PAGE> 53
SMG 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 SMG.

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. Concurrent 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.

52
<PAGE> 54
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.

Neither SMG nor any of its members owns directly or indirectly any Units.

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

53
<PAGE> 55
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 or have an
ownership interest in the New General Partner.

The New General Partner does not have any interest in the General Partner or its
Affiliates, and the General Partner has no interest in the New General Partner
or its Affiliates. The General Partner will receive no consideration in the
event the New General Partner is substituted as a successor general partner. The
General Partner and the New General Partner do not have any common officers or
directors.

SMG and Mr. Sorenson have entered into an agreement with the Partnership to
substitute SMG as the New General Partner of the Partnership upon adoption of
the First Alternative Amendments. The agreement provides that, following such
approval, SMG will execute the Partnership Agreement, thereby agreeing to be
bound by all the terms and conditions of the Partnership. Under the agreement,
SMG 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 SMG 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 SMG to assume the
position of New General Partner if the First Alternative Amendments are adopted.
Under the agreement, SMG 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.
SMG'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.

SMG HAS REPRESENTED TO THE PARTNERSHIP THAT THE FOLLOWING DESCRIPTION OF ITS
INTENTIONS WITH RESPECT TO MANAGING 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, along with other factors
relevant to an industrial park. In addition, an audit of competing parks will be
undertaken to assist in drafting comprehensive park covenants.

It is possible that the New General Partner might enter into a contract for sale
of a portion of the Property which would could require construction of
infrastructure or other improvements. The Partnership would bear the cost of
such improvements. No such contracts are currently contemplated.

54
<PAGE> 56

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 and improve the return to
the Limited Partners. However, there can be no guarantee that the Partnership
will be able to realize a better return to the Limited Partners 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 further 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 would
continue through the end of the extended Partnership term.

55
<PAGE> 57

The effect of the First Alternative Amendments would be that the Partnership
would pay a management fee to the New General Partner of $1,398 in 1997
(assuming approval of the First Alternative Amendments on October 29, 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.
A 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 First Alternative Amendments would 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 or its Affiliates would only be
entitled to up to 50% of any such compensation.

The following table sets forth the proposed commissions and management fees to
be paid to the New General Partner under the First Alternative Amendments.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
YEAR AMOUNT OF COMMISSION TOTAL MANAGEMENT TOTAL POSSIBLE
COMMISSION FEE MANAGEMENT
FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 Up to 50% of competitive Depends on sale $1,398 *
real estate commission or price of
disposition fee not to exceed Property
10% of contract price for
Property
- -----------------------------------------------------------------------------------------
1998 Same as 1997 Same $8,100.00/
annum *
- -----------------------------------------------------------------------------------------
1999 Same as 1997 Same $8,100.00/
annum *
- -----------------------------------------------------------------------------------------
2000 Same as 1997 Same $8,100.00/
annum *
- -----------------------------------------------------------------------------------------------------------
$25,698 **
</TABLE>

- - * or pro rata portion of fee if Property is sold before the end of the year.

- - ** or lesser amount, depending on a pro rata reduction if the Property is sold
before 12/31/00

56
<PAGE> 58
EXCLUSIVE RIGHT TO SELL THE PROPERTY

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

"(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."

The First 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.

Section 4.2(a) "AUTHORITY OF GENERAL PARTNER" would be amended to add the
following provision:

"(xi) 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."

The foregoing amendments to Sections 4.3(c)(i) and 4.2(a) are designed both as
an incentive to the New General Partner to be substituted as general partner and
to facilitate sales of the Property.

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

57
<PAGE> 59
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 September 15, 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 September 15, 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 September 15, 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.

58
<PAGE> 60
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 maximize the value of the
Property to the Partnership and improve the return to the Limited Partners.
However, there can be no assurance that the Partnership will be able to realize
a better return to the Limited Partners 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 further 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 be dissolved,
its assets liquidated and any distributions made in accordance with the
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.

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.

59
<PAGE> 61
(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.

(ii) Commissions

The Partnership Agreement does not permit the payment of commissions to the
General Partner by the Partnership in connection with a sale of Partnership
property. In addition, Section 4.3(c)(i) 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 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.

60
<PAGE> 62
The following table sets forth the proposed commissions and management fees to
be paid to General Partner under the Second Alternative Amendments.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR AMOUNT OF COMMISSION TOTAL MANAGEMENT TOTAL POSSIBLE
COMMISSION FEE MANAGEMENT
FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 Up to 50% of competitive Depends on sale None
real estate commission or price of
disposition fee not to exceed Property
10% of contract price for
Property
- ----------------------------------------------------------------------------------------------------------
1998 Same as 1997 Same $8,100.00/
annum *
- ----------------------------------------------------------------------------------------------------------
1999 Same as 1997 Same $8,100.00/
annum *
- ----------------------------------------------------------------------------------------------------------
2000 Same as 1997 Same $8,100.00/
annum *
- ----------------------------------------------------------------------------------------------------------------------------------
$24,300 **
</TABLE>

- - * or pro rata portion of fee if the Property is sold before the end of the
year.

- - ** or lesser amount, depending on a pro rata reduction if the Property is sold
before 12/31/00

EXCLUSIVE RIGHT TO SELL THE PROPERTY

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

(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."

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.

Section 4.2(a) "AUTHORITY OF GENERAL PARTNER" would be amended to add the
following provision:

<PAGE> 63
"(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."

The foregoing amendments to Sections 4.3(c)(i) and 4.2(a) are designed both as
an incentive to the General Partner to continue as general partner and to
facilitate sales of the Property.

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 at below its most recent appraised value discussed above
under the heading "THE PROPERTY - Appraisal".

FEDERAL TAX CONSEQUENCES; LEGAL OPINION

The Partnership has obtained an opinion from legal counsel as of the date of
this Proxy Statement that neither of the Alternative Amendments would cause: (i)
a material adverse effect on the Limited Partners by reason of a termination of
the Partnership for Federal income tax purposes; or (ii) the Partnership to be
treated as an association taxable as a corporation for Federal income tax
purposes. If for some reason such legal counsel cannot restate the contemplated
opinion on the date of the Special Meeting, the General Partner would adjourn
the Special Meeting to a later date or cancel it.

62
<PAGE> 64
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.

VOTING

RECORD DATE. The General Partner has established the close of business on
September 15, 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. For
either of the sets of Alternative Amendments to take effect, the Limited
Partners must vote more than 50% of the total number of outstanding Units in
favor of one of the sets of Alternative Amendments at the Special Meeting.
Limited Partners will possess one vote for each Unit eligible to be voted that
they hold.

63
<PAGE> 65

proposed sets of Alternative Amendments. However, the adoption of any amendment
contained in a set of Alternative Amendments is conditioned upon the adoption of
all of the amendments within that set of Alternative Amendments. In order to be
adopted, all of the amendments contained in a set of Alternative Amendments must
receive at least 50% of the votes of Units eligible to vote.

For example, a Limited Partner may vote "FOR" an individual proposal in the
First Alternative Amendments and "AGAINST" the remaining proposals. Because
the adoption of the entire set of amendments is conditional on each individual
proposal receiving more than 50% of the votes of all the Units, it is possible
that the Limited Partner's vote against (or abstention from voting on) such
remaining proposals could have the effect of a vote against all of the
proposals in the First Alternative Amendments if the proposals which the
Limited Partner votes against do not receive the required vote for passage.

EQUAL NUMBER OF VOTES CAST. In the event of an equal number of votes being cast
sufficient for the adoption of both sets of Alternative Amendments, the General
Partner will by a random drawing select the set of Alternative Amendments to be
adopted. In such random drawing, the words "First Alternative Amendments" and
"Second Alternative Amendments" will be written on separate ballots and placed
in separate sealed envelopes in a ballot box. A member of the management of the
General Partner, in the presence of an independent third party, who will be
either counsel to or auditors for the Partnership, will then draw the set of
Alternative Amendments to be adopted.

ABSTENTIONS/BROKER NON-VOTES. With respect to each set of 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 one set of Alternative Amendments, rather than just
a majority of those eligible Units present at the Special Meeting.

APPRAISAL 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

64
<PAGE> 66
appraisal rights in connection with the adoption of either set of Alternative
Amendments. Therefore, in the event one of the sets of Alternative Amendments is
adopted, Limited Partners who oppose the adoption of such set of Alternative
Amendments will not have the right to dissent and demand payment in cash for the
fair value of their Units.

PROXIES. Proxy holders 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 each set of
Alternative Amendments. Moreover, the proxy holders 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.

REVOCATION OF PROXIES. A Limited Partner may revoke its proxy at any time prior
to the proxy holder's voting of the Units to which such proxy applies by: (i)
submitting a proxy with a later date 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, to be received by the
Information Agent on or before October 28, 1997.

LIST OF LIMITED PARTNERS. Limited Partners may obtain a list of the name and
last known address of each partner in the Partnership by submitting a written
request to Margaret T. Tamasitis, Secretary, Southeast Acquisitions, Inc., 250
King of Prussia Road, Radnor, PA 19087. Requests for lists must be accompanied
by payment of the reasonable costs incurred by the General Partner to reproduce
the list.

Requests for lists must be accompanied by payment of the reasonable costs
incurred by the General Partner to reproduce the list.

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, 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

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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 September 15, 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 September 15, 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 5.9%
NA-0404
1 Burton Hills Blvd., Suite 210
Nashville, Tennessee 37215
</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

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opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.

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, Commission File No.
0-16835, (as amended on July 15, 1997) (ii) the Partnership's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997 and (iii)
the Partnership's periodic reports, and amendments, if any, filed with the
Commission under the Exchange Act after the date hereof but on or before the
date of 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

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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. Requests should be made to Margaret M. Tamasitis,
Secretary, Southeast Acquisitions, Inc., 250 King of Prussia Road, Radnor, PA
19087 (610) 964-7234.

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<PAGE> 70
APPENDIX I

GLOSSARY OF DEFINED TERMS

The following terms used in the foregoing Proxy Statement shall have the
meanings specified in this Appendix.

"Acquisition Cost" means the price originally paid for a Partnership 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.

"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 an
amount less than zero.

"Affiliate" or "Affiliated Person" of a specified Person means (i) and 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, or partner of the specified
Person; and (iv) if the specified Person is an officer, director or partner, any
company for which such a Person acts in any such capacity.

"Alternative Amendments" means the proposed First Alternative Amendments and
Second Alternative Amendments to the Partnership Agreement.

"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).

"Cash Flow" means Partnership cash funds provided from operations (including
lease payments on net leases from builders and sellers) without deduction for
depreciation, but after deducting cash funds used to pay all other expenses,
debt payments, capital improvements and replacements.

"Commission" means The Securities and Exchange Commission.

"Consulting Agreement" means the Consulting Agreement between Deborah J. Dillon,
and the General Partner by which Ms. Dillon agreed to act as Director of
Operations of the Partnership under a performance-based consulting agreement.

"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.

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<PAGE> 71
"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.

"Exchange Act" means The Securities and Exchange Act of 1934, as amended.

"Fidelity Mutual" means Fidelity Mutual Life Insurance Company, in
Rehabilitation, which indirectly owns all of the capital stock of the General
Partner.

"Financial Information" means any financial statements, supplementary
information, and management discussion and analysis of financial condition and
results of operations.

"First Alternative Amendments" means the proposed set of Alternative Amendments
set forth on pages B1-B3 of Exhibit B to this Proxy Statement.

"General Partner" means Southeast Acquisitions, Inc., a Delaware corporation.

"Information Agent" means D.F. King & Co., Inc.

"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.

"Kaiser" means Kaiser Steel Corporation

"Limited Partners" means the limited partners of Southeast Acquisitions I, L.P.

"New General Partner" means Southern Management Group, LLC, a
Tennessee Limited Liability Company.

"Nominee Holders" means banks, brokerage firms, custodians, nominees, and
fiduciaries that may hold Units on behalf of beneficial owners in Southeast
Acquisitions I, L.P.

"Partnership Agreement" means the Restated Limited Partnership Agreement of
Southeast Acquisitions I, L.P.

"Partner" or "Partners" means any General Partner or Limited Partner.

"Partnership" means Southeast Acquisitions I, L.P.

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

"Phoenix" means Phoenix Investment Company, a publicly owned Atlanta based real
estate development company and investment firm.

"Plan" means the plan of Rehabilitation for Fidelity Mutual.

"Property" means the property acquired by the Partnership in Columbia, South
Carolina.

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<PAGE> 72
"Proxy Card" means the proxy card distributed to all Limited Partners of Record
for the purpose of instructing proxy-holders how to vote a Limited Partner's
Units with respect to the Alternative Amendments if that partner cannot attend
the vote personally.

"Proxy Materials" means collectively, the notice of the Special Meeting, the
Proxy Statement, and Proxy Card distributed by the Partnership through its
Information Agent.

"Proxy Statement" means materials distributed by the Partnership to all Limited
Partners concerning the vote on the Alternative Amendments.

"Record Date" means September 15, 1997.

"Rehabilitation" means the state directed rehabilitation of Fidelity Mutual.

"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.

"SEA Shares" means the capital stock of the General Partner.

"Second Alternative Amendments" means the proposed set of Alternative Amendments
set forth on pages B4-B6 of Exhibit B to this Proxy Statement.

"SMG" means Southern Management Group, LLC, a Tennessee Limited Liability
Company.

"Special Meeting" means the meeting held October 29, 1997 to consider and vote
upon the Alternative Amendments.

"SV" means Southeast Venture Companies, the predecessor to SVC.

"SVC" means Southeast Venture Corporation, Inc., a Tennessee corporation which
owns 49% of SMG.

"Units" means the units of limited partnership interest in the Partnership.

"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.

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<PAGE> 73
EXHIBIT A

PARTNERSHIP AGREEMENT
<PAGE> 74
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> 75
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.

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<PAGE> 76
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> 77
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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(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

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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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(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.

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"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
----------------------

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EXHIBIT B

ALTERNATIVE AMENDMENTS
<PAGE> 99
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 October 29, 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 October 29, 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
October 29, 1997.

1. Southeast Acquisitions, Inc. is hereby removed as the General
Partner of the Partnership, and Southern Management Group, 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, 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."

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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, 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 October 29, 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:

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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
September 15, 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, LLC.

By____________________________
Name:
Title:

LIMITED PARTNERS LIMITED PARTNERS

By____________________________
Name:
Title:

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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 October 29, 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
October 29, 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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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 October 29, 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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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:

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<PAGE> 105
EXHIBIT C

AGREEMENT BETWEEN
SOUTHERN MANAGEMENT GROUP,
R. W. SORENSON AND THE PARTNERSHIP.

<PAGE> 106
AMENDED AND RESTATED
SUBSTITUTION AGREEMENT

THIS AMENDED AND RESTATED SUBSTITUTION AGREEMENT is made as of this 1st
day of August 1997, by and between SOUTHERN MANAGEMENT GROUP, LLC, a
Tennessee Limited Liability Company ("SMG"), 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, under an agreement dated April 1, 1997 by and between SMG,
Sorenson, SEA I, SEA II, SEA III and the General Partner (the "Original
Agreement") SMG agreed to be substituted as the new General Partner and assume
all the attendant responsibilities and obligations of the General Partners of
such of the SEA Partnerships as approve the substitution;

WHEREAS, certain modifications to the Original Agreement are required as
a result of revised voting procedures and an extension of the dates for 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, SMG and Sorenson are willing to indemnify the SEA Partnerships
against such costs and expenses upon a default by SMG or Sorenson under this
Agreement; and

WHEREAS, each of the SEA Partnerships is willing to indemnify Sorenson and
SMG 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 to amend and
restate the Original Agreement as follows:

Section 1. Substitution of New General Partner.

(a) If the Unit holders of SEA I adopt 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 September 15, 1997 (the "SEA
I Proxy")) at the

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<PAGE> 107

special Meeting of Limited Partners to be held on or about October 29, 1997 (or
such other date to which the Special Meeting may be reasonably postponed), SMG
agrees to be substituted as the new General Partner of SEA I.

(b) If the Unit holders of SEA II adopt 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 September 15, 1997
(the "SEA II Proxy")) at the Special Meeting of Limited Partners to be held on
or about October 28, 1997 (or such other date to which the Special Meeting may
be reasonably postponed), SMG agrees to be substituted as the new General
Partner of SEA II.

(c) If the Unit holders of SEA III adopt 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 September 15, 1997
(the "SEA III Proxy")) at the Special Meeting of Limited Partners to be held on
or about October 28, 1997 (or such other date to which the Special Meeting may
be reasonably postponed), SMG 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,
SMG 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 SMG in accordance with
Section 2, the General Partner agrees to transfer to SMG 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 SMG being substituted as a General
Partner set forth in the relevant Partnership Agreement, SMG 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 SMG in accordance with Section 2, the General Partner will deliver
to SMG all of the books and records in its possession of each of the
Partnerships which has approved the substitution of SMG as the new General
Partner, along with a transmittal letter listing 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
SMG in the orderly

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<PAGE> 108
transition of management and operation of such of the Partnerships as approve of
the substitution of SMG as the new General Partner, including, without
limitation, making officers, employees and agents of the General Partner
available to SMG at reasonable times and for reasonable periods at their
offices in Radnor, Pennsylvania and providing reasonable assistance to SMG in
its preparation and filing of third quarter financial reports for such
Partnerships.

Section 5. Representations and Warranties

SMG 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. SMG 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 SMG and Sorenson that all
statements appearing in the Proxy Statement relating to such Partnership, other
than statements based on materials or information provided by SMG, Sorenson or
their affiliates, in the light of the circumstances under which they were made
are not, 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.

SMG and Sorenson, as the principal member of SMG, 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 SMG as the new
General Partner, including, without limitation, the costs and expenses relating
to solicitation of proxies in connection with the substitution of SMG for the
existing General Partner in the event that Sorenson or SMG defaults under any
provision of this Agreement.

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

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<PAGE> 109
General Partner of such Partnership, including, without limitation, the costs
and expenses relating to solicitation of proxies to substitute SMG 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 SMG as the new General Partner, including, without limitation, any
liabilities or obligations of such Partnership that arose prior to the admission
of SMG as the new General Partner.

The General Partner hereby agrees to indemnify SMG and Sorenson from and
against any and all claims, liabilities, costs and expenses (including legal
expenses) incurred by SMG and Sorenson in connection with actions by the
General Partner prior to the admission of SMG 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 SMG 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) The Original Agreement is deemed to be amended and restated in its
entirety by this Agreement as of the date first set forth above.

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

C-4
<PAGE> 110
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

SOUTHERN MANAGEMENT GROUP, 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/ Arthur W. Mullin
--------------------------
Name: Arthur W. Mullin
Title: President

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

By: /s/ Arthur W. Mullin
--------------------------
Name: Arthur W. Mullin
Title: President

C-5

<PAGE> 111
SOUTHEAST ACQUISITIONS III, L.P.
by: SOUTHEAST ACQUISITIONS, INC.,
General Partner

By: /s/ Arthur W. Mullin
--------------------------
Name: Arthur W. Mullin
Title: President

C-6

<PAGE> 112

EXHIBIT D

LEGAL OPINION

<PAGE> 113
OBERMAYER REBMANN MAXWELL & HIPPEL LLP
ONE PENN CENTER - 19TH FLOOR
1617 JFK BLVD.
PHILADELPHIA, PA 19103

September 15, 1997

SOUTHEAST ACQUISITIONS I, L.P.
250 King of Prussia Road
Radnor, PA 19087

RE: EFFECT OF PROPOSED PARTNERSHIP AGREEMENT AMENDMENTS ON THE
FEDERAL INCOME TAX STATUS OF THE PARTNERSHIP

Ladies and Gentlemen:

Southeast Acquisitions I, L.P. (the "Partnership") was formed as a
limited partnership under Delaware law on December 5, 1986 and is presently
existing as a Delaware limited partnership pursuant to a Restated Limited
Partnership Agreement dated as of June 4, 1987 (the "Partnership Agreement").
You have asked for our opinion as to whether or not the amendments which are
proposed to be made to the Partnership Agreement as described in the Proxy
Statement referred to below (the "Alternative Amendments") would either (1)
adversely affect the classification of the Partnership as a partnership for
federal income tax purposes, or (2) cause a "termination" of the Partnership
for federal income tax purposes.

The sole general partner of the Partnership at the present time is
Southeast Acquisitions, Inc. (the "Existing General Partner"). Under cover of
letter dated September 15, 1997, the Existing General Partner delivered to the
limited partners of the Partnership (the "Limited Partners") a Proxy Statement
dated September 15, 1997 (the "Proxy Statement") soliciting Limited Partner
consent to one of two alternative sets of amendments to the Partnership
Agreement. Under the first alternative set of amendments, Southern Management
Group, LLC (the "Proposed New General Partner") would be substituted in place of
the Existing General Partner as the sole general partner of the Partnership, and
new commissions and management fees would be authorized for the Proposed New
General Partner. Under the second alternative set of amendments, which would not
involve a change in general partner of the Partnership, new commissions and
management fees would be authorized for the Existing General Partner. In
addition, under each alternative set of amendments, the stated term of the
Partnership would be extended from December 31, 1997 to December 31, 2000, and
there would be a modification of the requirement that a majority in interest of
the Limited Partners consent to a sale or disposition at one time of all or
substantially all the assets of the Partnership under certain circumstances.

The interest of the Existing General Partner in the capital of the
Partnership is less than 50 percent of the total interest in Partnership
capital, and the interest of the Existing General

D-1

<PAGE> 114
Partner in the profits of the Partnership is less than 50 percent of the total
interest in Partnership profits.

In rendering our opinion, we have examined (i) a copy of the
Partnership Agreement, (ii) a copy of the Proxy Statement, and (iii) such legal
authorities as we have deemed to be relevant in allowing us to form our
opinion, including United States Treasury Regulation Sections 301.7701-2,
301.7701-2, and 301.7701-3, as amended by Treasury Decision 8697 (the "Entity
Regulations"), and Treasury Regulation 1.708-1, as amended by Treasury Decision
6175 (the "Termination Regulations"). The Entity Regulations were published in
the Federal Register on December 18, 1996, and are generally effective as of
January 1, 1997. The Termination Regulations were published in the Federal
Register on May 8, 1997.

The General Partner has represented to us, and we assume to be the
case, that (a) the Partnership Agreement is the partnership agreement under
which the Partnership currently exists, (b) the Partnership has filed all of
its federal income tax returns as a partnership, (c) the Partnership has
otherwise been treated by its partners as a partnership for federal income tax
purposes (and not as an association taxable as a corporation) throughout the
existence of the Partnership, (d) neither the Partnership nor any partner
thereof was notified in writing on or before May 8, 1996 that the Partnership's
classification as a partnership for federal income tax purposes was under
examination by the Internal Revenue Service, and (e) any transfer of the
Existing General Partner's interest in the Partnership by reason of the
Alternative Amendments, when combined with any other changes in ownership of
interests in the Partnership during the 12-month period ending on the date of
such transfer, will not result in a sale or exchange of 50 percent or more of
the total interest in partnership capital and profits.

In our opinion, under current law, based on the facts and assumptions
set forth above, the adoption of either set of Alternative Amendments (1) would
not adversely affect the classification of the Partnership as a partnership for
federal income tax purposes (and not as an association taxable as a
corporation), and (2) would not cause a "termination" of the Partnership for
federal income tax purposes.

/s/ OBERMAYER REBMANN MAXWELL & HIPPEL LLP

D-2
<PAGE> 115
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................................. 10
Risk Factors............................ 29
Conflicts of Interest................... 32
History of the Partnership.............. 34
The General Partner..................... 37
The Property............................ 44
The Alternative Amendments.............. 47
Federal Tax Consequences; Legal
Opinion................................ 62
Eligible Units.......................... 63
Voting.................................. 63
Information Agent....................... 65
Solicitation by the General Partner..... 66
Ownership of Units...................... 66
Experts................................. 66
Available Information................... 67
Incorporation of Certain Documents
by Reference.......................... 67
Appendix: Glossary of Defined Terms..... 69
Exhibit A: Partnership Agreement........ A-1
Exhibit B: Amendments to
Partnership Agreement................. B-1

Exhibit C: Agreement between
Southern Management Group, R.W.
Sorenson and the Partnership......... C-1

Exhibit D: Legal Opinion................ D-1

SOUTHEAST ACQUISITIONS I, L.P.

General Partner:
Southeast Acquisitions, Inc.
250 King of Prussia Road
Radnor, Pennsylvania 19087
Telephone No. (610) 964-7178
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

September 15, 1997

<PAGE> 116
PROXY PROXY

SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA 19087
TELEPHONE (610) 964-7178

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 September 15, 1997 the Record Date at the Special Meeting to
be held on October 29, 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.

YOU MAY VOTE IN FAVOR OF OR AGAINST OR ABSTAIN FROM VOTING WITH RESPECT TO EACH
AMENDMENT CONTAINED IN EACH SET OF ALTERNATIVE AMENDMENTS. HOWEVER, THE
ADOPTION OF ANY AMENDMENT CONTAINED IN A SET OF ALTERNATIVE AMENDMENTS IS
CONDITIONED UPON THE ADOPTION OF ALL OF THE AMENDMENTS WITHIN THAT SET OF
ALTERNATIVE AMENDMENTS.

IN ORDER TO BE ADOPTED, ALL OF THE AMENDMENTS CONTAINED IN A SET OF ALTERNATIVE
AMENDMENTS MUST RECEIVE AT LEAST 50% OF THE VOTES OF LIMITED PARTNERSHIP UNITS
ELIGIBLE TO VOTE.

IN THE EVENT BOTH SETS OF ALTERNATIVE AMENDMENTS RECEIVE IN EXCESS OF 50% OF
THE VOTES OF LIMITED PARTNERSHIP UNITS ELIGIBLE TO VOTE, THE SET OF ALTERNATIVE
AMENDMENTS RECEIVING THE MOST VOTES IN EXCESS OF 50% WILL BE ADOPTED.

IN THE EVENT OF AN EQUAL NUMBER OF VOTES BEING CAST WHICH ARE SUFFICIENT FOR
THE ADOPTION OF BOTH THE FIRST ALTERNATIVE AMENDMENTS AND THE SECOND
ALTERNATIVE AMENDMENTS, THE GENERAL PARTNER WILL DETERMINE A METHOD OF RANDOM
SELECTION AND SELECT THE SET OF ALTERNATIVE AMENDMENTS TO BE ADOPTED PURSUANT
THERETO.

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 AMENDMENT.

1. PROPOSAL TO APPROVE FIRST ALTERNATIVE AMENDMENTS

(please select a, b, c or vote on individual amendments under d)

a. / / FOR approval of all of the First Alternative Amendments

b. / / AGAINST approval of all of the First Alternative
Amendments

c. / / ABSTAIN from voting for approval of all of the First
Alternative Amendments

d. As follows as to the individual amendments in the First
Alternative Amendments: PLEASE NOTE THAT NONE OF THE
FOLLOWING AMENDMENTS CAN BE ADOPTED ON ITS OWN. THE ADOPTION
OF ANY AMENDMENT SET FORTH IN THIS SECTION (d) IS
CONDITIONED UPON ADOPTION OF ALL OF THE OTHER AMENDMENTS
IN THIS SECTION (d)

i. As to the amendment extending the terms of the
Partnership to December 31, 2000:

/ / FOR
/ / AGAINST
/ / ABSTAIN

ii. As to the substitution of Southern Management Group,
LLC as the New General Partner of the Partnership:

/ / FOR
/ / AGAINST
/ / ABSTAIN

iii. As to the authorization of new commissions and
management fees payable to the New General Partner,
both effective following October 29, 1997:

/ / FOR
/ / AGAINST
/ / ABSTAIN

iv. As to the proposal to give the New General Partner the
exclusive right to sell the Property:

/ / FOR
/ / AGAINST
/ / ABSTAIN

v. As to the proposal to amend the Partnership Agreement
to provide that a majority in interest of the Limited
Partners must consent to the transfer at one time of
60% or more of the real estate acreage held by the
Partnership as of August 18, 1997 unless (i) in
connection with the liquidation of the Partnership, or
(ii) where the proceeds of the transfer, 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 real property sold.
/ / FOR
/ / AGAINST
/ / ABSTAIN

2. PROPOSAL TO APPROVE SECOND ALTERNATIVE AMENDMENTS

(please select a, b, c or vote on individual amendments under d)

a. / / FOR approval of all of the Second Alternative Amendments

b. / / AGAINST approval of all of the Second Alternative
Amendments

c. / / ABSTAIN from voting for approval of all of the Second
Alternative Amendments

d. As follows as to the individual amendments in the Second
Alternative Amendments: PLEASE NOTE THAT NONE OF THE
FOLLOWING AMENDMENTS CAN BE ADOPTED ON ITS OWN. THE ADOPTION
OF ANY AMENDMENT SET FORTH IN THIS SECTION (d) IS
CONDITIONED UPON ADOPTION OF ALL OF THE OTHER AMENDMENTS
IN THIS SECTION (d)

i. As to the amendment extending the term of the
Partnership to December 31, 2000 (with Southeast
Acquisitions, Inc. remaining as General Partner):

/ / FOR
/ / AGAINST
/ / ABSTAIN

ii. As to the amendment authorizing new commissions payable
to the General Partner or an Affiliate on the sale of
the Property, following October 29, 1997 and new
management fees for the General Partner, following
December 31, 1997:

/ / FOR
/ / AGAINST
/ / ABSTAIN

iii. As to the proposal to give the New General Partner the
exclusive right to sell the Property:

/ / FOR
/ / AGAINST
/ / ABSTAIN

iv. As to the amendment to delete from the Partnership the
requirement that a majority only 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, would be sufficient to provide the Limited
Partners with distributions equal with Unpaid
Cumulative Return plus their Adjusted Capital
Contributions:

/ / FOR
/ / AGAINST
/ / ABSTAIN

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

<PAGE> 117
THE PROXYHOLDERS WILL VOTE THE UNDERSIGNED'S UNITS IN THE MANNER DIRECTED
HEREON. 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 FOR BOTH SETS OF ALTERNATIVE AMENDMENTS.

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
PROMPTLY USING
THE ENCLOSED ENVELOPE. ---------------------------------------------
Signature if held jointly

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