SOUTHEAST ACQUISITIONS I L P, DEFR14A, 1997-09-23

SOUTHEAST ACQUISITIONS I L P
DEFR14A, 1997-09-23
LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES)

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SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. 1)

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Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] 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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SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA 19087

September 22, 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, 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 NOVEMBER 6, 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 November 6, 1997 at 2
pm Eastern Standard 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" or "SMG") 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 Partnership
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 22,
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;

- Authorize new commissions, payable to the General Partner on the sale or
sales of Partnership 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 Partnership
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
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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
22, 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 22, 1997
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SOUTHEAST ACQUISITIONS I, L.P.

PROXY STATEMENT

SPECIAL MEETING OF THE LIMITED PARTNERS
TO BE HELD ON NOVEMBER 6, 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, November 6, 1997 at 2 pm, Eastern Standard
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.1 and p.33.

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:

- 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 p.17.
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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 commission.

- 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 commission.

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

- Willingness of General Partner to retain 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 p.21.

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 22, 1997 unless in connection with a liquidation of the
Partnership pursuant to the Partnership Agreement or in the event that

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the net proceeds of such sale, when distributed in accordance with the
Partnership Agreement, will be sufficient to provide the Limited Partners
with distributions equal to the Acquisition Cost of the assets sold.

The second 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.

The Partnership will mail this Proxy Statement (this "Proxy Statement") on
or about September 22, 1997.

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.

In order to be adopted, all of the amendments contained in a set of
Alternative Amendments must receive in excess of 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

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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.

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 the 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
22, 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.............................................................................. 1
The Alternative Amendments...................................................... 1
Risk Factors.................................................................... 2
Conflicts of Interest........................................................... 4
Reasons for and Benefits of Each Set of Alternative Amendments.................. 5
Differences Between the Alternative Amendments.................................. 7
Comparison of Fees and Commissions Under Each Set of Alternative Amendments..... 8
Comparison of Plans of New General Partner and General Partner.................. 9
History of the Partnership...................................................... 10
The Property.................................................................... 10
Investment Objectives........................................................... 10
The General Partner............................................................. 11
The New General Partner......................................................... 13
Voting.......................................................................... 15
RISK FACTORS......................................................................... 17
FIRST ALTERNATIVE AMENDMENTS....................................................... 17
Risk of Decrease in Property Value if Partnership Term Extended................. 17
No Assurance of Improved Return................................................. 17
Possible Sales of Property at Low Price Without Consent of Limited Partners if
Consent Requirements Modified.................................................. 17
Possible Death or Disability of Principal Member of New General Partner......... 18
Minimal Capitalization of New General Partner................................... 18
New General Partner's Lack of Experience in Public Real Estate Partnerships..... 18
Limited Cash Reserves........................................................... 18
New General Partner Not Required to Devote Full Time to Partnership............. 18
Risk in Plans of New General Partner............................................ 19
SECOND ALTERNATIVE AMENDMENTS...................................................... 19
Risk of Decrease in Property Value if Partnership Term Extended................. 19
No Assurance of Improved Return................................................. 19
Limited Capitalization of General Partner....................................... 19
Possible Sales of Property at Low Price Without Consent of Limited Partners if
Consent Requirements Eliminated................................................ 20
Risk in Rehabilitation of Ultimate Parent of General Partner.................... 20
Limited Cash Reserves........................................................... 20
Risk in Ms. Deborah Dillon Not Acting as Consultant............................. 20
General Partner Not Required to Devote Full Time to Partnership................. 20
Risk in Plans of General Partner................................................ 21
NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED...................................... 21
Possible Liquidation of Property at Below Acquisition Cost...................... 21
CONFLICTS OF INTEREST................................................................ 21
FIRST ALTERNATIVE AMENDMENTS....................................................... 21
Timing of Sale to Obtain Commission............................................. 21
Timing of Sale to Obtain Distribution........................................... 21
Broker Participation............................................................ 22
</TABLE>

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<TABLE>
<CAPTION>
PAGE
---
<S> <C>
SECOND ALTERNATIVE AMENDMENTS...................................................... 22
Timing of Sale to Obtain Commission............................................. 22
Timing of Sale to Obtain Distribution........................................... 22
Broker Participation............................................................ 22
NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED...................................... 22
Timing of Sale to Obtain Commissions............................................ 22
Timing of Sale to Obtain Distribution........................................... 22
HISTORY OF THE PARTNERSHIP........................................................... 23
Public Offering.................................................................... 23
Purchase of Property............................................................... 23
Distributions/Cumulative Annual Return............................................. 23
Investment Objectives; Marketing................................................... 24
General Partner's Right to Sell Property; Reserves................................. 25
Rights of the Limited Partners on Dissolution...................................... 25
THE GENERAL PARTNER.................................................................. 25
Background......................................................................... 25
Directors and Officers............................................................. 27
Former Management/Consulting Relationship.......................................... 28
Current Management................................................................. 28
General Partner's Plans if Second Alternative Amendments are Adopted............... 30
General Partner's Plans if Neither Set of Alternative Amendments is Adopted........ 30
THE PROPERTY......................................................................... 30
Background......................................................................... 30
Recent Developments................................................................ 30
Real Estate Market Conditions...................................................... 31
Marketing of Property.............................................................. 31
Appraisal.......................................................................... 32
THE ALTERNATIVE AMENDMENTS........................................................... 33
REASONS FOR AND BENEFITS OF EACH SET OF ALTERNATIVE AMENDMENTS..................... 33
Benefits of Adopting First Alternative Amendments............................... 34
Benefits of Adopting Second Alternative Amendments.............................. 35
DIFFERENCES BETWEEN THE ALTERNATIVE AMENDMENTS..................................... 35
FIRST ALTERNATIVE AMENDMENTS....................................................... 36
Substitution of New General Partner............................................. 36
Extension of Partnership Term................................................... 41
Authorization of Fees and Commissions for New General Partner................... 41
Exclusive Right to Sell the Property............................................ 42
Modification of Requirement that Limited Partners Consent to Sale of All or
Substantially All the Assets of the Partnership................................ 43
SECOND ALTERNATIVE AMENDMENTS...................................................... 44
Extension of Partnership Term................................................... 44
Authorization of Fees and Commissions for General Partner....................... 44
Exclusive Right to Sell the Property............................................ 45
Elimination of Requirement that Limited Partners Consent to Sale of All or
Substantially All the Assets of the Partnership................................ 46
FEDERAL TAX CONSEQUENCES; LEGAL OPINION.............................................. 46
ELIGIBLE UNITS....................................................................... 46
VOTING............................................................................... 47
</TABLE>

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<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Record Date..................................................................... 47
Vote Conditioned on Adoption of All of Amendments in Either the First or Second
Alternative Amendments......................................................... 47
Required Vote................................................................... 47
Equal Number of Votes Cast...................................................... 47
No Indication of Vote........................................................... 47
Neither Alternative Amendments Adopted.......................................... 48
Abstentions/Broker Non-Votes.................................................... 48
Appraisal Rights................................................................ 48
Proxies......................................................................... 48
Revocation of Proxies........................................................... 48
List of Limited Partners........................................................ 48
INFORMATION AGENT.................................................................... 48
SOLICITATIONS BY THE GENERAL PARTNER................................................. 49
OWNERSHIP OF UNITS................................................................... 49
EXPERTS.............................................................................. 49
AVAILABLE INFORMATION................................................................ 50
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................... 50
APPENDIX I: GLOSSARY OF DEFINED TERMS................................................ 51
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>

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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, November 6,
1997 at 2 pm, Eastern Standard 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 22,
1997 unless the sale or disposition returns to the Limited Partners at
least the original Acquisition Cost of the assets sold or disposed of.

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.

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<PAGE> 13

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 at
p. 32), 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.

- 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 22, 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.

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<PAGE> 14

- 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. 17.

SECOND ALTERNATIVE AMENDMENTS

- POSSIBLE DECREASE IN VALUE OF THE PROPERTY IF THE PARTNERSHIP TERM IS
EXTENDED.

- 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
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

3
<PAGE> 15

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.

- 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, 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 or 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. 19.

NEITHER SET OF ALTERNATIVE AMENDMENTS ADOPTED

- RISK OF LIQUIDATION OF PARTNERSHIP PROPERTY AT BELOW ACQUISITION COST.

The 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. 21.

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.

4
<PAGE> 16

- 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 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. 21.

SECOND ALTERNATIVE AMENDMENTS

- 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.

- 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.
22.

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.

See "CONFLICTS OF INTEREST -- Neither Set of Alternative Amendments
Adopted" below at p. 22.

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

5
<PAGE> 17

the opportunity to vote to extend the term of the Partnership pursuant to either
of the two sets 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" below
at p. 32) 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. 28) or the impact of Fidelity
Mutual's ownership interest in the General Partner (See "THE GENERAL
PARTNER -- Background" below at p. 25) (See also "RISK FACTORS -- SECOND
ALTERNATIVE AMENDMENTS -- Risk in Rehabilitation of Ultimate Parent of General
Partner" below at p. 20).

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 at p. 17).

- 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 at p. 25.

- ABILITY TO ACT QUICKLY ON PROSPECTIVE SALES.

6
<PAGE> 18

Property which could be jeopardized as a result of the time and
complexity involved in obtaining Limited Partners' consent to the
transaction.

See "THE ALTERNATIVE AMENDMENTS -- REASONS FOR AND BENEFITS OF EACH SET OF
ALTERNATIVE AMENDMENTS -- Benefits of Adopting the First Alternative Amendments"
below at p. 34.

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. 19).

- 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 -- REASONS FOR AND BENEFITS OF EACH SET OF
ALTERNATIVE AMENDMENTS -- Benefits of Adopting the Second Alternative
Amendments" below at p. 35.

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.

7
<PAGE> 19

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 22, 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.

COMMISSIONS AND MANAGEMENT FEES PAID TO GENERAL PARTNER
UNDER PARTNERSHIP AGREEMENT TERMINATING DECEMBER 31, 1997

<TABLE>
<CAPTION>
TOTAL
TOTAL MANAGEMENT MANAGEMENT
YEAR AMOUNT OF COMMISSION COMMISSION FEE FEE PAID
- ------------- ------------------------------ --------------- ----------------- --------------
<S> <C> <C> <C> <C>
1986-1997.... No limitation on amount of None paid $8,100.00/annum $ 64,800
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>
TOTAL POSSIBLE
TOTAL MANAGEMENT MANAGEMENT
YEAR AMOUNT OF COMMISSION COMMISSION FEE FEE
- ------------- ------------------------------ --------------- ---------------- --------------
<S> <C> <C> <C> <C>
1997......... Up to 50% of competitive real Depends on sale $1,221*
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*
---------
$ 25,521**
</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.

8
<PAGE> 20

PROPOSED COMMISSIONS AND MANAGEMENT FEES TO BE PAID TO
GENERAL PARTNER UNDER SECOND ALTERNATIVE AMENDMENTS

<TABLE>
<CAPTION>
TOTAL POSSIBLE
TOTAL MANAGEMENT MANAGEMENT
YEAR AMOUNT OF COMMISSION COMMISSION FEE FEE
- ------------- ------------------------------ --------------- ----------------- --------------
<S> <C> <C> <C> <C>
1997......... Up to 50% of competitive real Depends on sale None
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'S 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 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

9
<PAGE> 21

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
at p. 23.)

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 at p. 30.)

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.

10
<PAGE> 22

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.

[FIDELITY MUTUAL ORGANIZATIONAL CHART]

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. 25).

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.

11
<PAGE> 23

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

<TABLE>
<S> <C>
ASSETS
Cash......................................................................... $ 791
Mortgage Receivable.......................................................... $ 560,873
Investment in Southeast Acquisitions I, II and III........................... $ 0
----------
$ 561,664
==========
SHAREHOLDER'S INVESTMENT
Common Stock (Par 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>

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 at p. 28.

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

12
<PAGE> 24

Partner until the end of 1996. (See "THE GENERAL PARTNER -- Former
Management/Consulting Relationship" below at p. 28). 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" below at p. 19).

THE 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 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. 36 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. 36).

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. 36).

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

13
<PAGE> 25

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.

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.

14
<PAGE> 26

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.

VOTING

RECORD DATE. The General Partner has established the close of business on
September 22, 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.

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 in excess of 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

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<PAGE> 27

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 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.

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.

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 November 5, 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> 28

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 "THE ALTERNATIVE AMENDMENTS -- 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 22, 1997, the New General Partner will have
no restrictions on the sales price that it may obtain for parcels of the
Property amounting to less than 60% of the acreage held by the
Partnership as of September 22, 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.

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<PAGE> 29

- 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 and "FIRST ALTERNATIVE AMENDMENTS -- Substitution of New
General Partner" below) 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

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<PAGE> 30

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.

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> 31

- 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) 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 -- General Partner's Plans 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.

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<PAGE> 32

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.

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.

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<PAGE> 33

- 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 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 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.

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.

The General Partner is currently able to receive a 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.

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

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<PAGE> 34

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.

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.

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 Annual Return.... $ -- $ -- $ --
---------- ---------- ----------
Ending Cumulative Annual Return................... $ 246,458 $ 668,958 $1,091,458
Adjusted Capital Contributions & Cumulative Annual
Return.......................................... $4,471,458 $4,893,958 $5,316,458
</TABLE>

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<PAGE> 35

<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 & Cumulative Annual
Return.......................................... $5,738,958 $6,161,458 $6,583,958
</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 Annual Return.... $ -- $ -- $ --
---------- ---------- ----------
Ending Cumulative Annual Return................... $2,781,458 $3,203,958 $3,626,458
Adjusted Capital Contributions & Cumulative Annual
Return.......................................... $7,006,458 $7,428,958 $7,851,458
</TABLE>

<TABLE>
<CAPTION>
1996 6/30/97
---------- ----------
UNAUDITED
<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 Annual Return................... $ -- $ --
---------- ----------
End Cumulative Annual Return..................................... $4,048,958 $4,258,472
Adjusted Capital Contributions & Cumulative Annual Return........ $8,273,958 $8,483,472
</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.

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<PAGE> 36

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 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

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<PAGE> 37

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

[FIDELITY MUTUAL ORGANIZATIONAL CHART]

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 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.

26
<PAGE> 38

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

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

<TABLE>
<S> <C>
ASSETS
Cash......................................................................... $ 791
Mortgage Receivable.......................................................... $ 560,873
Investment in Southeast Acquisitions I, II & III............................. $ 0
----------
$ 561,664
==========
SHAREHOLDER'S INVESTMENT
Common Stock (Par 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>

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
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.

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

27
<PAGE> 39

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 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 "THE ALTERNATIVE AMENDMENTS -- FIRST ALTERNATIVE
AMENDMENTS -- Substitution of 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

28
<PAGE> 40

thousands of acres that Kaiser owned throughout Southern California and
formulated development plans for certain portions of its holdings, while selling
off other holdings to either users or developers.

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

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

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

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

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 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.

29
<PAGE> 41

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.

GENERAL PARTNER'S PLANS 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 the 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.

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

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

30
<PAGE> 42

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 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 Business Park. 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 Park 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 re-list 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.

31
<PAGE> 43

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.

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

32
<PAGE> 44

there was not enough data to support a development approach with a discounted
cash flow analysis.

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,
Assistant 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

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.

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.

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.

33
<PAGE> 45

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"
above) 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" above).

- 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 ultimate 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.

- 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.

34
<PAGE> 46

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.

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 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.

35
<PAGE> 47

- 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.

- 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 22, 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.

36
<PAGE> 48

INDEPENDENT AUDITOR'S REPORT

Members
Southern Management Group, LLC
Nashville, Tennessee

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.

37
<PAGE> 49

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.

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

*******

38
<PAGE> 50

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.

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

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

39
<PAGE> 51

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).

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

40
<PAGE> 52

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.

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.

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.

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

41
<PAGE> 53

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.

The effect of the First Alternative Amendments would be that the
Partnership would pay a management fee to the New General Partner of $1,221 in
1997 (assuming approval of the First Alternative Amendments on November 6, 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>
TOTAL POSSIBLE
TOTAL MANAGEMENT MANAGEMENT
YEAR AMOUNT OF COMMISSION COMMISSION FEE FEE
- -------------------- ------------------------------ --------------- ----------- --------------
<S> <C> <C> <C> <C>
1997................ Up to 50% of competitive real Depends on sale $1,221*
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*
-------
$ 25,521**
</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.

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

42
<PAGE> 54

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 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 22, 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 22, 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 22, 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."

43
<PAGE> 55

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

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

SECOND ALTERNATIVE AMENDMENTS

Extension of Partnership Term

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

Authorization of Fees and Commissions for General Partner

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

(i) Management Fees

44
<PAGE> 56

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 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.

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

<TABLE>
<CAPTION>
TOTAL POSSIBLE
TOTAL MANAGEMENT MANAGEMENT
YEAR AMOUNT OF COMMISSION COMMISSION FEE FEE
- ------------- ------------------------------ --------------- ----------------- --------------
<S> <C> <C> <C> <C>
1997......... Up to 50% of competitive real Depends on sale None
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):

"(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."

45
<PAGE> 57

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:

"(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.

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

46
<PAGE> 58

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 22, 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.

VOTE CONDITIONED ON ADOPTION OF ALL OF AMENDMENTS IN EITHER THE FIRST OR
SECOND SET OF ALTERNATIVE AMENDMENTS. Limited Partners may vote in favor of or
against or abstain from voting with respect to each of the amendments 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 in excess of 50% of the votes of Units eligible to vote.

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.

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.

47
<PAGE> 59

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 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 November 5, 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, Assistant 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,

48
<PAGE> 60

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 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 22, 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 22, 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 opportunity to make a statement if they so desire and
will be available to respond to appropriate questions.

49
<PAGE> 61

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 and August 28, 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 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, Assistant Secretary, Southeast Acquisitions,
Inc., 250 King of Prussia Road, Radnor, PA 19087 (610) 964-7234.

50
<PAGE> 62

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) of the
Partnership Agreement, but in no event an amount 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, 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).

"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
were accepted by the General Partner, and the subscribers therefor are admitted
as Limited Partners.

"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
financial information, and management discussion and analysis of financial
condition and results of operations.

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

"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.

51
<PAGE> 63

"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.

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

"Record Date" means September 22, 1997.

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

"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;

52
<PAGE> 64

(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-B5 of Exhibit B to this Proxy Statement.

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

"Special Meeting" means the meeting to be held November 6, 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) of the Partnership Agreement, but
in no event less than zero.

53
<PAGE> 65

EXHIBIT A

PARTNERSHIP AGREEMENT
<PAGE> 66

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
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-6
4.1 Exclusive Management Rights of General Partner..............................
A-6
4.2 Authority of General Partner................................................
A-6
4.3 Restrictions on Authority of General Partner................................
A-7
4.4 Duties and Obligations of the General Partner...............................
A-8
4.5 Compensation of General Partner.............................................
A-9
4.6 Partnership Expenses........................................................
A-9
4.7 Other Business of Partners..................................................
A-11
4.8 Limitation on Responsibility of General Partner; Indemnification............
A-11
ARTICLE V SUCCESSOR AND ADDITIONAL GENERAL PARTNERS: WITHDRAWAL OF GENERAL
PARTNER................................................................... A-12
5.1 Successor or Additional General Partner.....................................
A-12
5.2 Bankruptcy, Death, Dissolution or Incompetence of General Partner...........
A-12
5.3 Liability of Withdrawn General Partner......................................
A-13
5.4 Restrictions on Transfer of General Partner's Interest......................
A-13
5.5 Consent of Limited Partners to Successor or Additional General Partners.....
A-13
5.6 Valuation of Interest of General Partner....................................
A-13
</TABLE>
<PAGE> 67

<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
ARTICLE VI DISSOLUTION AND LIQUIDATION..............................................
A-14
6.1 Events Causing Dissolution..................................................
A-14
6.2 Capital Contribution on Dissolution.........................................
A-14
6.3 Liquidation.................................................................
A-15
6.4 Time Limitation.............................................................
A-15
ARTICLE VII TRANSFERABILITY OF UNITS................................................
A-15
7.1 Restrictions on Transfers...................................................
A-15
7.2 Assignees and Substituted Limited Partners..................................
A-16
ARTICLE VIII BOOKS AND RECORDS; BANKING.............................................
A-17
8.1 Books and Records...........................................................
A-17
8.2 Accounting and Fiscal Year..................................................
A-17
8.3 Bank Accounts and Investments...............................................
A-17
8.4 Reports.....................................................................
A-17
8.5 Depreciation and Elections..................................................
A-18
8.6 Designation of Tax Matters Partner..........................................
A-18
ARTICLE IX MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS...........................
A-18
9.1 Meetings....................................................................
A-18
9.2 Voting Rights of Limited Partners...........................................
A-19
ARTICLE X MISCELLANEOUS
10.1 Appointment of General Partner as Attorney-in-Fact..........................
A-20
10.2 Amendments..................................................................
A-20
10.3 Security Interest and Right of Setoff.......................................
A-22
10.4 Ownership by Limited Partner of Interest in General Partner or Affiliates...
A-22
10.5 Parties Bound...............................................................
A-22
10.6 Governing Law; Construction.................................................
A-22
ARTICLE XI DEFINITIONS..............................................................
A-22
11.1 Defined Terms...............................................................
A-22
</TABLE>
<PAGE> 68

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

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

INTRODUCTION

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

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

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

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

ARTICLE I

ORGANIZATION

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

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

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

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

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

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

A-1
<PAGE> 69

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

A-2
<PAGE> 70

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 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.

A-3
<PAGE> 71

(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.

(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.

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(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 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.

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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.

(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.

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(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.

(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

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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 General Partner or an Affiliate thereof may (but shall not be

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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.

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(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 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

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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.

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

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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 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

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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.

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

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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.

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

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(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.

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.

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(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 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

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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 statements of income, partners'
equity and changes in financial position for such

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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

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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 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

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

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

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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 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.

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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.

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.

A-22
<PAGE> 90

"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.

"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.

"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

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<PAGE> 91

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.

"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.

"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.

A-24
<PAGE> 92

"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;

(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.

"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.

A-25
<PAGE> 93

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

GENERAL PARTNER: SOUTHEAST ACQUISITIONS, INC.

By: /s/ DEBORAH D. BAKER

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

INITIAL LIMITED PARTNER: F M INITIAL, INC.

By: /s/ ANTHONY R. BALABON

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

A-26
<PAGE> 94

EXHIBIT B

ALTERNATIVE AMENDMENTS
<PAGE> 95

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 November 6, 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 November 6, 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 November
6, 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."

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

B-1
<PAGE> 96

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
November 6, 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:

"(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 November 6, 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."

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 22,
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.

B-2
<PAGE> 97

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

<TABLE>
<S> <C>
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:
</TABLE>

B-3
<PAGE> 98

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 November 6, 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 November
6, 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."

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."

B-4
<PAGE> 99

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

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

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.

<TABLE>
<S> <C>
GENERAL PARTNER SOUTHEAST ACQUISITIONS, INC.
By
----------------------------------------------
Name:
Title:

LIMITED PARTNERS LIMITED PARTNERS
By
----------------------------------------------
Name:
Title:
</TABLE>

B-5
<PAGE> 100

EXHIBIT C

AGREEMENT BETWEEN
SOUTHERN MANAGEMENT GROUP,
R. W. SORENSON AND THE PARTNERSHIP
<PAGE> 101

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 22, 1997
(the "SEA I Proxy")) at the special Meeting of Limited Partners to be held on or
about November 6, 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 22, 1997
(the "SEA II Proxy")) at the Special Meeting of Limited Partners to be held on
or about November 5, 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

C-1
<PAGE> 102

mailed on or about September 22, 1997 (the "SEA III Proxy")) at the Special
Meeting of Limited Partners to be held on or about November 5, 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 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

C-2
<PAGE> 103

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 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-3
<PAGE> 104

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

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

By: /s/ ARTHUR W. MULLIN

-----------------------------------
Name: Arthur W. Mullin
Title: President

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EXHIBIT D

LEGAL OPINION
<PAGE> 106

OBERMAYER REBMANN MAXWELL & HIPPEL LLP
ONE PENN CENTER -- 19TH FLOOR
1617 JFK BLVD.
PHILADELPHIA, PA 19103
SEPTEMBER 22, 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 22, 1997, the Existing General Partner delivered to the
limited partners of the Partnership (the "Limited Partners") a Proxy Statement
dated September 22, 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 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.

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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

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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 changed 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

<TABLE>
<S> <C>
Summary.............................................................................. 1
Risk Factors......................................................................... 17
Conflicts of Interest................................................................ 21
History of the Partnership........................................................... 23
The General Partner.................................................................. 25
The Property......................................................................... 30
The Alternative Amendments........................................................... 33
Federal Tax Consequences; Legal Opinion.............................................. 46
Eligible Units....................................................................... 46
Voting............................................................................... 47
Information Agent.................................................................... 48
Solicitation by the General Partner.................................................. 49
Ownership of Units................................................................... 49
Experts.............................................................................. 49
Available Information................................................................ 50
Incorporation of Certain Documents by Reference...................................... 50
Appendix I: Glossary of Defined Terms................................................ 51

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
</TABLE>

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 22, 1997
<PAGE> 109
PROXY PROXY

SOUTHEAST ACQUISITIONS I, L.P.
250 KING OF PRUSSIA ROAD
RADNOR, PENNSYLVANIA 19087
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 limited partnership Units of Southeast Acquisitions I, L.P.
(the "Partnership") that the undersigned held as a Limited Partner on September
22, 1997, the Record Date, at the Special Meeting to be held on November 6,
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 IN EXCESS OF 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 BY A RANDOM DRAWING 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 AGREEMENT.

PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

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<PAGE> 110
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

FOLD CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.

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)

FOR AGAINST ABSTAIN

i. As to the amendment extending the term of [ ] [ ] [ ]
the Partnership to December 31, 2000:

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

iii. As to the authorization of new commissions [ ] [ ] [ ]
and management fees payable to the New
General Partner, both effective following
November 6, 1997:

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

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 sale or
disposition at one time of 60% or more of the real estate acreage
held by the Partnership as of September 22, 1997 unless (i) in
connection with the liquidation of the Partnership, or (ii) where
the 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
real property sold:

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)

FOR AGAINST ABSTAIN

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

ii. As to the amendment authorizing new [ ] [ ] [ ]
commissions payable to the General Partner
on the sale of the Property, following
November 6, 1997 and new management fees for
the General Partner, following
December 31, 1997:

iii. As to the proposal to give the General [ ] [ ] [ ]
Partner the exclusive right to sell the
Property.

iv. As to the amendment to 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, would be sufficient to provide the
Limited Partners with distributions equal to the Unpaid Cumulative
Return plus their Adjusted Capital Contributions:

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

THE PROXYHOLDERS WILL VOTE THE UNDERSIGNED'S UNITS IN THE MANNER DIRECTED
HEREON. IF YOUR 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 Dated:
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.
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- -- Signature -------------------------------------------------------------------

- -- Signature (if held jointly) -------------------------------------------------