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<SEC-DOCUMENT>0001005477-01-003779.txt : 20010622
<SEC-HEADER>0001005477-01-003779.hdr.sgml : 20010622
ACCESSION NUMBER:		0001005477-01-003779
CONFORMED SUBMISSION TYPE:	10-12G/A
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20010621

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FRANKLIN STREET PARTNERS LP
		CENTRAL INDEX KEY:			0001031316
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				042724223
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-12G/A
		SEC ACT:		
		SEC FILE NUMBER:	000-32615
		FILM NUMBER:		1665153

	BUSINESS ADDRESS:	
		STREET 1:		401 EDGEWATER PL
		STREET 2:		STE 200
		CITY:			WAKEFIELD
		STATE:			MA
		ZIP:			01880
		BUSINESS PHONE:		7815571300

	MAIL ADDRESS:	
		STREET 1:		401 EDGEWATER PLACE
		STREET 2:		STE 200
		CITY:			WAKEFIELD
		STATE:			MA
		ZIP:			01880
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-12G/A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10
<TEXT>


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------

                                    FORM 10/A


     PRE-EFFECTIVE AMENDMENT TO GENERAL FORM FOR REGISTRATION OF SECURITIES
                    Pursuant to Section 12(b) or 12(g) of the
                         Securities Exchange Act of 1934


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


                                 Amendment No. 1
The undersigned hereby amends in its entirety its General Form for Registration
                           of Securities on Form 10.


                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP
             (Exact Name of Registrant as Specified in its Charter)

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

        Massachusetts                                            04-2724223
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                         401 Edgewater Place, Suite 200
                            Wakefield, MA 01880-6210
                         (Address of principal offices)

                                 (781) 557-1300
              (Registrant's telephone number, including area code)

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

                    Securities to be registered under Section
                               12(b) of the Act:

                                      None

        Securities to be registered pursuant to Section 12(g) of the Act:

                                    Units of
                          Limited Partnership Interest
                                (Title of class)

                  A list of exhibits is located in Item 15(b).
<PAGE>

                                Table of Contents

                                     10-12G

Item 1.    Business............................................................1
Item 2.    Financial Information...............................................2
Item 3.    Properties.........................................................14
Item 4.    Security Ownership of Certain Beneficial Owners and Management.....16
Item 5.    Directors and Executive Officers...................................17
Item 6.    Executive Compensation.............................................19
Item 7.    Certain Relationships and Related Transactions.....................20
Item 8.    Legal Proceedings..................................................20
Item 9.    Market Price of and Dividends on the Registrant's Common
           Equity and Related  Stockholder Matters............................20
Item 10.   Recent Sales of Unregistered Securities............................21
Item 11.   Description of Registrant's Securities to be Registered............21
Item 12.   Indemnification of Directors and Officers..........................23
Item 13.   Financial Statements and Supplementary Data........................24
Item 14.   Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure...........................................24
Item 15.   Financial Statements and Exhibits..................................24


                                       -i-
<PAGE>

Item 1. Business


      Franklin Street Partners Limited Partnership (the "Company" or the
"Partnership") was formed as a Massachusetts general partnership in January 1997
as the successor to a Massachusetts general partnership, that was formed in 1981
and known as Franklin Street Partners, and subsequently formed as a
Massachusetts limited partnership in February 1997. The Company holds a 99%
interest in FSP Investments LLC, a Massachusetts limited liability company ("FSP
Investments"), a 99% interest in FSP Property Management LLC, a Massachusetts
limited liability company ("FSP Property Management"), and a 100% interest in
FSP Holdings LLC, a Delaware limited liability company ("FSP Holdings").

      FSP Investments acts as a real estate investment firm and broker/dealer
with respect to (a) the organization of investment vehicles which are typically
syndicated through private placements exempt from registration under the
Securities Act of 1933 ("Sponsored Entities"), some of which are limited
partnerships (the "Sponsored Partnerships") and some of which are corporations
intended to qualify for tax purposes as real estate investment trusts (the
"Sponsored REITs"), (b) the acquisition of real estate by the Sponsored Entities
and (c) the sale of equity interests in the Sponsored Entities. FSP Investments
derives revenue from commissions received in connection with the sale of equity
interests in the Sponsored Entities. FSP Investments also derives revenue from
acquisition fees paid by the Sponsored Entities for the services of FSP
Investments in identifying, inspecting and negotiating to purchase real
properties on behalf of the Sponsored Entities. FSP Investments is a registered
broker/dealer with the Securities and Exchange Commission and is a member of the
National Association of Securities Dealers, Inc.

      Between June 1997 and June 2000, FSP Investments completed the offerings
of limited partnership interests in 14 Sponsored Partnerships. The sole general
partner of each of the Sponsored Partnerships is FSP Holdings. On April 1, 1997,
FSP Holdings acquired the general partnership interest in four additional
Sponsored Partnerships (the "Prior Entities"), each of which had been organized
by the executive officers of the general partner of the Company prior to the
formation of the Company while they were employed by another entity. The general
partner of the Company is FSP General Partner LLC, a Massachusetts limited
liability company (the "General Partner"). The members of the General Partner
and their respective ownership interests therein are George J. Carter (33.94%),
R. Scott MacPhee (30.66%), Richard R. Norris (21.40%), William W. Gribbell
(11.36%), Barbara J. Corinha (1.60%), Melissa G. Mucciaccio (0.67%), Janet P.
Notopoulos (0.26%) and Patricia A McMullen (0.11%). The General Partner has no
other business other than acting as general partner of the Company. The
executive officers of the General Partner devote all of their business
activities to the Company and its subsidiaries.

      Between June 2000 and December 31, 2000, FSP Investments completed the
offerings of preferred stock in three Sponsored REITs. The Company expects that
future Sponsored Entities will be Sponsored REITs. Effective January 1, 2001,
one of the Sponsored Partnerships converted from a Partnership to a Sponsored
REIT. Accordingly, as of January 1, 2001, there were 21 Sponsored Entities, of
which 17 were Sponsored Partnerships and four were Sponsored REITs.

      Each Sponsored Entity sold its equity interests only to "accredited
investors'" within the meaning of Regulation D under the Securities Act. The
Sponsored Entities (other than a Prior Entity that conducted its offering
pursuant to a registration statement on Form S-11) conducted their offerings
pursuant to exemptions from registration under Rule 506 of Regulation D and
Section 4(2) of the Securities Act. The Sponsored Entities issued equity
interests for aggregate gross cash proceeds of $277,100,000. Each Sponsored
Entity holds a single real property. FSP Property Management provides property
management services to each Sponsored Entity.

      Pursuant to mergers effective January 1, 1999, January 1, 2000 and October
1, 2000, respectively, the Company acquired 17 Sponsored Partnerships. In
connection with these mergers, the Company issued units of its limited
partnership interest (the "Units") to the limited partners of the Sponsored
Partnerships. The mergers that were effective January 1, 1999 were approved by a
vote of limited partners of the Company. Neither the Company's governing
documents nor applicable state law required the approval of the limited partners
of the Company for the mergers that were effective January 1, 2000 and October
1, 2000. As a result of the mergers, FSP Holdings is the sole general partner of
each Sponsored Partnership that was acquired and the Company is the sole limited
partner of each such Sponsored Partnership. Accordingly, the Company owns,
directly and indirectly, 100% of the interest in the 17 Sponsored Partnerships,
each of which owns real


<PAGE>


property. Reference in this registration statement to the Company's properties
means the real properties owned by these 17 Sponsored Partnerships. The four
Sponsored REITs have not been acquired by the Company and continue to operate as
independent entities.

      FSP Property Management provides property management services to each
Sponsored Entity and receives fee income from those Sponsored Entities that have
not been acquired by the Company. FSP Property Management does not receive any
rental income.

      FSP Holdings acts as the general partner of each Sponsored Partnership.

      The Company has two principal sources of revenue:

      o     Investment banking income consisting of brokerage commissions,
            property acquisition, loan origination and other fees in connection
            with the organization and offering of Sponsored Entities.


      o     Rental income from the real properties it owns.


      The Company's investment objective is to increase the cash available for
distribution to its partners by increasing its revenue from investment banking
services and rental income. The Company expects that, through FSP Investments,
it will continue to organize and cause the offering of Sponsored Entities in the
future and that it will continue to derive investment banking income from such
activities. The Company also expects that in the future it will acquire
additional real properties, either on its own behalf for cash (although it has
not to date done so) or through the acquisition by merger of all the equity
interest in Sponsored Entities through the issuance of Units of limited
partnership interest. The Company may sell from time to time the real properties
it owns as market conditions warrant (although it has not to date done so) and
either distribute the proceeds to its partners or retain some or all of such
proceeds for investment in real properties or other Company activities. The
Company may acquire real properties in any geographic area of the United States
and of any property type. Of the 17 properties the Company owns, four are
apartment complexes, 11 are office buildings and two are industrial; four of
these properties are located in Texas, three properties are located in
Massachusetts, three properties are located in northern California, two
properties are located in Maryland, and one property is located in each of
southern California, Louisiana, Michigan, North Carolina and South Carolina. See
Item 3 hereof. The Company has no restrictions on the percentage of its assets
that may be invested in any one real property. The Company acquires its
properties primarily for their rental income but seeks to manage its properties
with a goal of increasing their value.

      The Company relies on the following principles in selecting real
properties for acquisition by a Sponsored Entity or the Company:

o     Buying investment properties at a price which produces value for investors
      and avoiding overpaying for real estate merely to outbid competitors.

o     Buying properties with excellent location with substantial infrastructure
      in place around them and avoiding investing in locations where the
      construction of such infrastructure is speculative.

o     Buying properties that are well-constructed and designed to appeal to a
      broad base of users and avoiding properties where quality has been
      sacrificed to cost savings in construction or which appeal only to a
      narrow group of users.

o     Aggressively managing, maintaining and upgrading a property and refusing
      to neglect or undercapitalize management, maintenance and capital
      improvement programs.

o     Having the ability to hold properties through down cycles and avoiding
      overleveraging properties and placing them at risk of foreclosure.

      The Company acquires and operates its real properties on an unleveraged
basis not subject to any mortgage loans. The Company has a revolving line of
credit that provides for borrowings of up to $53,000,000. The Company has drawn
on this line of credit, and intends to draw on this line of credit in the
future, only to obtain funds for the purpose of making interim mortgage loans to
Sponsored Entities. The Company's policy is to cause these loans to be secured
by a first mortgage of the real property (which may be of any type) owned by the
Sponsored Entity. The Company makes these loans to enable a Sponsored Entity to
acquire real property prior to the consummation of the offering of its equity
interests, and the loan is repaid out of the offering proceeds. The Company has
no restriction on the percentage of its assets that may be invested in any
single mortgage. The Company receives revenue from origination fees and interest
in connection with such mortgage loans.

      The Company's policy is not to invest in the securities of other issuers
except short-term investments in money market funds and similar securities and
the holding of a nominal interest in Sponsored REITs for the purpose of
facilitating the organization and operation of such Sponsored REITs. The Company
does not expect to receive any material amounts of revenue from its nominal
interest in any Sponsored REITs.

      The Company's policy is not to issue senior securities, borrow money
(except as described above), make loans to other persons (except as described
above), invest in the securities of other issuers for the purpose of exercising
control, underwrite the securities of other issuers (except that FSP Investments
expects to continue to sell interests in Sponsored Entities on a best efforts
basis in offerings exempt from registration under the Securities Act) or offer
securities in exchange for property. The Company expects that it will engage in
the purchase and sale of real estate investments as market conditions warrant.
The Company may repurchase or otherwise reacquire its securities. The Company's
policy is to deliver annual reports to each partner, including financial
statements certified by independent public accountants.

      Any of the Company's policies may be changed at any time by the General
Partner without the consent of the limited partners.


      With respect to its investment banking and brokerage business, the Company
faces competition for the investment dollars of potential purchasers of the
Sponsored Entities from every other kind of investment, including stocks, bonds,
mutual funds and other real-estate related investments, including REITs. Some of
the Company's competitors have significantly more resources than the Company and
are able to advertise their investment products. Because the offerings of the
Sponsored Entities are made pursuant to an exemption from registration under the
Securities Act, FSP Investments may not advertise the Sponsored Entities or
otherwise engage in any general solicitation of investors to purchase interests
in the Sponsored Entities.

      With respect to its real estate investments, the Company faces competition
in each of the markets where the properties are located. See "Financial
Information - Management's Analysis and Discussion of Financial Condition and
Results of Operations - Trends and Uncertainties" in Item 2 hereof. As of
December 31, 2000, each of the Company's 17 properties had an occupancy level in
excess of 90%.


      The rights, duties and obligations of the General Partner are set forth in
the Company's Third Amended and Restated Limited Partnership Agreement, dated as
of January 1, 2000, as amended (the "Partnership Agreement"). See Item 11
hereof. The General Partner has the exclusive right to manage the business of
the Company. The General Partner has no management agreement or other
contractual arrangement with the Company. The Company pays no fees or other
compensation to the General Partner or to the Company's subsidiaries and
affiliates. The General Partner is entitled to reimbursement by the Company for
its out-of-pocket expenses. No such expenses were reimbursed in the year ended
December 31, 2000. The executive officers of the General Partner receive
compensation from the Company and FSP Investments. See Item 6 hereof.


      The Company had 22 employees as of December 31, 2000.

Item 2. Financial Information.

Special Note Regarding Forward-Looking Statements

      This registration statement contains forward-looking financial statements.
These statements relate to future events or our future financial performance. In
some cases, one can identify forward-looking statements by terminology. For
example, "may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential" or "continue", or the negative of these terms
or other comparable terminology, indicate forward-looking statements. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, an investor should specifically consider various
factors set forth under "Management's Discussion and Analysis - Rick Factors".
These factors may cause our actual results to differ materially from any
forward-looking statement.

      Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We will not update any of the
forward-looking statements after the date of this registration statement to
conform them to actual results or to changes in our expectations that occur
after the date of this registration statement, other than as required by law.


                                       2
<PAGE>

Selected Financial Data

      The following selected financial information is derived from the
historical consolidated financial statements of the Company. This information
should be read in conjunction with "Financial Information--Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
Item 2 hereof and with the Company's consolidated financial statements and
related notes thereto included in Item 13 hereof.


                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP
            (dollars in thousands, except per partnership unit data)

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                        ---------------------------------------------------------------------------------------
                                            2000               1999              1998                1997                1996
                                        ---------------------------------------------------------------------------------------
                                                                                                 (unaudited)        (unaudited)
    <S>                                    <C>               <C>                <C>                 <C>                  <C>
    OPERATING DATA:
    Total revenues................         $34,793           $18,048            $11,555             $7,203               $  3
    Net income....................          11,706             3,455              1,977                272                (15)

    Basic and diluted net income
    per limited and general
    partnership unit..............           $0.50             $0.21              $0.17              $0.04                N/A(a)

<CAPTION>
                                                                           As of December 31,
                                        ---------------------------------------------------------------------------------------
                                            2000               1999              1998                1997                1996
                                        ---------------------------------------------------------------------------------------
    <S>                                   <C>                <C>                 <C>                <C>                   <C>
    BALANCE SHEET DATA
    (AT PERIOD END):
    Total assets..................        $199,483           $176,199            $95,150            $66,117               $71
    Total liabilities.............          19,280             28,821              1,294              1,638                --
    Total partners' capital.......         180,140            147,326             93,856             64,478                71
</TABLE>

      (a) The partnership was owned 100% by three general partners in 1996. No
units were issued until 1997.

      The 2000, 1999 and 1998 financial statements reflect the operations of
various merged Sponsored Partnerships. See Note 4 to the consolidated financial
statements of the Company and "Financial Information--Management's Discussion
and Analysis of Financial Condition and Results of Operations."



                                       3
<PAGE>



Management's Discussion and Analysis of Financial Condition and Results of
Operations

      The following information should be read in conjunction with the
consolidated financial statements included at Item 13.


      The Partnership operates in two business segments: rental operations and
investment banking services. FSP Investments provides real estate investment and
broker/dealer services that include: (a) the organization of Sponsored REITs in
2000 and Sponsored Partnerships prior to 2000, which were syndicated through
private placements; (b) the acquisition of real estate on behalf of the
Sponsored Entities; and (c) the sale of preferred stock in Sponsored REITs or
limited partnership interests in the Sponsored Partnerships. The following table
summarizes property owned by the Partnership for the three years ended December
31, 2000, 1999 and 1998.


                                                        December 31,
                                            -----------------------------------
                                               2000         1999          1998
                                            ---------     ---------     -------
      Residential
          Number of Properties............          4             4           4
          Number of Apartment Units.......        642           642         642

      Commercial
          Number of Properties............         13            12           5
          Square Footage..................  1,433,300     1,328,600     405,500


      As described in Note 4 to Financial Statements, the Partnership has
consummated three series of mergers. As described above, the Partnership
operates in two segments, real estate operations and broker/dealer and real
estate investment services. Prior to the consummation of the first series of
mergers, the Partnership operated only in the segment of broker/dealer and real
estate investment services. The first series of mergers added the real estate
operations to the Partnership's business. The nature of the Partnership's
business was not changed by the second and third series of mergers.

      The mergers were tax free reorganizations accounted for similar to a
pooling of interest, whereby the assets and liabilities of the Sponsored
Partnerships were recorded at their historic book values and transaction costs
were charged to expenses.

      In each merger the Company acquired the operating real estate assets of
the Sponsored Partnerships along with other assets and liabilities, including
cash, accounts receivable, prepaid expenses, accrued expenses, accounts payable,
deposits, and other normal recurring balance sheet items. None of the merged
Sponsored Partnerships was subject to debt financing and no debt was assumed or
created at the time of the merger. The investors of the merging entities
exchanged their interests for an interest in the Company. There were no cash
payments and no contingent payments.

      The acquisitions have affected the Company in two ways: the real estate
portfolio is more diverse, both geographically and with respect to property
type; and the Company has a larger borrowing capacity.

      The following table sets forth the identity of each merged Sponsored
Partnership, the date of its merger and the estimated value ascribed to that
Partnership.

<TABLE>
<CAPTION>
                                                       Estimated Value
Merged Partnership                 Merger Date         at Merger Date (in thousands)
- ------------------                 -----------         -----------------------------
<S>                                <C>                 <C>
Essex Lane                         January 1, 1999     $11,339
FSP Apartment Properties (REATA)   January 1, 1999      12,591
One Technology                     January 1, 1999      11,989
FSP North Andover                  January 1, 1999       9,919
FSP Weslayan Oaks                  January 1, 1999       5,760
FSP Park Seneca                    January 1, 1999      10,126
FSP Santa Clara                    January 1, 1999       7,938
FSP Piedmont                       January 1, 1999      12,435

FSP Silverside                     January 1, 2000      19,063
FSP Hillview                       January 1, 2000      16,814
FSP Telecom                        January 1, 2000       5,328

FSP Southfield Centre              October 1, 2000      16,412
FSP Blue Ravine                    October 1, 2000       6,475
FSP Bollman Place                  October 1, 2000       6,035
FSP Austin N.W.                    October 1, 2000      11,403
FSP Gateway Crossing               October 1, 2000      20,870
FSP Lyberty Way                    October 1, 2000      10,612
</TABLE>

      During 2000, the Partnership was issued 100% of the common stock in three
Sponsored REITs for nominal consideration in connection with the organization of
such Sponsored REITs. Additionally, the Partnership's general partner interest
in one Sponsored Partnership was exchanged for the common stock in a newly
formed Sponsored REIT, in connection with this Sponsored Partnership's
reorganization from a limited partnership to a REIT on January 1, 2001. The
Company's percentage interest in each Sponsored REIT is less than 1%. The
Company's cost of its investment in the Sponsored REITs approximates its share
of the underlying equity in the net assets of the REITs. The Company's share of
the Sponsored REITs' earnings, after deducting preferred stock dividends paid or
accrued, was not material for the year ended December 31, 2000.

      The Sponsored REITs have issued both common stock and preferred stock. The
common stock is owned solely by the Partnership and the preferred stock is owned
by unaffiliated investors. Each Sponsored REIT was organized to acquire a single
real estate property using the proceeds raised through a private offering of its
preferred stock. The Sponsored REITs do not contemplate having any long-term
financing. Following consummation of the offerings, the preferred shareholders
in each of the Sponsored REITs are entitled to 100% of the Sponsored REIT's cash
distributions. As a common shareholder, the Company has no rights to the
Sponsored REIT's regular cash distributions. However, upon liquidation of the
Sponsored REITs, the Company will be entitled to its percentage interest in any
proceeds after the preferred shareholders have recovered their investment. The
Company's percentage interest in each Sponsored REIT is less than 1%. The
affirmative vote of the holders of a majority of the Sponsored REIT's preferred
stockholders is required for any actions involving merger, sale of property,
amendment to charter or issuance of additional capital stock. In addition, all
of the Sponsored REITs allow the holders of more than 50% of the outstanding
preferred shares to remove, without cause, and replace one or more members of
the REIT's Board of Directors.


Results of Operations

      The following table shows the Partnership's financial data as a percentage
of total revenues for the three years ended December 31, 2000, 1999, and 1998
and the variance in dollars between the years ended December 31, 2000 and 1999
and the years ended December 31, 1999 and 1998. See Note 3 Business Segments of
the Consolidated Financial Statements and Supplementary Data for financial
information about business segments.

<TABLE>
<CAPTION>
                                                           Financial Data as a
                                                           Percentage of Total
                                                          Revenues for the Year       Variance in dollars between
                                                           Ended December 31,        the years ended December 31,
                                                           ------------------        ----------------------------
                                                                                        2000 and         1999 and
                                                          2000     1999     1998          1999             1998
                                                          ----     ----     ----          ----             ----
                                                                                             (in thousands)
<S>                                                      <C>      <C>      <C>           <C>              <C>
REVENUES:
    Rental income....................................     73.1%    90.4%    94.0%        $9,119          $5,456
    Syndication and commission income................     21.8%     4.4%     0.0%         6,785             789
    Interest and other income........................      5.1%     5.2%     6.0%           841             248
                                                         -----    -----    -----         ------          ------
    Total revenues...................................    100.0%   100.0%   100.0%        16,745           6,493
                                                         -----    -----    -----         ------          ------
</TABLE>


                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                          Financial Data as a
                                                          Percentage of Total
                                                         Revenues for the Year       Variance in dollars between
                                                           Ended December 31,        the years ended December 31,
                                                           ------------------        ----------------------------
                                                                                        2000 and         1999 and
                                                          2000     1999     1998          1999             1998
                                                          ----     ----     ----          ----             ----
                                                                                             (in thousands)
<S>                                                       <C>      <C>      <C>          <C>              <C>
EXPENSES:
    Selling, general and administrative..............     25.2%    28.9%    22.3%         3,572           2,648
    Other real estate operating expenses.............     18.7%    24.5%    26.1%         2,060           1,417
    Depreciation and amortization....................     12.1%    16.1%    18.2%         1,297             793
    Real estate taxes and insurance..................      7.1%     8.0%     9.5%         1,025             347
    Interest expense.................................      2.5%     1.7%     0.2%           561             273
    Merger costs.....................................      0.6%     1.3%     6.4%            (9)           (505)
    Minority interest................................      0.2%     0.4%     0.2%           (12)             42
                                                         -----    -----    -----         ------          ------
    Total expenses...................................     66.4%    80.9%    82.9%         8,494           5,015
                                                         -----    -----    -----         ------          ------
NET INCOME...........................................     33.6%    19.1%    17.1%        $8,251          $1,478
                                                         =====    =====    =====         ======          ======
</TABLE>

Comparison Of The Year Ended December 31, 2000 To The Year Ended December 31,
1999

      Revenues


      Total revenues increased $16.8 million or 92.3%, to $34.8 million for the
year ended December 31, 2000, as compared to $18.0 million for the year ended
December 31, 1999. Income from rental operations was $25.4 million for the year
ended December 31, 2000.


      The increase in rental income of $9.1 million, or 55.9%, compared to the
year ended December 31, 1999, is attributable to:

      o     the acquisition of seven commercial properties in 1999, which
            contributed revenues for a full year in 2000, as compared with a
            partial year in 1999, resulting in $8.0 million in incremental
            revenues;

      o     the acquisition of one commercial property in 2000, which
            contributed revenues for a partial year in 2000, as compared with no
            revenue in 1999, resulting in approximately $600 thousand in
            incremental revenues;

      o     increased revenues of approximately $500 thousand as a result of
            rent increases and other miscellaneous fees on existing properties.

      The increase in investment services income of $6.8 million, or 859%,
compared to the year ended December 31, 1999, is attributable to the syndication
of three REITs in 2000 compared to the syndication of one unconsolidated
Sponsored Partnership in 1999.

      The increase in interest and other income of $841 thousand, or 90.1%,
compared to the year ended December 31, 1999 is attributable to interest earned
on higher cash balances, cash equivalents and marketable securities and higher
average yields in 2000 compared to 1999.

      Expenses

      Total expenses increased $8.5 million, or 58.2%, to $23.1 million for the
year ended December 31, 2000, as compared to $14.6 million for the year ended
December 31, 1999.


                                       5
<PAGE>

      The increase in selling, general and administrative expenses of $3.6
million, or 68.4%, compared to the year ended December 31, 1999, is attributable
to:

      o     increased payroll and related expenses of $3.0 million, of which
            $2.3 million relates to equity based (non-cash) compensation;

      o     increased broker commissions and related costs of approximately $700
            thousand;

      o     offset by decreased other costs of approximately $100 thousand.

      The increase in other real estate operating expenses of $2.1 million, or
46.5%, compared to the year ended December 31, 1999, is primarily attributable
to the acquisition of seven commercial properties in 1999, which incurred costs
for a full year in 2000, as compared with a partial year in 1999.

      The increase in depreciation and amortization expenses of $1.3 million or
44.8%, compared to the year ended December 31, 1999, is primarily attributable
to:

      o     the acquisition of seven commercial properties in 1999, which
            incurred costs for a full year in 2000, as compared with a partial
            year in 1999, resulting in $1.2 million in incremental expenses;

      o     the acquisition of one commercial property in 2000, which incurred
            costs for a partial year in 2000, as compared with no costs in 1999,
            resulting in approximately $100 thousand in incremental costs;

      The increase in real estate taxes and insurance expenses of $1.0 million
or 70.8%, compared to the year ended December 31, 1999, is primarily
attributable to:

      o     the acquisition of seven commercial properties in 1999, which
            incurred costs for a full year in 2000, as compared with a partial
            year in 1999, resulting in approximately $800 thousand in
            incremental expenses;

      o     tax increases on the existing properties of approximately $200
            thousand.

      The increase in interest expense of $561 thousand, or 187.6%, compared to
the year ended December 31, 1999, is primarily attributable to:

      o     the syndication of three REITs in 2000 compared to the syndication
            of one unconsolidated Sponsored Partnership in 1999.

      Merger costs for the year ended December 31, 2000 approximated merger
costs for the year ended December 31, 1999.

      The minority interest for the year ended December 31, 2000 approximated
the minority interest for the year ended December 31, 1999.


                                       6
<PAGE>

      Comparison of the Year Ended December 31, 1999 to the Year Ended December
31, 1998

      Revenues


      Total revenues increased $6.5 million or 56.2%, to $18.0 million for the
year ended December 31, 1999, as compared to $11.5 million for the year ended
December 31, 1998. Income from rental operations was $16.3 million in 1999.


      The increase in rental income of $5.5 million, or 50.2%, compared to the
year ended December 31, 1998, is attributable to:

      o     the acquisition of two properties (one commercial, one residential)
            in 1998 which contributed revenues for a full year in 1999, as
            compared with a partial year 1998, resulting in $2.4 million in
            incremental revenues;

      o     the acquisition of seven commercial properties 1999, which
            contributed revenues for a partial year in 1999, as compared with no
            revenue in 1998, resulting in $3.1 million in incremental revenues;

      The increase in investment services income of $789 thousand, compared to
the year ended December 31, 1998, is attributable to the syndication of one
unconsolidated Sponsored Partnership in 1999. There was no investment services
revenue in 1998.

      The increase in interest and other income of $248 thousand, or 35.6%,
compared to the year ended December 31, 1998 is attributable to interest earned
on higher cash balances and cash equivalents.

      Expenses

      Total expenses increased $5.0 million, or 52.4%, to $14.6 million for the
year ended December 31, 1999, as compared to $9.6 million for the year ended
December 31, 1998.

      The increase in Selling, general and administrative expenses of $2.6
million, or 102.8%, compared to the year ended December 31, 1998, is
attributable to:

      o     increased payroll and related expenses of approximately $700
            thousand;

      o     increased broker commissions and related costs of $1.4 million;

      o     increased other costs of approximately $400 thousand.

      The increase in other real estate operating expenses of $1.4 million, or
47.0%, compared to the year ended December 31, 1998, is primarily attributable
to:

      o     the acquisition of seven commercial properties in 1999, which
            incurred costs for a partial year in 1999, as compared with no
            expenses in 1998, resulting in approximately $400 in incremental
            costs;


                                       7
<PAGE>

      o     the acquisition of two properties in 1998, which incurred costs for
            a full year in 1999, as compared with a partial year in 1999,
            resulting in approximately $900 thousand in incremental costs;

      o     increased costs of approximately $100 thousand on existing
            properties.

      The increase in depreciation and amortization expenses of $793 thousand or
37.7%, compared to the year ended December 31, 1998, is primarily attributable
to:

      o     the acquisition of seven commercial properties in 1999, which
            incurred costs for a partial year in 1999, as compared with no
            expense in 1998, resulting in $417 thousand in incremental expenses;

      o     the acquisition of two properties in 1998, which incurred costs for
            a full year in 1999 compared with a partial year in 1998, resulting
            in $376 thousand in incremental costs;

      The increase in real estate taxes and insurance expenses of $347 thousand
or 31.5%, compared to the year ended December 31, 1998, is primarily
attributable to:

      o     the acquisition of seven commercial properties in 1999, which
            incurred costs for a partial year in 1999, as compared with no
            expense in 1998, resulting in $254 thousand in incremental expenses;

      o     the acquisition of two properties in 1998, which incurred costs for
            a full year in 1999 compared with a partial year in 1998, resulting
            in $251 thousand in incremental costs;

      o     offset by decreased costs of $158 thousand on existing properties.

      The increase in interest expense of $273 thousand, or 1050%, compared to
the year ended December 31, 1998, is primarily attributable to the syndication
of one unconsolidated Sponsored Partnership in 1999 compared to the syndication
of no unconsolidated Sponsored Partnerships in 1998.

      The decrease in merger costs of $505 thousand or 68.6%, compared to the
year ended December 31, 1998, is primarily attributable non-recurring valuation
fees of $500 thousand incurred in 1998.

      The minority interest for the year ended December 31, 1999 approximated
the minority interest for the year ended December 31, 1998.

      Increases in Revenues


      In June 2000, a vacant parcel of land in Peabody, Massachusetts, which was
part of the One Technology Drive property, was removed from the lease with
Alliant Foodservice, Inc., subdivided and sold for $1,100,000. Alliant
Foodservice, Inc. renewed its lease on the remaining land and building for a
higher rent than the prior rent on the unsubdivided land and building. In April
2001, the Company sold a vacant parcel of land that was part of the Gateway
Crossing property in Columbia, Maryland for $515,000. A subdivision and sale of
vacant land at the Company's Southfield Centre property is possible in the
future.



                                       8
<PAGE>



      Effective October 15, 2000, Lucent Technologies extended the term of its
lease on the Company's property located in Santa Clara, California for five more
years. The first year's rent in the amount of $1,571,000 for the new lease is
approximately $835,000, or 213%, higher than the previous year's rent.

      Trends and Uncertainties


      The Company's properties in most locations benefited from the strong
economy and stock market in 2000. While rent increases in the Houston apartment
market slowed in 2000 as the market worked through a large inventory of new
product, office rents in high-demand markets, like Boston, Austin and Silicon
Valley increased, as evidenced by the lease renewals with Alliant Foodservice in
the Boston area and Lucent Technologies in Silicon Valley (which lease was
subsequently assigned to Agere). The Charlotte and Greenville office markets
were less robust with a significant amount of sublease space available.

      Although the Company's real estate portfolio is diversified by location,
product type and tenancy, it is likely to be affected by deteriorating general
economic conditions in 2001. The Company's tenancy generally does not include
dot.com tenants as major tenants in any buildings. One tenant which is engaged
in e-commerce and occupies approximately 11% (7,586 square feet) of the
Company's Austin, Texas property was acquired by PSINet, which has filed for
bankruptcy protection. The Company is uncertain what effect the bankruptcy will
have on the tenant, which was not included in the filing. As of June 14, 2001
the tenant had not paid the rent due June 1, 2001. In addition, the Company has
a number of tenants in the telecom and high technology sectors and others whose
businesses have slowed or whose stock prices have tumbled. Several tenants have
asked to sublet or reduce space. It is likely that some tenants will be unable
to pay rent and that some of the buildings will suffer larger vacancies or lower
rents in 2001 than in 2000 until the general market conditions change.

      The failure of many dot.com companies has put significant blocks of office
space back on the market in some of the Company's market areas, particularly in
Silicon Valley in California and Austin, Texas. Cutbacks at companies in other
industries have led those companies to offer sublease space at below market
rents, which has led to a further weakening in rents, larger vacancies and lower
prices for competing building space, particularly in Charlotte, North Carolina
and Greenville, South Carolina. These factors may affect the Company's ability
to retain and attract tenants in 2001 and the future. For example, in the
Charlotte, North Carolina market, both The Art Institutes and Primary Physicians
Care, which are companies that are growing, have given notice that they will
purchase their own buildings to take advantage of the opportunities in the
Charlotte market. In Greenville, South Carolina, Day & Zimmermann intends to
move to the top floor of a new high-rise building for less rent than they have
been paying in the Company's 1980's building. There are no other major tenants
with lease expirations in 2001, but there may be other tenants who fail
financially or who attempt to break their leases to take advantage of favorable
market conditions.


      In the ordinary course of owning and operating real estate, the potential
could exist for the Company to dispose of one or more properties in its
portfolio. Market conditions in specific geographic locations could present the
Company with the opportunity to realize significant


                                       9
<PAGE>

capital appreciation in an asset's value. The Company maintains close attention
to market conditions in all geographic locations where its properties are
located.

      Liquidity and Capital Resources

      Cash and cash equivalents were $13.7 million and $18.5 million at December
31, 2000 and 1999, respectively. This 25.9% decrease of $4.8 million is
attributable to $30.7 million used in investing activities partially offset by
$14.2 million provided by operating activities and $11.7 million provided by
financing activities.

      Investing Activities

      The Partnership's cash used in investing activities of $30.7 million is
primarily attributable to:

      o     $16.5 million for a loan to a Sponsored REIT which was subsequently
            repaid in February 2001;

      o     $10.0 million for the purchase of property and equipment; and

      o     $5.3 million for the purchase of marketable securities partially
            offset by proceeds of $1.1 million on the sale of land.

      Operating Activities

      The Partnership's cash provided by operating activities of $14.2 million
is primarily attributable to $18.2 million from operations, after addback of
$6.5 million from non cash expenses of which $4.2 million relates to
depreciation and amortization and $2.3 million relates to equity based
compensation.

      The cash provided by operating activities is partially offset by $2.5
million from the decrease in accounts payable and accrued expenses and $1.5
million decrease from a net change in other operating assets and liabilities.

      Financing Activities

      The Partnership's cash provided by financing activities of $11.7 million
is attributable to capital contributions of $39.8 million from the sale of
partnership units for three of the merged entities and borrowings under the line
of credit of $16.5 million;

      The cash provided by financing activities is partially offset by
repayments of the line of credit of $23.5 million and cash distributions to
partners of $21.0 million.

      Our principal demands for liquidity are cash for operations, distributions
to partners, debt repayments and expense associated with indebtedness. As of
December 31, 2000 we had $19,280,000 in liabilities and debt obligations. The
Company has no permanent, long-term debt.


                                       10
<PAGE>

In the near term, liquidity is generated from funds from ongoing real estate
operations and fees and commissions received from the sale of shares in new
Sponsored REITs.

      The Company maintains an unsecured line of credit through Citizens Bank.
The Company has entered into a Master Promissory Note and Loan Agreement which
provides for a revolving line of credit of up to $35 million (increased to $53
million in January 2001). Borrowings under the loan bear interest at either the
bank's base rate or a variable LIBOR rate. We use the unsecured line of credit
to provide each newly-formed Sponsored Entity with the funds to purchase its
property. The Company loans the purchase price of the property, at an interest
rate equivalent to the rate which the Company is paying to the bank, and takes
back a mortgage. The Company collects a commitment fee from the Sponsored
Entity. The loan is paid back in full from the capital contributions of each
Sponsored Entity's investors. The Company's loan agreement with the bank
includes customary restrictions on property liens and requires compliance with
various financial covenants. Financial covenants include maintaining minimum
cash balances in operating accounts, tangible net worth of at least $105 million
(increased to $140 million in January 2001) and compliance with other various
debt and income ratios. The Company was in compliance with all covenants as of
December 31, 2000. Borrowings under the loan agreement mature on February 23,
2003.


      The Company had borrowings of $16,500,000 at the bank's base rate of 9.5%
as of December 31, 2000. There was a corresponding amount due from related
parties at December 31, 2000. As of February 1, 2001, the entire amount of the
outstanding loan balance had been repaid in full. However, the Company intends
to utilize and subsequent to February 1, 2001 has utilized, its line of credit
for interim financing in connection with acquisition of real estate by
newly-formed Sponsored Entities.

      The Company's real properties generate rental income to cover the
ordinary, annual operating expenses of the properties and to fund distributions
to partners. As of December 31, 2000, the rental income covered the expenses for
each of the Company's real properties. In addition to rental income, the Company
maintains cash reserves that may be used to fund extraordinary expenses or major
capital expenses. The cash reserves were set aside when the Sponsored
Partnerships that the Company has acquired were originally syndicated. The cash
reserves as of December 31, 2000 (approximately $6.5 million) are in excess of
the known needs for extraordinary expenses or capital improvements for the real
properties within the next few years. There are no external restrictions on
these reserves, and they may be used for any Company purpose.


      Although there is no guarantee we will be able to obtain the funds
necessary for our future growth, we anticipate generating funds from continuing
real estate operations and from fees and commissions from the sale of shares in
newly-formed Sponsored Entities. With adequate reserves in place to cover
extraordinary expenses or capital improvements, the Company believes that it has
adequate funds for future needs.


                                       11
<PAGE>

Risk Factors


      THE COMPANY FACES RISKS IN CONTINUING TO ATTRACT INVESTORS FOR THE
SPONSORED ENTITIES.

      The Company's investment banking business depends upon continuing to
attract purchasers of equity interests in Sponsored Entities. The Company's
success in this area will depend on the propensity and ability of investors who
have previously invested in Sponsored Entities to continue to invest in future
Sponsored Entities and on the Company's ability to expand the investor pool for
the Sponsored Entities by identifying new potential investors.

      THE COMPANY FACES RISKS IN OWNING AND OPERATING REAL PROPERTY.


      An investment in the Company is subject to the risks incident to the
ownership and operation of real estate-related assets. These risks include the
fact that real estate investments are generally illiquid, which may impact the
Company's ability to vary its portfolio in response to changes in economic and
other conditions, as well as the risks normally associated with:

      o     changes in general and local economic conditions;

      o     the supply or demand for particular types of properties in
            particular markets;

      o     changes in market rental rates;

      o     the impact of environmental protection laws; and

      o     changes in tax, real estate and zoning laws.


      THE COMPANY FACES RISKS FROM GEOGRAPHIC CONCENTRATION.

      To the extent that the Company's portfolio of real properties is
concentrated in one or more geographic areas, the Company faces risks when
economic conditions deteriorate in such areas. The Company currently owns two
properties, constituting approximately 3.6% of the aggregate space owned by the
Company, that are located in Silicon Valley, an area in which economic
conditions have deteriorated.

      THE COMPANY COMPETES WITH NATIONAL, REGIONAL AND LOCAL REAL ESTATE
OPERATORS AND DEVELOPERS, WHICH COULD ADVERSELY AFFECT THE COMPANY'S CASH FLOW.


      Competition exists in every market in which the Company's properties are
located. The Company competes with, among others, national, regional and
numerous local real estate operators and developers. Such competition may
adversely affect the occupancy levels and the


                                       12
<PAGE>

rental revenues of the Company's properties, which could adversely affect the
Company's cash flow from operations and its ability to make expected
distributions to partners. Some of the Company's competitors may have more
resources than the Company or other competitive advantages. Competition may be
accelerated by any increase in availability of funds for investment in real
estate. For example, decreases in interest rates tend to increase the
availability of funds and therefore can increase competition. The extent to
which the Company is affected by competition will depend in significant part on
local market conditions.


      THERE IS LIMITED POTENTIAL FOR OCCUPANCY GAINS IN THE COMPANY'S
PROPERTIES.

      Each of the properties owned by the Company had a rate of occupancy in
excess of 90% as of December 31, 2000. The General Partner anticipates that
future increases in revenue from the Company's properties will be primarily the
result of rental rate increases. To the extent that the existing properties
continue to operate profitably, this will likely stimulate new development of
competing properties and result in greater competition between the newly
developed properties and the Company's properties.

      THE COMPANY IS SUBJECT TO POSSIBLE LIABILITY RELATING TO ENVIRONMENTAL
MATTERS, AND THE COMPANY CANNOT ASSURE YOU THAT IT HAS IDENTIFIED ALL POSSIBLE
LIABILITIES.


      Under various federal, state and local laws, ordinances and regulations,
an owner or operator of real property may become liable for the costs of removal
or remediation of certain hazardous substances released on or in its property.
Such laws may impose liability without regard to whether the owner or operator
knew of, or caused, the release of such hazardous substances. The presence of
hazardous substances on a property may adversely affect the owner's ability to
sell such property or to borrow using such property as collateral, and it may
cause the owner of the property to incur substantial remediation costs. In
addition to claims for cleanup costs, the presence of hazardous substances on a
property could result in the owner incurring substantial liabilities as a result
of a claim by a private party for personal injury or a claim by an adjacent
property owner for property damage. The Company cannot assure you that any
environmental assessments it has undertaken have revealed all potential
environmental liabilities, that any prior owner or operator of the properties
did not create any material environmental condition not known to the Company, or
that an environmental condition does not otherwise exist as to any one or more
of the properties that could have a material adverse effect on the Company's
financial condition or results of operations. In addition, the Company cannot
assure you that:

      o     future laws, ordinances or regulations will not impose any material
            environmental liability,

      o     the current environmental conditions of the Company's properties
            will not be affected by the condition of properties in the vicinity
            of such properties (such as the presence of leaking underground
            storage tanks) or by third parties unrelated to the Company, or

      o     tenants will not violate their leases by introducing hazardous or
            toxic substances into the Company's properties that could expose the
            Company to liability under federal or state environmental laws.


                                       13
<PAGE>


      THE COMPANY IS SUBJECT TO COMPLIANCE WITH THE AMERICANS WITH DISABILITIES
ACT AND FIRE AND SAFETY REGULATIONS WHICH COULD REQUIRE THE COMPANY TO MAKE
SIGNIFICANT CAPITAL EXPENDITURES.


      All of the Company's properties are required to comply with the Americans
With Disabilities Act, and the regulations, rules and orders that may be issued
thereunder (the "ADA"). The ADA has separate compliance requirements for "public
accommodations" and "commercial facilities," but generally requires that
buildings be made accessible to persons with disabilities. Compliance with ADA
requirements might require, among other things, removal of access barriers and
noncompliance could result in the imposition of fines by the U.S. government, or
an award of damages to private litigants. In addition, the Company will be
required to operate its properties in compliance with fire and safety
regulations, building codes and other land use regulations, as they may be
adopted by governmental agencies and bodies and become applicable to the
Company's properties. Compliance with such requirements may require the Company
to make substantial capital expenditures, which expenditures would reduce cash
otherwise available for distribution to partners.


      THE COMPANY MAY BECOME SUBJECT TO LOSS IN PROFIT OR IN ITS CAPITAL
INVESTMENT IN THE EVENT OF THE OCCURRENCE OF AN UNINSURED EVENT.


      The Company or its tenants carry comprehensive liability, fire and
extended coverage with respect to each of the properties owned by the Company,
with policy specification and insured limits customarily carried for similar
properties. There are, however, certain types of losses, such as from wars,
pollution or earthquakes, that may be either uninsurable or not economically
insurable (although the properties located in California all have earthquake
insurance). Should an uninsured material loss occur, the Company could lose both
its capital invested in the property and anticipated profits.


      THE LIMITED PARTNERS HAVE NO CONTROL OF THE OPERATIONS OF THE COMPANY.

      The General Partner will have sole authority for the operation and
management of the Company. The limited partners will not have a right to
participate in management of the Company or the decisions of the General Partner
relating thereto. The limited partners have no right to remove the General
Partner.

      THE LIMITED PARTNERS WILL HAVE NO RIGHT TO TRANSFER THEIR UNITS.

      Until such time as the Units are listed for trading on a national stock
exchange, the transfer of any Unit (other than pursuant to the death,
incompetency or dissolution of a limited partner) will require the prior written
approval of the General Partner, the granting or denying of which is in the
General Partner's absolute discretion.


      THERE IS NO PUBLIC TRADING MARKET FOR OUR SECURITIES.

      There is no public trading market for limited partnership interests in the
Company. The Company cannot assure you that any market will develop or that
there will be any liquidity in a market for Units in the Company.


      LIMITED PARTNERS MAY BE ALLOCATED TAX LIABILITY IN EXCESS OF CASH
DISTRIBUTIONS.

      While not anticipated, the limited partners may be allocated net profits
such that the resulting tax liability will exceed the cash if any distributed to
them by the Company in a particular period. Under these circumstances, the
limited partners would be required to pay their income tax liabilities
associated with their allocable shares of the Company's taxable income from
sources other than their shares of distributions from the Company.

      THERE IS A RISK OF TAX AUDIT.

      There is a possibility that the Company will be audited by the Internal
Revenue Service. Such an audit could result in an adjustment not only of the
Company's tax returns but possibly could lead to an audit of the limited
partners' personal tax returns with respect to non-Company items.


Quantitative and Qualitative Disclosures About Market Risks

      The Company was not a party to derivative commodity investments at or
during the year ended December 31, 2000. The Company's only other financial
instruments (as defined by Financial Accounting Standards Board Statement No.
107) are its cash and cash equivalents for which cost approximates market value.


      The Company's only indebtedness consists of draws from time to time upon
its line of credit. These borrowings bear interest at a variable rate. The
Company uses the funds it draws on its line of credit only for the purpose of
making interim mortgage loans to Sponsored Entities. These mortgage loans bear
interest at the same variable rate payable by the Company under its line of
credit. Therefore, the Company believes that it has mitigated its interest rate
risk with respect to its borrowings.


Item 3. Properties.

      Set forth below is information regarding our properties:


                                       14
<PAGE>


<TABLE>
<CAPTION>
                                                                     Approx.                    Approx.
                              Purchase       Date of     Number      Square     Occupancy      Number of
Property Location               Price       Purchase    of Units      Feet       12/31/00       Tenants      Major Tenant(s)(1)
<S>                            <C>          <C>           <C>          <C>         <C>            <C>        <C>
- ------------------------------------------------------------------------------------------------------------------------------
APARTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
3919 Essex Lane                $10,100,000   6/30/93      135          118,800     over 95%       135            None - Apts.
Houston, TX

3231 Allen Parkway             $10,700,000   8/11/94      159          129,000     over 95%       159            None - Apts.
Houston, TX

4041 Weslayan & Law             $4,200,000   4/29/97       84           70,500     over 95%        84            None - Apts.
Houston, TX

7250 Perkins Road              $18,000,000  10/16/98      264          223,800     over 95%       264            None - Apts.
Baton Rouge, LA

- ------------------------------------------------------------------------------------------------------------------------------
Total Apartments               $43,000,000                642          542,100
- ------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------
OFFICE
- ------------------------------------------------------------------------------------------------------------------------------

451 Andover Street              $8,000,000   6/1/96                     92,000     over 95%        40               Pentucket
North Andover, MA                                                                                                     Medical

1515 Mockingbird Lane           $6,850,000   7/1/97                    110,600     over 95%        80                 The Art
Charlotte, NC                                                                                                     Institutes,
                                                                                                                      Primary
                                                                                                              Physicians Care

33 & 37 Villa Road             $10,550,000   3/1/98                    143,800     over 90%        40        Day & Zimmermann
Greenville, SC

4995 Patrick Henry Dr.          $6,800,000   12/1/97                    40,300         100%       one                   Agere
Santa Clara, CA

678-686 Hillview Drive          $4,862,500   3/9/99                     36,300         100%       one                 Headway
Milpitas, CA                                                                                                     Technologies

5751-5771 Copley Drive         $15,400,000   3/12/99                   101,700         100%      three           XO, Tiernan,
San Diego, CA                                                                                                        Nextel &
                                                                                                                   Allegiance

81 Blue Ravine                  $5,700,000   9/27/99                    47,000         100%       one         Cardinal Health
Folsom, CA

18000 W. Nine Mile Rd.         $14,950,000   9/30/99                   212,500     over 90%       four                    IBM
Southfield, Michigan

11211 Taylor Draper Lane       $10,000,000  12/29/99                    68,600         100%       six                Columbia
Austin, Texas                                                                                                  Universal Life
                                                                                                                Insurance Co.

7130-7150 Columbia             $19,850,000  12/20/99                   188,800         100%      eight               Columbia
Gateway Dr.                                                                                                          National
Columbia, MD

10 Lyberty Way                  $9,100,000   5/23/00                   104,700         100%       one                  Lucent
Westford, MA                                                                                                     Technologies

- ------------------------------------------------------------------------------------------------------------------------------
Total Office                  $112,062,500                           1,146,300
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       15
<PAGE>


<TABLE>
<CAPTION>
                                                                     Approx.                    Approx.
                              Purchase       Date of     Number      Square     Occupancy      Number of
Property Location               Price       Purchase    of Units      Feet       12/31/00       Tenants      Major Tenant(s)(1)
<S>                           <C>           <C>           <C>        <C>               <C>        <C>             <C>
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL
- ------------------------------------------------------------------------------------------------------------------------------

One Technology Dr.              $9,175,000   12/1/95                   188,000         100%       one                 Alliant
Peabody, MA                                                                                                       Foodservice

8730 Bollman Place              $5,600,000  12/14/99                    99,000         100%       one                 Alliant
Savage (Jessup), MD                                                                                               Foodservice

- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIAL               $14,775,000                             287,000
- ------------------------------------------------------------------------------------------------------------------------------

GRAND TOTAL                   $169,837,500                642        1,975,400

- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Major tenants are tenants who occupy 10% or more of the space in a
      particular property.

      The Company has no material undeveloped or unimproved properties. In the
opinion of the General Partner, the Company's properties are adequately covered
by insurance.


Item 4. Security Ownership of Certain Beneficial Owners and Management.

      Principal Equity Owners

      The general partner of the Company is FSP General Partner LLC, a
Massachusetts limited liability company (the "General Partner"). The following
table sets forth information regarding the beneficial ownership of our limited
partnership interests as of January 1, 2001 of: (1) each person known by us to
own beneficially five percent or more of our outstanding limited partnership
interests; (2) each of our directors and executive officers; and (3) all of our
directors and executive officers as a group. The Company is managed by the
General Partner, whose managing member is George J. Carter. Accordingly, the
General Partner and Mr. Carter are treated as directors of the Company, and the
executive officers of the General Partner are treated as executive officers of
the Company. Mr. Carter holds the 1% interest in FSP Investments and FSP
Property Management not held by the Company. Unless otherwise indicated in the
footnotes to the table, the beneficial owners named have, to our knowledge, sole
voting and investment power with respect to the Units beneficially owned,
subject to community property laws where applicable.


                                       16
<PAGE>

Units of Limited Partnership
Interest Beneficially Owned
or Into Which Securities are
Convertible(1)

Name of Holder                                     Number           Percent
- ---------------------------------------------------------------------------
George J. Carter(2)                                383,719            1.63%

Richard R. Norris(2)(3)                             27,112            *

R. Scott MacPhee(2)                                 18,036            *

William W. Gribbell(2)                               9,068            *

Barbara J. Corinha(2)                                5,000            *

Janet P. Notopoulos(2)                               5,000            *
                                                   -------            ----
All Executive Officers as a Group
     (consisting of 6 persons)(2)                  447,935            1.91%
                                                   =======            ====

   * Less than one percent.

(1)   There are no securities convertible into Units of limited partnership
      interest.
(2)   FSP General Partners LLC owns 948,449.2 units of general partnership
      interest in the Company, which equals a 3.88% interest in the cash
      distributions, profits and losses of the Company. Mr. Carter, who may be
      deemed to be a director of the Company, is the managing member of the
      General Partner and each of the other executive officers of the Company is
      a member of the General Partner.
(3)   Includes 13,556 Units owned by the Richard R. Norris Living Trust, and
      13,556 Units owned by the Karen C. Norris Living Trust which Mr. Norris
      may be deemed to beneficially own. Excludes 5,664 Units owned by Gretchen
      D. Norris as to which Mr. Norris has power of attorney but as to which Mr.
      Norris disclaims beneficial ownership.

Item 5. Directors and Executive Officers.

      Directors and Officers

      The Company has no individual directors or executive officers. The general
partner of the Company is FSP General Partner LLC (the "General Partner").
Information regarding the executive officers of the General Partner is set forth
below:

      George J. Carter, age 52, is President of the General Partner and is
responsible for all aspects of the business of the Company and its affiliates,
with special emphasis on the evaluation, acquisition and structuring of real
estate investments. From 1992 through 1996 he


                                       17
<PAGE>

was President of Boston Financial Securities, Inc. ("Boston Financial"). Prior
to joining Boston Financial, Mr. Carter was owner and developer of Gloucester
Dry Dock, a commercial shipyard in Gloucester, Massachusetts. From 1979 to 1988,
Mr. Carter served as Managing Director in charge of marketing of First Winthrop
Corporation, a national real estate and investment banking firm headquartered in
Boston, Massachusetts. Prior to that, he held a number of positions in the
brokerage industry including those with Merrill Lynch & Co. and Loeb Rhodes &
Co. Mr. Carter is a graduate of the University of Miami (B.S.). Mr. Carter is a
NASD General Securities Principal (Series 24) and holds a NASD Series 7 general
securities license.

      Barbara J. Corinha, age 44, is the Vice President, Chief Operating
Officer, Treasurer and Secretary of the General Partner. In addition, Ms.
Corinha has as her primary responsibility, together with Mr. Carter, the
management of all operating business affairs of the Company and its affiliates.
From 1993 through 1996, she was Director of Operations for the private placement
division of Boston Financial. Prior to joining Boston Financial, Ms. Corinha
served as Director of Operations for Schuparra Securities Corp. and as the Sales
Administrator for Weston Financial Group. From 1979 through 1986, Ms. Corinha
worked at First Winthrop Corporation in administrative and management
capacities; including Office Manager, Securities Operations and Partnership
Administration. Ms. Corinha attended Northeastern University and the New York
Institute of Finance. Ms. Corinha is a NASD General Securities Principal (Series
24). She also holds other NASD supervisory licenses including Series 4 and
Series 53, and a NASD Series 7 general securities license.

      R. Scott MacPhee, age 43, is an Executive Vice President of the General
Partner and has as his primary responsibility the direct equity placement of the
Sponsored Entities. From 1993 through 1996 he was an executive officer of Boston
Financial. From 1985 to 1993 Mr. MacPhee worked at Winthrop Financial
Associates. Mr. MacPhee attended American International College. Mr. MacPhee
holds a NASD Series 7 general securities license and is a registered investment
adviser.

      Richard R. Norris, age 57, is an Executive Vice President of the General
Partner and has as his primary responsibility the direct equity placement of the
Sponsored Entities. From 1993 through 1996 he was an executive officer of Boston
Financial. From 1983 to 1993 Mr. Norris worked at Winthrop Financial Associates.
Prior to that, he worked at Arthur Young & Company (subsequently named Ernst &
Young through a merger). Mr. Norris is a graduate of Bowdoin College (B.A.) and
Northeastern University (M.S.). Mr. Norris holds a NASD Series 7 general
securities license and is a registered investment adviser.

      William W. Gribbell, age 41, is an Executive Vice President of the General
Partner and has as his primary responsibility the direct equity placement of the
Sponsored Entities. From 1993 through 1996 he was an executive officer of Boston
Financial. From 1989 to 1993 Mr. Gribbell worked at Winthrop Financial
Associates. Mr. Gribbell is a graduate of Boston University (B.A.). Mr. Gribbell
holds a NASD Series 7 general securities license and is a registered investment
adviser.

      Janet Prier Notopoulos, age 53, is a Vice President of the General
Partner, President of FSP Property Management LLC and has as her primary
responsibility the oversight of the management of the real estate assets of the
Company and its affiliates. Prior to joining Franklin


                                       18
<PAGE>

Street Partners in 1997, Ms. Notopoulos was a real estate and marketing
consultant for various clients. From 1975 to 1983, she was Vice President of
North Coast Properties, Inc., a Boston real estate investment company. Between
1969 and 1973, she was a real estate paralegal at Goodwin, Procter & Hoar. Ms.
Notopoulos is a graduate of Wellesley College (B.A.) and the Harvard School of
Business Administration (M.B.A).


      Each of the above persons other than Ms. Notopoulos began working for the
Company at its inception in 1997. Ms. Notopoulos was employed as a consultant by
the Company commencing in March 1997 and became a full-time employee on January
1, 1998.


Item 6. Executive Compensation.

      The General Partner of the Company is entitled to receive 3.88% of all
cash distributions of the Company.

      The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years, awarded or accrued, to the Company's Chief
Executive Officer and the other four most highly compensated executive officers.


<TABLE>
<CAPTION>
                                                          Annual Compensation
                                             -----------------------------------------------
                                                                                Other                   All
                                               Annual                           Annual                 Other
Name and                                       Salary         Bonus         Compensation (1)      Compensation (2)
Principal Position                 Year         ($)            ($)               ($)                    ($)
- ----------------------------       ----      ----------------------------------------------------------------------
<S>                                <C>        <C>            <C>             <C>                   <C>
George J. Carter                   2000       120,000        40,746                                1,703,770(3)
President and CEO                  1999       120,000        80,000                                    6,000(4)
                                   1998       120,000        30,000

Richard R. Norris                  2000                       5,453          1,545,750               233,190(5)
Executive VP                       1999                                        849,330                 6,000(4)
                                   1998                                        643,240

R. Scott MacPhee                   2000                       4,329            981,338               186,360(6)
Executive VP                       1999                                        849,533                 6,000(4)
                                   1998                                        643,240

William W. Gribbell                2000                       2,176            701,358                96,680(7)
Executive VP                       1999                                        404,822                 6,000(4)
                                   1998                                        342,287

Barbara J. Corinha                 2000        60,000       161,200                                   56,000(8)
Chief Operating Officer            1999        50,000       125,000                                    6,000(4)
                                   1998        45,000       105,000
</TABLE>

(1)   Consists of brokerage commissions paid by FSP Investments in respect of
      the sale of securities by Sponsored Entities.
(2)   All executive officers were issued Units, valued at $10 per Unit, in
      April 2000 as part of their annual compensation. The valuation of $10 per
      Unit was determined in good faith by the General Partner. The value of $10
      had been ascribed to each Unit in connection with the mergers that were
      effective January 1, 2000, and no material changes in the financial
      condition or results of the Company had occurred between that date and
      April 1, 2000.
(3)   Includes $1,697,770 in Units and a $6,000 Company Contribution to a Simple
      IRA.
(4)   Represents Company contributions to Simple IRA plan.
(5)   Includes $227,190 in Units and a $6,000 Company Contribution to a Simple
      IRA.
(6)   Includes $180,360 in Units and a $6,000 Company Contribution to a Simple
      IRA.
(7)   Includes $90,680 in Units and a $6,000 Company Contribution to a Simple
      IRA.
(8)   Includes $50,000 in Units and a $6,000 Company Contribution to a Simple
      IRA.



                                       19
<PAGE>

Item 7. Certain Relationships and Related Transactions.


      Messrs. Carter, MacPhee, Norris and Gribbell and Mses. Corinha and
Notopoulos, each of whom is an executive officer of the Company, are executive
officers and, except for Ms. Notopoulos, directors of each of the Sponsored
REITs. Messrs. Carter, MacPhee, Norris and Gribbell serve as executive officers
of the general partner of the Sponsored Partnerships. None of such persons
received any remuneration from the Sponsored Entities for such service.

      FSP Investments has provided syndication and real estate acquisition
advisory services for the Sponsored REITs in 2000 and Sponsored Partnerships
prior to 2000. Transactions with merged Sponsored Partnerships have been
eliminated in the Company's consolidated financial statements. Fees from
non-consolidated related entities for property acquisition services amounted to
approximately $1,581,000, $348,000 and $0 for the years ended December 31, 2000,
1999 and 1998, respectively. Sales commissions earned for the sale of Sponsored
REIT preferred shares in 2000 and partnership units in one Sponsored Partnership
in 1999 amounted to approximately $4,036,000, $443,000 and $0 for the years
ended December 31, 2000, 1999 and 1998 respectively.

      The Company has also provided interim financing for the purchase of
certain Sponsored REIT properties prior to completion of the Sponsored REITs
private equity offerings. Financing commitment fees earned by the Partnership
from the Sponsored REITs totaled approximately $1,952,000 for the year ended
December 31, 2000. Interest income charged to the Sponsored REITs amounted to
approximately $497,000 for the year ended December 31, 2000. The Company
received no interim financing fees or interest in 1999 or 1998.

      Management fees charged to the merged Sponsored Partnerships have been
eliminated in the Company's consolidated financial statements. Total property
management fee income from non-consolidated entities amounted to approximately
$112,000, $16,000 and $0 for the years ended December 31, 2000, 1999 and 1998
respectively. There were no related entity management fees for the year ended
December 31, 1998. Property management fees range from 1% to 5% of collected
rents.

      Aggregate fees charged to the Sponsored Entities, which were eliminated in
the Company's consolidated financial statements, amounted to approximately
$6,176,000, $8,113,000 and $2,886,000 for the years ended December 31, 2000,
1999 and 1998, respectively.

      At December 31, 2000, the Company had an interim financing note receivable
due from a Sponsored REIT. The note earned interest at 9.5% and was paid in full
upon closing of the Sponsored REIT's private equity offering in February 2001.


      The Company was organized in January 1997 by Messrs. Carter, MacPhee,
Norris and Gribbell. In connection with the initial equity funding of the
Company, they received general partnership interests in the Company that were
entitled in the aggregate to 50% of the Company's cash distributions, profits
and losses. Such interest is currently held through their membership interests
in the General Partner and aggregates less than 4%.


      The Company pays no fees or other compensation to the General Partner.


Item 8. Legal Proceedings.

      There are no material legal proceedings to which the Company is a party.
The Company from time to time may be involved in suits relating to the real
properties it owns for liability for slips and falls, damage to automobiles in
parking garages, minor theft or similar matters. Most of these suits are covered
by insurance. In addition, in the ordinary course of business, the Company may
become involved in litigation to collect rents or other income due to it from
tenants.

Item 9. Market Price of and Dividends on the Registrant's Common Equity and
        Related Stockholder Matters.

      There is no established public trading market for the Company's Units of
limited partnership interest.

      As of December 31, 2000, there were 743 holders of record of Units limited
partnership interest in the Company. This computation is based upon the number
of record holders reflected in our corporate records.

      Set forth below are the distributions per Unit that the Company has made
in respect of each quarter in the last two fiscal years.


                                              Amount Per Limited and
                      Quarter Ended            General Partner Unit
                          3/31/99                      $0.20
                          6/30/99                      $0.21
                          9/30/99                      $0.22
                         12/31/99                      $0.23
                          3/31/00                      $0.24
                          6/30/00                      $0.25
                          9/30/00                      $0.26
                         12/31/00                      $0.27



                                       20
<PAGE>

Item 10. Recent Sales of Unregistered Securities.


      On April 1, 2000, the Company issued 230,000 Units of limited partnership
interest as compensation to its executive officers pursuant to an exemption from
registration under Section 4(2) of the Securities Act. Effective October 1,
2000, the Company acquired six Sponsored Entities through merger. In connection
with these mergers, the Company issued 7,204,716 Units of limited partnership
interest to the limited partners of those Sponsored Entities. Effective January
1, 2000, the Company acquired three Sponsored Entities though merger. In
connection with these mergers, the Company issued 4,999,972 Units of limited
partnership interest to the limited partners of those Sponsored Entities.
Effective January 1, 1999, the Company acquired eight Sponsored Entities through
mergers. In connection with these mergers, the Company issued 11,999,907 Units
of limited partnership interest to the limited partners of those Sponsored
Entities. The Company issued the Units in each of these mergers pursuant to
exemptions from registration under Rule 506 of Regulation D and Section 4(2) of
the Securities Act. The Company bases its belief that such transactions had the
benefit of these exemptions on the fact that no general solicitation was
conducted and on information furnished in investor questionnaires, and
representations made, by the limited partners of each acquired Sponsored Entity
as to their status as accredited investors.


Item 11. Description of Registrant's Securities to be Registered.

      Distributions of cash from the Company, if any, will be made within 90
days following the end of each fiscal quarter on the basis of the number of
Units in the Company held by each partner. As of December 31, 2000, the holders
of Units of limited partnership interest in the Company were entitled in the
aggregate to receive 96.12% of cash distributions. The net proceeds available
for distribution upon liquidation of the Company will be distributed, after
adjusting the partners' capital accounts to reflect any gain or loss in
connection with the event, to and among the partners having positive balances in
their respective capital accounts, in the proportions that such positive capital
accounts bear to each other.


      Net profits and losses will generally be allocated on the basis of the
number of Units owned by each partner. Net profits from sale or other
disposition of all or any portion of the Company's property or upon liquidation
of the Company will be allocated, first, to partners having negative capital
account balances in proportion to and to the extent of such balances and,
second, to the partners in such proportions and amounts as would result in the
respective capital account balance of each partner equaling, as nearly as
possible, such partner's share of the then fair market value of the Company's
assets reduced by the amount of all of the Company's liabilities (the "Company
Capital") determined by calculating the amount such partner would receive if the
Company Capital were distributed to the partners based on the number of units of
partnership interest owned by each of them. Net losses from sale or other
disposition of all or any portion of the Company's property or upon liquidation
of the Company will be allocated, first, to partners with positive capital
account balances in the respective amounts of such balances (except that if the
amount of net losses to be allocated is less than the sum of the capital account
balances of all partners having positive capital account balances, then the net
losses will be allocated to the partners in such proportions and in such amounts
as would result in the respective capital account balance of each partner
equaling, as nearly as possible, such partner's share of the then Company
Capital determined by calculating the amount such partner would receive if the
Company Capital were distributed to the partners based on the number of units of
partnership interest owned by each of them) and, second, pro rata to the
partners in accordance with the number of units of partnership interest held by
each of them. The Partnership Agreement also contains a number of special
allocation provisions, including provisions relating to the allocation of
deductions attributable to any nonrecourse indebtedness the Company may incur.
The Partnership Agreement contains no restrictions on the Company's ability to
incur indebtedness except that no such indebtedness may provide for the personal
liability of any limited partner.


      The General Partner has the exclusive right to manage the business of the
Company. The holders of Units of limited partnership interest have no right to
take part in management, do not have any voice in the operations of the Company
and have no right to remove the General Partner or approve the admission of a
new General Partner. Each holder of Units of limited partnership interest:

      o     shares in accordance with the Partnership Agreement in all charges,
            credits and distributions;


                                       21
<PAGE>

      o     has access to books and records at all reasonable times and on
            reasonable notice at the office of the Company;

      o     has a right to receive from the General Partner income tax
            information; and

      o     has the right to vote on certain proposed amendments to the
            Partnership Agreement.

      The General Partner and a majority in interest of the holders of Units of
limited partnership interest may, subject to the various limitations set forth
in Sections 4.11 and 8.04 of the Partnership Agreement, at any time amend the
Partnership Agreement. The General Partner may also send notice in writing of
any proposed amendment to the holders of Units of limited partnership interest
not less than 30 days prior to the proposed effective date of such amendment. If
the holders of Units of limited partnership interest then owning 20% or more of
all of the Units of limited partnership interest give notice in writing to the
General Partner prior to such proposed effective date stating that they object
to such proposed amendment, then such proposed amendment may not be adopted
without the vote or written consent of the holders of a majority of the Units of
limited partnership interest. If such notice is not given by the requisite
percentage, such proposed amendment will become effective without any further
act on the part of the holders of Units of limited partnership interest.

      The General Partner, without the consent or approval of the holders of
Units of limited partnership interest, may make certain amendments to the
Partnership Agreement or to add to its duties or surrender any of its rights or
powers, or to cure ambiguities or inconsistencies in the Partnership Agreement.

      In addition, the General Partner, without the consent or approval of the
holders of Limited Partnership interest, may amend appropriate provisions of the
Partnership Agreement if the Company is advised at any time by its legal counsel
that the allocations of profits and loses provided in the Partnership Agreement
are unlikely to be respected for federal income tax purposes, either because of
the promulgation and adoption of regulations under Section 704 of the Internal
Revenue Code or other developments in applicable law. In making any such
amendment, the General Partner is required to use its best efforts to effect as
little change in the economic tax arrangement among the partners as it shall
determine in its sole discretion to be necessary to provide for allocations of
profits and losses which it believes will be respected for federal income tax
purposes.

      Finally, the General Partner may, without the consent or approval of the
holders of Units of limited partnership interest, amend the Partnership
Agreement from time to time, including amending and restating it, in any manner
as the General Partner, in its sole discretion, deems necessary or appropriate
in connection with establishing, or taking steps to establish, a public market
for the Units of limited partnership interest in the Company; provided, however,
that no such amendment may:

      o     increase the amount of capital contributions required to be made by
            any holder of Units of limited partnership interest;

      o     increase the liability for any holder of Units of limited
            partnership interest; or


                                       22
<PAGE>

      o     affect the method of allocation of cash distributions among holders
            of Units of limited partnership interest.


      Until such time as the Units of limited partnership interest are listed
for trading on a national stock exchange, transferability of the Units is
limited and is subject to the prior written approval of the General Partner
(except in the case of assignments occurring pursuant to the death, incompetency
or dissolution of a limited partner), the granting or denying of which is in the
General Partner's absolute discretion. In addition, no transfer or assignment of
a Unit of limited partnership interest may be made if counsel for the Company
shall be of the opinion that such transfer or assignment may not be effected
without registration under the Securities Act or would result in a violation of
applicable state securities laws. Any assignment must be executed by the
assignor and assignee on a form satisfactory to the General Partner and its
terms must not contravene those set forth in the Partnership Agreement. The
assignee of any Unit of limited partnership interest has certain rights of
ownership, including the right to receive dividends, but may become a substitute
limited partner only upon meeting certain conditions, including the execution of
an agreement to be bound by the Partnership Agreement and a power of attorney
authorizing the General Partner to act in his or her behalf in connection with
certain affairs of the Company. An assignee who does not become a substitute
limited partner will have none of the rights and powers of a limited partner
under the Partnership Agreement and applicable state law.


      The Partnership Agreement provides that on an annual basis the Company
will use its best efforts to repurchase any Units of limited partnership
interest in the Company from holders desiring to sell them. Any holder of Units
of limited partnership interest wishing to take advantage of this opportunity
must so request no later than July 1 of any year for a purchase which would be
effective the following January 1. The purchase price paid by the Company will
be 90% of the fair market value of the Units purchased, as determined by the
General Partner.

Item 12. Indemnification of Directors and Officers

      Under Massachusetts partnership law, the General Partner of the Company
will be accountable to the Company as a fiduciary and must exercise good faith
and integrity in handling the Company's affairs. The Company's Partnership
Agreement provides that the General Partner will not be liable to the Company or
any of its limited partners for any act or omission performed in good faith in a
manner reasonably believed by it to be within the scope of authority granted to
it by the Partnership Agreement and in the best interests of the Company,
provided that the General Partner shall not have been guilty of gross negligence
or willful misconduct with respect to such act or omission. As a result, limited
partners might have a more limited right of action in certain circumstances than
they would have in the absence of such a provision in the Partnership Agreement.

      The Partnership Agreement also provides that the General Partner and its
affiliates performing services on behalf of the Company are indemnified to the
fullest extent permitted by law from losses, costs and expenses (including
attorneys' fees) incurred by them by reason of being a General Partner or having
served at the request of the Company as a director, officer or trustee of
another entity. Any claim for indemnification under the Partnership Agreement
will be satisfied only out of the assets of the Company and no limited partner
will have any personal liability to satisfy an indemnification claim made
against the Company.

      Notwithstanding the foregoing, the above-mentioned persons will not be
indemnified by the Company from loss incurred by such person in connection with
matters as to which


                                       23
<PAGE>

such person shall have been finally adjudicated in any action, suit or
proceeding not to have acted in good faith in the reasonable belief that his,
her or its action was in or not inconsistent with the best interests of the
Company.

      The Company may also advance funds to a person indemnified under the
Partnership Agreement for legal expenses and other costs incurred as a result of
legal action brought against such person if such person undertakes to repay the
advanced funds to the Company if it is subsequently determined that such person
is not entitled to indemnification pursuant to the terms of the Partnership
Agreement. The General Partner may cause the Company to purchase and maintain,
at the Company's expense, insurance on behalf of the General Partner or its
agents which will insure them against any liability asserted against all or any
of them in any such capacity or arising out of their status as such.

Item 13. Financial Statements and Supplementary Data.

      See attached financial statements beginning on page F-1.

Item 14. Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

      None.

Item 15. Financial Statements and Exhibits

      (a)   Financial Statements

      See Index to Financial Statements and Schedules on page F-1.

      (b)   Exhibits

            3.1   Certificate of Limited Partnership

            3.2   Amendment to Certificate of Limited Partnership

            4.1   Third Amended and Restated Limited Partnership Agreement,
                  dated as of January 1, 2000

            4.2   First Amendment, dated as of January 1, 2000, to Third Amended
                  and Restated Limited Partnership Agreement, dated as of
                  January 1, 2000

            4.3   Second Amendment, dated as of June 26, 2000, to Third Amended
                  and Restated Limited Partnership Agreement, dated as of
                  January 1, 2000

            21    Subsidiaries of the Registrant


                                       24
<PAGE>


      Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this Amendment No. 1 to Form 10 to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                            FRANKLIN STREET PARTNERS LIMITED
                                            PARTNERSHIP


                                            By: FSP General Partner LLC,
                                                its General Partner



                                             By: /s/ George J. Carter
                                                ----------------------
                                                 Managing Member and President



                                       25
<PAGE>

                   Index to Financial Statements and Schedules


Franklin Street Partners and Subsidiaries

Reports of independent certified public accountants                    F-2 - F-9

Consolidated financial statements:

    Balance sheets as of December 31, 2000 and 1999                  F-10 - F-11

    Statements of operations for the years ended
      December 31, 2000, 1999 and 1998                                      F-12

    Statements of partners' capital for the years ended
      December 31, 2000, 1999 and 1998                                      F-13

    Statements of cash flows for the years ended
      December 31, 2000, 1999 and 1998                                      F-14

    Notes to consolidated financial statements                       F-15 - F-38


                                      F-1
<PAGE>

               Report of Independent Certified Public Accountants

To the Partners of
Franklin Street Partners Limited Partnership
Wakefield, Massachusetts

We have audited the accompanying consolidated balance sheets of Franklin Street
Partners Limited Partnership and subsidiaries as of December 31, 2000 and 1999,
and the related consolidated statements of operations, partners' capital and
cash flows for each of the three years in the period ended December 31, 2000.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
certain real estate partnerships, which statements reflect total assets of
$85,859,000 as of December 31, 1999 and total revenues of $4,794,000 and
$490,000 for the years ended December 31, 1999 and 1998, respectively. Those
statements were audited by other auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to the amounts included for such real
estate partnerships, is based solely on the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors for 1999 and 1998 provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors for
1999 and 1998, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Franklin Street
Partners Limited Partnership and subsidiaries at December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.

                                                                BDO Seidman, LLP

Boston, Massachusetts
February 27, 2001, except Note 6
which is as of April 9, 2001


                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Austin N.W. Limited Partnership
(a Massachusetts Limited Partnership)
Wakefield, Massachusetts


      We have audited the accompanying balance sheet of FSP Austin N.W. Limited
Partnership (A Massachusetts Limited Partnership), as of December 31, 1999, and
the related statements of operations, changes in partners' equity and cash flows
for the period October 13, 1999 (date of inception) to December 31, 1999. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FSP Austin N.W. Limited
Partnership (a Massachusetts Limited Partnership) as of December 31, 1999, and
the results of its operations, and its cash flows for the period October 13,
1999 (date of inception) to December 31, 1999, in conformity with generally
accepted accounting principles.


Roy & Stevens, P.C.

Boston, Massachusetts
January 28, 2000


                                      F-3
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Blue Ravine Limited Partnership
(a Massachusetts Limited Partnership)
Wakefield, Massachusetts


      We have audited the accompanying balance sheet of FSP Blue Ravine Limited
Partnership (A Massachusetts Limited Partnership), as of December 31, 1999, and
the related statements of operations, changes in partners' equity and cash flows
for the period August 13, 1999 (date of inception) to December 31, 1999. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FSP Blue Ravine Limited
Partnership (a Massachusetts Limited Partnership) as of December 31, 1999, and
the results of its operations, and its cash flows for the period August 13, 1999
(date of inception) to December 31, 1999, in conformity with generally accepted
accounting principles.


Roy & Stevens, P.C.

Boston, Massachusetts
January 28, 2000


                                      F-4
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Bollman Place Limited Partnership
(a Massachusetts Limited Partnership)
Wakefield, Massachusetts


      We have audited the accompanying balance sheet of FSP Bollman Place
Limited Partnership (A Massachusetts Limited Partnership), as of December 31,
1999, and the related statements of operations, changes in partners' equity and
cash flows for the period September 28, 1999 (date of inception) to December 31,
1999. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FSP Bollman Place Limited
Partnership (a Massachusetts Limited Partnership) as of December 31, 1999, and
the results of its operations, and its cash flows for the period September 28,
1999 (date of inception) to December 31, 1999, in conformity with generally
accepted accounting principles.


Roy & Stevens, P.C.

Boston, Massachusetts
January 28, 2000


                                      F-5
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Hillview Center Limited Partnership
(a Massachusetts Limited Partnership)
Wakefield, Massachusetts


      We have audited the accompanying balance sheet of FSP Hillview Center
Limited Partnership (A Massachusetts Limited Partnership), as of December 31,
1999, and the related statements of operations, changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FSP Hillview Center Limited
Partnership (a Massachusetts Limited Partnership) as of December 31, 1999, and
the results of its operations and cash flows for the year ended December 31,
1999, in conformity with generally accepted accounting principles.


Roy & Stevens, P.C.

Boston, Massachusetts
February 15, 2000


                                      F-6
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Telecom Business Center Limited Partnership
(a Massachusetts Limited Partnership)
Wakefield, Massachusetts


      We have audited the accompanying balance sheet of FSP Telecom Business
Center Limited Partnership (A Massachusetts Limited Partnership), as of December
31, 1999, and the related statements of operations, changes in partners' equity
and cash flow for the period February 1, 1999 (date of inception) to December
31, 1999. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FSP Telecom Business Limited
Partnership (a Massachusetts Limited Partnership) as of December 31, 1999, and
the results of its operations, and its cash flows for the period February 1,
1999 (date of inception) to December 31, 1999, in conformity with generally
accepted accounting principles.


Roy & Stevens, P.C.

Boston, Massachusetts
January 28, 2000


                                      F-7
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Silverside Plantation Limited Partnership


We have audited the accompanying balance sheet of FSP SILVERSIDE PLANTATION
LIMITED PARTNERSHIP as of December 31, 1999 and the related statements of
income, changes in partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FSP SILVERSIDE PLANTATION
LIMITED PARTNERSHIP as of December 31, 1999 and the results of its operations,
changes in partners' equity, and cash flows for the year then ended in
conformity with generally accepted accounting principles.


Habif, Arogeti & Wynne, LLP


Atlanta, Georgia

January 24, 2000


                                      F-8
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Partners
FSP Silverside Plantation Limited Partnership


We have audited the accompanying balance sheet of FSP SILVERSIDE PLANTATION
LIMITED PARTNERSHIP as of December 31, 1998 and the related statements of
income, changes in partners' equity, and cash flows for the period October 16,
1998 [Date of Inception] to December 31, 1998. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FSP SILVERSIDE PLANTATION
LIMITED PARTNERSHIP as of December 31, 1998 and the results of its operations,
changes in partners' equity, and cash flows for the period October 16, 1998
[Date of Inception] to December 31, 1998 in conformity with generally accepted
accounting principles.


Habif, Arogeti & Wynne, LLP


Atlanta, Georgia

January 15, 1999


                                      F-9
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                                     Consolidated Balance Sheets
                                                                        (Note 4)

December 31,                                                    2000        1999
================================================================================
                                                               (in thousands)

Assets

Real estate investments, at cost (Note 5):
   Land                                                     $ 35,524    $ 34,392
   Buildings and improvements                                136,276     128,616
   Fixtures and equipment                                        995         896
- --------------------------------------------------------------------------------

                                                             172,795     163,904

   Less accumulated depreciation                              12,164       8,192
- --------------------------------------------------------------------------------

     Real estate investments, net                            160,631     155,712

Cash and cash equivalents                                     13,718      18,519
Restricted cash                                                  499         489
Marketable securities                                          5,322          --
Due from related parties (Note 6)                             16,734          --
Tenant rent receivables                                        1,238         573
Prepaid expenses                                                 535         393
Office computers and furniture, net of accumulated
  depreciation of $142,000 and $72,000                           303         239
Deposits and other assets                                        503         274
- --------------------------------------------------------------------------------
     Total assets                                           $199,483    $176,199
================================================================================


                                      F-10
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                                     Consolidated Balance Sheets
                                                                        (Note 4)

December 31,                                                  2000         1999
================================================================================
                                                               (in thousands)

Liabilities and Partners' Capital

Liabilities:
   Bank note payable (Note 7)                             $ 16,500     $ 23,522
   Accounts payable and accrued expenses                     2,281        4,810
   Tenant security deposits                                    499          489
- --------------------------------------------------------------------------------

     Total liabilities                                      19,280       28,821
- --------------------------------------------------------------------------------

Minority interests in consolidated subsidiaries                 63           52
- --------------------------------------------------------------------------------

Commitments and contingencies (Notes 6, 7, 8 and 10)


Partners' capital (deficit) (Notes 8 and 9)
   Limited partners, 23,486,096 and 18,958,445
   units issued and outstanding                            182,462      149,172
   General partner, 948,499 units issued
   and outstanding                                          (2,322)      (1,846)
- --------------------------------------------------------------------------------


     Total partners' capital                               180,140      147,326
- --------------------------------------------------------------------------------

     Total liabilities and partners' capital              $199,483     $176,199
================================================================================

                    See accompanying notes to consolidated financial statements.


                                      F-11
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                           Consolidated Statements of Operations
                                                                 (Notes 3 and 4)

<TABLE>
<CAPTION>
Years ended December 31,                                               2000                  1999                 1998
======================================================================================================================
                                                                   (in thousands, except per partnership unit amounts)

<S>                                                                <C>                   <C>                  <C>
Revenues (Note 6):
   Rental income                                                   $ 25,434              $ 16,315             $ 10,859
   Investment services income                                         7,574                   789                   --
   Interest and other income                                          1,785                   944                  696
- ----------------------------------------------------------------------------------------------------------------------

     Total revenues                                                  34,793                18,048               11,555
- ----------------------------------------------------------------------------------------------------------------------

Expenses (Note 6):
   Selling, general and administrative (Notes 8 and 10)               8,795                 5,223                2,575
   Other real estate operating expenses                               6,489                 4,429                3,012
   Depreciation and amortization (Note 5)                             4,194                 2,897                2,104
   Real estate taxes and insurance                                    2,473                 1,448                1,101
   Interest expense                                                     860                   299                   26
   Merger costs (Note 4)                                                222                   231                  736
   Minority interests                                                    54                    66                   24
- ----------------------------------------------------------------------------------------------------------------------

     Total expenses                                                  23,087                14,593                9,578
- ----------------------------------------------------------------------------------------------------------------------

Net income                                                         $ 11,706              $  3,455             $  1,977
======================================================================================================================


Allocation of net income to:
   Limited Partners                                                $ 11,228              $  3,258             $  1,818
   General Partner                                                      478                   197                  159
- ----------------------------------------------------------------------------------------------------------------------
                                                                   $ 11,706              $  3,455             $  1,977
======================================================================================================================
Basic and diluted net income per limited and general
   partnership unit                                                $    .50              $    .21             $    .17
======================================================================================================================
</TABLE>


                    See accompanying notes to consolidated financial statements.


                                      F-12
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                    Consolidated Statements of Partners' Capital
                                                                        (Note 4)


<TABLE>
<CAPTION>
                                                                                                                  Total Partners'
                                                                Limited Partners        General Partner               Capital
                                                               -----------------        ---------------           ---------------
For the years ended December 31, 2000, 1999 and 1998           Units      Amount        Units    Amount           Units     Amount
===================================================================================================================================
(in thousands, except units)
<S>                                                      <C>            <C>           <C>        <C>         <C>          <C>
Balance, December 31, 1997                                9,523,613     $  64,376     948,499    $   103     10,472,112   $  64,479
   Capital contributions                                  3,842,737        34,752          --         --      3,842,737      34,752
   Net income                                                    --         1,818          --        159             --       1,977
   Cash distributions to partners                                --        (6,603)         --       (749)            --      (7,352)
- -----------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1998                               13,366,350        94,343     948,499       (487)    14,314,849      93,856
   Capital contributions                                  5,592,095        63,316          --         --      5,592,095      63,316
   Net income                                                    --         3,258          --        197             --       3,455
   Cash distributions to partners                                --       (11,705)         --     (1,596)            --     (13,301)
- -----------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1999                               18,958,445       149,212     948,499     (1,886)    19,906,944     147,326
   Capital contributions                                  4,297,651        39,829          --         --      4,297,651      39,829
   Issuance of limited partnership units for
     compensation (Note 8)                                  230,000         2,300          --         --        230,000       2,300
   Net income                                                    --        11,228          --        478             --      11,706
   Cash distributions to partners                                --       (20,091)         --       (930)            --     (21,021)
- -----------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2000                               23,486,096     $ 182,478     948,499    $(2,338)    24,434,595   $ 180,140
===================================================================================================================================
</TABLE>

- ----------

Partnership units issued in connection with the merger transactions in 1999 and
2000 are treated as outstanding for all periods presented since the date of
inception of each Sponsored Partnership (see Note 4).


                    See accompanying notes to consolidated financial statements.


                                      F-13
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                           Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
Years ended December 31,                                               2000                  1999                 1998
======================================================================================================================
                                                                                       (in thousands)
<S>                                                               <C>                   <C>                   <C>
Cash flows from operating activities:
   Net income                                                     $  11,706             $   3,455             $  1,977
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization                                    4,194                 2,897                2,104
     Partnership units issued for compensation                        2,300                    --                   --
     Gain on sale of land                                              (149)                   --                   --
     Minority interests                                                  54                    66                   24
     Changes in operating assets and liabilities:
       Restricted cash                                                  (10)                 (406)                 104
       Prepaid expenses                                                (142)                 (335)                 146
       Tenant rent receivables                                         (665)                 (389)                (101)
       Due from related parties                                        (234)                   --                   --
       Deposits and other assets                                       (381)                  306                  110
       Accounts payable and accrued expenses                         (2,529)                3,635                 (401)
       Tenant security deposits                                          10                   406                 (104)
- ----------------------------------------------------------------------------------------------------------------------
         Net cash provided by operating activities                   14,154                 9,635                3,859
- ----------------------------------------------------------------------------------------------------------------------

Cash flow from investing activities:
   Loan to related party                                            (16,500)                   --                   --
   Purchase of property and equipment                                (9,952)              (77,255)             (28,980)
   Proceeds received on sale of land                                  1,076                    --                   --
   Purchase of marketable securities                                 (5,322)                   --                   --
- ----------------------------------------------------------------------------------------------------------------------
         Net cash used for investing activities                     (30,698)              (77,255)             (28,980)
- ----------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
   Cash distributions to partners                                   (21,021)              (13,301)              (7,352)
   Cash distributions to minority interest holders                      (43)                  (50)                  (4)
   Borrowings under line of credit                                   16,500                23,522                   --
   Repayments of line of credit                                     (23,522)                   --                   --
   Capital contributions                                             39,829                63,316               34,752
- ----------------------------------------------------------------------------------------------------------------------
         Net cash provided by financing activities                   11,743                73,487               27,396
- ----------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                 (4,801)                5,867                2,275

Cash and cash equivalents, beginning of year                         18,519                12,652               10,377
- ----------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                            $  13,718             $  18,519             $ 12,652
======================================================================================================================

Supplemental disclosure of cash flow information:
   Cash paid for:
     Interest                                                     $     860             $     299             $     26
     Income taxes                                                 $      --             $      --             $     --
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                      F-14
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

1.    Organization


      Franklin Street Partners Limited Partnership (the "Partnership") was
      formed as a Massachusetts limited partnership on February 4, 1997. The
      Partnership owns a 99% interest in FSP Investments LLC ("FSP Investments")
      and a 99% interest in FSP Property Management LLC ("FSP Property
      Management"). The Partnership also has a nominal interest in five
      corporations organized to operate as Real Estate Investment Trusts
      ("REITs"), which are accounted for on the equity method (see Notes 2 and
      6).


      The Partnership operates in two business segments: rental operations and
      investment services. FSP Investments provides real estate investment and
      broker/dealer services. FSP Investment's services include: (i) the
      organization of REIT entities in 2000 (the "Sponsored REITs") and limited
      partnerships prior to 2000, (the "Sponsored Partnerships"), which are
      syndicated through private placements; (ii) the acquisition of real estate
      on behalf of the sponsored entities; and (iii) the sale of preferred stock
      in REITs or limited partnership interests in the Sponsored Partnerships.
      FSP Property Management provides property management services for the
      sponsored entities.


      During 1999 and 2000, a total of seventeen Sponsored Partnerships were
      merged into the Partnership (see Note 4). The Partnership previously owned
      a 5% general partner interest in each of the Sponsored Partnerships. The
      mergers were tax-free reorganizations accounted for similar to a pooling
      of interest, whereby the assets and liabilities of the Sponsored
      Partnerships were recorded at their historic book values and transaction
      costs were charged to expenses. The Partnership's 1998 and 1999
      consolidated financial statements have been restated to include the
      combined balance sheets and operations of the Partnership and the
      seventeen merged Sponsored Partnerships. Operations of the merged
      Sponsored Partnerships are included for all periods presented since the
      date of inception of each Sponsored Partnership.



                                      F-15
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies

      Basis of Presentation

      The accompanying consolidated financial statements include the accounts of
      the Partnership, majority-owned subsidiaries and the seventeen merged
      Sponsored Partnerships (see Note 4). All significant intercompany accounts
      and transactions have been eliminated in consolidation.

      Business Segments

      The Partnership follows Statement of Financial Accounting Standards
      ("SFAS") No. 131 "Disclosures about Segments of an Enterprise and Related
      Information," which established standards for the way that public business
      enterprises report information about operating segments in annual
      financial statements and requires that those enterprises report selected
      information about operating segments in interim financial reports issued
      to shareholders (see Note 3).

      Minority Interests

      Minority interests represents the 1% interest in FSP Investments and FSP
      Property Management, which is held by an officer and member of the general
      partner of the Partnership. Minority interests cash distributions paid
      were approximately $43,000, $50,000 and $4,000 for the years ended
      December 31, 2000, 1999 and 1998, respectively, and are reflected as a
      reduction to the Partnership's minority interests liability.

      Estimates and Assumptions

      The preparation of financial statements 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
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.

      Reclassifications

      Certain balances in the 1999 and 1998 financial statements have been
      reclassified to conform to the 2000 presentation.


                                      F-16
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Investment In REITs


      Common stock investments in REITs are accounted for using the equity
      method. Under the equity method of accounting, the Partnership's cost is
      subsequently adjusted by their share of the Sponsored REITs' earnings,
      after deducting the REITs' preferred stock dividends paid or accrued.
      Equity in the losses of Sponsored REITs' are not recognized to the extent
      that the investment balance would become negative. Dividends are
      recognized as income after the investment balance is reduced to zero.
      There were no dividends received from the REITs for the year ended
      December 31, 2000.


      Real Estate Investments and Depreciation


      Real estate investments are carried at cost, net of accumulated
      depreciation. Betterments, major renovations, and certain costs directly
      related to the acquisition and improvement of real estate are capitalized.
      Expenditures for maintenance and repairs, including routine painting and
      carpeting, are charged to operations as incurred. Depreciation is computed
      using the straight-line method over the assets' estimated useful lives as
      follows:


      Category                                                             Years
      ==========================================================================
      Buildings:
          Residential                                                         27
          Commercial                                                          39
      Building and improvements                                         15 to 39
      Fixtures and equipment                                              5 to 7

      The Partnership evaluates its assets used in operations by identifying
      indicators of impairment and by comparing the sum of the estimated
      undiscounted future cash flows for each asset to the asset's carrying
      value. When indicators of impairment are present and the sum of the
      undiscounted future cash flows are less than the carrying value of such
      asset, an impairment loss is recorded equal to the difference between the
      assets current carrying value and its value based on discounting its
      estimated future cash flows. At December 31, 2000, 1999 and 1998, no such
      indicators of impairment were identified.


                                      F-17
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Cash and Cash Equivalents

      The Partnership considers all highly liquid debt instruments purchased
      with a maturity of three months or less to be cash equivalents. Cash and
      cash equivalents consists of the following (in thousands):

      December 31,                                                2000      1999
      ==========================================================================
      Capital reserve funds held in money
        market and cash equivalent accounts                    $ 3,464   $ 8,024
      Money market accounts                                      3,826        --
      Operating accounts                                         6,428    10,495
      --------------------------------------------------------------------------
                                                               $13,718   $18,519
      ==========================================================================


      Capital reserve funds are internally segregated by the Partnership and
      have no external restrictions.


      Restricted Cash

      Restricted cash consists of tenant security deposits. Tenant security
      deposits are refunded when tenants vacate provided that the tenant has not
      damaged the property.


                                      F-18
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Marketable Securities

      The Partnership accounts for investments in debt and equity securities
      under the provisions of SFAS No. 115, "Accounting for Certain Investments
      in Debt and Equity Securities". The Partnership classifies its debt and
      equity securities as available-for-sale securities.

      Investments in marketable securities mature as follows (in thousands):

                                                            After
                                                           1 Year
                                              Within       Through
      December 31, 2001                       1 Year       3 Years         Total
      ==========================================================================
      Government-backed debt
        securities                            $3,957        $   --        $3,957
      Corporate bonds                            968           397         1,365
      --------------------------------------------------------------------------
                                              $4,925        $  397        $5,322
      ==========================================================================

      The above securities are stated at cost, which approximates their fair
      value at December 31, 2000.

      Financial Instruments

      The Partnership estimates that the carrying value of cash and cash
      equivalents, restricted cash, marketable securities, amounts due from
      related parties and the bank note payable approximate their fair values
      based on their short-term maturity and prevailing interest rates.


                                      F-19
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Revenue Recognition


      Commercial Properties - The Partnership has retained substantially all of
      the risks and benefits of ownership of the Partnership's commercial
      properties and accounts for its leases as operating leases. Rental income
      from leases, which include scheduled increases in rental rates during the
      lease term, is recognized on a straight-line basis. The Partnership does
      not have any percentage rent arrangements with its commercial property
      tenants. Reimbursable common area maintenance charges are included in
      rental income in the period earned.


      Residential Apartments - Rental income from tenants of residential
      apartment properties is recognized in the period earned.

      Investment Services Income - The Partnership recognizes property
      acquisition and syndication fees in the period services are rendered,
      provided that the fee is fixed and collection is probable. Interim
      financing fees are recognized in the period earned. Commission income from
      the sale of partnership units in Sponsored Partnerships or preferred stock
      in Sponsored REITs is recognized as earned, which generally occurs upon
      closing.

      Income Taxes

      No provision has been made for Federal or state income taxes in the
      consolidated financial statements of the Partnership. Partners are
      required to report on their individual tax returns their allocable share
      of income, gains, losses, deductions and credits of the Partnership. The
      Partnership files its tax returns on the accrual basis.

      Net Income Per Partnership Unit

      The Partnership follows SFAS No. 128 "Earnings per Share", which specifies
      the computation, presentation and disclosure requirements for the
      Partnership's net income per partnership unit. Basic net income per unit
      is computed by dividing net income by the weighted average number of
      partnership units outstanding during period. Diluted net income per share
      reflects the potential dilution that could occur if securities or other
      contracts to issue units were exercised or converted into units. There
      were no potential dilutive units outstanding at December 31, 2000, 1999
      and 1998.


      The partnership units issued in connection with the merger transactions
      described in Note 4 have been treated as outstanding for all periods
      presented since the date of inception of each Sponsored Partnership.



                                      F-20
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Net Income Per Partnership Unit

      The denominator used for calculating basic and diluted net income per unit
      is as follows:

      Years ended December 31,                  2000          1999          1998
      ==========================================================================


      Weighted average number
        of units outstanding:
        Limited partners                  22,291,114    15,678,911    10,871,303
        General partner                      948,592       948,592       948,592


      Recent Accounting Standards

      In June 1998, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 133, "Accounting for Derivative Instruments and Hedging
      Activities." SFAS No. 133 requires companies to recognize all derivative
      contracts at their fair values, as either assets or liabilities on the
      balance sheet. If certain conditions are met, a derivative may be
      specifically designated as a hedge, the objective of which is to match the
      timing of gain or loss recognition on the hedging derivative with the
      recognition of (1) the changes in the fair value of the hedged asset or
      liability that are attributable to the hedged risk, or (2) the earnings
      effect of the hedged forecasted transaction. For a derivative not
      designated as a hedging instrument, the gain or loss is recognized in
      income in the period of change. SFAS No. 133, as amended by SFAS No. 137
      and 138, is effective for all fiscal quarters of fiscal years beginning
      after June 15, 2000.


                                      F-21
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

2.    Significant Accounting Policies (Continued)

      Recent Accounting Standards (Continued)

      Historically, the Partnership has not entered into derivative contracts
      either to hedge existing risks or for speculative purposes. Accordingly,
      adoption of the new standard did not affect the Partnership's financial
      statements.

      In March 2000, the FASB issued interpretation No. 44 ("FIN 44"),
      "Accounting for Certain Transactions Involving Stock Compensation, an
      interpretation of APB Opinion No. 25." FIN 44 clarifies the application of
      APB No. 25 for (a) the definition of an employee for purposes of applying
      APB No. 25, (b) the criteria for determining whether a plan qualifies as a
      noncompensatory plan, (c) the accounting consequences of various
      modifications to the previously fixed stock options or awards, and (d) the
      accounting for an exchange of stock compensation awards in a business
      combination. FIN 44 was effective July 1, 2000 but certain conclusions
      covered specific events that occurred after either December 15, 1998 or
      January 12, 2000. Adoption of FIN 44 did not have an effect on the
      Partnership `s financial statements.

      In December 1999, the Securities and Exchange Commission ("SEC") issued
      Staff Accounting Bulletin No. 101 which summarizes certain of the SEC
      staff's views in applying generally accepted accounting principles to
      revenue recognition in financial statements. The Staff Accounting bulletin
      became effective in the fourth quarter of 2000. The adoption of this
      guidance did not have an impact on the Partnership's results of operations
      or financial position, however, the guidance may impact the way in which
      the Partnership will account for future transactions.


                                      F-22
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

3.    Business Segments

      The Partnership operates in two business segments: rental operations and
      investment services (including real estate acquisition, financing and
      broker/dealer services). Segment operating results are measured and
      assessed based on a performance measure known as Funds From Operations
      ("FFO"). FFO is defined as net income (computed in accordance with
      generally accepted accounting principles) plus depreciation and
      amortization and other non-cash expenses. FFO is not a measure of
      operating results or cash flows from operating activities as measured by
      generally accepted accounting principles, and is not necessarily
      indicative of cash available to fund cash needs and should not be
      considered an alternative to cash flows as a measure of liquidity.

      FFO by business segment are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                          Per
                                                                                                     Consolidated
                                           Rental       Investment                 Intercompany      Statements of
                                         Operations      Services       Total      Eliminations       Operations
=====================================================================================================================
<S>                                      <C>             <C>        <C>                <C>             <C>
Year ended December 31, 2000:
  Total revenues                         $ 26,817        $14,152    $ 40,969           $(6,176)        $ 34,793
  Total expenses                          (14,332)        (9,854)    (24,186)            1,099          (23,087)
  Depreciation and amortization             4,275             68       4,343              (149)           4,194
  Non-cash expenses                            --          2,300       2,300                --            2,300
- --------------------------------------------------------------------------------------------------------------------
FFO                                      $ 16,760        $ 6,666    $ 23,426           $(5,226)        $ 18,200
====================================================================================================================

Year ended December 31, 1999:
  Total revenues                         $ 17,204        $ 9,143    $ 26,347           $(8,299)        $ 18,048
  Total expenses                           (9,945)        (5,315)    (15,260)              667          (14,593)
  Depreciation and amortization             2,965             41       3,006              (109)           2,897
- --------------------------------------------------------------------------------------------------------------------
FFO                                      $ 10,224        $ 3,869    $ 14,093           $(7,741)        $  6,352
====================================================================================================================

Year ended December 31, 1998:
  Total revenues                         $ 11,560        $ 6,208    $ 17,768           $(6,213)        $ 11,555
  Total expenses                           (6,979)        (2,802)     (9,781)              203           (9,578)
  Depreciation and amortization             2,136             33       2,169               (65)           2,104
- --------------------------------------------------------------------------------------------------------------------
FFO                                      $  6,717        $ 3,439    $ 10,156           $(6,075)        $  4,081
====================================================================================================================
</TABLE>

      Non-cash expenses of $2,300,000 for the year ended December 31, 2000 are
      comprised of equity-based compensation charges (see Note 8).


                                      F-23
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

3.    Business Segments (Continued)

      The Partnership's FFO before the restatement for the October 1, 2000
      Merged Partnerships (see Note 4) is summarized as follows (in thousands):

      Year ended December 31,                                              2000
      ==========================================================================

      Total FFO before intercompany eliminations                        $23,426

      Less amounts for October 1, 2000 Merged Partnerships
        for the period prior to date of merger:
         Total revenues                                                  (6,880)
         Total expenses                                                   4,184
         Depreciation and amortization                                   (1,003)
      --------------------------------------------------------------------------

      Total FFO, excluding pre-merger operations                        $19,727
      ==========================================================================

      The Partnership's cash distributions from operations for the year ended
      December 31, 2000 (excluding $3,953,000 of cash distributions related to
      the October 1, 2000 Merged Partnerships for the period prior to the date
      of merger) are summarized as follows:

                                          Distribution                Total
                                         Per Partnership              Cash
      Quarter paid                            Unit                Distributions
      ==========================================================================
                                                                 (in thousands)

      Second quarter of 2000                  $.24                      $ 4,080
      Third quarter of 2000                    .25                        4,308
      Fourth quarter of 2000                   .26                        4,480
      First quarter of 2001                    .27                        6,597
      --------------------------------------------------------------------------
                                                                        $19,465
      ==========================================================================

      Cash distributions per partnership unit is based on the total outstanding
      units at the end of each calendar quarter. Cash available for
      distribution, as determined at the sole discretion of the general partner,
      is required to be distributed to unit holders within 90 days following the
      end of each calendar quarter. The cash distribution of approximately
      $6,597,000 for the fourth quarter of 2000 was declared and paid in 2001.
      The cash distribution of approximately $4,200,000 for the fourth quarter
      of 1999 was declared and paid in the first quarter of 2000.


                                      F-24
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

3.    Business Segments (Continued)

      The following table is a summary of other financial information by
      business segment (in thousands):

                                      Rental        Investment
                                    Operations       Services             Total
      ==========================================================================

      December 31, 2000:
         Capital expenditures        $  9,825          $   127          $  9,952
         Identifiable assets         $173,888          $25,595          $199,483

      December 31, 1999:
         Capital expenditures        $ 77,060          $   195          $ 77,255
         Identifiable assets         $145,037          $31,162          $176,199

      December 31, 1998:
         Capital expenditures        $ 28,973          $     7          $ 28,980

4.    Merger Transactions

      Effective October 1, 2000, the Partnership and six Sponsored Partnerships
      consummated a series of mergers pursuant to an Agreement and Plan of
      Merger (the "October 2000 Merger"). Under the terms of the October 2000
      Merger, all limited partnership interests in the six Sponsored
      Partnerships outstanding on October 1, 2000 were exchanged for 7,204,716
      new limited partnership units in the Partnership. The operations of the
      six merged Sponsored Partnerships consist of six commercial rental
      properties (see Note 5).

      Effective January 1, 2000, the Partnership and three Sponsored
      Partnerships consummated a series of mergers pursuant to an Agreement and
      Plan of Merger (the "January 2000 Merger"). Under the terms of the January
      2000 Merger, all limited partnership interests in the three Sponsored
      Partnerships outstanding on January 1, 2000 were exchanged for 4,999,972
      new limited partnership units in the Partnership. The operations of the
      three merged Sponsored Partnerships consist of a residential apartment
      property and two commercial real estate properties (see Note 5).


                                      F-25
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

4.    Merger Transactions (Continued)

      Effective January 1, 1999, the Partnership and eight Sponsored
      Partnerships consummated a series of mergers pursuant to an Agreement and
      Plan of Merger (the "1999 Merger"). Under the terms of the 1999 Merger,
      all partnership units in the Partnership and all limited partnership
      interests in the eight Sponsored Partnerships outstanding on January 1,
      1999 were exchanged for 11,999,907 new partnership units in the combined
      Partnership. The operations of the merged Sponsored Partnerships consist
      of five commercial rental properties and three residential real estate
      properties (see Note 5).

      The Partnership's allocation of partnership units between the existing
      partners and the new partners were based upon the estimated relative value
      of each partners' contribution into the combined Partnership. Such
      allocation was based, in part, on independent real estate appraisals and
      third party valuation services.


      Following the consummation of a merger described above, the Partnership
      held, directly or indirectly, 100% of the interests in each Sponsored
      Partnership involved in the merger. The merger transactions were solely an
      exchange of partnership units and no cash was involved. The mergers were
      tax-free reorganizations accounted for similar to a pooling of interest.
      The assets and liabilities of the Sponsored Partnerships were recorded at
      their historic book values and total merger costs of approximately
      $222,000, $231,000 and $736,000 were expensed in the accompanying
      consolidated statements of operations for the years ended December 31,
      2000, 1999 and 1998, respectively. The Partnership's consolidated
      financial statements have been restated for all periods to include the
      results of operations, financial positions and cash flows of the Sponsored
      Partnerships since their date of inception. Partnership units issued in
      connection with the mergers are treated as outstanding for all periods
      presented since the date of inception of each Sponsored Partnership.



                                      F-26
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

4.    Merger Transactions (Continued)

      The Partnership's December 31, 1999 and 1998 consolidated total partners'
      capital has been restated as follows (in thousands):

      December 31,                                            1999         1998
      ==========================================================================

      Franklin Street Partners Limited
         Partnership and Subsidiaries total
         partners' capital, as previously
         reported                                        $  72,887     $ 75,134

      Total partners' capital of the merged Sponsored
         Partnerships                                       78,302       19,793

      Elimination of intercompany balances
         and transactions                                   (3,863)      (1,071)
      --------------------------------------------------------------------------

      Combined total partners' capital, as restated      $ 147,326     $ 93,856
      ==========================================================================


                                      F-27
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

4.    Merger Transactions (Continued)

      The separate total revenues and net income of the Partnership and the
      various Sponsored Partnerships prior to the mergers were as follows (in
      thousands):

      Year ended December 31,                           1999               1998
      ==========================================================================

      Total revenues:
         Franklin Street Partners Limited
           Partnership and Subsidiaries,
           as previously reported                    $20,519            $13,961
         Merged Sponsored Partnerships                 5,641                490
         Elimination of intercompany balances
           and transactions                           (8,112)            (2,896)
      --------------------------------------------------------------------------

                                                     $18,048            $11,555
      ==========================================================================

      Net income:
         Franklin Street Partners Limited
           Partnership and Subsidiaries,
           as previously reported                    $ 8,729            $ 4,613
         Merged Sponsored Partnerships                 2,341                233
         Elimination of intercompany balances
           and transactions                           (7,615)            (2,869)
      --------------------------------------------------------------------------

                                                     $ 3,455            $ 1,977
      ==========================================================================


                                      F-28
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

5.    Real Estate Investments

      In connection with the various merger transactions described at Note 4,
      the Partnership acquired seventeen real estate properties during 2000 and
      1999. The following is a summary of the more significant elements of the
      Partnership's real estate investments (dollar amounts in thousands):

<TABLE>
<CAPTION>



                                                                                                             Date
                                                                        Approximate                       Acquired by
                                                Date of                   Square           Date            Sponsored
Description                                      Merger        Units     Footage       Constructed       Partnership
========================================================================================================================
<S>                                           <C>               <C>        <C>             <C>                  <C>
Residential Apartments:
  Essex House, Houston, TX                    January 1999      135        118,800            1993              1993
  Reata, Houston, TX                          January 1999      159        129,000            1994              1994
  Weslayan Oaks, Houston, TX                  January 1999       84         70,500            1995              1997
  Silverside Plantation, Baton Rouge, LA      January 2000      264        223,800            1998              1998

Commercial Properties:
  North Andover
    Office Park, No. Andover, MA              January 1999       --         92,000         1972-1978            1996
  Park Seneca, Charlotte, NC                  January 1999       --        110,600            1969              1997
  Piedmont Center, Greenville, SC             January 1999       --        143,800            1973              1998
  4995 P. Henry Drive, Santa Clara, CA        January 1999       --         40,300            1978              1997
  One Technology Drive, Peabody, MA           January 1999       --        188,000            1982              1995
  Hillview Center, Milpitas, CA               January 2000       --         36,300            1984              1999
  Telecom Business Center, San Diego, CA      January 2000       --        101,700            1997              1999
  Southfield Center, Southfield, MI           October 2000       --        212,500            1977              1999
  Blue Ravine, Folsom, CA                     October 2000       --         47,000            1984              1999
  Bollman Place, Savage, MD                   October 2000       --         99,000            1984              1999
  Austin N.W., Austin, TX                     October 2000       --         68,600            1998              1999
  10 Lyberty Way, Westford, MA                October 2000       --        104,700            1984              2000
  Gateway Crossing 95, Columbia, MD           October 2000       --        188,800         1988-1994            1999
- ------------------------------------------------------------------------------------------------------------------------


========================================================================================================================

<CAPTION>
                                                                                                          Total Cost at
                                                      Original Cost                   Cost              December 31, 2000
                                               --------------------------          Capitalized     --------------------------
                                                              Buildings,           (Disposals)                    Buildings,
                                                             Improvements         Subsequent to                  Improvements
Description                                      Land       and Fixtures          Acquisition         Land      and Fixtures
==================================================================================================================================
<S>                                           <C>                <C>                  <C>         <C>               <C>
Residential Apartments:
  Essex House, Houston, TX                    $  2,426           $   7,674            $   648     $   2,426         $   8,322
  Reata, Houston, TX                             2,811               7,889                567         2,811             8,456
  Weslayan Oaks, Houston, TX                     1,236               2,964                 70         1,236             3,034
  Silverside Plantation, Baton Rouge, LA         2,000              16,000               (205)        1,885            15,910

Commercial Properties:
  North Andover
    Office Park, No. Andover, MA                 1,056               6,944                895         1,056             7,839
  Park Seneca, Charlotte, NC                     1,370               5,480                (42)        1,270             5,538
  Piedmont Center, Greenville, SC                1,356               9,194                596         1,356             9,790
  4995 P. Henry Drive, Santa Clara, CA           3,009               3,791                 58         3,009             3,849
  One Technology Drive, Peabody, MA              1,033               8,142               (450)        1,033             7,692
  Hillview Center, Milpitas, CA                  2,135               2,728                  7         2,135             2,735
  Telecom Business Center, San Diego, CA         4,730              10,670                 78         4,730            10,748
  Southfield Center, Southfield, MI              4,112              10,838                138         4,112            10,976
  Blue Ravine, Folsom, CA                          766               4,934                 22           766             4,956
  Bollman Place, Savage, MD                      1,556               4,044                 45         1,556             4,089
  Austin N.W., Austin, TX                          631               9,369                161           631             9,530
  10 Lyberty Way, Westford, MA                   1,173               7,927                 78         1,173             8,005
  Gateway Crossing 95, Columbia, MD              4,339              15,511                291         4,339            15,802
- ----------------------------------------------------------------------------------------------------------------------------------

                                              $ 35,739           $ 134,099            $ 2,957     $  35,524         $ 137,271
==================================================================================================================================

<CAPTION>

                                                                       Total
                                                                    Accumulated
                                                                  Depreciation at
                                                                   December 31,
Description                                           Total            2000
==================================================================================
<S>                                              <C>                 <C>
Residential Apartments:
  Essex House, Houston, TX                       $   10,748          $  2,473
  Reata, Houston, TX                                 11,267             1,951
  Weslayan Oaks, Houston, TX                          4,270               490
  Silverside Plantation, Baton Rouge, LA             17,795             1,268

Commercial Properties:
  North Andover
    Office Park, No. Andover, MA                      8,895             1,398
  Park Seneca, Charlotte, NC                          6,808               466
  Piedmont Center, Greenville, SC                    11,146               763
  4995 P. Henry Drive, Santa Clara, CA                6,858               277
  One Technology Drive, Peabody, MA                   8,725             1,066
  Hillview Center, Milpitas, CA                       4,870               124
  Telecom Business Center, San Diego, CA             15,478               497
  Southfield Center, Southfield, MI                  15,088               344
  Blue Ravine, Folsom, CA                             5,722               151
  Bollman Place, Savage, MD                           5,645                98
  Austin N.W., Austin, TX                            10,161               257
  10 Lyberty Way, Westford, MA                        9,178               129
  Gateway Crossing 95, Columbia, MD                  20,141               412
- ----------------------------------------------------------------------------------

                                                 $  172,795          $ 12,164
==================================================================================
</TABLE>

- ----------
There were no encumbrances on the above properties. Depreciable lives at
December 31, 2000 are summarized at Note 2.


                                      F-29
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

5.    Real Estate Investments (Continued)

      The following table summarizes the changes in the Partnership's real
      estate investments and accumulated depreciation (in thousands):

<TABLE>
<CAPTION>
      December 31,                                   2000             1999            1998
      ======================================================================================
      <S>                                     <C>               <C>             <C>
      Real estate investments, at cost:
         Balance, beginning of year           $163,904          $ 86,835        $58,080
           Acquisitions                          9,179            76,881         28,634
           Improvements                            639               188            121
           Dispositions                           (927)               --             --
      --------------------------------------------------------------------------------------

         Balance, end of year                 $172,795          $163,904        $86,835
      ======================================================================================

      Accumulated depreciation:
         Balance, beginning of year:          $  8,192          $  5,447        $ 3,617
           Depreciation                          3,972             2,745          1,830
           Dispositions                             --                --             --
      --------------------------------------------------------------------------------------

         Balance, end of year                 $ 12,164          $  8,192        $ 5,447
      ======================================================================================
</TABLE>

6.    Related Party Transactions

      Investment in Sponsored REITs

      During 2000, the Partnership acquired 100% of the common stock in four
      Sponsored REITs for nominal consideration. Additionally, the Partnership's
      5% general partner interest in one Sponsored Partnership was exchanged for
      the common stock in a newly formed REIT, in connection with this Sponsored
      Partnership's reorganization from a limited partnership to a REIT on
      January 1, 2001.


                                      F-30
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

6.    Related Party Transactions (Continued)

      Investment in Sponsored REITs (Continued)


      The Sponsored REITs were formed as corporations under the laws of Delaware
      and operate in a manner intended to qualify as REITs for Federal income
      tax purposes. To qualify as a REIT, each entity must comply with certain
      operating activity requirements and must generally distribute 95% (90%
      commencing January 1, 2001) of its taxable income to its shareholders. The
      REITs have issued both common stock and preferred stock. The common stock
      is owned solely by the Partnership and the preferred stock is owned by
      outside individual investors. Each REIT was organized to acquire a single
      real estate property using the proceeds raised through private offerings
      of its preferred stock. The REIT's do not contemplate having any long-term
      financing. The preferred shareholders' in each of the REITs are entitled
      to 100% of the REITs dividends. As a common shareholder, the Partnership
      has no rights to the REIT's regular cash dividends. However, upon
      liquidation of the REITs the Partnership will be entitled to its
      percentage interest in any proceeds after the preferred shareholders have
      recovered their investment. The Partnership's percentage interest in each
      REIT is less than 1%. The Partnership's cost of its investment in the
      REITs approximates its share of the underlying equity in the net assets of
      the REITs. The Partnership's share of the REITs' earnings, after deducting
      preferred stock dividends paid or accrued, was not material for the year
      ended December 31, 2000.


      The affirmative vote of the holders of a majority of the REIT's preferred
      stockholders is required for any actions involving merger, sale of
      property, amendment to charter or issuance of additional capital stock. In
      addition, all of the REIT's amended their certificates of incorporation in
      April 2001 to allow the holders of more than fifty percent of the
      outstanding preferred shares to remove, without cause, and replace one or
      more members of the REIT's Board of Directors.


                                      F-31
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

6.    Related Party Transactions (Continued)

      Sponsored Entity Fees

      FSP Investments has provided syndication and real estate acquisition
      advisory services for the Sponsored REITs in 2000 and Sponsored
      Partnerships prior to 2000. Transactions with merged Sponsored
      Partnerships have been eliminated in the accompanying consolidated
      financial statements. Fees from non-consolidated related entities for
      property acquisition services amounted to approximately $1,581,000 and
      $346,000 for the years ended December 31, 2000 and 1999, respectively.
      Sales commissions earned for the sale of Sponsored REIT preferred shares
      in 2000 and partnership units in one Sponsored Partnership in 1999
      amounted to approximately $4,036,000 and $443,000 for the years ended
      December 31, 2000 and 1999, respectively.

      The Partnership has also provided interim financing for the purchase of
      certain REIT properties prior to completion of the REIT's private equity
      offerings. Financing commitment fees earned by the Partnership from the
      REITs totaled approximately $1,957,000 for the year ended December 31,
      2000. Interest income charged to the REITs amounted to approximately
      $457,000 for the year ended December 31, 2000.

      Management Fees

      Management fees charged to the merged Sponsored Partnerships have been
      eliminated in the accompanying consolidated statements of operations.
      Total property management fee income from non-consolidated entities
      amounted to approximately $112,000 and $16,000 for the years ended
      December 31, 2000 and 1999, respectively. There were no related entity
      management fees for the year ended December 31, 1998. Property management
      fees range from 1% to 5% of collected rents.


                                      F-32
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

6.    Related Party Transactions (Continued)

      Due From Related Parties

      Amounts due from related parties consist of the following (in thousands):

      December 31,                                              2000       1999
      ==========================================================================

         Interim financing note receivable due             $  16,500         --
         from Sponsored REIT, bearing
         interest at the bank's base rate (9.5%
         at December 31, 2000), collateralized
         by the REIT's real estate and the
         assignment of its rents; paid in full
         upon closing of REIT's private equity
         offering in February 2001.


         Interest receivable from Sponsored REITs, paid
         upon closing of private equity offering in
         February 2001.                                          144         --

         Non-interest bearing cash advances due on
         demand from Sponsored REITs.                             90         --
      --------------------------------------------------------------------------

                                                           $  16,734    $    --
      ==========================================================================


                                      F-33
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

7.    Bank Note Payable

      The Partnership has a revolving line of credit agreement (the "Loan
      Agreement") with a bank providing for borrowings up to $35 million
      (increased to $53 million in February 2001). Borrowings under the Loan
      Agreement bear interest at either the bank's base rate or a variable LIBOR
      rate, as defined. Borrowings outstanding under the Loan Agreement consist
      of the following (in thousands):

      December 31,                                             2000        1999
      ==========================================================================

      Note payable, bearing interest at the
         bank's base rate (9.5% at December 31, 2000).      $16,500      $ 3,672

      Note payable, bearing interest at LIBOR plus
         1.25% per annum (7.75% at December 31, 1999).           --       19,850
      --------------------------------------------------------------------------

                                                            $16,500      $23,522
      ==========================================================================

      The Loan Agreement includes restrictions on property liens and requires
      compliance with various financial covenants. Financial covenants include
      the maintenance of at least $1,500,000 in operating cash accounts, a
      minimum tangible net worth of $140,000,000 and compliance with various
      debt and operating income ratios, as defined in the Loan Agreement. The
      Partnership was in compliance with the Loan Agreement's financial
      covenants as of December 31, 2000. Outstanding borrowings of $16,500,000
      at December 31, 2000 were repaid in February 2001. The Loan Agreement
      matures on February 23, 2003.

      The Loan Agreement also provides for personal borrowings of up to
      $3,000,000 by the members of the Partnership's general partner for the
      purpose of acquiring partnership units or paying income taxes thereon.
      Borrowings of $800,000 were outstanding with members of the general
      partner at December 31, 2000, which are guaranteed by the Partnership.


                                      F-34
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

8.    Partners' Capital

      General

      The Partnership's general partner has the exclusive right to manage the
      business of the Partnership and make certain amendments to the Partnership
      Agreement, without the consent or approval of the limited partners. The
      Partnership's limited partners do not take part in management and do not
      have any voting rights regarding the Partnership's operations. A majority
      in interest of the limited partners, with the consent of the general
      partners, may amend the Partnership Agreement, subject to certain
      limitations as defined in the Partnership Agreement.

      Except as provided for under certain Federal tax provisions described in
      the Partnership Agreement, net income or net losses from operations shall
      be allocated to all partners based on their percentage interest in the
      Partnership. Net profits or losses arising from a sale or other
      disposition of all or any portion of the Partnership's property or upon
      liquidation of the Partnership shall be allocated as follows:

      Net Profit - The Partnership's net profits are allocated first to the
      extent of any partner's negative capital account balance, and thereafter
      in proportion with their percentage interest in the Partnership.

      Net Losses - First to the extent of any partner's positive capital account
      balance, and thereafter in proportion with their percentage interest in
      the Partnership.

      The Partnership's cash distributions are allocated to the limited partners
      and the general partner based on each partner's percentage interest in the
      Partnership.

      Equity-Based Compensation

      In April 2000, the Partnership issued 230,000 partnership units with a
      fair value of $2,300,000 to certain officers of the Partnership in lieu of
      cash compensation. The 230,000 partnership units were fully vested on the
      date of issuance. This equity-based compensation charge of $2,300,000 is
      included in selling, general and administrative expenses in the
      accompanying statement of operations for the year ended December 31, 2000.
      Cash distributions paid to the holders of the 230,000 units amounted to
      approximately $117,000 for the year ended December 31, 2000.


                                      F-35
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

8.    Partners' Capital (Continued)

      General Partner Interests


      On December 30, 1999, FSP General Partner LLC (the "General Partner") was
      organized solely to hold the Partnership's general partner units, which
      were previously held by eight individuals. The General Partner's financial
      activities consist of receiving cash distributions from the Partnership
      and paying such amounts to its members. The members of the General Partner
      function as Officers and/or Directors of the Partnership. The Partnership
      pays no fees or other compensation to the General Partner. The General
      Partner has no commitment or intent to furnish direct or indirect
      financial assistance to the Partnership. Total cash distributions paid to
      the General Partner were approximately $930,000, $1,596,000 and $749,000
      for the years ended December 31, 2000, 1999 and 1998, respectively.

9.    Federal Income Tax Reporting


      The difference between Partners' capital for financial reporting purposes
      and for income tax purposes is approximately as follows (in thousands):

      Partners' capital - financial reporting purposes,
        December 31, 2000                                              $180,140

      Partnership's cumulative tax reporting differences,
         primarily relating to non-deductible expenses,
         depreciation and other temporary differences                     1,350
      -------------------------------------------------------------------------

      Partners' capital - income tax purposes,
        December 31, 2000                                              $181,490
      =========================================================================


                                      F-36
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

10.   Commitments

      Rentals Under Operating Leases

      The Partnership's commercial rental operations include the leasing of
      office buildings and industrial properties subject to leases with terms
      greater than one year. The leases thereon expire at various dates through
      2012. The following is a schedule of approximate future minimum rental
      income on non-cancelable operating leases as of December 31, 2000 (in
      thousands):

      Year ended December 31,
      =========================================================================

      2001                                                              $26,719
      2002                                                               14,759
      2003                                                               12,179
      2004                                                                8,444
      2005                                                                3,936
      Thereafter                                                         12,358
      -------------------------------------------------------------------------

                                                                        $78,395
      =========================================================================

      Office

      Lease The Partnership leases its corporate office space under a six year
      operating lease that commenced in June 1999. The lease includes a base
      annual rent and additional rent for the Partnership's share of taxes and
      operating costs.

      Future minimum lease payments are approximately as follows (in thousands):

      Year ended December 31,
      =========================================================================

      2001                                                                 $190
      2002                                                                  199
      2003                                                                  203
      2004                                                                  209
      2005                                                                   97
      -------------------------------------------------------------------------

                                                                           $898
      =========================================================================


                                      F-37
<PAGE>

                                                        Franklin Street Partners
                                            Limited Partnership and Subsidiaries

                                      Notes to Consolidated Financial Statements

      Rent expense was approximately $184,000, $126,000 and $52,000 for the
      years ended December 31, 2000, 1999 and 1998, respectively.

10.   Commitments (Continued)

      Retirement Plan

      During 1999, the Partnership formed a retirement savings plan for eligible
      employees. Under the plan, the Partnership matches participant
      contributions up to $6,000 annually per participant. The Partnership's
      total contribution under the plan amounted to approximately $53,000 and
      $46,000 for the years ended December 31, 2000 and 1999, respectively.


                                      F-38
<PAGE>

Exhibit Index

Exhibits   Description
- --------   -----------

3.1        Certificate of Limited Partnership

3.2        Amendment to Certificate of Limited Partnership

4.1        Third Amended and Restated Limited Partnership Agreement,
           dated as of January 1, 2000

4.2        First Amendment, dated as of January 1, 2000, to Third Amended
           and Restated Limited Partnership Agreement, dated as of
           January 1, 2000

4.3        Second Amendment, dated as of June 26, 2000, to Third Amended
           and Restated Limited Partnership Agreement, dated as of
           January 1, 2000

21         Subsidiaries of the Registrant

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>CERTIFICATE OF LIMITED PARTNERSHIP
<TEXT>


                                                                     Exhibit 3.1

                       CERTIFICATE OF LIMITED PARTNERSHIP
                                       OF
                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP

      Pursuant to the provisions of the Massachusetts Uniform Limited
Partnership Act (the "Act"), the undersigned hereby agrees, certifies and swears
to this Certificate of Limited Partnership creating a limited partnership to be
known as "Franklin Street Partners Limited Partnership":

      1. Name of Partnership. The name of the Partnership is Franklin Street
Partners Limited Partnership (the "Partnership").

      2. Business of Partnership. The character of the business of the
Partnership and its purpose are to own an interest in FSP Investments LLC, a
Massachusetts limited liability company, to own an interest in FSP Property
Management LLC, a Massachusetts limited liability company, and to engage in any
and all activities permitted under the Act.

      3. Office of the Partnership; Agent for Service of Process. The office of
the Partnership for purposes of Section 4(1) of the Act (and the office at which
its records are maintained for purposes of Section 5(a) of the Act) is c/o FSP
Investments LLC, 401 Edgewater Place, Suite 110, Wakefield, Massachusetts 01880.
The name and address of the Partnership's agent for service of process in
Massachusetts is George J. Carter, 5 Megans Way, Gloucester, Massachusetts
01930.

      4. General Partners' Name and Business Address. The names and business
address of the general partners of the Partnership are as follows:

                                George J. Carter
                                R. Scott MacPhee
                                Richard R. Norris
                               William W. Gribbell
                         401 Edgewater Place, Suite 110
                         Wakefield, Massachusetts 01880

      5. Date of Dissolution of the Partnership. The latest date on which the
Partnership is to dissolve is December 31, 2086.


                                       2
<PAGE>

      IN WITNESS WHEREOF, the undersigned, being all the general partners of the
Partnership, have signed and sworn to this Certificate of Limited Partnership
under the penalties of perjury as of this 24th day of January, 1997.


                                          GENERAL PARTNERS


                                                  /s/ George J. Carter
                                          --------------------------------
                                          George J. Carter


                                                  /s/ R. Scott MacPhee
                                          --------------------------------
                                          R. Scott MacPhee


                                                  /s/ Richard R. Norris
                                          --------------------------------
                                          Richard R. Norris


                                                  /s/ William W. Gribbell
                                          --------------------------------
                                          William W. Gribbell


                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>AMENDMENT TO THE CERTIFICATE OF LTD. PARTNERSHIP
<TEXT>


                                                                     Exhibit 3.2

               AMENDMENT TO THE CERTIFICATE OF LIMITED PARTNERSHIP
                                       OF
                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP

      Pursuant to the provisions of ss.9 of the Massachusetts Uniform Limited
Partnership Act (the "Act"), the undersigned hereby agrees, certifies and swears
to the following:

      1. Name of Partnership. The name of the Partnership is Franklin Street
Partners Limited Partnership (the "Partnership").

      2. Date of Filing Certificate. The Certificate of Limited Partnership was
filed on the 4th day of February, 1997.

      3. Date of Dissolution of the Partnership. The latest date on which the
partnership is to dissolve is the 31st day of December, 2060.

      4. The Amendment. The Certificate of Limited Partnership of Franklin
Street Partners Limited Partnership is hereby amended to reflect the withdrawal
of the current general partners: George J. Carter, R. Scott MacPhee, Richard R.
Norris and William W. Gribbell (collectively, the "Withdrawing General
Partners"), from the Partnership and the admission of FSP General Partner LLC,
as sole general partner, each effective as of January 1, 2000.

      IN WITNESS WHEREOF, the undersigned, being the withdrawing general
partners of the Partnership and the new general partner, have signed and sworn
to this Amendment to the Certificate of Limited Partnership under penalties of
perjury as of this 1st day of January, 2000.

WITHDRAWING GENERAL                       SUCCESSOR GENERAL PARTNER:
PARTNERS:


    /s/ George J. Carter                  FSP GENERAL PARTNER LLC
- ----------------------------
George J. Carter

                                          By:    /s/ George J. Carter
                                             -----------------------------------
    /s/ R. Scott MacPhee                     George J. Carter, Managing Member
- ----------------------------
R. Scott MacPhee


    /s/ Richard R. Norris
- ----------------------------
Richard R. Norris


    /s/ William W. Gribbell
- ----------------------------
Willam W. Gribbell

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>AMENDED AND RESTATED LTD. PARTNERSHIP AGREEMENT
<TEXT>


                                                                     Exhibit 4.1

                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP

            THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

      Third Amended and Restated Agreement of Limited Partnership of Franklin
Street Partners Limited Partnership, a Massachusetts limited partnership (the
"Partnership"), dated as of January 1, 2000, among George J. Carter, R. Scott
MacPhee, Richard R. Norris, and William W. Gribbell, each as a general partner
(each of them being sometimes hereinafter referred to individually as a "General
Partner" and collectively as the "General Partners"), Scott H. Carter and
Jeffrey B. Carter as limited partners (the "Class B Limited Partners") and those
Persons listed on Schedule I hereto as limited partners (the "Limited
Partners"). The General Partners, Limited Partners and Class B Limited Partners
are sometimes hereinafter referred to individually as a "Partner" and
collectively as the "Partners." "Person" means any natural person or any
corporation, partnership, limited liability company, trust or other entity.

                              Preliminary Statement

      The Partnership was formed as a limited partnership pursuant to an
Agreement of Limited Partnership dated as of January 24,1997, as amended to date
(the "Original Partnership Agreement") and a Certificate of Limited Partnership
dated as of February 4,1997, filed with the Office of the Secretary of State of
the Commonwealth of Massachusetts (the "'Filing Office") on February 4, 1997.

      The purposes of this amendment to the Original Partnership Agreement are
to (i) provide for the admission of additional Limited Partners to the
Partnership, (ii) set out more fully the rights, obligations and duties of the
General Partners and the Limited Partners, and (iii) amend and restate in its
entirety the Original Partnership Agreement.

      WHEREAS, the Original Partnership Agreement provides that the General
Partners may amend the Original Partnership Agreement, without the consent or
approval of the Limited Partners or Class B Limited Partners, in any manner they
deem necessary or appropriate in connection with establishing, or taking steps
to establish, a public market for the Units (as defined below) of limited
partnership interest;

      WHEREAS, the Original Partnership Agreement provides that the distribution
of cash by the Partnership and allocations of net profits and net losses shall
be made in;

      WHEREAS, the General Partners have determined that allocating
distributions of cash on the basis of units of partnership interest designated
as general partnership interest, limited partnership interest or Class B limited
partnership interest (collectively, "Units") rather than on the basis of fixed
percentages to the Limited Partners, General Partners and Class B Limited
Partners as groups, is an appropriate step for the Partnership to take in
preparing to establish a public market for the Units of limited partnership
interest;
<PAGE>

      WHEREAS, the General Partners have determined that converting the
percentage interests of the General Partners and the Class B Limited Partners
into a number of Units of general partnership interest and Class B limited
partnership, respectively, equal to their respective corresponding percentages
of the total number of Units (taking into account the dilutive effect of the
admission of additional Limited Partners pursuant to this amendment), does not
affect the method of allocation of cash distributions or the method of
allocation of net profits or net losses except by reducing the percentages
thereof allocated to the General Partners and the Class B Limited Partners; and

      WHEREAS, the Class B Limited Partners are consenting to the adoption of
this amendment.

      NOW, THEREFORE, it is hereby agreed that the Original Partnership
Agreement is amended and restated and shall be replaced in its entirety by the
following agreement:

                                   ARTICLE I

                               GENERAL PROVISIONS

      1.01 Name of the Partnership. The name of the Partnership shall be
Franklin Street Partners Limited Partnership, or such other name as the General
Partners may from time to time determine. The General Partners shall cause to be
filed on behalf of the Partnership such partnership or assumed or fictitious
name certificate or certificates as may from time to time be required by law.

      1.02 Business of the Partnership. The business of the Partnership shall be
to (i) hold a 99% interest in FSP Investments LLC, a Massachusetts limited
liability company, (ii) own corporations or other entities organized to act as
general partners of limited partnerships sponsored by FSP Investments LLC
("Sponsored Partnerships"), (iii) hold a 99% interest in FSP Property Management
LLC, a Massachusetts limited liability company, (iv) acquire by merger or
otherwise the Sponsored Partnerships, and (v) engage in any other activity in
which a limited partnership organized under the laws of the Commonwealth of
Massachusetts may lawfully engage. FSP Investments LLC, FSP Property Management
LLC, the entities referred to in clause (ii) above and any other entities in
which the Partnership may hold an equity interest are hereinafter referred to as
"Operating Companies."

      1.03 Place of Business of the Partnership. The principal place of business
of the Partnership shall be located at 401 Edgewater Place, Suite 200,
Wakefield, Massachusetts 01880. The General Partners may, at any time and from
time to time, change the location of the Partnership's principal place of
business, upon written notice of such change to the Limited Partners and Class B
Limited Partners, and may establish such additional place or places of business
of the Partnership as they may from time to time determine.

      1.04 Duration of the Partnership. The Partnership commenced upon the
filing of a Certificate of Limited Partnership for the Partnership in accordance
with the Uniform Limited Partnership Act as enacted in the Commonwealth of
Massachusetts (the "Partnership Act"), and shall have infinite life unless
terminated at an earlier date in accordance with Article VII hereof.


                                      -2-
<PAGE>

      1.05 Partners' Names and Addresses. The names and business address of the
General Partners are:

           George J. Carter
           R. Scott MacPhee
           Richard R. Norris
           William W. Gribbell
           401 Edgewater Place, Suite 200
           Wakefield, Massachusetts 01880

The names and mailing addresses of the Limited Partners are as set forth on
Schedule II hereto. The names and business addresses of the Class B Limited
Partners are set forth on Schedule III hereto.

      1.06 Title to Partnership Property. All property owned by the Partnership,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Partnership as an entity, and no Partner, individually, shall have any
ownership of such property. The Partnership may hold any of its assets in its
own name or in the name of its nominee, which nominee may be one or more
individuals, partnerships, trusts or other entities.

      1.07 Resident Agent. The Partnership's agent for service of process shall
be George J. Carter, 5 Megans Way, Gloucester, Massachusetts 01930, or such
other Person as may be designated by the General Partners in a certificate of
amendment to the Certificate of Limited Partnership of the Partnership filed
with the Secretary of State of Massachusetts. The General Partners shall give
each Limited Partner prompt notice of any change of such agent for service of
process.

      1.08 Certificate of Limited Partnership. Except as otherwise provided
herein, the General Partners shall not be obligated to deliver or mail copies of
the Partnership Certificate of Limited Partnership or any certificate of
amendment thereto or of cancellation thereof to the Limited Partners or Class B
Limited Partners. Such documents will be available for inspection at the offices
of the Partnership as provided in Section 5.01 hereof.

                                   ARTICLE II

                    CAPITAL CONTRIBUTIONS, PROFITS AND LOSSES

      2.01 Capital Contributions.

           (a) The General Partners have contributed $100,003 in cash to the
capital of the Partnership and own the number of Units of general partnership
interest set forth opposite their respective names on Schedule I hereto.

           (b) The Limited Partners have made contributions to the capital of
the Partnership in the amounts, and own the number of Units of limited
partnership interest, set forth opposite their respective names on Schedule II
hereto.


                                      -3-
<PAGE>

           (c) The Class B Limited Partners have made contributions to the
capital of the Partnership in the amounts, and own the number of Units of Class
B limited partnership interest, set forth opposite their respective names on
Schedule III hereto.

           (d) No interest shall accrue on any contributions to the capital of
the Partnership, and no Partner shall have the right to withdraw or to be repaid
any capital contributed by him, except as specifically provided in this
Agreement. No Partner shall be required to contribute any additional capital to
the Partnership.

      2.02 Capital Accounts; Accounting Principles. A separate capital account
shall be maintained for each Partner (a "Capital Account"). Such accounts shall
be maintained and adjusted in accordance with the Internal Revenue Code of 1986,
as amended (the "Code"), and Treasury Regulation ss.1.704-1(b)(2)(iv) and other
applicable regulations under Sections 704(b) and (c) of the Code. There shall be
credited to each Partner's Capital Account the amount of money and the fair
market value of property actually contributed to the Partnership by such
Partner, and there shall be charged to such Capital Accounts the fair market
value of distributions to the Partner and the Partner's share of syndication
costs of the Partnership which are described in Section 709 of the Code.

      There shall also be credited or charged to the Capital Accounts of the
Partners their shares of the income or loss of the Partnership in the
proportions hereinafter set forth. The income or loss of the Partnership for any
fiscal year shall be the taxable income or loss as shown on the Partnership's
Federal income tax return, adjusted as required by the regulations under Section
704 of the Code. In particular, but not in limitation of the foregoing, the
income of the Partnership shall include income exempt from tax and any increases
in basis occasioned by Section 48(q)(2) of the Code, and losses shall include
expenses described in Section 705(a)(2)(B) of the Code (relating (primarily to
expenses incurred in generating income exempt from tax) and decreases in basis
occasioned by Section 48(a)(1) or (3) of the Code.

      If a new Partner is admitted to the Partnership (or the interest of an
existing Partner is increased) by reason of a contribution to it (and not by
reason of purchase of an existing interest in the Partnership), the Capital
Accounts of all Partners and the book basis of Partnership property shall be
adjusted to reflect the fair market value of Partnership property. Subsequent
depreciation and gain or loss on sale of Partnership property shall be based on
such adjusted books for purposes of Capital Accounts. Depreciation for book
purposes shall equal depreciation for tax purposes for any period during which
tax depreciation is allowable, so the only effect of such adjustment to the
Partnership's books will be that depreciation for book purposes will continue
after depreciation for tax purposes has expired. Taxable gain or loss on sale of
Partnership property shall be allocated first to eliminate any discrepancy
between a Partner's book and tax basis for his interest in the property, and
then in the manner in which book gain or loss is allocated.

      For purposes of determining the Partners' capital accounts, repayments of
loans made pursuant to Section 4.03 shall not be treated as distributions to
Partners.


                                      -4-
<PAGE>

      2.03 Definitions.

      For purposes of this Agreement, the following terms shall have the
following meanings:

      "Economic Risk of Loss" means the risk as determined under Treasury
Regulation ss.1-752-2 (taking all applicable "grandfathering" rules into
account) that a Partner or Person related to a Partner will suffer an economic
loss as a result of the failure of the Partnership to repay a liability.

      "Excess Negative Balance" for a Partner means the excess, if any, of (i)
the negative balance in a Partner's Capital Account after reducing such balance
by the net adjustments, allocations and distributions described in Treasury
Regulation ss.1.704-1(b)(2)(ii)(d)(4), (5) and (6) which, as of the end of the
Partnership's taxable year are reasonably expected to be made to such Partner,
over (H) the sum of (A) the amount, if any, which the Partner is required to
restore to the Partnership upon liquidation of such Partner's interest in the
Partnership (or which is so treated pursuant to Treasury Regulations
ss.1104-1(b)(2)(h)(c)), (B) the Partner's Share of Minimum Gain and (C) that
portion of any indebtedness of the Partnership (other than Partner Nonrecourse
Debt) with respect to which the Partner bears the Economic Risk of Loss that
such indebtedness would not be repaid out of the Partnership's assets if all of
the Partnership's assets were sold at their respective tax basis as of the end
of the fiscal year or other period and the proceeds from the sales together with
any amounts described in clause (A), above, were used to pay the Partnership's
liabilities.

      "Net Profits" and "Net Losses" mean the taxable income or loss, as the
case may be, for a period (or from a transaction) as determined in accordance
with Code Section 703(a) computed with any adjustments required by Treasury
Regulation ss.1.704-1(b)(2)(iv).

      "Minimum Gain" means the amount determined by computing with respect to
each Nonrecourse Debt of the Partnership, the amount of gross income, if any,
that would be realized by the Partnership if it disposed of the property
securing such debt in full satisfaction thereof, and by then aggregating the
amounts so computed.

      "Nonrecourse Debt" means any Partnership liability to the extent that the
liability is nonrecourse for purposes of Treasury Regulation ss.1.1001-2.

      "Nonrecourse Deductions" for a taxable year means deductions funded by
Nonrecourse Debt as determined under Treasury Regulation ss.ss.1.704-2(c) and
1.704-2(i)(2).

      "Partner Nonrecourse Debt" means any Nonrecourse Debt to the extent that a
Partner bears the Economic Risk of Loss associated with the debt.

      "Partnership Capital" means the fair market value of all of the
Partnership's assets reduced by the amount of all of the Partnership's
liabilities.

      "Share of Minimum Gain" means, for each Partner, the sum of such Partner's
share of Minimum Gain attributable to Nonrecourse Debt other than Partner
Nonrecourse Debt (computed in accordance with Treasury Regulation ss.1.704-2(g))
and such Partner's share of


                                      -5-
<PAGE>

Minimum Gain attributable to Partner Nonrecourse Debt (computed in accordance
with Treasury Regulation ss.1.704-2(i)(5)).

      2.04 Allocation of Net Profits and Net Losses.

           (a) Except as provided in Sections 2.05 and 2.06 below (which shall
be applied first), the Net Profits and Net Losses of the Partnership from
operations 'for any year (or other fiscal period) shall be allocated pro rata
among the Partners in proportion to the number of Units held by each of them.

           (b) Except as provided in Sections 2.05 and 2.06 below (which shall
be applied first), any Net Profits arising from a sale or other disposition of
all or any portion of the Partnership's property or upon liquidation of the
Partnership shall be allocated as follows:

               (i) First, to any Partners having negative Capital Account
                   balances, in proportion to and to the extent of such negative
                   balances; and

               (ii) The balance, if any, to the Partners in such proportions and
                   in such amounts as would result in the respective Capital
                   Account balance of each Partner equaling, as nearly as
                   possible, such Partner's share of the then Partnership
                   Capital determined by calculating the amount the Partner
                   would receive if an amount equal to the Partnership Capital
                   were distributed to the Partners in accordance with the
                   provisions of Section 3.01.

           (c) Except as provided in Sections 2.05 and 2.06 below (which shall
be applied first), any Net Losses arising from a sale or other disposition of
all or any portion of the Partnership's property or upon liquidation of the
Partnership shall be allocated among the Partners as follows:

               (i) First, to each Partner with a positive Capital Account
                   balance, in the amount of such positive balance; provided,
                   however, that if the amount of Net Losses to be allocated is
                   less than the sum of the Capital Account balances of all
                   Partners having positive Capital Account balances, then the
                   Net Losses shall be allocated to the Partners in such
                   proportions and in such amounts as would result in the
                   respective Capital Account balance of each Partner equaling,
                   as nearly as possible, such Partner's share of the then
                   Partnership Capital determined as set forth in Section
                   2.04(b)(ii) above; and

               (ii) The balance, if any, pro rata to the Partners in accordance
                   with the number of Units held by each of them.

           (d) If the amount of Net Profits allocable to the Partners pursuant
to Section 2.04(b)(ii) or the amount of Net Losses allocable to them pursuant to
Section 2.04(c)(i) is insufficient to allow the Capital Account balance of each
Partner to equal such Partner's share of the Partnership Capital, such Net
Profits or Net Losses shall be allocated among the Partners in


                                      -6-
<PAGE>

such a manner as to decrease the differences between the Partners' respective
Capital Account balances and their respective shares of the Partnership Capital
in proportion to such differences.

      2.05 Allocations of Nonrecourse Deductions and Minimum Gain.

      Notwithstanding the provisions of Section 2.04 above, the following
allocations of gross income and Nonrecourse Deductions shall be made in the
following order of priority:

           (a) If in any year there is a net decrease in the amount of Minimum
Gain attributable to either (i) Nonrecourse Debt that is not Partner Nonrecourse
Debt or (ii) Partner Nonrecourse Debt, then each Partner shall first be
allocated items of gross income for such year (and, if necessary, subsequent
years) in an amount equal to such Partner's share of the net decrease in such
Minimum Gain (determined in accordance with Treasury Regulation
ss.ss.1.704-2(g)(2) and 1.704-2(i)(5)) to the minimum extent required by, and in
the manner specified in, Treasury Regulation ss.ss.1.704-2(f) and 1.704-2(i)(4).

           (b) All Nonrecourse Deductions of the Partnership for any year, other
than Nonrecourse Deductions attributable to Partner Nonrecourse Debt, shall be
allocated in the same manner and proportions as are the Net Profits or Net
Losses of the Partnership for such year.

All Nonrecourse Deductions of the Partnership for any year attributable to
Partner Nonrecourse Debt shall be allocated to the Partners who bear the
Economic Risk of Loss with respect to the debt.

      2.06 Overriding Allocations of Net Profits and Net Losses.

      Notwithstanding the provisions of Section 2.04 above, but subject to the
provisions of Section 2.05 above, the following allocations of Net Profits and
Net Losses and items thereof shall be made:

           (a) If, during any year a Partner receives any adjustment, allocation
or distribution described in Treasury Regulation ss.1.704-1(b)(2)(ii)(d)(4), (5)
or (6), and, as a result of such adjustment, allocation or distribution, such
Partner's Capital Account has an Excess Negative Balance, then items of income
for such year (and, if necessary, subsequent years) shall first be allocated to
such Partner in an amount equal to such Partner's Excess Negative Balance.

           (b) In no event shall Net Losses of the Partnership be allocated to a
Partner if such allocation would cause or increase an Excess Negative Balance in
such Partner's Capital Account.

           (c) In the event that Net Profits, Net Losses or items thereof are
allocated to one or more Partners pursuant to subsections (a) or (b) above,
subsequent Net Profits and Losses will first be allocated (subject to the
provisions of subsections (a) and (b)) to the Partners in a manner designed to
result in each Partner having a Capital Account balance equal to what it would
have been had the original allocation of Net Profits, Net Losses or items
thereof pursuant to subsections (a) or (b) not occurred.


                                      -7-
<PAGE>

           (d) Except as otherwise provided herein or as required by Code
Section 704, for tax purposes, all items of income, gain, loss, deduction or
credit shall be allocated to the Partners in the same manner as are Net Profits
and Net Losses.

           (e) Allocation of items of income, gain, loss, deduction or credit
attributable to interests owned by the Partnership in entities which are treated
as partnerships for Federal income tax purposes shall be allocated in accordance
with the provisions of Treasury Regulation ss.1.704-2(k).

           (f) The respective interests of the Partners in the net profits and
net losses of the Partnership shall remain as set forth above unless changed by
amendment to this Agreement or by a transfer of an interest in the Partnership
authorized by the terms of this Agreement.

           (g) If Units are transferred by a Partner other than on the first day
of the Partnership's fiscal year, as between transferor and transferee net
profits and net losses for the year of transfer shall be allocated on the basis
of the number of days in such year that each was the owner of the Unit(s)
transferred without regard to the results of the Partnership's operations during
the periods before and after such transfer.

           (h) In the event the Partnership shall, at any time, whether pursuant
to the dissolution of the Partnership or otherwise, distribute any property in
kind, the difference, if any, between the fair market value of such property and
the value at which such property is carried on the books of the Partnership
shall be credited (or charged) to the capital accounts of the Partners in
accordance with the manner in which the Partners would have shared in the gain
or loss from the sale of such property prior to such distribution.

      2.07 Minimum Allocations to General Partners. Notwithstanding the other
provisions of this Article II the General Partners shall receive at least 1% of
each item of income, gain, loss, deduction or credit allocated to the Partners
hereunder.

                                  ARTICLE III

                               CASH DISTRIBUTIONS

      3.01 Distribution of Cash. Cash available for distribution to Partners,
shall, in amounts which shall be the sole discretion of the General Partners, be
distributed within 90 days following the end of each fiscal quarter, subject to
the prior payment of all Partnership fees and obligations as they become due
(including, without limitation, the loans described in Section 4.03 and the
expenses described in Section 4.09 hereof), pro rata to the Partners in
proportion to the number of Units held by each of them.


                                      -8-
<PAGE>

                                   ARTICLE IV

                                   MANAGEMENT

      4.01 Management of the Partnership.

           (a) The overall management and control of the business and affairs of
the Partnership shall be vested solely in the General Partners. Unless and until
revoked by the holders of a majority of the Units of general partnership
interest (such number is referred to herein as "a majority in interest of the
General Partners"), George J. Carter shall be the Managing General Partner and,
except as provided in Section 4.01(b) hereof, the Managing General Partner shall
have the full, exclusive and complete discretion in the management and control
of the business of the Partnership for the purposes herein stated and shall make
all decisions affecting the business of the Partnership and shall exercise all
of the powers, duties and responsibilities of the General Partners under this
Agreement. A majority in interest of the General Partners may, at any time,
revoke the Managing General Partner's authority to manage and control the
affairs of the Partnership and designate another General Partner to be the
Managing General Partner by giving notice to the Managing General Partner of
such election to revoke and designate, whereupon the business of the Partnership
will be managed and controlled by, the new Managing General Partner. No Person
dealing with the Partnership shall be required to inquire (i) into the authority
of any General Partner to take any action or to make any decision hereunder or
(ii) as to whether any necessary consents of other Partners have been obtained.

           (b) Notwithstanding anything herein to the contrary, the following
actions shall require the approval of a majority in interest of the General
Partners:

               (i)   the disposition of all or substantially all of the
                     Partnership's interest in an Operating Company;

               (ii)  the acquisition of an interest in an Operating Company;

               (iii) any amendment to this Agreement;

               (iv)  the removal of a General Partner, with or without Cause;

               (v)   the admission of an additional General Partner or
                     additional Limited Partner; or

               (vi)  the dissolution of the Partnership.

      4.02 Authority of the General Partners.

           (a) Except as otherwise expressly provided in this Agreement, all
decisions respecting any matter set forth herein or otherwise affecting or
arising out of the conduct of the business of the Partnership shall be made by
the General Partners and the General Partners shall have the exclusive right and
full authority to manage, conduct and operate the Partnership's business.
Specifically, but not by way of limitation, and subject to Section 4.01 and
subsection (c) hereof, the General Partners shall be authorized in the name and
on behalf of the Partnership:


                                      -9-
<PAGE>

               (1) to borrow money and, as security therefor, to mortgage,
           pledge or otherwise encumber the assets of the Partnership;

               (2) to cause to be paid all amounts due and payable by the
           Partnership to any Person;

               (3) to employ such agents, employees, managers, accountants,
           attorneys, consultants and other Persons necessary or appropriate to
           carry out the business and affairs of the Partnership, whether or not
           any such Persons so employed are affiliated or related to any
           Partner, and to pay such fees, expenses, salaries, wages and other
           compensation to such Persons as any of them shall in his sole
           discretion determine; provided, however, that any Person employed by
           the Partnership which is affiliated with or related to' any Partner
           shall not be employed upon terms and conditions materially more
           favorable than the Partnership would obtain from an unrelated third
           party for similar service;

               (4) to pay, extend, renew, modify, adjust, submit to arbitration,
           prosecute, defend or compromise, upon such terms as any of them may
           determine and upon such evidence as any of them may deem sufficient,
           any obligation, suit, liability, cause of action or claim, including
           tax claims, either in favor of or against the Partnership;

               (5) to compromise the obligation of a Partner to make a
           contribution to the capital of the Partnership or to return to the
           Partnership money or other property paid or distributed to such
           Partner in violation of the Uniform Limited Partnership Act as
           enacted in the Commonwealth of Massachusetts;

               (6) to pay any and all fees and to make any and all expenditures
           which any of them, in his sole discretion, deems necessary or
           appropriate in connection with the organization of the Partnership,
           the offering and sale of limited partnership interests therein, the
           management of the affairs of the Partnership, and the carrying out of
           his obligations and responsibilities under this Agreement;

               (7) to exercise the rights and fulfill the obligations of the
           Partnership as an owner of an equity interest in any Operating
           Company, including without limitation the giving of any consent,
           approval or waiver and the taking of any actions permitted to be
           taken by the Partnership under the governing documents of an
           Operating Company;

               (8) to cause to be obtained and continued in force all policies
           of insurance which the General Partners deem reasonably necessary for
           the protection of the Partnership, from such insurer or insurers as
           the General Partners may, in their sole discretion, select;

               (9) to cause to be paid any and all taxes, charges and
           assessments that may be levied, assessed or imposed upon any of the
           assets of the Partnership, and, if they so determine, to contest any
           such taxes, charges or assessments;


                                      -10-
<PAGE>

               (10) to serve as the tax matters partner for the Partnership,
           pursuant to Sections 6221-6233 of the Code;

               (11) to acquire interests in Operating Companies and to sell or
           otherwise dispose of or finance or refinance all or any portion of
           the Partnership's interest in an Operating Company;

               (12) to execute such documents as the General Partners deem
           necessary or advisable to reflect the Partnership's ownership of its
           interest in an Operating Company as may be required;

               (13) to make all applicable elections under the Code;

               (14) to exercise all powers and authority granted to general
           partners pursuant to the Partnership Act; and

               (15) to enter into any other agreements on behalf of the
           Partnership regardless of whether they extend beyond the term of the
           Partnership.

           (b) With respect to all of their obligations, powers and
responsibilities under this Agreement, the General Partners are, and each of
them is, authorized to execute and deliver, for and on behalf of the
Partnership, such notes and other evidences of indebtedness, contracts,
agreements, assignments, deeds, leases, loan agreements, mortgages and other
security instruments and agreements as any of them deems proper, all on such
terms and conditions as any of them deems proper.

           (c) Notwithstanding anything to the contrary herein contained, the
General Partners shall have no authority to, and they covenant and agree that
they will not, (i) commingle the Partnership's funds with funds of any other
natural person, partnership, corporation, association or other legal entity;
(ii) do any act in contravention of this Agreement or the Certificate of Limited
Partnership of the Partnership which would make it impossible to carry on the
ordinary business of the Partnership; or (iii) possess any Partnership property
or assign the right of the Partnership in specific Partnership property for
other than a Partnership purpose.

      In no event shall the General Partners enter into any loan, lease or other
obligation, whether or not set forth above, that shall provide or purport to
provide for the personal liability of any Limited Partner or Class B Limited
Partner thereunder.

           (d) The Managing General Partner shall be the "tax matters partner"
of the Partnership for Federal income tax purposes. Pursuant to Section
6223(c)(3) of the Code, upon receipt of notice from the Internal Revenue Service
("IRS") of the beginning of an administrative proceeding with respect to the
Partnership, the Managing General Partner, as the tax matters partner, agrees to
furnish the Internal Revenue Service with the names, addresses and profits
interests of each of the Limited Partners and Class B Limited Partners. The
Managing General Partner agrees not to enter into a settlement agreement
pursuant to Section 6224 of the Code without providing at least 30 days' advance
written notice to each Limited Partner of the terms of the settlement. If the
Partnership receives from the IRS a Final Partnership Administrative Adjustment
pursuant to Code Section 6223, and if it is determined to seek judicial review
of such


                                      -11-
<PAGE>

IRS action pursuant to Code Section 6226, then the tax matters partner shall
select the judicial forum for such review.

      The tax matters partner shall receive no compensation for his services.
All third party costs and expenses incurred by the tax matters partner in
performing his duties as such shall be borne by the Partnership. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm,
law firm, or any other advisor to assist the tax matters partner in discharging
his duties hereunder. The Partnership hereby indemnifies and holds harmless the
Managing General Partner from and against any claim, loss, liability action or
damage resulting from his action or his failure to take any action as the "tax
matters partner, provided that any such action or failure to act was not
willful.

           (e) The General Partners shall at all times use their best efforts to
meet all requirements of the Code and currently applicable regulations, rulings
and revenue procedures of the IRS and to meet any further requirements set by
Congress, the IRS, any agency of the federal government or the courts 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.

      4.03 Loans by General Partners to the Partnership. To the extent the
Partnership does not have available to it from other sources sufficient funds to
enable the Partnership to meet its costs, expenses, obligations, liabilities and
charges, or to make any expenditure authorized by this Agreement, the General
Partners shall advance such funds to the Partnership, up to a maximum aggregate
amount outstanding at any time of $1,000,000. Notwithstanding the provisions of
Section 4.01(a), the foregoing obligation to advance funds shall be the joint
and several obligation of the General Partners. All amounts so advanced shall
take the form of a loan and shall bear interest at a rate equal to the "prime
rate" announced from time to time by Fleet Bank, N.A., or any successor bank
thereto, plus two percent (2%). Such loans will be repaid prior to any other
distributions to the Partners.

      4.04 Services of the General Partners. During the existence of the
Partnership, the General Partners shall devote such time and effort to the
Partnership business as may be necessary to promote adequately the interests of
the Partnership and the mutual interests of the Partners; however, it is
specifically understood and agreed that the General Partners shall not be
required to devote full time to Partnership business, and the General Partners
may at any time and from time to time engage in and possess interests in other
business ventures of any and every type and description, including, without
limitation, the ownership, operation, financing, and management of real estate,
independently or with others, and neither the Partnership nor any Partner shall
by virtue of this Agreement have any right, title or interest in or to such
independent ventures.

      4.05 Liability of the General Partners; Indemnification.

           (a) The General Partners shall not be personally liable for the
return of the capital contributions of the Limited Partners or Class B Limited
Partners, it being expressly understood that any return of capital shall be made
solely from the assets of the Partnership; nor shall the General Partners be
required to pay to the Partnership or to any Limited Partner or Class B Limited
Partner any capital deficits upon dissolution or otherwise. The General Partners
shall


                                      -12-
<PAGE>

not be liable, responsible or accountable in damages or otherwise to the
Partnership or any of the Partners for any act or omission performed or omitted
by any of them in good faith and in a manner reasonably believed by such General
Partner to be within the scope of authority granted by this Agreement and in the
best interests of the Partnership if such General Partner shall not have been
guilty of gross negligence or willful misconduct with respect to such acts or
omissions.

           (b) The Partnership shall save harmless and indemnify each General
Partner (which term shall for the purposes of this Section 4.05 include
employees, agents, partners, officers and directors of a General Partner) to the
fullest extent permitted by law against any cost, expense (including attorneys'
fees), loss, damage, judgment or liability reasonably incurred by or imposed
upon him or it in connection with any action, claim, suit or proceeding
(including any proceeding before any administrative or legislative body or
agency) to which he may be made a party or otherwise involved or with which he
shall be threatened by reason of being a General Partner or by reason of having
served, at the request of the Partnership, as a director, trustee or officer of
a corporation or other business entity or partner of a partnership in which the
Partnership owns or owned an interest or of which the Partnership is or was a
creditor (whether or not he continues to be a General Partner or an officer,
director or trustee of such corporation or other business entity or partner of a
partnership at the time such action, claim, suit or proceeding is brought or
threatened). No indemnification shall be provided hereunder with respect to
matters as to which the Person seeking indemnification shall have been finally
adjudicated in any such action, suit or proceeding not to have acted in good
faith in the reasonable belief that his action was in or not inconsistent with
the best interests of the Partnership. The foregoing right of indemnification
shall be in addition to any rights to which the General Partners may otherwise
be entitled and shall inure to the benefit of the successors, assigns, executors
or administrators of each General Partner. The Partnership may, but shall not be
required to, pay the expenses incurred by any Person indemnified hereunder in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding, upon receipt of an undertaking
by such indemnified person to repay such payment if there shall be an
adjudication or determination that he is not entitled to indemnification as
provided herein, which undertaking may be accepted without reference to the
financial ability of such person to make repayment.

           (c) The General Partners may cause the Partnership to purchase and
maintain, at the expense of the Partnership, insurance on behalf of any General
Partner, an officer, director or stockholder of any corporate General Partner, a
partner in any General Partner which is itself a partnership or any agent
appointed by any General Partner, which shall insure such parties against any
liability asserted against all or any of them in any such capacity or arising
out of their status as such.

           (d) All judgments against the Partnership and the General Partners,
wherein the General Partners are entitled to indemnification, must first be
satisfied from Partnership assets before any General Partner is responsible for
these obligations.

      4.06 Limitations on Limited Partners. Neither any Limited Partner nor any
Class B Limited Partner in its capacity as such shall: (a) be permitted to take
part in the control of the business or affairs of the Partnership; (b) have any
voice in the management or operation of any


                                      -13-
<PAGE>

Partnership property; or (c) have the authority or power in his capacity as a
Limited Partner or Class B Limited Partner to act as agent for or on behalf of
the Partnership or any other Partner, to do any act which would be binding on
the Partnership or any other Partner, or to incur any expenditures on behalf of
or with respect to the Partnership.

      4.07 Liability of Limited Partners. So long as he complies with the
provisions of Section 4.06, the liability of each Limited Partner and Class B
Limited Partner for the losses, debts and obligations of the Partnership shall
be limited to his capital contribution and his share of any undistributed net
profits; provided, however, that under applicable partnership law, a Limited
Partner or Class B Limited Partner may be liable to the Partnership to the
extent of previous distributions made to him in the event that the Partnership
does not have sufficient assets to discharge its liabilities.

      4.08 Evidence of General Partner Authority.

           (a) Every contract, deed, mortgage, lease and other instrument
executed by a General Partner shall be conclusive evidence in favor of every
Person relying thereon or claiming thereunder that at the time of the delivery
thereof:

               (1) the Partnership was in existence,

               (2) this Agreement had not been terminated or cancelled or
           amended in any manner so as to restrict such authority (except as
           shown in certificates or other instruments duly filed in the office
           of the Secretary of State of the Commonwealth of Massachusetts), and

               (3) the execution and delivery of such instruments were duly
           authorized by the General Partners.

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

               (1) as to who are the General Partners, Limited Partners and
           Class B Limited Partners hereunder;

               (2) as to the existence or nonexistence of any fact or facts
           which constitute conditions precedent to acts by the General Partners
           or in any other manner germane to the affairs of the Partnership;

               (3) as to who is authorized to execute and deliver any instrument
           or document of the Partnership;

               (4) as to the authenticity of any copy of this Agreement and
           amendments hereto; or

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


                                      -14-
<PAGE>

      4.09 Certain Expenses. All out-of-pocket expenses incurred by each General
Partner in connection with the Partnership's organization, formation or business
shall be paid by the Partnership or reimbursed to each General Partner by the
Partnership.

      4.10 Meetings.

           (a) A meeting of the Partners for the purpose of acting upon any
matter upon which the Limited Partners are entitled to vote may be called by the
General Partners at any time and shall be called by the General Partners no more
than 15 days after receipt of a written request for such a meeting signed by
that number of Limited Partners owning an aggregate number of Units of limited
partnership interest which are equal to or greater than 25% of the aggregate
number of Units of limited partnership interest owned by all Limited Partners
(such number of Limited Partners is referred to herein as "25% in interest of
the Limited Partners"). The General Partners shall give written notice of any
such meeting to all Limited Partners, and such meeting shall be held no more
than 60 days after the General Partners send such notice to the Limited
Partners.

           (b) At any meeting of Limited Partners the presence in person of that
number of Limited Partners whose aggregate number of Units are equal to or
greater than a majority of the aggregate number of Units of limited partnership
interest (such number of Limited Partners is referred to herein as "a majority
in interest of Limited Partners") shall be necessary to constitute a quorum for
the transaction of business. If such quorum is not present on the date for which
the meeting is called within one-half hour after the time fixed for the holding
of such meeting, the meeting shall be adjourned to be held not earlier than ten
days and not later than 21 days thereafter. Notice shall be given promptly to
all Limited Partners of the time and place of the adjourned meeting. Any
business may be transacted at the adjourned meeting which might properly have
been transacted at the original meeting. A General Partner shall serve as
chairman at any such meeting and shall establish rules of procedure for such
meeting.

           (c) The General Partners may, and, no more than 15 days after receipt
of a written request signed by 25% in interest of the Limited Partners, the
General Partners shall, submit any matter upon which the Limited Partners are
entitled to vote to the Limited Partners for a vote by written consent without a
meeting. Such written consents shall be treated for all purposes as votes at a
meeting.

           (d) Subject to the provisions of Section 4.11(b), any action which
may be taken at a meeting in accordance with this Section 4.10 may be taken by
the General Partners with the prior written consent of a majority in interest of
the Limited Partners.

      4.11 Rights of Limited Partners.

           (a) A majority in interest of the Limited Partners, with the consent
of the General Partners may amend this Agreement subject to the limitations that
such amendment (A) shall not in any manner allow the Limited Partners or Class B
Limited Partners to take part in the control of the Partnership's business or
otherwise modify their limited liability, (B) shall not, without the consent of
the General Partner affected, alter the rights, powers and duties of such
General Partner as set forth in Articles IV and V, the capital contribution of
such General Partner


                                      -15-
<PAGE>

as set forth in Section 2.01, the interest of such General Partner in net
profits and net losses as set forth in Section 2.04 (except as the interest of
the General Partners may be altered as a group), the interest of such General
Partner in distributions of cash as set forth in Article III or the interest of
such General Partner in distributions upon liquidation as set forth in Section
7.02 (except as the interest of the General Partners may be altered as a group),
or the obligation of the Partnership to purchase the interest of the General
Partner as set forth in Section 4.12(c), (C) shall not alter any Limited
Partner's share of profits, losses, or distributions, except as the share of the
Limited Partners may be altered as a group and shall not alter any Class B
Limited Partner's share of profits, losses or distributions without the consent
of such Class B Limited Partner, and (D) shall not alter the limitations set
forth in clauses (A), (B) and (C).

           (b) The voting rights of the Limited Partners set forth in this
Section 4.11 shall not be effective and any votes taken pursuant thereto shall
be void ab initio if prior to or within 15 days after such vote either (i) the
Partnership has received an opinion of counsel that such action may not be
effective without subjecting the Limited Partners to liability as general
partners under Massachusetts law or the law of any other jurisdiction in which
the Partnership owns property and is doing business or (ii) a court of competent
jurisdiction shall have entered a final judgment to the foregoing effect.

      4.12 Withdrawal, Removal and Resignation of a General Partner.

           (a) Except as otherwise provided in this Section 4.12, a General
Partner shall not retire or withdraw from the Partnership and shall not
transfer, sell, alienate, assign or otherwise dispose of all or any part of its
interest as a General Partner, whether voluntarily, involuntarily, by operation
of law, at judicial sale or otherwise.

           (b) A General Partner who (i) voluntarily withdraws as a General
Partner from the Partnership prior to January 1, 2000 or (ii) is required to
withdraw for Cause (as defined below) by vote of a majority in interest of the
General Partners, shall relinquish his interest as a General Partner in the
Partnership immediately upon such withdrawal, and such interest shall thereupon
be converted to the interest of a Limited Partner in the Partnership and shall
be allocated among the Limited Partners, pro rata in accordance with their
respective ownership of Units.

           (c) Any General Partner who (i) voluntarily withdraws as a General
Partner in the Partnership on or after January 1, 2000, (ii) dies, (iii) is
adjudicated incompetent by a court of competent jurisdiction, (iv) becomes
bankrupt (which shall mean the occurrence of one of the events specified in
Sections 23(4) and (5) of the Partnership Act in effect on the date hereof or
(v) is required to withdraw without Cause by a vote of a majority in interest of
the General Partners, shall sell, and the Partnership shall purchase, such
General Partner's interest in the Partnership for a price equal to the fair
market value of such interest. The effective date of the sale shall be the date
on which the event specified in clauses (i) through (v) of this Section 4.12(c)
occurs, and on such date the General Partner's interest in the Partnership shall
be converted to that of a Limited Partner and shall be allocated among the
remaining Partners, pro rata in accordance with their respective interests in
cash available for distribution as set forth in Article III hereof. The purchase
price for such General Partner's interest shall be paid by the Partnership
within 30 days of the date of determination of the fair market value of such
General


                                      -16-
<PAGE>

Partner's interest by, at the election of the remaining General Partners, either
(A) payment m cash of the full amount of such purchase price or (B) delivery of
a promissory note in the principal amount of such purchase price, payable in
three equal consecutive annual installments commencing on the first anniversary
of the effective date of the sale. Such promissory note shall bear interest at
the "prime rate" charged from time to time by Fleet Bank, N.A., or any successor
bank thereto, plus 2%, payable annually on the date that the principal payment
for such year is due and payable. Such fair market value shall be determined by
agreement of such withdrawing General Partner and the remaining General
Partners. If they are unable to reach agreement within 30 days of the effective
date of the sale, such fair market value shall be determined by two independent
appraisers, one selected by the withdrawing General Partner and one by the
remaining General Partners. If such appraisers are unable to agree on the value
of the former General Partner's interest in the Partnership, they shall jointly
appoint a third independent appraiser whose determination shall be final and
binding. The cost of the appraisal shall be borne equally by the withdrawing
General Partner and the Partnership.

           (d) For purposes of this Section 4.12, "Cause" shall mean (i)
dishonesty or intentional misconduct by the General Partner in connection with
the performance by him of his duties as a General Partner or as an employee of
an Operating Company, (ii) the material failure by a General Partner to perform
his duties and obligations under this Agreement or as an employee of an
Operating Company, (iii) conduct by a General Partner of a criminal nature which
has an adverse impact on the Partnership or an Operating Company, (iv) conduct
by a General Partner which is a material breach of such General Partner's
fiduciary duties to the Partnership and the other Partners or (v) fraudulent
conduct by a General Partner in connection with the business affairs of the
Partnership or an Operating Company.

           (e) Notwithstanding anything to the contrary in this Agreement, the
General Partners may unanimously contribute their interests in the Partnership
to a limited liability company, partnership or similar entity, which shall
thereupon be admitted as the General Partner of the Partnership, and such
contribution shall not constitute a withdrawal for purposes of Sections 4.12(b)
or 4.12(c).

      4.13 Successor and Additional General Partners.

           (a) Any Person may, without the consent of the Limited Partners or
Class B Limited Partners but with the consent of a majority in interest of the
General Partners, be admitted as an additional or successor General Partner, to
the extent permitted by law, upon his agreeing to be bound by the provisions of
this Agreement to the same extent and on the same terms and conditions as the
General Partners then serving as such. Any such additional or successor General
Partner shall, as a condition of receiving any interest in the Partnership, also
agree to be bound by the Massachusetts Uniform Limited Partnership Act and any
agreements, contracts, leases, instruments or other documents theretofore
executed and delivered on behalf of the Partnership to the same extent and on
the same terms and conditions as the General Partners then serving as such. Each
Limited Partner and Class B Limited Partner by agreeing to become such and by
his execution of a counterpart of the signature page of this Agreement hereby
consents to the admission of any such Person as a successor or additional
General Partner on the terms and conditions set forth above.


                                      -17-
<PAGE>

           (b) Notwithstanding the withdrawal of a General Partner, and in
addition to his other obligations herein contained, such General Partner shall
remain liable for payment of all debts, obligations, liabilities and commitments
of the Partnership incurred while he was a General Partner, to the extent (i)
the Partnership does not have funds available for such payment and (ii) such
debts, obligations, liabilities and commitments of the Partnership provide for
the personal liability of such General Partner or of the Partnership thereunder.

      4.14 Additional Limited Partners. With the consent of a majority in
interest of the General Partners, additional Limited Partners or additional
limited partners of a new class of limited partnership interest may be admitted
as partners of the Partnership.

                                    ARTICLE V

                        BOOKS, RECORDS AND BANK ACCOUNTS

      5.01 Books and Records. The General Partners shall keep just and true
books of account with respect to the operations of the Partnership. Such books
shall reflect, to the extent applicable, that the limited partnership interests
have not been registered under the Securities Act of 1933, as amended (the
"Act") and that the interests may not be sold or transferred without
registration under the Act or exemption therefrom or without compliance with
Section 6.01 of this Agreement. Such books shall be maintained at the principal
place of business of the Partnership, or at such other place as the General
Partners shall determine, and all Partners, and their duly authorized
representatives, shall at all reasonable times have access to such books.

      5.02 Accounting Basis and Fiscal Year. The Partnership's books of account
shall be kept on the tax basis accrual method of accounting, or on such other
method of accounting as the General Partners may from time to time determine,
and shall be dosed and balanced at the end of each Partnership year. The same
method of accounting shall be used for both Partnership accounting and tax
purposes. The fiscal year of the Partnership shall be the calendar year.

      5.03 Reports. Until the Units of limited partnership interest shall have
been registered under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), within 90 days after the end of each fiscal year, the General
Partners shall cause to be prepared and sent to each Person who was a Limited
Partner or Class B Limited Partner at any time during the fiscal year then ended
a financial report of the Partnership, including a balance sheet and a profit
and loss statement, and, if such profit and loss statement is not prepared on a
cash basis, a cash flow or Source and application of funds statement. Within 90
days after the end of each fiscal year, the General Partners shall furnish each
Limited Partner and Class B Limited Partner with such information as may be
needed to enable such Limited Partner or Class B Limited Partner to file his
Federal income tax return and any required state income tax return. The cost of
all such reporting shall be paid by the Partnership as a Partnership expense.
Until the Units shall have been registered under the Exchange Act, any Partner
may, at any time, at his own expense, cause an audit of the Partnership books to
be made by a certified public accountant of his own selection.

      5.04 Bank Accounts. The General Partners shall be responsible for causing
one or more accounts to be maintained in a bank or banks which is a member of
the Federal Deposit


                                      -18-
<PAGE>

Insurance Corporation, which accounts shall be used for the payment of the
expenditures incurred by the General Partners in connection with the business of
the Partnership, and in which shall be deposited any and all cash receipts. All
such amounts shall be and remain the property of the Partnership, and shall be
received, held and disbursed by the General Partners for the purposes specified
in this Agreement. There shall not be deposited in any of said accounts any
funds other than funds belonging to the Partnership, and no other funds shall in
any way be commingled with such funds.

                                   ARTICLE VI

                  ASSIGNABILITY OF INTEREST OF LIMITED PARTNERS

      6.01 Assignment of a Limited Partner's Interest. A Limited Partner may not
sell, transfer, assign, pledge, or otherwise dispose of or encumber all or any
part of his or its economic interest in the Partnership whether voluntarily,
involuntarily or by operation of law) unless all of the following conditions
shall have been satisfied:

           (a) unless the Units of limited partnership interest shall have been
listed for trading on a national stock exchange, the General Partners shall have
previously consented to such assignment in writing, the granting or denying of
which consent shall be in the General Partners' absolute discretion (except that
the General Partners' consent shall not be required for assignment or transfers
occurring pursuant to the death, incompetency or dissolution of a Limited
Partner);

           (b) no such assignment shall be made if, in the opinion of counsel to
the Partnership, such assignment may not be effected without registration under
the Act, would cause the Partnership to become subject to the Investment Company
Act of 1940, as amended or would result in the violation of any applicable state
securities laws;

           (c) the Partnership shall not be required to recognize any such
assignment until the instrument conveying such interest has been delivered to
the General Partners for recordation on the books of the Partnership;

           (d) unless an assignee becomes a Substituted Limited Partner in
accordance with the provisions set forth below, he shall not be entitled to any
of the rights granted to a Limited Partner hereunder, other than the right
(unless prohibited by Section 6.01(b) hereof) to receive all or part of the
share of the net profits, net losses, cash distributions or returns of capital
to which his assignor would otherwise be entitled; and

           (e) the assignee pays to the Partnership all costs and expenses
incurred in connection with such assignment, including Specifically, without
limitation, fees and expenses of counsel to the Partnership.

      6.02 Substituted Limited Partner. An assignee of the interest of a Limited
Partner or any portion thereof shall become a Substituted Limited Partner
entitled to all the rights of a Limited Partner if, and only if:

           (a) the assignor gives the assignee such right;


                                      -19-
<PAGE>

           (b) the General Partners consent to such substitution, the granting
or denying of which consent shall be in the General Partners' absolute
discretion;

           (c) the assignee pays to the Partnership all costs and expenses
incurred in connection with such substitution; and

           (d) the assignee executes and delivers such instruments in form and
substance satisfactory to the General Partners, as the General Partners may deem
necessary or desirable to effect such substitution and to confirm the agreement
of the assignee to be bound by all of the terms and provisions of this
Agreement.

      6.03 Other Restrictions on Assignment. The Partnership and the General
Partners shall be entitled to treat the record owner of any Partnership interest
as the absolute owner thereof in all respects, and shall incur no liability for
distributions of cash or other property made in good faith to such owner until
such time as a written assignment of such interest has been received and
accepted by the General Partners and recorded on the books of the Partnership.
The General Partners may refuse to accept an assignment until the first day of
the next successive quarterly accounting period. In no event shall any
Partnership interest, or any portion thereof, be sold, transferred or assigned
to a minor or incompetent, and any such attempted sale, transfer or assignment
shall be void and ineffectual and shall not bind the Partnership or the General
Partners.

                                   ARTICLE VII

                           DISSOLUTION AND TERMINATION

      7.01 Events of Dissolution.

           (a) The Partnership shall be dissolved:

               (i)   on a date designated by the General Partners; and

               (ii)  upon the occurrence of an event of withdrawal (as defined
                     in the Partnership Act) with respect to a General Partner.

           (b) Notwithstanding the occurrence of an event specified in Section
7.01(a)(ii), the Partnership shall not be dissolved and its business and affairs
shall not be discontinued, and the Partnership shall remain in existence as a
limited partnership under the laws of the Commonwealth of Massachusetts if (i)
one or more General Partners continue to serve as a General Partner; or (ii) if
there be no general partner, a majority in interest of the Limited Partners
elect, within 90 days after such occurrence, to continue the Partnership and the
Partnership business. Upon the occurrence of an event Specified in Section
7.01(a)(ii) with respect to a General Partner who is not the sole General
Partner, the business of the Partnership shall be continued by the remaining
General Partner(s) upon the same terms and conditions set forth in this
Agreement, each remaining General Partner agrees to continue the Partnership on
such terms and conditions, and each Limited Partner hereby agrees to such
continuation. Upon the occurrence of an event specified in Section 7.01(a)(ii)
if there is no remaining General Partner, any Limited Partner may obtain from
the Partnership a list of all of the Limited Partners


                                      -20-
<PAGE>

and their addresses and a meeting may be called and held in accordance with
Section 4.10 hereof to consider the continuation of the Partnership's business.
If such election is made by a majority in interest of the Limited Partners, they
shall also choose an additional General Partner.

           (c) 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 shall
have been cancelled and the assets of the Partnership shall have been
distributed as provided herein. Notwithstanding the dissolution of the
Partnership, prior to the termination of the Partnership, as aforesaid, the
business of the Partnership and the affairs of the Partners, as such, shall
continue to be governed by this Agreement. Upon dissolution, the General
Partners or, if there be none, a liquidator appointed by a majority in interest
of the Limited Partners shall liquidate the assets of the Partnership, apply and
distribute the proceeds thereof as contemplated by this Agreement and cause the
cancellation of the Partnership's Certificate of Limited Partnership.

           (d) In the event the General Partners (or, where applicable, the
liquidator) determine that it is necessary upon dissolution to make a
distribution of any property of the Partnership in kind or if the General
Partners shall determine to make a distribution in kind other than pursuant to
dissolution, such property shall be transferred and conveyed on the basis of the
fair market value thereof to the Partners or their assignees, so as to vest in
each of them an undivided interest, as tenants-in-common, in the whole of such
property, and the capital accounts of all Partners shall be adjusted to reflect
any difference between such fair market value and the cost at which such
property is carried on the books of the Partnership.

      7.02 Distribution Upon Liquidation.

           (a) After payment of liabilities owing to creditors, the General
Partners or liquidator shall set up such reserves as they or he deems reasonably
necessary for any contingent or unforeseen liabilities or obligations of the
Partnership. Said reserves may be paid over by the General Partners or
liquidator to a bank, to be held in escrow for the purpose of paying any such
contingent or unforeseen liabilities or obligations and, at the expiration of
such period as the General Partners or liquidator may deem advisable, such
reserves shall be distributed to the partners or their assigns in the manner set
forth in subsection (b) below.

           (b) After paying such liabilities and providing for such reserves,
the General Partners or liquidator shall cause the remaining net assets of the
Partnership to be distributed to and among the Partners in proportion to and in
satisfaction of the positive balances in their capital accounts. In the event
that any part of such net assets consists of notes or accounts receivable or
other non-cash assets, the General Partners or liquidator shall take whatever
steps they or he deems appropriate to convert such assets into cash or into any
other form which would facilitate the distribution thereof.


                                      -21-
<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

      8.01 Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement shall be in writing, signed by the
Partner giving such notice, election or demand and shall be delivered
personally, sent by registered or certified mail, return receipt requested or
sent for overnight delivery by a nationally recognized overnight delivery
service (except that routine notices required or permitted to be given by the
General Partners or the Partnership may be sent by ordinary first-class mail),
to the other Partner or Partners, at his or its address set forth herein, or at
such other address as may be supplied by written notice given in conformity with
the terms of this Section 8.01. The date of personal delivery or the date of
mailing, as the case may be, shall be the date of such notice.

      8.02 Successors and Assigns. Subject to the restrictions on transfer set
forth herein, this Agreement, and each and every provision hereof, shall be
binding upon and shall inure to the benefit of the Partners, their respective
successors, successors-in-title, heirs and assigns, and each and every
successor-in-interest to any Partner, whether such successor acquires such
interest by way of gift, purchase, foreclosure, or by any other method, shall
hold such interest subject to all of the terms and provisions of this Agreement.

      8.03 Power of Attorney. Each Limited Partner and Class B Limited Partner,
including any additional or substituted Limited Partner, by the execution of
this Agreement or any counterpart thereof does hereby irrevocably constitute and
appoint the Managing General Partner, with full power of substitution, his true
and lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to make, execute, acknowledge, swear to, deliver, file
and record such documents and instruments as may be necessary or appropriate to
carry out the provisions of this Agreement, including, but not limited to, (a)
copies of this Agreement and amendments hereto or restatements hereof adopted
pursuant to the provisions hereof (including without limitation any such
amendment adopted pursuant to the provisions of Section 8.04(a) or Section
8.04(b) and any such amendment required upon the admission of a substituted or
additional Limited Partner or Class B Limited Partner, an additional limited
partner of a different class or a successor or additional General Partner, the
continuation of this Partnership, the formation of a successor limited
partnership or the doing of any act requiring the amendment of this Agreement
under the laws of the Commonwealth of Massachusetts, the applicable laws of any
other jurisdiction in which the Managing General Partner deems such action to be
necessary or desirable or by any regulatory agency and any such amendment
relating to a successor limited partnership) and, upon termination of the
Partnership (or its successor), a certificate or agreement of dissolution and
termination, as and if the same may be required by the laws of the Commonwealth
of Massachusetts, the applicable laws of any other jurisdiction in which the
Managing General Partner deems said filing to be necessary or desirable or by
any regulatory agency, (b) any amendments to the Certificate of Limited
Partnership or restatements thereof adopted pursuant to the provisions hereof
(including without limitation any such amendment required upon the continuation
of the Partnership, the formation of a successor limited partnership or the
doing of any act requiring the amendment of this Agreement under the laws of the
Commonwealth of Massachusetts, the applicable laws of any other jurisdiction in
which the Managing General Partner deems said filing to be necessary or
desirable, the rules and


                                      -22-
<PAGE>

regulations of any regulatory agency and any such amendment relating to a
successor limited partnership), (c) any certificate of fictitious name, if
required by law, (d) such other certificates or instruments as may be required
under the law of the Commonwealth of Massachusetts or any other jurisdiction, or
by any regulatory agency, as the Managing General Partner may deem necessary or
advisable, and (e) all such other instruments as the Managing General Partner
may deem necessary or advisable in accordance with the terms hereof; provided,
however, that none of the foregoing acts shall increase the liability of any
Limited Partner or Class B Limited Partner beyond that expressly set forth in
this Agreement.

      The power of attorney granted in this Section 8.03 is a special power of
attorney coupled with an interest and is irrevocable, shall survive the death or
incompetency of a Limited Partner or Class B Limited Partner, may be exercised
by the attorney-in-fact by his signature on behalf of all Limited Partners and
all Class B Limited Partners, and shall survive the delivery of an assignment by
a Limited Partner or Class B Limited Partner of the whole or any portion of his
economic interest, except that where the assignee of any such interest has been
approved, pursuant to the provisions of Section 6.02, for admission to the
Partnership as a substitute Limited Partner, the power of attorney shall survive
the delivery of such assignment solely for the purpose of enabling the
attorney-in-fact to execute, acknowledge and file any instrument necessary to
effect such substitution.

      8.04 Amendments.

           (a) In addition to any amendments otherwise authorized herein,
amendments may be made to this Agreement and the Partnership's Certificate of
Limited Partnership from time to time in any of the following manners:

               (i)   Subject to the limitations set forth in Section
                     4.12(a)(i)(A) (B), (C) and (D), by the General Partners,
                     without the consent or approval of the Limited Partners or
                     the Class B Limited Partners (x) to add to the duties or
                     obligations of the General Partners or surrender any right
                     or power granted to the General Partners herein; (y) 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; and (z) in any manner that they deem necessary
                     or appropriate, in their sole discretion, in connection
                     with establishing or taking steps to establish, a public
                     market for the Units; provided, however, that no amendment
                     shall be adopted pursuant to this Section 8.04(a)(i) unless
                     the adoption thereof (1) does not affect the method of
                     allocation of cash distributions provided in Article III or
                     the method of allocation of net profits or net losses
                     provided in Section 2.04 among the Limited Partners or
                     Class B Limited Partners, respectively, or among the
                     Limited Partners, Class B Limited Partners and the General
                     Partners, except that any such amendment may reduce the
                     percentage thereof allocated to the General Partners; and
                     (2) does


                                      -23-
<PAGE>

                     not affect the limited liability of the Limited Partners or
                     Class B Limited Partners contemplated by Section 4.07 of
                     this Agreement or the status of the Partnership as a
                     partnership for Federal income tax purposes.

               (ii)  By a writing duly executed by the General Partners and a
                     majority in interest of the Limited Partners in accordance
                     with Section 4.11.

               (iii) The General Partners may amend this Agreement in any
                     respect not otherwise provided for in Sections 8.04(a)(i),
                     8.04(a)(ii) and 8.04(b), subject to the limitations set
                     forth in Section 4.12(a)(i)(A), (B), (C) and (D), in
                     accordance with the procedures set forth in this Section
                     8.04(a)(iii). Not less than thirty (30) days prior to the
                     effective date of such proposed amendment, the General
                     Partners shall send notice in writing to each Limited
                     Partner setting forth a verbatim statement of the proposed
                     amendment and a statement that on the proposed effective
                     date this Agreement will be amended as proposed unless,
                     prior to such date, Limited Partners then owning twenty
                     percent (20%) or more of the Units of limited partnership
                     interest send to the General Partners written notice
                     stating that they object to such proposed amendment. Unless
                     such objections are received prior to the proposed
                     effective date, on or after the effective date the General
                     Partners shall execute the proposed amendment on behalf of
                     all Partners. If such objections are received prior to the
                     proposed effective date, then such proposed amendment shall
                     not become effective without the vote or written consent of
                     a majority in interest of the Limited Partners.

           (b) In addition to any amendments otherwise authorized herein,
amendments may be made to this Agreement from time to time by the General
Partners, without the consent or approval of the Limited Partners or the Class B
Limited Partners, to amend appropriate provisions of this Agreement if the
Partnership is advised at any time by its legal counsel that the allocations of
profits and losses provided in Section 2.04 hereof are unlikely to be respected
for Federal income tax purposes, because of either the promulgation and adoption
of further Treasury regulations under Code Section 704 or other developments in
applicable law. In making any such amendment, the General Partners shall use
their best efforts to effect as little change in the economic and tax
arrangements among the Partners as they shall determine in their sole discretion
to be necessary to provide for allocations of profits and losses which they
believe will be respected for Federal income tax purposes. Any amendments made
by the General Partners pursuant to this Section 8.04(b) shall be deemed to be
made pursuant to the fiduciary obligations of the General Partners to the
Partnership and the Limited Partners and Class B Limited Partners and no such
amendment shall give rise to any claim or cause of action by any Limited
Partners or Class B Limited Partners.

      8.05 Partition. The Partners hereby agree that no Partner, nor any
successor-in-interest to any Partner, shall have the right while this Agreement
remains in effect to have the property of the Partnership partitioned, or to
file a complaint or institute any proceeding at law or in equity to


                                      -24-
<PAGE>

have the property of the Partnership partitioned, and each Partner, on behalf of
himself, his successors, representatives, heirs, and assigns, hereby waives any
such right. It is the intention of the Partners that during the term of this
Agreement, the rights of the Partners and their successors-in-interest, as among
themselves shall be governed by the terms of this Agreement, and that the right
of any Partner or successor-in-interest to assign, transfer, sell or otherwise
dispose of his interest in the Partnership's property shall be subject to the
limitations and restrictions of this Agreement.

      8.06 No Waiver. The failure of any Partner to insist upon strict
performance of a covenant hereunder or of any obligations hereunder,
irrespective of the length of time for which such failure continues, shall not
be a waiver of such Partner's right to demand strict compliance in the future.
No consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation hereunder shall constitute a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligation hereunder.

      8.07 Entire Agreement. This Agreement constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, inducements or conditions, expressed or
implied, written or oral, among them respecting the subject matter contained
herein. There are no representations, agreements, arrangements or
understandings, oral or written, between and among the parties hereto relating
to the subject matter of this Agreement which are not fully expressed herein.
The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof. This Agreement may
not be modified or amended, except as provided in Section 4.11(a) and Section
8.04, other than by an agreement in writing executed by and on behalf of the
party sought to be bound by such modification or amendment.

      8.08 Captions. Titles or captions of Articles or Sections contained in
this Agreement are inserted only as a matter of convenience and for reference,
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision hereof.

      8.09 Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties hereto on separate counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same instrument, and in pleading or proving any provisions of this Agreement
it shall not be necessary to produce more than one such counterpart. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.

      8.10 Applicable Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted, construed and enforced
in accordance with the laws of the Commonwealth of Massachusetts and the
Partnership Act. In the event of any conflict between any provisions of this
Agreement and any non-mandatory provision of the Partnership Act, the provisions
of this Agreement shall control and take precedence. It is agreed that the
parties hereto intend to continue a limited partnership hereby, but in the event
that the General Partners shall fail to comply substantially with the
requirements for the continuation of a limited partnership under the laws of the
Commonwealth of Massachusetts, the Partnership shall


                                      -25-
<PAGE>

be administered pursuant to the provisions of the Partnership Act as if it were
a limited partnership.

      8.11 Gender Etc. In the case of all terms used in this Agreement, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, as the context requires.

      8.12 General Partners. References herein to the General Partner shall
refer collectively to all of the General Partners or if there be at the time
only one General Partner to such General Partner. As used herein, the term
"General Partner" or "General Partners" shall mean the party named as such in
this Agreement and any successor or additional General Partners that may
properly be added from time to time pursuant to the terms of this Agreement.

      8.13 Status of Successor Trustees as Partners. Any successor trustee or
trustees of any trust as a Partner of the Partnership shall be entitled to
exercise the same rights and privileges and be subject to the same duties and
obligations as his predecessor trustee. As used in this Agreement, the term
"trustee" shall include any and all such successor trustees.

      8.14 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law; but if any such provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the minimal extent
of such prohibition or invalidity without invalidating the remainder of such
provisions or the remaining provisions of this Agreement or the application of
such provisions to other parties or circumstances.

      8.15 Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays or holidays
in the Commonwealth of Massachusetts; provided, however, that if the final day
of any time period falls on a Saturday, Sunday or holiday in the Commonwealth of
Massachusetts, then the final day shall be deemed to be the next day which is
not a Saturday, Sunday or such a holiday.

      8.16 Further Assurances. In addition to the documents and instruments to
be delivered as herein provided, each Limited Partner and Class B Limited
Partner shall, from time to time at the request of any General Partner, execute
and deliver such instruments and shall take such other action as may be required
to carry out more effectively the terms of this Agreement.

      8.17 Schedules. Schedules I, II and III hereto shall be incorporated into
and shall be deemed a part of this Agreement. If either such Schedule shall not
be attached hereto at the time of execution of this Agreement, or if either such
Schedule shall be incomplete, such Schedule may be later attached or completed
in accordance with the provisions of this Agreement and such Schedule shall, as
later attached or completed, for all purposes be deemed a part of this Agreement
as if attached hereto or completed at the time of the execution hereof. Without
limiting the generality of the foregoing, Schedule II shall be amended from time
to time to reflect the admission of Limited Partners.


                                      -26-
<PAGE>

      IN WITNESS WHEREOF, the Partners have executed this Agreement as of the
first day of January, 2000.

GENERAL PARTNERS                      LIMITED PARTNERS: THOSE
                                      PERSONS LISTED ON SCHEDULE II
                                      HERETO

George J. Carter

 /s/ George J. Carter                    /s/ George J. Carter
- ----------------------------------    ------------------------------------------
                                      By: George J. Carter,
George J. Carter                          their Attorney-in-Fact


R. Scott MacPhee

 /s/ R. Scott MacPhee
- ----------------------------------    CLASS B LIMITED PARTNERS


Richard R. Norris                     Scott H. Carter

 /s/ Richard R. Norris                 /s/ Scott H. Carter
- ----------------------------------    ------------------------------------------


William W. Gribbell                   Jeffrey B. Carter

 /s/ William W. Gribbell               /s/ Jeffrey B. Carter
- ----------------------------------    ------------------------------------------


                                      -27-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>AMENDED & RESTATED LTD. PARTNERSHIP AGREEMENT
<TEXT>


                                                                     Exhibit 4.2

                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP

                               FIRST AMENDMENT TO
            THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

      This First Amendment to the Third Amended and Restated Limited Partnership
Agreement, dated as of January 1, 2000 (the "Partnership Agreement") of Franklin
Street Partners Limited Partnership, a Massachusetts limited liability
partnership (the "Partnership"), is made as of January 1, 2000 by and among
George J. Carter, R. Scott MacPhee, Richard R. Norris and William W. Gribbell
(collectively, the "Withdrawing General Partners"), FSP General Partner LLC, a
Massachusetts limited liability company ("FSP LLC"), Scott H. Carter and Jeffrey
B. Carter as limited partners (the "Class B Limited Partners") and those Persons
listed on Schedule II to the Partnership Agreement as limited partners (the
"Limited Partners"). Capitalized terms used herein and otherwise defined shall
have the respective meanings ascribed to them in the Partnership Agreement.

      WHEREAS, the Partnership was formed as a limited partnership pursuant to
an Agreement of Limited Partnership dated as of January 24, 1997, as amended to
date in the form of the Partnership Agreement, and a Certificate of Limited
Partnership dated as of February 4, 1997, filed with the Office of the Secretary
of State of the Commonwealth of Massachusetts on February 4, 1997;

      WHEREAS, Section 4.12(e) of the Partnership Agreement provides that the
Withdrawing General Partners may unanimously contribute their interests in the
Partnership to a limited liability company, which shall thereupon be admitted as
the General Partner of the Partnership;

      WHEREAS, the Withdrawing General Partners have contributed their general
partner interests in the Partnership to FSP LLC, effective as of the date
hereof; and

      WHEREAS, the parties hereto wish to provide for the admission of FSP LLC
as a General Partner in substitution for the Withdrawing General Partners.

      NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed that the Partnership Agreement is
amended as follows:


                                      -1-
<PAGE>

      1. In accordance with the provisions of Section 4.12(e) of the Partnership
Agreement, FSP LLC is hereby admitted as the sole General Partner of the
Partnership.

      2. References in the Partnership Agreement to the "General Partners", "a
majority in interest of the General Partners" and the "Managing General Partner"
shall henceforward refer to FSP LLC.

      3. The words "Schedule I" in the first sentence of the Partnership
Agreement are hereby amended to read "Schedule II".
P
      Except as specifically amended hereby, the Partnership Agreement shall
remain in full force and effect.

      IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of January 1, 2000.

WITHDRAWING GENERAL               SUCCESSOR GENERAL PARTNER:
PARTNERS:

/s/ George J. Carter
- -----------------------------     FSP GENERAL PARTNER LLC
George J. Carter
                                  By: /s/ George J. Carter
                                      ------------------------------------------
                                      George J. Carter, Managing Member
/s/ R. Scott MacPhee
- -----------------------------
R. Scott MacPhee

/s/ Richard R. Norris
- -----------------------------     CLASS B LIMITED PARTNERS
Richard R. Norris                 AND LIMITED PARTNERS:

/s/ William W. Gribbell           By: /s/ George J. Carter
- -----------------------------         ------------------------------------------
William W. Gribbell                   George J. Carter, their attorney-in-fact


                                      -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>AMENDED & RESTATED LTD. PARTNERSHIP AGREEMENT
<TEXT>


                                                                     Exhibit 4.3

                  FRANKLIN STREET PARTNERS LIMITED PARTNERSHIP

                               SECOND AMENDMENT TO
            THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

      This Second Amendment to the Third Amended and Restated Limited
Partnership Agreement, dated as of January 1, 2000 (the "Partnership Agreement")
of Franklin Street Partners Limited Partnership, a Massachusetts limited
liability partnership (the "Partnership"), is made as of June 26, 2000 by and
among FSP General Partner LLC, a Massachusetts limited liability company ("FSP
LLC"), Scott H. Carter and Jeffrey B. Carter as limited partners (the "Class B
Limited Partners") and those Persons listed on Schedule II to the Partnership
Agreement as limited partners (the "Limited Partners"). Capitalized terms used
herein and otherwise defined shall have the respective meanings ascribed to them
in the Partnership Agreement.

      WHEREAS, the Partnership was formed as a limited partnership pursuant to
an Agreement of Limited Partnership dated as of January 24, 1997, as amended to
date in the form of the Partnership Agreement, and a Certificate of Limited
Partnership dated as of February 4, 1997, filed with the Office of the Secretary
of State of the Commonwealth of Massachusetts on February 4, 1997;

      WHEREAS, Section 8.04 of the Partnership Agreement provides that the
General Partner and a majority in interest of the Limited Partners may amend the
Partnership Agreement; and;

      WHEREAS, a majority in interest of the Limited Partners have consented to
the adoption of this Second Amendment.

      NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed that the Partnership Agreement is
amended as follows:

      A new Section 6.04 in the form attached hereto as Appendix A is hereby
added to the Partnership Agreement.

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


                                      -1-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of June 26, 2000.

                                GENERAL PARTNER:

                                FSP GENERAL PARTNER LLC

                                By: /s/ George J. Carter
                                    --------------------------------------------
                                    George J. Carter, Managing Member


                                CLASS B LIMITED PARTNERS
                                AND LIMITED PARTNERS:

                                By: /s/ George J. Carter
                                    --------------------------------------------
                                    George J. Carter, their attorney-in-fact


                                      -2-

<PAGE>


                                                                      APPENDIX A

Appendix A

6.04  Purchase of Interests of Limited Partners.

      (a) The Partnership shall use its best efforts to repurchase Units on an
annual basis from Limited Partners desiring to have such Units repurchased upon
the terms and conditions set forth below.

      (b) A Limited Partner wishing to have some or all of his or her Units
repurchased by the Partnership must mail or deliver a written request to the
Partnership indicating his or her desire to have such Units repurchased. Any
such request must be received by the Partnership on or before July 1 immediately
preceding the January 1 date on which the repurchase is to be effective. Any
such request to have Units repurchased shall constitute an offer by the Limited
Partner to sell such Units and shall be irrevocable. If the Partnership does not
have sufficient funds to purchase all of the Units so offered or is otherwise
prohibited from purchasing all of the Units so offered, the Partnership will
purchase Units in the order in which effective offers are received from offerors
to the extent that the Partnership has funds available therefor and is not
prohibited from purchasing Units.

      (c) The purchase price for any Units purchased by the Partnership will
equal 90% of the Fair Market Value of the Units. "Fair Market Value" of a Unit
shall mean the fair market value as determined by the General Partner in its
sole and absolute discretion, after consultation with an adviser selected by the
General Partner. Any repurchase of Units by the Partnership shall be effective
as of January 1 of the year following the year in which the corresponding offer
was timely made pursuant to Section 6.04(b). Any Limited Partner whose Units are
to be repurchased shall execute and deliver such transfer and other documents
and instruments as the Partnership may reasonably request. Any Units repurchased
by the Partnership shall be cancelled and shall not be reissued by the
Partnership.

      (d) In fulfilling the Partnership's obligation to use best efforts to
repurchase Units for which offers have been timely made pursuant to Section
6.04(b), the General Partner shall be authorized to take such steps as it deems
appropriate, in its sole discretion, including without limitation the
disposition of assets of the Partnership (including assets owned by Sponsored
Partnerships which have been acquired by the Partnership) and incurring
indebtedness on behalf of the Partnership.

      (e) Notwithstanding anything herein to the contrary, no Unit shall be
repurchased by the Partnership pursuant to this Section 6.04 if:

            (i)   The Partnership is insolvent or such repurchase would render
                  the Partnership insolvent;

            (ii)  Such repurchase would impair the capital or operations of the
                  Partnership;


<PAGE>


            (iii) Such repurchase would contravene any provision of federal or
                  state securities laws;

            (iv)  Such repurchase would cause the Partnership to terminate as a
                  partnership under the Code;

            (v)   Such repurchase would cause the Partnership to fail to qualify
                  for one or more of the "safe harbors" contained in Treasury
                  Regulation Section 1.7704-1(e) through (j) that would preclude
                  the Partnership from being treated as a "publicly traded
                  partnership" within the meaning of Section 7704 of the Code;
                  or

            (vi)  The General Partner determines such repurchase would otherwise
                  not be in the best interests of the Partnership.

      (f) If the Partnership is unable to repurchase any Units, the Partnership
shall use its best efforts to arrange for a purchase by a third party or
parties, including without limitation members of the General Partner, of such
Units; provided, however, that no such purchase shall be effected if it would
not be permitted under the terms of Section 6.04(e). In addition, the
Partnership shall have the right to satisfy its obligations under Section
6.04(a) by arranging for the purchase of Units by any such third party or
parties for the price set forth in Section 6.04(c).

      (g) Any request for repurchase of Units by a Limited Partner pursuant to
Section 6.04(b) shall be binding on such Limited Partner's successors, heirs and
assigns.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>SUBSIDIARIES FRANKLIN ST PARTNERS LTD PARTNERSHIP
<TEXT>


Subsidiaries of Franklin Street Partners Limited Partnership

Name                                              Jurisdiction of Organization
- ----                                              ----------------------------

FSP Investments LLC                               Massachusetts

FSP Property Management LLC                       Massachusetts

FSP Holdings LLC                                  Delaware

Essex Lane Associates Limited
Partnership                                       Massachusetts

FSP Apartment Properties Limited
Partnership                                       Massachusetts

FSP Austin N.W. Limited Partnership               Massachusetts

FSP Blue Ravine Limited Partnership               Massachusetts

FSP Bollman Place Limited Partnership             Massachusetts

FSP Gateway Crossing Limited Partnership          Massachusetts

FSP Hillview Center Limited Partnership           Massachusetts

FSP Lyberty Way Limited Partnership               Massachusetts

FSP North Andover Office Park Limited
Partnership                                       Massachusetts

FSP Park Seneca Limited Partnership               Massachusetts

FSP Piedmont Center Limited Partnership           Massachusetts

FSP Santa Clara Limited Partnership               Massachusetts

FSP Silverside Plantation Limited
Partnership                                       Massachusetts

FSP Southfield Centre Limited
Partnership                                       Massachusetts

FSP Telecom Business Center Limited
Partnership                                       Massachusetts

FSP Weslayan Oaks Limited Partnership             Massachusetts

One Technology Drive Limited Partnership          Massachusetts

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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