Exhibit 3


                 KRUPP CASH PLUS-II LIMITED PARTNERSHIP

                AMENDED AGREEMENT OF LIMITED PARTNERSHIP


        Amended Agreement dated as of the 25th day of March, 1986, by and among
The Krupp Corporation, a Massachusetts corporation, and The Krupp Company
Limited Partnership-IV, a Massachusetts limited partnership, each as a General
Partner; Krupp Depositary Corporation, as the Corporate Limited Partner; and
those Persons who may hereafter be admitted to the Partnership as Investor
Limited Partners. The Corporate Limited Partner and the Investor Limited
Partners are collectively referred to herein as the "Limited Partners" and,
together with the General Partners, as the "Partners." Certain other terms used
throughout this Agreement are defined in Section 17 hereof.

        WHEREAS, the General Partners and the Corporate Limited Partner have
formed a limited partnership (the "Partnership") by filing a Certificate of
Limited Partnership with the Secretary of State of The Commonwealth of
Massachusetts under an Agreement of Limited Partnership dated as of December 18,
1985 (the "Original Agreement") and the provisions of the Massachusetts Uniform
Limited Partnership Act; and

        WHEREAS, the General Partners and the Corporate Limited Partner wish to
amend the Original Agreement to provide, among other matters, for (i) economic
and other rights of investors (the "Unit holders") in the Partnership who will
hold Units of Depositary Receipts evidencing such rights and who may, under
certain circumstances, be admitted to the Partnership as Investor Limited
Partners; (ii) the assignment to the extent permitted by Massachusetts law by
the Corporate Limited Partner to the Unitholders of all of its interest in
distributions, including liquidating distributions, and profits and losses of
the Partnership and all of its other rights, duties and obligations in
connection with the Limited Partner Interests which correspond to the Units;
(iii) the obligation of the Corporate Limited Partner to exercise any and all
rights, duties and obligations with respect to such Limited Partner Interests
solely in favor of, in the interest of, and at the direction of the Unitholders;
(iv) the continued status of the Corporate Limited Partner as a Limited Partner
of the Partnership; and (v) the admission of Investor Limited Partners subject
to the terms and conditions herein specified;

        NOW, THEREFORE, the parties hereto agree as follows:

        Section 1.  CONTINUATION.  The parties agree to continue the 
Partnership pursuant to the Original Agreement and the provisions of the Uniform
Limited Partnership Act of The Commonwealth of Massachusetts.

        Section 2. NAME AND OFFICE. The Partnership shall be conducted under the
name and style of "Krupp Cash Plus-II Limited Partnership." The principal office
and place of business of the Partnership shall be located at 470 Atlantic
Avenue, Boston, Massachusetts 02210, or at such other place as the General
Partners may from time to time determine and specify by written notice to all of
the Partners. The Partnership shall at all times maintain in Massachusetts (i)
an office at which shall be kept the basic Partnership documents described in
Section 12.2 hereof, and (ii) an agent for service of process selected by the
General Partners in accordance with any relevant provisions of the Massachusetts
Uniform Limited Partnership Act as then in effect.

        Section 3.    PURPOSES AND POWERS.

           3.1 PURPOSES. The purposes of the Partnership are to acquire, invest
in, maintain, operate, lease, improve, hold, encumber, sell, manage and
otherwise deal with the Assets of the Partnership.



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           3.2    POWERS.  In furtherance of the above purposes, the Partnership
shall have the powers:

               (a) to acquire, improve, hold, sell, exchange and otherwise deal
in Properties situated in any location in the United States and in any real
property appurtenant thereto and in interests therein as may be necessary or
desirable to carry out the operation, leasing and maintenance of such
Properties;

               (b) to acquire, hold, sell, exchange and otherwise deal in
mortgage-backed securities ("MBS") issued or originated under or in connection
with federal housing programs of the Government National Mortgage Association
("GNMA"), the Federal National Mortgage Association ("FNMA") or the Federal Home
Loan Mortgage Corporation ("FHLMC");

               (c) subject to any applicable statutes and regulations, to
borrower money to further the purposes of the Partnership, to issue evidences of
indebtedness in respect thereof and to secure the same by mortgage or pledge or
grant of lien on or other security interest in a Property or any other assets of
the Partnership; and

               (d) to do all things, carry on any activities and enter into,
perform, modify, supplement or terminate any contracts necessary to, in
connection with or incidental to the furtherance of the purposes of the
Partnership, all so long as such things, activities and contracts may be
lawfully done, carried on or entered into by the Partnership under the laws of
The Commonwealth of Massachusetts and the United States of America and under the
terms of this Agreement.

        The Partnership shall not engage in any business not provided for in
this Section 3.2 without the Consent of the holders of a majority of the Limited
Partner Interests.

        Section 4. TERM.  The term of the partnership shall end at midnight on 
December 31, 2025, unless the Partnership is sooner dissolved or terminated as 
provided in Section 11 hereof.

        Section 5. CAPITAL CONTRIBUTIONS.

           5.1 CONTRIBUTIONS OF GENERAL PARTNERS. The General Partners have
contributed in cash in respect of their Interests an aggregate of $3,000, in the
respective amounts set forth opposite their names in Schedule A hereto. Upon the
dissolution and termination of the Partnership, the General Partners will
contribute to the Partnership an amount equal to the lesser of (i) the deficit
balances in their Capital Accounts or (ii) the excess of one and one-hundredths
percent (1.01%) of the total Capital Contributions of the Limited Partners over
the amount of capital previously contributed by the General Partners.

           5.2 CONTRIBUTIONS OF LIMITED PARTNERS. The Corporate Limited Partner
has contributed $2,000 in cash in respect of 100 Limited Partner Interests. Upon
the purchase of Units by Unitholders, the Corporate Limited Partner shall
contribute in cash to the Partnership the Subscription Prices paid by the
Unitholders, shall receive Limited Partner Interests in return therefor, shall
assign all its rights with respect to such Interests to the Unitholders to the
extent permitted by Massachusetts law, shall agree to exercise any and all
rights with respect to such Interests as directed by the Unitholders, shall
remain a Limited Partner with respect to such Interests as permitted by the
Massachusetts Uniform Limited Partnership Act, and shall within 45 days after
the initial purchase of Interests by Unitholders deliver Depositary Receipts to
the Unitholders evidencing their rights with respect to such Interests. Not less
than 400,000 Units (not including Units purchased by the General Partners and
their Affiliates) and not more than 7,500,000 Units evidenced by Depositary
Receipts will be sold. An investor who tenders payment for a Unit and accepts
confirmation of purchase without objection for a ten-day period following the
mailing of such confirmation shall thereby have assented to all of the terms and
conditions of this Agreement.

           5.3 SALE OF ADDITIONAL LIMITED PARTNER INTERESTS OR UNITS. Subsequent
to the final closing of the sale of not less than 400,000 Units (not including
Units purchased by the General Partners and their Affiliates) and not more than
7,500,000 Units, the Partnership may not sell additional Limited Partner


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Interests or Units; provided, however, that this Section shall not prevent a
Unitholder from exchanging Units for Limited Partner Interests pursuant to
Section 7.6(i) hereof.

           5.4 CAPITAL ACCOUNTS. A Capital Account shall be established and
maintained for each General Partner, Limited Partner, and Unitholder. The
Capital Account of each Partner shall be (a) credited with all payments made to
the Partnership by such Partner on account of Capital Contributions and with
allocations to such Partner of Partnership Profits for Tax Purposes and
tax-exempt income, and (b) charged with allocations to such Partner of
Partnership Losses for Tax Purposes, with other Partnership expenditures which
are not deductible for federal income tax purposes (not including payments of
indebtedness or expenditures included in the basis of any Partnership asset),
and with cash distributions made to such Partner as distributions of Cash Flow
or of Net Cash Proceeds of Capital Transactions and the Terminating Capital
Transaction, and shall otherwise appropriately reflect transactions of the
Partnership and the Partners, all as provided in Treasury Department Regulations
section 1.704-1(b). The Capital Account of each Unitholder shall be kept in the
same manner as the Capital Account of a Partner. A Substitute General or Limited
Partner shall be deemed to have made the Capital Contribution to the Partnership
which was made with respect to the Interest transferred or exchanged and to have
received from the Partnership the credits, allocations and charges with respect
to such Interest and shall otherwise succeed to the Capital Account kept with
respect to such Interest.

           5.5 ADDITIONAL CAPITAL CONTRIBUTIONS; INTERPRETATION. No Partner or
Unitholder shall be required to make any Capital Contribution, or be entitled to
bring an action for partition against the Partnership, or to demand or receive
any distribution of or with respect to his Capital Contribution except as is
specifically provided under this Agreement. No loan made by a General Partner,
Limited Partner or Unitholder to the Partnership shall constitute a Capital
Contribution for any purpose.

        Section 6.    GENERAL PARTNERS.

           6.1    EXTENT OF POWERS AND DUTIES.

               (a) GENERAL. Except as expressly limited by the provisions of
this Agreement, the General Partners shall have complete and exclusive
discretion in the management and control of the affairs and business of the
Partnership and all powers necessary, convenient or appropriate to carry out the
purposes, conduct the business and exercise the powers of the Partnership.
Except as so expressly limited, the General Partners shall possess and enjoy
with respect to the Partnership all of the rights and powers of partners of a
partnership without limited partners to the extent permitted by Massachusetts
law.

               (b) POWERS AND DUTIES. The General Partners shall diligently and
faithfully exercise their discretion to the best of their ability and use their
best efforts during so much of their time as may be necessary to carry out the
purposes and conduct the business of the Partnership in accordance with this
Agreement and in the best interests of the Partnership and so as, consistent
therewith, to protect the interests of the Investor Limited Partners and
Unitholders as a group. The General Partners shall have fiduciary responsibility
for the safekeeping and use of all funds and assets of the Partnership, whether
or not in their immediate possession or control, and they shall not employ or
permit another Person to employ such funds or assets in any manner except for
the exclusive benefit of the Partnership. In particular, the General Partners,
solely, shall be responsible for and shall use their best efforts and exercise
discretion to the best of their ability: (i) to cause Assets to be acquired,
held, and sold, exchanged or otherwise disposed of; (ii) to rent, maintain and
operate the Properties; (iii) to select and supervise the activities of the real
estate management agent(s) for the Partnership including, without limitation,
the periodic inspection of the Properties in order to assure their proper
maintenance and repair; (iv) to assure the proper application of revenues of the
Partnership; (v) to maintain proper books of account for the Partnership and to
prepare all reports of operations and tax returns which are to be furnished to
the Partners and Unitholders pursuant to this Agreement or which are required by
taxing bodies or other governmental agencies; (vi) to maintain adequate
insurance with respect to the Properties and any other insurable property of the
Partnership pursuant to policies of insurance in form and coverage customary for
property similar to the Properties and


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such other insurable property; and (vii) to assure the doing of all other things
which may be necessary or advisable in connection with the supervision of the
affairs, business and property of the Partnership.

               (c) AMPLIFICATION OF POWERS AND DUTIES. As amplification, and not
by way of limitation on the powers expressed herein, the General Partners shall
have, subject to the provisions of this Agreement, full power and authority on
behalf of the Partnership, in order to carry out and accomplish its purposes and
functions: (i) to expand Partnership capital and income; (ii) to purchase,
lease, sell, convey, exchange, improve, divide, combine and otherwise transact
business with respect to interests in real estate and personal property, and in
that connection to employ engineers, contractors, attorneys, accountants,
brokers, appraisers, and such other consultants, advisors, artisans, and workmen
as may be necessary or advisable for the purpose; (iii) to designate
depositories of the Partnership's funds, and the terms and conditions of such
deposits and drawings thereon; (iv) to borrower money or otherwise to procure
extensions of credit for the Partnership, as security therefor to pledge,
hypothecate, mortgage, assign, transfer, and grant security interests in the
Assets, and in connection therewith to execute, seal, acknowledge and delivery
promissory notes, guarantees, mortgages, security and other agreements,
assignments and any other written documents; (v) to execute and deliver
documents and instruments relating to real and personal property of whatever
kind and description, including, but not limited to, deeds, mortgages, leases
and other documents of title or conveyance, regulatory agreements with
governmental bodies and agencies, powers of attorney, and other contracts,
instruments and agreements of all kinds; (vi) to hold all or any portion of the
Assets in the name of one or more trustees, nominees or other agents of or for
the Partnership for the purpose of facilitating transactions involving said
Assets; (vii) to establish reserves for normal repairs, replacements and
contingencies and, in their discretion, for any other proper Partnership
purpose; (viii) to invest the proceeds of the offering of Units on an interim
basis as provided in Section 6.2(a) hereof for a period of up to 24 months after
the date on which the offering of Units commences; (ix) to reinvest the proceeds
of the sale of an MBS if such MBS is sold by the Partnership within five years
after the final closing of the sale of Units; (x) to reinvest the proceeds of
the sale of a Property if such Property is sold by the Partnership within two
years after the final closing of the sale of Units; (xi) to offer and sell the
Units to the public directly or through any licensed Affiliate of the General
Partners and to employ personnel, agents and dealers for such purpose; (xii) to
receive interest from the escrow agent with respect to the Subscription Prices
and to cause the first distribution to a Unitholder to include the amount, if
any, attributable to such interest on account of the period of time prior to the
initial closing of the sale of Units; (xiii) to appoint a transfer agent with
respect to the Units; (xiv) to list the Units on NASDAQ or another securities
exchange or to withdraw the Units from such listing and take such actions as
they deem appropriate therefor; (xv) to take such steps as the General Partners
determine are advisable or necessary and will not result in any material adverse
effect on the economic position of a majority in interest of the Investor
Limited Partners and the Unitholders with respect to the Partnership in order to
preserve the tax status of the Partnership as a pass-through entity for federal
income tax purposes, including, without limitation, removing the Depositary
Receipts from public trading markets, causing the Corporate Limited Partner to
cancel all Depositary Receipts and imposing restrictions on transfers of Units
or Limited Partner Interests (provided such restrictions on transfers do not
cause the Partnership's Assets to be deemed to be "plan assets" with respect to
investors which are Qualified Plans); (xvi) to take such steps as the General
Partners determine are advisable or necessary and will not result in any
material adverse effect on the economic position of a majority in interest of
the Investor Limited Partners and the Unitholders with respect to the
Partnership to restructure the Partnership and its activities to obtain a
prohibited transaction exemption from the Department of Labor or to comply with
any exemption in final plan asset regulations adopted by the Department of
Labor, including, but not limited to, establishing a fixed percentage of Units
permitted to be held by Qualified Plans or other tax-exempt investors or
discontinuing sales to such entities after a given date, in the event that
either the assets of the Partnership constitute "plan assets" for purposes of
ERISA or the transactions contemplated hereunder constitute prohibited
transactions under ERISA or the Code and an exemption for such transactions is
not obtainable from the Department of Labor; (xvii) to take such steps as the
General Partners determine are advisable or necessary with the Consent of a
majority of the Limited Partner Interests, to restructure the Partnership and
its activities in order to enable the Partnership to qualify as a real estate
investment trust for federal income tax purposes; and (xviii) in general to do
all things and execute all documents the General Partners


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shall deem necessary or convenient to accomplish the purposes of the
Partnership, or to protect and preserve the Assets, to the same extent as if
they owned such Assets individually. The powers of the General Partners
enumerated in subsections (xv) and (xvi) above may be carried out by them and
the Corporate Limited Partner acting on behalf of the Unitholders without any
canvassing of or voting by the Unitholders.

               (d) ACCEPTANCE OF UNITHOLDERS. The General Partners' right to
accept as Unitholders prospective transferees of Depositary Receipts is more
fully set forth in Section 7.2 hereof. The General Partners shall have the right
to accept as initial Unitholders such Persons (including the General Partners
and their Affiliates) as may acquire at least 250 Units or, in the case of IRAs
and Keogh Plans, 100 Units, up to an aggregate of no fewer than 400,000 Units
(not including Units purchased by the General Partners and their Affiliates) and
not more than 7,500,000 Units. Each person desiring to become an initial
Unitholder shall execute and deliver (or cause to be executed and delivered) to
the General Partners a subscription agreement and such other documents as shall
be deemed appropriate by the General Partners. Each such subscription shall be
subject to acceptance by the General Partners. If subscriptions are received and
accepted respecting no fewer than 400,000 Units (excluding Units subscribed for
by the General Partners and their Affiliates), the initial closing of the sale
of Units shall occur. The General Partners will accept or reject each
subscription for Units within 30 days after they receive it; if rejected, all
subscription payments which accompanied such rejected subscription shall be
returned forthwith to the subscriber. No General Partner or Affiliate of a
General Partner or any underwriter, dealer or salesman of Units shall directly
or indirectly pay or award any finder's fee, commission or other compensation to
any Person engaged by a potential Unitholder for investment advice as an
inducement to such advisor to advise the purchase of Units; provided, however,
that this provision shall not prohibit the normal sales commission payable to a
registered broker-dealer or other properly licensed Person for selling Units.
Within 15 days after a successful completion of the minimum offering, the
Subscription Prices for such Units shall be contributed in cash to the
Partnership, the Corporate Limited Partner shall receive the Limited Partner
Interests corresponding to such Units, the assignment to the Unitholders and
their contractual rights under Section 7.6(b) hereof with respect to such Units
shall commence, the General Partners shall prepare and file an amendment to the
Certificate of Limited Partnership which shall reflect the contribution to the
Partnership of the Subscription Price of such Units, and the Depositary Receipts
with respect to such Units shall be delivered to the Unitholders within 45 days
after such initial closing of the sale of Units. Thereafter, Subscription Prices
will be contributed to the Partnership and Depositary Receipts will be delivered
to Unitholders as described above until the termination of the offering of the
Units. The General Partners shall prepare and file from time to time during the
offering of Units, and at least once every 30 days, further amendments to the
Certificate of Limited Partnership to reflect the increase of the Capital
Contribution of the Corporate Limited Partner on behalf of the Unitholders.
Until acceptance of their subscriptions by the General Partners, subscribers
will not be Unitholders, but instead will be creditors of the Partnership
entitled to a return of their respective subscription payments in the event they
are not accepted as Unitholders.

               (e) MAINTENANCE OF NET WORTH. The General Partners shall at all
times use their best efforts to maintain their combined net worth (including the
net worth of the general partners of any partnership which serves as a General
Partner including, without limitation, The Krupp Company Limited Partnership-IV)
at a sufficient level to meet all requirements of the Code under currently
applicable rulings, regulations and policies of the Internal Revenue Service and
as hereafter interpreted by the Internal Revenue Service, any agency of the
federal government or the courts, to permit the Partnership to be classified for
federal income tax purposes as a partnership and not as an association taxable
as a corporation, and shall, irrespective of such requirements, maintain such
combined net worth on a fair market basis at an amount at least equal to
$1,000,000.

               (f) DELEGATION OF POWERS. Each General Partner, while there is
more than one, may act on behalf of the Partnership in connection with any
particular matter affecting the Partnership, including the authority to execute
notes, deeds, mortgages and other instruments. Except as otherwise provided
under this Agreement or by law, the General Partners may delegate all or any of
their duties under this Agreement


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to any of their own respective partners, officers or employees, and in
furtherance of such delegation may elect, employ, contract or deal with any
Person (including any General Partner or any Affiliate of a General Partner).

               (g) RELIANCE BY THIRD PARTIES. No Person dealing with the
Partnership, or its Assets, whether as mortgagee, assignee, purchaser, lessee,
grantee or otherwise, shall be required to investigate the authority of the
General Partners, or any General Partner purporting to act in behalf of the
other General Partners, in selling, assigning, leasing, mortgaging, conveying or
otherwise dealing with any Partnership Assets or any part thereof, nor shall any
such assignee, lessee, purchaser, mortgagee, grantee or other Person entering
into a contract with the Partnership be required to inquire as to whether the
approval of the Partners or Unitholders for any such sale, assignment, lease,
mortgage, transfer or other transaction has been first obtained. Any such Person
shall be conclusively protected in relying upon a certificate of authority or
any other material fact signed by any General Partner, or in accepting any
instrument signed by any General Partner in the name and behalf of the
Partnership or the General Partners.

           6.2 LIMITATIONS ON THE EXERCISE OF POWERS OF GENERAL PARTNERS. The
General Partners shall have no power to take any action prohibited by this
Agreement or by the Massachusetts Uniform Limited Partnership Act. Furthermore,
in their administration of the Partnership's affairs, the General Partners shall
be subject to the following specific limitations:

               (a) INVESTMENT OBJECTIVES AND POLICIES. The Partnership's
Investment in Assets shall not be less than eight-two percent (82%) of the gross
proceeds of the Partnership's offering of Units, and Front-End Fees and Expenses
shall not exceed eighteen percent (18%) of such gross proceeds. The Partnership
expects to invest approximately 70% of the net proceeds of the offering of Units
in unleveraged Properties. The Properties to be acquired by the Partnership
shall consist primarily of apartment complexes, office and light industrial
buildings, and/or shopping centers. All of the Properties shall be located in
the United States. The Partnership shall invest in developed Properties and may
expand, rehabilitate or otherwise improve existing Properties. The Partnership
may invest in resort or recreational properties, hotels, nursing homes, gaming
facilities, or mobile home parks through either joint venture or net-lease
investments respecting existing properties or facilities. No unimproved or
non-income producing property shall be acquired. The Partnership expects to
invest approximately 30% of the net proceeds of the offering of Units in MBS
issued by GNMA, FNMA or FHLMC. On an interim basis, the Partnership may invest
its funds either in (i) United States Government securities, other United States
Government guaranteed money instruments, certificates of deposit of banks
located in the United States having total assets in excess of $100 million, bank
repurchase agreements collateralized by securities of the United States
Government or governmental agencies, bankers' acceptances, and similar money
market investments, or (ii) shares of public investment companies registered
with the Securities and Exchange Commission whose assets exceed $50,000,000 and
are invested in the foregoing types of investments and held by an independent
custodian. The General Partners shall attempt to manage the Partnership's
investments in MBS and its interim investments to assure that the Partnership
shall not be deemed an investment company as such term is defined in the
Investment Company Act of 1940. The Partnership shall not redeem or repurchase
Limited Partnership Interests or Units and shall not underwrite the securities
of other issuers.

               (b) SALES AND LEASES OF PROPERTIES FROM OR TO THE GENERAL
PARTNERS AND THEIR AFFILIATES. The Partnership shall not purchase, lease or
acquire any Asset from any General Partner or any Affiliate of any General
Partner or any Person in which any General Partner or Affiliate has a material
(i.e., greater than 5%) interest including, without limitation, any partnership
of which any General Partner or Affiliate of a General Partner is a partner.
Notwithstanding the foregoing, the General Partners or their Affiliates may
purchase a Property in their own name, and assume loans in connection therewith
and temporarily hold title thereto for the purpose of facilitating the
acquisition of such Property or the borrowing of money for the Partnership, or
any other purpose related to the business of the Partnership, provided that (i)
such Property is purchased by the Partnership for a Purchase Price (and related
cash investment) no greater than the Purchase Price (and related cash
investment) in such Property (including, without limitation, equity payments,
transfer taxes, financing and closing costs) made or agreed to be made


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by the General Partners or their Affiliates, except for payment of Acquisition
Expenses to the extent permitted by this Agreement, (ii) there is no difference
in interest rates of the loans secured by the Property at the time acquired by
the General Partners or their Affiliates and the time acquired by the
Partnership, and (iii) no other payment directly or indirectly arising out of
such transaction is received by, nor any other benefit conferred upon, any
General Partner or Affiliate thereof apart from compensation otherwise permitted
by this Agreement. The General Partners or their Affiliates may lease office or
other space in any Property owned by the Partnership; provided, however, that
any such lease (i) shall be on terms and conditions no less favorable to the
Partnership than those which would have been determined by arm's-length
negotiations with a non-affiliated person for comparable space in the area where
the Property is located, which determination may be made on the basis of, and
shall take into account, the terms, conditions and rentals agreed to by any
other tenants of the Property, (ii) shall be terminable on 60 days' prior
written notice by the Partnership without penalty, and (iii) shall provide that
any rentals from subleases relating thereto which are in excess of the rentals
from such lease shall be paid to the Partnership and, provided further, that no
more than 15% of the office space of the Partnership Properties shall be leased
to the General Partners or their Affiliates. Except as otherwise provided
herein, the Partnership shall not sell or lease any Property to any General
Partner or any Affiliate of a General Partner.

               (c) LOANS TO OR FROM THE GENERAL PARTNERS AND THEIR AFFILIATES.
No loans may be made by the Partnership to any General Partner or any Affiliate
of a General Partner. A General Partner or any Affiliate of a General Partner
may loan funds to the Partnership but only with interest rates and other finance
charges and fees not in excess of the amounts that are charged by unrelated
banks on comparable loans for the same purpose in the locality of the Property
in connection with which the loan was made, and in no event shall the annual
interest rate charged on any such loan exceed by more than 2% the base rate of
Bank of New England, N.A., Boston, Massachusetts. In addition, (i) to the extent
that the General Partners or their Affiliates shall themselves borrow the funds
which they loan to the Partnership, the interest rates and other finance charges
charged to the Partnership shall not exceed the corresponding amounts paid by
the General Partners of their Affiliates, and (ii) neither any General Partner
nor any Affiliate of a General Partner shall make loans to the Partnership with
a prepayment charge or penalty which is evidenced or secured by either a first
or junior or all-inclusive note or mortgage except to the extent that such
prepayment charge or penalty is attributable to an underlying encumbrance.
Neither any General Partner or Affiliate of a General Partner shall provide
permanent financing for the Partnership, and all payments of principal and
interest on any financing provided by the General Partners or any Affiliate of a
General Partner shall be due and payable within 12 months after the date of the
loan. In the event the Partnership utilizes any all-inclusive (or "wrap-around")
note issued by the Partnership to the General Partners or an Affiliate thereof,
said note shall provide that the Partnership shall receive credit on its
obligation under said note for payments made by the Partnership directly on the
underlying encumbrance and that a bank, escrow company or other paying agent
shall collect payments (other than amounts not to be applied to the underlying
encumbrance) on the all-inclusive note and make disbursements therefrom to the
holder of the underlying encumbrance prior to making any disbursement to the
holder of the all-inclusive note or, in the alternative, all payments on the
all-inclusive note and underlying notes shall be made directly by the
Partnership. In addition, no General Partner or Affiliate of a General Partner
shall receive interest on the amount of the underlying encumbrance included in
any all-inclusive note in excess of that payable to the lender on that
underlying encumbrance.

               (d) EXCHANGE OF INTERESTS FOR ASSETS.  The Partnership shall not 
acquire any Asset in exchange for Interests in the Partnership.

               (e) JOINT VENTURE INVESTMENTS. The Partnership shall not make
investments in the general or limited partner interests of any other program, or
enter into any joint venture or partnership which owns or operates a particular
Asset except for (i) any such general partnership or venture entered into to
facilitate the holding of title to any Asset and in which the Partnership holds
all or substantially all of the beneficial interest, or (ii) a general
partnership or joint venture to acquire and hold an Asset and with respect to
which each of the following conditions is satisfied. First, the Partnership
shall acquire a controlling interest in any such general partnership or venture.
For purposes hereof, the Partnership shall


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be deemed to have a "controlling interest" in such general partnership or
venture if the Partnership holds an interest of not less than 50% in the capital
and profits of the venture and the joint venture agreement or related documents
grants to the Partnership the joint right to make or participate in basic
management decisions concerning the sale, leasing, refinancing, expansion or
improvement of the Asset. Second, the General Partners, in their capacity as
managers of the Partnership, shall not do, or cause such joint venture to do,
any act which would not be permitted under this Agreement if title to such Asset
were held directly by the Partnership. Third, no such general partnership or
venture shall be entered into by the Partnership which involves the payment of
duplicate property management or other fees which would have the effect of
circumventing any of the restrictions on and prohibition of transactions
involving conflicts of interest contained in this Agreement. Fourth, in the
event of a proposed sale of the Asset initiated by either joint venture partner,
the Partnership must have a right of first refusal to purchase the other party's
interest. Fifth, the Partnership may enter into joint ventures with another
partnership sponsored by the General Partners or their Affiliates, but only if
such other partnership has substantially identical investment objectives and
management compensation provisions to those of the Partnership. No duplicative
property management or other fees shall be permitted in any such joint ventures.
In addition, each partnership must have a right of first refusal to buy out the
other partnership, and the investment by each partnership must be on
substantially the same terms and conditions.

               (f) PROPERTY APPRAISALS. No Property shall be acquired at a
Purchase Price to the Partnership in excess of its value as determined by an
appraisal prepared by a competent independent appraiser, which appraisals shall
be maintained in the records of the Partnership for not less than five years
after the date of acquisition and which shall be available for inspection and
duplication by any Partner or his representative at his cost. Similar appraisals
shall be made of each Property in each year.

           6.3 LIABILITY FOR ACTS OR OMISSIONS AND INDEMNIFICATION. No General
Partner or Affiliate of a General Partner shall be liable, responsible or
accountable in damages to any of the Partners, Unitholders or the Partnership
for any act or omission of any General Partner in good faith on behalf of the
Partnership and in a manner reasonably believed by such General Partner to be
within the scope of the authority granted to the General Partners by this
Agreement and in the best interests of the Partnership, except for acts or
omissions constituting negligence, misconduct or breach of fiduciary duty. The
General Partners and their respective Affiliates shall be entitled to indemnity
from the Partnership for any loss, damage, or claim by reason of any act or
omission performed or omitted by the General Partners in good faith on behalf of
the Partnership and in a manner reasonably believed by the General Partners to
be within the scope of the authority granted to the General Partners by this
Agreement and in the best interests of the Partnership, except that they shall
not be entitled to be indemnified in respect of any loss, damage or claim
incurred by reason of negligence, misconduct, or breach of fiduciary duty. Any
indemnity under this Section shall be provided out of and to the extent of
Partnership assets only, and no Partner shall have or incur any personal
liability on account thereof. In no event shall the Partnership assume the cost
of any portion of liability insurance which would insure the General Partners
for any liability as to which the General Partners are prohibited from being
indemnified by the Partnership.

           Notwithstanding the foregoing, neither the General Partners nor any
officer, director, employee, agent, Affiliate or assign of the General Partners
or of the Partnership shall be indemnified for liabilities arising under federal
and state securities laws unless there has been a successful adjudication on the
merits of each count involving securities law violations and indemnification of
litigation costs is approved, or such claims have been dismissed with prejudice
on the merits by a court of competent jurisdiction.

           6.4 COMPENSATION OF THE GENERAL PARTNERS AND THEIR AFFILIATES. The
General Partners and their Affiliates shall be entitled to receive from the
Partnership the following amounts in addition to distributions made to them
pursuant to Section 8 hereof:

               (a) The Partnership is authorized to enter into a Sales Agent
Agreement with Krupp Securities Corporation under which Krupp Securities
Corporation shall agree to act as managing underwriter


                                 A-8

 









for the offering of Units made pursuant to Section 6.1(d) hereof. Krupp
Securities Corporation will in turn enter into Selected Dealer Agreements with
participating selected dealers. Pursuant to the Sales Agent Agreement and the
Selected Dealer Agreements, Krupp Securities Corporation or the participating
selected dealers, as the case may be, shall be entitled to receive out of the
gross proceeds of such offering the following compensation: (1) a sales
commission of up to a maximum of $80 (8%) per $1,000 of Units sold and (2) an
accountable reimbursement of due diligence expenses incurred by prospective
selected dealers up to a maximum of $5 (1/2%) per $1,000 of Units sold.

               (b) For services rendered in connection with the acquisition of
Assets by the Partnership, the Partnership shall pay to Affiliates of the
General Partners an Acquisition Fee equal to 2.85% of the initial Invested
Capital of the Unitholders resulting from the offering of Units. In the event
that any other fee or commission is incurred in connection with the selection or
purchase of any Property by the Partnership, whether designated as a real estate
commission, acquisition fee, finder's fee, selection fee, development fee,
construction fee, non-recurring management fee, consulting fee or any fee of
similar nature however designated and however treated for tax or accounting
purposes, it shall be paid by Affiliates of the General Partners out of the
Acquisition Fee. In addition, the Partnership shall reimburse the General
Partners and their Affiliates with respect to Acquisition Expenses incurred by
them. In no event shall the aggregate of the Acquisition Expenses paid by the
Partnership exceed 1% of the initial Invested Capital of the Unitholders
resulting from the offering of Units. Subject to the foregoing limitations and
to the additional limitations set forth in Section 12.4 hereof, the General
Partners and their Affiliates shall be entitled to receive reimbursement for
organizational and offering expenses, Acquisition Expenses, and other expenses
incurred by them in connection with the organization and operation of the
Partnership.

               (c) For services rendered in managing the affairs of the
Partnership, the Partnership shall pay to the General Partners a Basic
Management Fee equal to 5% of the Partnership's annual Cash Flow, but payment of
such Fee will be subordinated to the extent necessary for the Unitholders and
Investor Limited Partners to receive under Section 8.2 an amount for such year
equal to a 7% non-cumulative annual return on their Invested Capital.

               (d) For services rendered in managing the affairs of the
Partnership, the Partnership shall pay to the General Partners an Incentive Fee
in an amount equal to 3% of the Partnership's annual Cash Flow, but payment of
such Fee will be subordinated to the extent necessary for the Unitholders and
Investor Limited Partners to receive under Section 8.2 an amount for such year
equal to an 8% non-cumulative annual return on their Invested Capital.

               (e) Upon the sale of any Property, the General Partners shall
receive for their actual services in connection with such sale a real estate
disposition fee in an amount equal to 3% of the contract sales price of the
Property, provided that in no event shall (1) any such fee exceed 50% of the
competitive real estate commission in the area where the Property sold is
located and, together with any other brokerage fees payable to or by any other
Person, exceed 6% of the contract price for the sale of such Property, and (2)
any such real estate disposition fee be paid until after all Investor Limited
Partners and Unitholders shall first have received a return of their total
Invested Capital and any previously unpaid Cumulative Return as determined under
Section 8.3(a) or Section 8.3(b) hereof. If and when such a return has been
achieved, any and all real estate disposition fees previously earned by the
General Partners shall be paid by the Partnership to the General Partners prior
to any other distributions to the Partners. If the General Partners participate
with an independent broker on resale, the aforesaid subordination requirement
shall apply only to the commission earned by the General Partners.

               (f) The Partnership is authorized to purchase title insurance and
liability insurance from Affiliates of the General Partners at rates at least
equal to the lowest rate obtainable from two unaffiliated companies
independently engaged in the business of providing such services to other than
Affiliates, provided at least 75% of their insurance brokerage service gross
revenue is derived from other than Affiliates.



                                 A-9

 









               (g) Commencing with the month of acquisition of any Property, the
General Partners are authorized to enter into a property management agreement
with respect to such Property. Under any such agreements with a General Partner
or any Affiliate of the General Partners, the Partnership shall pay a monthly
fee equal to the amount customarily charged in arm's-length transactions by
other firms rendering comparable services for comparable properties in the
localities where such Properties are located, but in no event to exceed (i) 5%
of the gross receipts from residential properties under management (including
all rent-up, leasing, and re-leasing fees and bonuses, and leasing related
services, paid to any Person, except for locator services performed by
non-Affiliated Persons in certain geographic areas where such locator services
are not traditionally included in property management services), (ii) 6% of the
gross receipts from office or commercial properties under management if such
property management firm provides leasing, re-leasing and leasing related
services (including, without limitation, the negotiation and review of leases
and renewals thereof), (iii) 3% of the gross receipts from office or commercial
properties under management if such property management firm does not provide
leasing, re-leasing and leasing related services, (iv) 3% of the gross receipts
from industrial properties under management (inclusive of leasing, re-leasing
and leasing related services provided by such property management firm), or (v)
1% of the gross receipts from industrial, office or commercial properties which
are leased on a long-term (ten or more years) net (or similar) basis, except
that a one-time initial leasing fee of 3% of the gross receipts on each such
lease shall be permitted, such fee to be payable over the first five full years
of the original term of such lease. Such fee shall include, with respect to the
Property subject to such agreement, any fees paid to a non-related Person for
bookkeeping or property management services, but shall exclude (except in the
case of residential properties) any fees paid to real estate brokers which are
not Affiliates of the General Partners in connection with the procurement of
tenants in such Property. Under any such agreement, the management agent shall
agree to perform services in connection with day-to-day operations of the
Partnership Property subject to the Agreement including, but not limited to: (i)
collection of rent payable under outstanding leases of the Partnership Property;
(ii) supervision of the maintenance, repair, remodeling, and refurbishing of the
Partnership Property; (iii) review of rental schedules and recommendations with
respect to changes thereto; (iv) employment and supervision of on-site property
managers and other property management personnel on behalf of the Partnership,
together with the establishment of procedures regarding the management of
Partnership Property; (v) negotiation and review of leases with respect to the
Partnership Property if the managing agent is responsible for leasing,
re-leasing and leasing related services; (vi) negotiation and review of
maintenance agreements; (vii) review of replacement and working capital reserves
and recommendations with respect to changes thereto; (viii) preparation and
review of budgets and cash flow projections for the Partnership Property; (ix)
periodic physical inspections and market surveys; and (x) determination and
implementation of capital improvements. Subject to the limitations set forth in
Section 12.4 hereof, the General Partners are authorized to reimburse the entity
or entities which manage any Property pursuant to a management agreement for
proper expenditures, obligations and liabilities (including the salaries of
on-site property managers and personnel) incurred by such agent in connection
with the operation of such Property.

           6.5 OTHER INTERESTS OF THE GENERAL PARTNERS AND THEIR AFFILIATES. Any
General Partner and any Affiliate of a General Partner may engage in or possess
an interest in other business ventures (unconnected with the Partnership) of
every kind and description, independently or with others including, but not
limited to, serving as general partner of other partnerships and participating
in the real estate business in all of its phases, which shall include, without
limitation, ownership, operation, financing, construction, management,
syndication and development of real property and which may include properties
competitive with any Property. The General Partners will devote such time to the
affairs of the Partnership and each other such partnership as they, within their
sole discretion, deem necessary for the property performance of their duties.
Neither the Partnership, the Limited Partners nor the Unitholders (except for
the General Partners and their Affiliates) shall have any rights in and to such
independent ventures or the income or profits therefrom by reason of the General
Partners' position with the Partnership. Neither the General Partners nor any
Affiliate of any General Partner shall be obligated to present any particular
investment opportunity to the Partnership even if such opportunity is of a
character which, if presented to the Partnership, could be taken by the
Partnership, and each of the General Partners and their Affiliates shall have
the right to take for its own account (individually or otherwise) or to
recommend to others any


                                 A-10

 









such particular investment opportunity. Notwithstanding the foregoing, while the
Partnership has available uncommitted funds to invest in additional Properties
(other than funds of the Partnership allocated to the purchase of MBS or which
became available because of a Capital Transaction or because of the failure to
close on a property acquisition originally allocated to the Partnership), the
General Partners shall not commit any real property for investment to their own
account or to any non-specified real estate partnership subsequently sponsored
by the General Partners or their Affiliates unless the General Partners
determine that such property would not be a suitable investment for the
Partnership or that the Partnership then has insufficient funds to make such
investment. The General Partners shall make such determination on the basis of
the investment policies and objectives set forth in Section 6.2(a) hereof.
Subject to the other provisions of this Agreement, the Partnership may employ or
transact business with any Person, notwithstanding the fact that any Partner or
Unitholder or any of his Affiliates may have (or have had) an interest in or
connection with such Person, and neither the Partnership, the other Partners nor
the Unitholders shall have any rights by virtue of this Agreement in or to any
income or profits derived therefrom. Nothing herein shall be deemed to diminish
the General Partners' overriding fiduciary obligation to the Partnership or to
act as a waiver of any right or remedy the Partnership or other Partners or
Unitholders may have in the event of a breach by a General Partner of such
obligation.

           6.6 OTHER TRANSACTIONS INVOLVING THE GENERAL PARTNERS AND THEIR
AFFILIATES. Except as specifically permitted by this Agreement, the General
Partners are prohibited from entering into any agreements, contracts or
arrangements on behalf of the Partnership with any General Partner or any
Affiliate of any General Partner. Such prohibition shall include, without
limitation, the following: (a) neither a General Partner nor any such Affiliate
shall be given an exclusive right to sell or exclusive employment to sell
Property for the Partnership, provided that the General Partners shall be
entitled to perform services in connection with the sale of Partnership
Properties and to receive real estate disposition fees in connection therewith
as specified in Section 6.4(e) hereof; (b) neither any General Partner nor any
such Affiliate shall receive directly or indirectly a commission or fee (but may
receive reimbursements of expenses incurred) in connection with the reinvestment
of the proceeds of the sale, exchange or refinancing of any Property; and (c)
neither any General Partner nor any such Affiliate shall enter into an agreement
or contract with the Partnership for the development of any Property or the
construction of improvements on any Property. In addition, in connection with
any property management or other agreement entered into by the Partnership with
any General Partner or any Affiliate of the General Partners, no rebates or
"give-ups" may be received by a General Partner or any such Affiliate, nor may
the General Partner or any such Affiliate participate in any reciprocal business
arrangements which would have the effect of circumventing any of the provisions
of this Agreement.

        Section 7. LIMITED PARTNERS AND UNITHOLDERS; CORPORATE LIMITED PARTNER; 
DEPOSITARY RECEIPTS.

           7.1 CLASSES OF LIMITED PARTNERS AND UNITHOLDERS. There shall be one
class of Limited Partner Interests held by the Corporate Limited Partner and,
under certain circumstances, by Unitholders who become Investor Limited
Partners. Subject to the provisions of Section 9 of this Agreement, a Withdrawn
General Partner, or his estate or legal representatives, may also be treated as
a Limited Partner (but not as an Investor or Corporate Limited Partner) in
respect of any Interest formerly held as a General Partner in the manner
specified in Section 9.3(b) hereof.

           7.2 TRANSFERABILITY OF UNITS. The General Partners' right to accept
initial subscribers as Unitholders is set forth in Section 6.1(d) hereof. Each
prospective transferee of a Depositary Receipt may be accepted by the General
Partners as a Unitholder if such transferee provides the General Partners with
(i) information, including name, address, status as a tax-exempt entity or
non-resident alien, such information as may be necessary or appropriate to
determine suitability under applicable securities laws, and such other
information as the General Partners may request, and (2) a fee of not more than
$10.00 (not including related brokerage commissions) to reimburse the
Partnership for its costs respecting the transfer. The General Partners will use
their best efforts to accept or reject a prospective transfer as a Unitholder
within the same month as they receive such information. If a prospective
transferee is not accepted by the


                                 A-11

 









General Partners, such prospective transferee shall have no right to any
distributions or allocations of the Partnership and shall have no other rights,
obligations or duties with respect to the Partnership.

        The General Partners shall accept a prospective transferee unless a
transfer restriction applies. The General Partners shall reject a prospective
transferee if any of the following transfer restrictions applies.

               (a) The prospective transferee is not suitable under applicable 
federal or state securities laws;

               (b) The prospective transferee is a non-resident alien;

               (c) The transfer would cause the assets of the Partnership to be
"plan assets" or the transactions contemplated hereunder to be prohibited
transactions under ERISA or the Code;

               (d) The transfer is a transfer of fewer than 100 Units or would
cause the prospective transferor or the prospective transferee to hold fewer
than 250 Units (or 100 Units for IRAs and Keogh Plans), except for transfer by
will or intestacy upon the death of the transferor or by operation of law; or

               (e) The transfer would cause the Partnership to terminate under 
Section 708 of the Code.

        The General Partner may impose additional transfer restrictions in
accordance with Section 6.1(c) hereof. The Depositary Receipts evidencing the
Units shall be transferable after the first distribution from the Partnership of
Distributable Cash Flow under Section 8.2 hereof following the termination of
the offering. Transfers of Depositary Receipts shall be effective on the date of
acceptance by the General Partners.

           7.3 ABSENCE OF CONTROL OVER PARTNERSHIP BUSINESS. The Limited
Partners and Unitholders hereby consent to the exercise by the General Partners
of the powers conferred on them by this Agreement. No Limited Partner or
Unitholder (except one who may also be a General Partner, and then only in his
capacity as General Partner) shall participate in or have any control over the
Partnership business or have any right or authority to act for or to bind the
Partnership. No Limited Partner or Unitholder shall have the right to have the
Partnership dissolved and liquidated or to have his Capital Contribution
returned except as provided in this Agreement.

           7.4 LIMITED LIABILITY. The liability of each Limited Partner in his
capacity as a Limited Partner shall be limited to the amount of his Capital
Contribution, and the liability of each Unitholder in his capacity as a
Unitholder shall be limited to the amount of his Subscription Price described in
Section 5.2 hereof. No Limited Partner, in his capacity as Limited Partner, and
no Unitholder, in his capacity as Unitholder, shall have any further obligations
to the Partnership or be required to contribute any capital or loan any funds to
the Partnership; provided, however, that nothing herein shall relieve the
Limited Partners or Unitholders of any liability imposed under law, including
but not limited to their liability under the Massachusetts Uniform Limited
Partnership Act for the amount of returned Capital Contributions to the extent
necessary to discharge the Partnership's liabilities to creditors who extend
credit to the Partnership during the period the Capital Contribution was held by
the Partnership. Each Unitholder assumes and agrees to pay or to reimburse the
Corporate Limited Partner with respect to any such liability of the Corporate
Limited Partner with respect to the Limited Partner Interests corresponding to
his or its Units.

           7.5 ADMISSION OF INVESTOR AND SUBSTITUTE LIMITED PARTNERS. The
General Partners shall prepare and file from time to time after the initial
offering of Units, and in any event not less frequently than quarterly,
amendments to the Certificate of Limited Partnership to admit Investor Limited
Partners and Substitute Limited Partners pursuant to Section 7.6(h) and 10
hereof.



                                 A-12

 









           7.6  RELATIONSHIP BETWEEN CORPORATE LIMITED PARTNER AND UNITHOLDERS; 
DEPOSITARY RECEIPTS.

               (a) ISSUANCE OF DEPOSITARY RECEIPTS. Upon the contribution of the
Subscription Price for a Unit to the capital of the Partnership under Sections
5.2 and 6.1(d) hereof, the Corporate Limited Partner shall receive the Limited
Partner Interest corresponding to such Unit, the assignment to the Unitholder
and his contractual rights under section 7.6(b) hereof shall commence, the Units
will be deemed deposited by the Unitholders with the Depositary, the Depositary
Receipts will be issued by the Depositary, and a Depositary Receipt registered
in the name of the Unitholder will be delivered to him. Except in the case of
the Reinvestment Plan where Depositary Receipts may be issued in the name of a
nominee for the Reinvestment Agent, Depositary Receipts may not be issued in the
name of a nomine or agent, but may be issued only in the name of the beneficial
owner. The Corporate Limited Partner shall act as Depositary with respect to all
Units. By subscribing for a Unit and by the General Partners' acceptance of such
subscription, a Unitholder shall be deemed to have assented to all the terms and
conditions of this Agreement.

               (b) ASSIGNMENT AND COVENANT BY CORPORATE LIMITED PARTNER. The
Corporate Limited Partner, by the execution of this Agreement, irrevocably
transfers and assigns, to the extent permitted by the Massachusetts Uniform
Limited Partnership Act, to the Unitholders all of the Corporate Limited
Partner's rights and interest in and to the Limited Partner Interests
corresponding to the Units, including the right to distributions, including
liquidating distributions of the Partnership, as of the time of release to the
Partnership of the Subscription Price for each such Unit. At the same time, the
Corporate Limited Partner, by the execution of this Agreement, agrees and
covenants that it will exercise any other rights with respect to each Limited
Partner Interest solely in favor of, in the interest of, and at the direction of
the Unitholder whose Unit corresponds to such Limited Partner Interest. The
Corporate Limited Partner shall remain a Limited Partner of the Partnership with
respect to the Limited Partner Interests corresponding to the Units,
notwithstanding the assignment of its rights and interests under this Section
7.6(b).

               (c) CONSENT TO ASSIGNMENT AND COVENANT. The General Partners, by
the execution of this Agreement, irrevocably consent to and acknowledge that (1)
the foregoing assignment and covenant by the Corporate Limited Partner to the
Unitholders with respect to the Corporate Limited Partner's rights and interest
in the Limited Partner Interests corresponding to the Units as described above
is effective and (2) the Unitholders are intended to be assignees of record and
third party beneficiaries of all rights and privileges of the Corporate Limited
Partner in respect of the Limited Partner Interests corresponding to their
Units. The General Partners covenant and agree that, in accordance with the
foregoing assignment and covenant of the Corporate Limited Partner, all the
Corporate Limited Partner's rights and privileges in respect of the underlying
Limited Partner Interests may be exercised by the Unitholders on an
Interest-by-Interest basis or, if not permitted to be exercised by the
Unitholders under Massachusetts law, then by the Corporate Limited Partner on an
Interest-by-Interest basis as provided by Section 7.6(e) hereof.

               (d) NO LIABILITY OF CORPORATE LIMITED PARTNER. The Corporate
Limited Partner shall not be liable to any Unitholder for any action or
nonaction by it taken or omitted in good faith or in reliance upon advice,
written notice, request or direction from a Unitholder believed by it to be
genuine and to have been signed or presented by the proper person or persons.
The Unitholders and Investor Limited Partners and not the Corporate Limited
Partner shall be liable to the Partnership or any third party for any
obligations for which limited partners are liable under this Agreement or
Massachusetts law, and each Unitholder assumes and agrees to pay or to reimburse
the Corporate Limited Partner with respect to any such liability applicable to
his Unit.

               (e) VOTING. In the event that the Unitholders are not permitted
to exercise any voting or similar rights in the Partnership directly, the
Corporate Limited Partner shall canvass the preferences of all Unitholders on
all matters submitted to a vote of the Limited Partners, and the Corporate
Limited Partner shall vote each underlying Limited Partner Interest only in
accordance with the directions of the Unitholder whose Unit corresponds to such
Interest, with each Unit (and, therefore, each Limited Partner Interest)
entitled to one vote. The Corporate Limited Partner shall only vote the Limited
Partner Interests


                                 A-13

 









held by it in accordance with, and to the extent of, written instructions
received from the Unitholders. All voting shall be conducted in accordance with
section 13 hereof.

               (f) CALLING MEETINGS. Unitholders, individually or collectively
with Investor Limited Partners, owning directly or indirectly 10% or more of the
outstanding Limited Partner Interests, may exercise the rights of Limited
Partners to call a meeting by written notice to the Corporate Limited Partner
and the General Partners. Within ten business days after receipt of such notice,
the Corporate Limited Partner shall request a meeting in accordance with the
procedures set forth in Section 13.1 hereof.

               (g) ALLOCATIONS AND DISTRIBUTIONS. The portion of Profits or
Losses for Tax Purposes and distributions which shall be credited to the account
of the Corporate Limited Partners for the benefit of Unitholders shall be
allocated and apportioned among the Unitholders in the same manner as Profits or
Losses for Tax Purposes and distributions are allocated and apportioned among
Limited Partners with respect to the underlying Limited Partner Interests in
Section 8 of this Agreement.

               (h) EXCHANGE OF UNITS FOR LIMITED PARTNER INTERESTS. Any
Unitholder who desires to exchange all of his Units for Limited Partner
Interests may do so by delivering to the Depositary his Depositary Receipts and
transfer applications (which are available upon request from the Depositary),
and the payment of a fee of $100.00 per transaction, for legal and
administrative costs and filing fees. The effective date of any such exchange
shall be the first day of the month following the date as of which the General
Partners file an amendment to the Certificate of Limited Partnership listing the
name of such Unitholder as an Investor Limited Partner. Such an amendment shall
be filed no later than 15 days after the completion of any fiscal quarter of the
Partnership in which a Unit is exchanged for a Limited Partner Interest. Persons
who effect such conversion will receive one Limited Partner Interest for each
Unit they exchange and will not be able to re-exchange Limited Partner Interests
for Units. In accordance with Section 5.5 hereof, the Capital Account of the
Corporate Limited Partner shall be reduced by an amount equal to the capital
account of such former Unitholder, and such amount will be credited to the
Unitholder's Capital Account as an Investor Limited Partner. Units which have
been converted into Limited Partner Interests will be cancelled and will not be
reissued. If Units shall be exchanged for Limited Partner Interests as a result
of a requirement imposed by the General Partners under Section 6.1(c) hereof or
by applicable law, there shall be no fee charged by the Partnership with respect
to the transaction.

        Section 8.  ALLOCATIONS AND DISTRIBUTIONS.

           8.1    ALLOCATIONS OF PROFITS OR LOSSES FOR TAX PURPOSES.

               (a) OPERATING PROFITS OR LOSSES. Prior to the initial closing of
the sale of Units, the Profits or Losses for Tax Purposes of the Partnership
shall be allocated to the Corporate Limited Partner and the General Partners in
proportion to their respective Capital Contributions. Commencing with the date
of the initial closing of the sale of Units, the Profits or Losses for Tax
Purposes of the Partnership, other than Profits or Losses of the Partnership
arising from a Capital Transaction and the Terminating Capital Transaction, for
each fiscal year (or portion thereof) shall be determined as of the end of such
fiscal year, or portion thereof, and allocated ninety-eight percent (98%) to the
class comprised of the Limited Partners, and two percent (2%) to the class
comprised of the General Partners.

               (b) PROFITS FOR TAX PURPOSES FROM A CAPITAL TRANSACTION.  The 
Profits for Tax Purposes of the Partnership arising from a Capital Transaction 
shall be allocated as follows:

                  FIRST, to the class comprised of the General Partners to the
extent of cash distribution pursuant to Section 8.3(a) FIRST attributable to the
return of Invested Capital;

                  SECOND, to the class comprised of the General Partners to the
extent of cash distributions pursuant to Section 8.3(a) SECOND attributable to
the return of Invested Capital;



                                 A-14

 









                  THIRD, to the class comprised of the Limited Partners to the
extent of cash distributions pursuant to Section 8.3(a) THIRD;

                  FOURTH, to the class comprised of the General Partners to the
extent of cash distributions pursuant to Section 8.3(a) FOURTH; and

               (c) PROFITS FOR TAX PURPOSES FROM THE TERMINATING CAPITAL
TRANSACTION. The Profits for Tax Purposes arising from the Terminating Capital
Transaction and the winding up of the affairs of the Partnership shall be
allocated among the Partners (treating the classes comprised of the Limited
Partners and the General Partners as separate classes for such allocation) as
follows:

                  FIRST, to each class of Partners (without preference over the
other class of Partners) in the amount as to each class equal to (or if less
than, in proportion to) the aggregate of the then negative balances (if any) in
the Capital Accounts of the Partners of such class;

                  SECOND, to the class comprised of the Limited Partners until
the aggregate of the positive balances in the Capital Accounts of the Partners
of such class is equal to its Invested Capital;

                  THIRD, to the class comprised of the General Partners until
the aggregate of the positive balances in the Capital Accounts of the Partners
of such class is equal to its Invested Capital;

                  FOURTH, to the class comprised of the Limited Partners until
such class has been allocated an amount of Profits equal to the Cumulative
Return less the sum of (i) all amounts of cash whenever distributed to such
class pursuant to Section 8.2 and (ii) all amounts of cash whenever distributed
to such class pursuant to Section 8.3(a) THIRD;

                  FIFTH, to the class comprised of the General Partners until
such class has been allocated the amount of Profits necessary so that the
amounts whenever allocated under Section 8.1(b) THIRD and clause FOURTH of this
Section 8.1(c) when compared to the amounts whenever allocated under Section
8.1(b) FOURTH and this clause FIFTH are in the ratio of 85 to 15; and

                  SIXTH, any remaining Profits shall be allocated eighty-five
percent (85%) to the class comprised of the Limited Partners and fifteen percent
(15%) to the class comprised of the General Partners.

               (d) LOSSES FOR TAX PURPOSES FROM A CAPITAL TRANSACTION. All
Losses for Tax Purposes attributable to a Capital Transaction shall be allocated
ninety-eight percent (98%) to the class comprised of the Limited Partners and
two percent (2%) to the class comprised of the General Partners.

               (e) LOSSES FOR TAX PURPOSES FROM THE TERMINATING CAPITAL
TRANSACTION. Losses for Tax Purposes attributable to the Terminating Capital
Transaction and the winding-up of the affairs of the Partnership shall be
allocated to the Partners to the extent of, and any excess in proportion to, the
positive balances in their Capital Accounts (adjusted as though the
Partnership's fiscal year ended immediately prior to the event giving rise to
such Losses).

               (f) ONE PERCENT INTEREST OF GENERAL PARTNERS. Notwithstanding
anything to the contrary that may be expressed or implied in this Agreement, the
interests of all of the General Partners, taken together, in each item of
Partnership income, gain, loss, deduction, ro credit will be equal to at least
one percent (1%) of each of those items at all times during the existence of the
Partnership. In determining the interests of the General Partners in those
items, any Limited Partner Interests owned by the General Partners shall not be
taken into account.

               (g) QUALIFIED INCOME OFFSET. Notwithstanding anything in Section
8.1(a) to the contrary, if, at the end of any taxable year, any Partner has a
negative Capital Account (beyond the amount


                                 A-15

 









of such negative Capital Account such Partner is required to restore to the
Partnership) as a result of (a) allocations of loss or deduction (other than
those attributable to nonrecourse debt of the Partnership) to such Partner
pursuant to Code section 706(d) or Treasury Department Regulations section
1.751(b)(2)(a) or (b) distributions to such Partner, which allocations or
distributions could not reasonably have been expected to occur as of the end of
the prior taxable year (such negative Capital Account referred to hereafter as
"Qualified Income Offset Account"), then items of income and gain shall be
allocated to such Partner (or among all Partners in proportion to their
respective Qualified Income Offset Accounts) to the extent of such Qualified
Income Offset Account as quickly as possible.

               (h) INTEREST ON SUBSCRIPTION PRICES. Notwithstanding anything in
Section 8.1(a) to the contrary, (i) interest income of the Partnership with
respect to Subscription Prices for Units on account of the period of time prior
to the initial closing of the sale of Units shall be allocated to each Unit in
the same amount as the cash, if any, to be distributed with respect to such Unit
attributable to the receipt by the Partnership of such interest with respect to
such Subscription Price.

           8.2    DISTRIBUTABLE CASH FLOW.

           Distributable Cash Flow of the Partnership shall be distributed
ninety-eight percent (98%) to the class comprised of the Limited Partners and
two percent (2%) to the class comprised of the General Partners except that cash
shall be distributed with respect to each Unit in the amount, if any, equivalent
to the interest received by the Partnership with respect to the Subscription
Price for such Unit on account of the period of time prior to the initial
closing of the sale of Units.

           8.3    PROCEEDS OF CAPITAL TRANSACTIONS AND THE TERMINATING CAPITAL 
TRANSACTION.

               (a) CAPITAL TRANSACTION PROCEEDS. Net Cash Proceeds of a Capital
Transaction other than the Terminating Capital Transaction shall be distributed
as follows:

                  FIRST, to the class comprised of the Limited Partners until
such class has received a return of its total Invested Capital;

                  SECOND, to the class comprised of the General Partners until
such class has received a return of its total Invested Capital;

                  THIRD, to the class comprised of the Limited Partners until
such class has received an amount equal to the Cumulative Return less the sum of
(i) all amounts of cash whenever distributed to such class pursuant to this
Section 8.2, and (ii) all amounts of cash whenever distributed to such class
pursuant to this Section 8.3(a) THIRD (which distributions were made due to a
prior Capital Transaction);

                  FOURTH, to the class comprised of the General Partners until
such class has received the amount necessary so that the amounts of Net Cash
Proceeds whenever allocated under clauses THIRD and this clause FOURTH are in
the ratio of 85 to 15; and

                  FIFTH, any remaining Net Cash Proceeds shall be distributed
eighty-five percent (85%) to the class comprised of the Limited Partners and
fifteen percent (15%) to the class comprised of the General Partners.

               (b) TERMINATING CAPITAL TRANSACTION PROCEEDS. Net Cash Proceeds
of the Terminating Capital Transaction and the winding up of the affairs of the
Partnership shall be distributed as follows:

                  FIRST, to each class of Partners in the amount as to each
class equal to (or if less than, in proportion to) the aggregate of the then
positive balances (if any) in the Capital Accounts of the Partners of such
class;



                                 A-16

 









                  SECOND, to the class comprised of the Limited Partners until
the aggregate of the positive balances in the Capital Accounts of the Partners
of such class is equal to its Invested Capital;

                  THIRD, to the class comprised of the General Partners until
the aggregate of the positive balances in the Capital Accounts of the Partners
of such class is equal to its Invested Capital;

                  FOURTH, to the class comprised of the Limited Partners until
such class has received an amount equal to the Cumulative Return less the sum of
(i) all amounts of cash whenever distributed to such class pursuant to Section
8.2, and (ii) all amounts of cash whenever distributed to such class pursuant to
Section 8.3(a) THIRD;

                  FIFTH, to the class comprised of the General Partners until
such class has received the amount necessary so that the amounts whenever
allocated under Section 8.3(a) THIRD and clause FOURTH of this Section 8.3(b)
when compared to the amounts whenever allocated under Section 8.3(a) FOURTH and
this clause FIFTH are in the ratio of 85 to 15; and

                  SIXTH, any remaining Net Cash Proceeds shall be distributed
eighty-five percent (85%) to the class comprised of the Limited Partners and
fifteen percent (15%) to the class comprised of the General Partners.

           8.4    SPECIAL PROVISIONS FOR ALLOCATIONS AND DISTRIBUTIONS.

               (a) Subject to the provisions of Sections 8.4(d) and 8.4(e)
hereof, and to allocation (if any) to Partners in accordance with their
respective Capital Accounts of Profits and Net Cash Proceeds from the
Terminating Capital Transaction pursuant to Sections 8.1(c) FIRST and 8.3(b)
FIRST, all Profits or Losses for Tax Purposes of the Partnership allocated to,
and distributions of cash made to, the classes of Partners consisting of the
Limited Partners and the General Partners shall be allocated among the
respective members of such classes as follows: (1) among the Limited Partners,
in proportion to their respective number of Interests, and (2) among the General
partners, in proportion to their respective Invested Capital.

               (b) All profits or losses for Tax Purposes allocated to, and
distributions of cash made to, the Partners shall be credited or charged, as the
case may be, to their Capital Accounts as of the date as of which such Profits
or Losses for Tax Purposes are allocated and the date as of which distributions
of cash are made. All distributions made to the Partners pursuant to the
provisions of Section 8.2 hereof shall be treated as having been made and
charged to their respective Capital Accounts prior to the allocation of Profits
or Losses for Tax Purposes pursuant to Section 8.1(a); distributions under
Section 8.3(a) shall be treated as having been made and charged to their
respective Capital Accounts prior to the allocation of Profits for Tax Purposes
pursuant to Section 8.1(b); distributions under Section 8.3(b) shall be treated
as having been made and charged to their respective Capital Accounts after the
allocation of Profits for Tax Purposes pursuant to Section 8.1(c) and after the
allocation of Losses for Tax Purposes pursuant to Section 8.1(e); and all cash
distributions pursuant to Sections 8.2(b) and 8.3(a) shall be treated as having
been made and charged to their respective Capital Accounts prior to the
allocation of Losses for Tax Purposes pursuant to Section 8.1(d) and Section
8.1(e). The Profits or Losses for Tax Purposes of the Partnership allocated
among the Partners pursuant to Section 8.1(a) shall be credited or charged to
their respective Capital Accounts prior to the allocation of Profits or Losses
for Tax Purposes of the Partnership pursuant to Sections 8.1(b), (c), (d) and
(e).

               (c) The Partnership shall make distributions of Distributable
Cash Flow for each quarter commencing with the quarter in which the initial
closing of the sale of Units occurs. Within 45 days after the completion of each
quarter of the Partnership's fiscal year, the Partnership will make a
distribution of Distributable Cash Flow, which distribution will be based upon
an estimate by the General Partners of the Partnership's total Distributable
Cash Flow for such year. Within 90 days after the end of each fiscal year, the
Partnership's Distributable Cash Flow for such year will be determined and,
after


                                 A-17

 









giving effect to the amount of Distributable Cash Flow previously distributed,
the remainder will then be distributed.

               (d) All Profits or Losses for Tax Purposes allocated pursuant to
Section 8.1(a) and all distributions made pursuant to Section 8.2, if any, to
the class of Limited Partners based upon transactions of the Partnership during
any fiscal year in which Units are initially sold, shall be allocated among the
Limited Partners as follows: (i) each such fiscal year shall be divided into 365
equal portions and the operations of the Partnership shall be deemed to have
occurred on a pro rata basis over each of such portions irrespective of the
actual operations of the Partnership; (ii) such allocations and distributions
shall be made with respect to each Interest on the basis of the number of such
portions during such fiscal year such Interest was outstanding. An Interest
shall be deemed outstanding from the date of acceptance by the General Partners
of the subscription therefor.

               (e) In the event that a Unit or Interest is transferred, (i)
Distributable Cash Flow with respect to the fiscal quarter during which the
transfer occurs shall be distributed among the Unitholders or Investor Limited
Partners recognized as such under this Agreement on the basis of the number of
days during such quarter that each was so recognized on a pro rata irrespective
of the actual operations of the Partnership on such days; (ii) if Distributable
Cash Flow for any fiscal year with respect to a Unit or Interest is distributed
to more than one Person under this Section, then the Profit or Loss for Tax
Purposes allocated under Section 8.1(a) to such Unit or Interest with respect to
such fiscal year shall be divided into 365 equal portions and allocated one
portion to the Person who received Distributable Cash Flow for each day
irrespective of the actual operations of the Partnership; (iii) Net Cash
Proceeds and Profit or Loss For Tax Purposes arising from the same Capital
Transaction (or the Terminating Capital Transaction) shall be distributed and
allocated, respectively, to the Unitholder or Investor Limited Partner
recognized as such under this Agreement as of the date of such Capital
Transaction (or the Terminating Capital Transaction); and (iv) Net Cash Proceeds
and Profit or Loss for Tax Purposes not received or realized, as the case may
be, upon a Capital Transaction (or the Terminating Capital Transaction), but
later received or realized, as the case may be, by the Partnership as a result
of an installment or other deferred payment sale, shall be distributed and
allocated, respectively, to the Unitholder or Investor Limited Partner
recognized as such under this Agreement as of the dates such Net Cash Proceeds
and Profit or Loss are received or realized, as the case may be, by the
Partnership.

               (f) Any allocation or distribution with respect to a Limited
Partner Interest shall be made directly to the Unitholder of the Unit
corresponding to such Interest, if any.

               (g) If an amount paid or deemed paid to the General Partners or
their Affiliates as a fee or payment described in Section 6.4 is a distribution
to a general partner in its capacity as a partner and not a guaranteed payment
as defined in Section 707(c) of the Code or a payment to a partner not acting in
his capacity as a partner under Section 707(a) of the Code, the General Partners
shall be allocated an amount of Partnership gross income equal to such payment
and its Capital Account shall be reduced to reflect the distribution. For
purposes of Sections 8.1, 8.2 and 8.3, Profits and Losses for Tax Purposes shall
be determined after making any allocation required by this Section 8.4(g).

               (h) All amounts paid with respect to any Unit as sales
commissions shall be allocated to the particular Unit with respect to which they
are paid and the Capital Account for such Unit shall be reduced to reflect such
allocation.

           8.5 RETURN OF CAPITAL CONTRIBUTIONS. All Partners and Unitholders
shall look solely to the assets of the Partnership for the return of Capital
Contributions or any other distributions with respect to their Interests. If the
assets remaining after payment or discharge, or provisions for payment or
discharge, of its debts and liabilities are insufficient to return the Capital
Contributions or to make any other distributions to the Partners and
Unitholders, no Partner or Unitholder shall have any recourse against the
personal assets of any other Partner or Unitholder for that purpose, except to
the limited extent set forth in Section 6.3 hereof.


                                 A-18

 









           8.6 REINVESTMENT OF NET CASH PROCEEDS. The Partnership shall not
reinvest Cash Flow in Assets. The Partnership may reinvest Net Cash Proceeds
only as provided in Section 6.1(c) hereof. In the event reinvestment is
permitted under Section 6.1(c) hereof, the General Partners may elect, in their
sole discretion based upon real estate and MBS market conditions then in effect,
either to distribute all or any portion of the cash available for such
reinvestment or to reinvest such cash in Properties or MBS. Notwithstanding the
foregoing, if the transaction giving rise to such cash shall create any federal
or state income tax liability for Investor Limited Partners or Unitholders, no
such cash shall be reinvested unless sufficient Net Cash Proceeds are
distributed to enable Investor Limited Partners and Unitholders to pay such
taxes (assuming the Investor Limited Partners and Unitholders are taxable at an
overall rate of 40% on ordinary income and 16% on long-term capital gains).

           8.7 RETURN OF UNINVESTED CAPITAL CONTRIBUTIONS. In the event that any
portion of the Limited Partners' Capital Contributions is not invested or
committed for investment by the Partnership within 24 months from the date on
which the offering of Units commenced (except for any amounts utilized to pay
expenses of the Partnership and amounts set aside for working capital reserves
not in excess of 5% of such Capital Contributions), such portion of Capital
Contributions shall promptly be distributed by the Partnership as a return of
capital. For the purpose of this Agreement, funds will be deemed to have been
committed to investment and will not be returned to the extent written
agreements in principle, commitment letters, letters of intent or understanding,
option agreements or any similar contracts or understandings were at any time
executed but not terminated during the aforesaid 24-month period, regardless of
whether any such investment is or is not ultimately consummated, and to the
extent any funds have been reserved to make contingent payments in connection
with any property, regardless of whether any such payments are or are not
ultimately made. In the event that any Capital Contributions shall be returned
pursuant to this Section, the respective Capital Contributions (and Invested
Capital) of the Investor Limited Partners and Unitholders shall be reduced by
the amount of such distribution.

           8.8 LIMITATION ON DISTRIBUTIONS TO THE GENERAL PARTNERS.
Notwithstanding anything to the contrary that may be expressed or implied in
this Agreement, distributions of Net Cash Proceeds of any Capital Transactions
or the Terminating capital Transaction shall not be made to the General Partners
pursuant to Section 8 hereof until 100% of the Limited Partners' Invested
Capital shall have been returned and the Limited Partners shall have received an
amount equal to the sum of (i) a 6% annual cumulative return on the portion of
their Invested Capital Invested in Property, and (ii) a 10% annual cumulative
return on the portion of their Invested Capital invested in MBS; such amounts to
be subject to reduction on a pro rata basis, but not below zero, by the
aggregate amount of prior distributions to the Limited Partners from
Distributable Cash Flow and Net Cash Proceeds from prior Capital Transactions.
Furthermore, in no event shall the General Partners receive in the aggregate in
excess of 15% of the Net Cash Proceeds of all Capital Transactions and the
Terminating Capital Transaction which remain following the payments of Net Cash
Proceeds to the Limited Partners described in this Section 8.8.

        Section 9.    WITHDRAWAL OF GENERAL PARTNERS.

           9.1 VOLUNTARY WITHDRAWAL. Any General Partner may Voluntarily
Withdraw as a General Partner from the Partnership at any time provided that (a)
the General Partners shall have given sixty (60) days prior notice thereof to
the Limited Partners, (b) the Partnership shall have received the opinion of
Counsel to the Partnership to the effect that such Withdrawal will not
constitute a termination of the Partnership or otherwise materially adversely
affect the status of the Partnership for federal income tax purposes and (c) if
the General Partner proposing to Withdraw is then the sole General Partner, or
if such Voluntary Withdrawal shall require the admission of a new General
Partner in order to preserve the status of the Partnership as a partnership for
federal income tax purposes, a new General Partner shall have been selected who,
or which, (i) shall have stated willingness to be admitted, (ii) shall satisfy
the then applicable provisions of the Code and any applicable procedures,
regulations, rules and rulings (including published private rulings) thereunder,
including applicable net worth requirements so that the Partnership shall be
classified as a partnership for tax purposes, and (iii) shall have received the
specific written consent of any remaining General Partner and of Limited
Partners holding not less than a majority of the Limited Partner


                                 A-19

 









Interests with respect to such admission. Notwithstanding the foregoing, in no
event shall either The Krupp Corporation or The Krupp Company Limited
Partnership-IV Voluntarily Withdraw as a General Partner from the Partnership
prior to December 31, 1989.

           9.2 INVOLUNTARY WITHDRAWAL. A General Partner shall be deemed to have
Involuntarily Withdrawn as a General Partner from the Partnership upon the
occurrence of any of the following events: (a) in the case of The Krupp Company
Limited Partnership-IV or an additional or Substitute General Partner which is a
partnership, upon the death, physical or mental incapacity (as determined by
certificate of a licensed physician), dissolution or bankruptcy of all general
partners of such partnership, (b) in the case of The Krupp Corporation or an
additional or Substitute General Partner which is a corporation, the filing of a
certificate of dissolution, or its equivalent, for such General Partner or the
revocation of its charter, (c) the removal of the General Partner pursuant to a
vote of the Limited Partners made in accordance with Section 13 of this
Agreement, (d) the making of an assignment for the benefit of creditors, or (e)
any other event which constitutes an event of withdrawal under the Massachusetts
Uniform Limited Partnership Act as then in effect.

           9.3    CONSEQUENCES OF WITHDRAWAL.

               (a) Upon the Withdrawal of any General Partner, the Withdrawn
General Partner or his estate or legal representatives shall be entitled to
receive from the Partnership (i) any positive balance in his or its Capital
Account (as adjusted to the date of such Withdrawal), (ii) any amounts due and
owing to it or him by the Partnership less any amounts due and owing by it or
him to the Partnership, and (iii) the remaining balance, if any, of fees payable
as and when due pursuant to this Agreement or any other written agreements
between the Partnership and such General Partner in his capacity as General
Partner; however, the Withdrawn General Partner shall not be entitled to any
such fees which had not yet been earned by him prior to his Withdrawal. The
right of a General Partner, his estate or legal representatives to payment of
said amounts and fees shall be subject to any claim for damages which the
Partnership or any Partner may have against such General Partner, his estate or
legal representatives if such Withdrawal is in contravention of this Agreement.
Valuation of a Withdrawn General Partner's Interest shall be in accordance with
the provisions of Section 13.4 hereof.

               (b) Each General Partner hereby covenants and agrees, in the
event of his Withdrawal, to transfer to a Substitute General Partner selected as
provided in Section 9.5 hereof or to the remaining General Partner or General
Partners, such portion, if any, of his General Partner Interest as may be
required to assure that the Partnership will meet the minimum general
partnership interest requirement for the continued treatment of the Partnership
as a partnership under the then applicable provisions of the Code and any
applicable procedures, regulations, rules and rulings (including published
private rulings) thereunder. Any such transfer will be made in consideration of
the payment by the Substitute General Partner or the remaining General Partner
or Partners to the Withdrawn General Partner, his estate or legal
representatives, of the fair market value of such interest. Such payments shall
be in addition to any amounts payable pursuant to Section 9.3(a) hereof by the
Partnership. Any portion of such Withdrawn General Partner's Interest which is
not required to be transferred as aforesaid may be retained by such Withdrawn
General Partner, or his estate or legal representatives as appropriate. Such
Withdrawn General Partner, or his estate or legal representatives, shall be
treated as a Limited Partner in the Partnership in respect to any such retained
Interest.

               (c) If the Withdrawal of a General Partner shall occur as a part
of a removal and replacement of such General Partner effected in accordance with
Section 13 hereof, the provisions of said Section 13 shall govern to the extent
(if any) that the provisions of said Section 13 are inconsistent with the
provisions of this Section 9.3

           9.4 LIABILITY OF WITHDRAWN GENERAL PARTNER. If the business of the
Partnership is continued after Withdrawal of a General Partner, the Withdrawn
General Partner, his estate or legal representatives shall remain liable for all
obligations and liabilities incurred by him while a General Partner and for
which


                                 A-20

 









he was liable as a General Partner, but shall be free of any obligation or
liability incurred on account of or arising from the activities of the
Partnership from and after the time such Withdrawal shall have become effective.

           9.5    CONTINUATION OF PARTNERSHIP BUSINESS.

               (a) PROCEDURE IF THERE IS A REMAINING GENERAL PARTNER. Upon the
Withdrawal of a General Partner, the remaining General Partner or Partners, if
any, shall promptly notify the Limited Partners and Unitholders of such
Withdrawal. The remaining General Partner or Partners may elect to continue the
Partnership business. If at any time The Krupp Company Limited Partnership-IV or
a successor General Partner with substantial net worth shall Withdraw as a
General Partner, the remaining General Partners or Partner may (but shall not be
obligated to) propose for admission a Substitute General Partner or General
Partners, unless a Substitute General Partner shall have already been proposed
by the Limited Partners pursuant to Section 13 hereof. Any such proposed
Substitute General Partner shall, with the specific written consent of the other
General Partners and of the Limited Partners with respect to not less than a
majority of the Limited Partner Interests, become a Substitute General Partner
upon his or its execution of this Agreement.

               (b) PROCEDURE IF THERE IS NO REMAINING GENERAL PARTNER. If,
following the Withdrawal of a General Partner, there is no remaining General
Partner or Substitute General Partner, any Limited Partner may notify the other
Limited Partners and Unitholders of such circumstances and may propose for
admission a Substitute General Partner, unless a Substitute General Partner
shall have already been proposed by the Limited Partners pursuant to Section 13
hereof. Any Substitute General Partner proposed by such Limited Partner pursuant
to this Section 9.5(b) or Section 13.2 hereof, shall, with the specific written
consent of the Limited Partners with respect to not less than a majority of the
Limited Partner Interests, become a Substitute General Partner upon his or its
execution of this Agreement and may thereupon elect to continue the Partnership
business. If no Substitute General Partner has received the consent of the
Limited Partners with respect to not less than a majority of the Limited Partner
Interests, executed this Agreement, and elected to continue the Partnership
business within one hundred eighty (180) days from the date of the last
remaining General Partner's Withdrawal, then the Partnership shall thereupon
terminate.

        Section 10.   ASSIGNMENT OF LIMITED PARTNER INTERESTS.

           10.1 WITHDRAWAL OF A LIMITED PARTNER. Subject to compliance with this
Agreement, a Limited Partner may withdraw from the Partnership only by assigning
or otherwise transferring his or its Interest as specified in this Section 10.
Such withdrawal of a Limited Partner shall not dissolve or terminate the
Partnership. In the event of a Limited Partner's withdrawal because of death,
legal incompetence, dissolution or other termination, the estate, legal
representative or successor of such withdrawn Limited Partner shall be deemed to
be the assignee of such withdrawn Limited Partner's Interest any many become a
Substitute Limited Partner upon compliance with the provisions of Section 10.3
hereof.

           10.2 ASSIGNMENT. Units of Depositary Receipts may be Assigned in
accordance with Section 7.2 hereof. Limited Partner Interests of the Corporate
Limited Partner which corresponds to Units may be Assigned in accordance with
Section 7.6(b) hereof. Other Limited Partner Interests may be Assigned only in
accordance with this Section 10.2 and Section 10.4. Such Limited Partner
Interests may be Assigned provided there shall be filed with the Partnership, in
form satisfactory to the General Partners, a duly executed counterpart of the
instrument making such Assignment and such instrument (a) evidences the written
acceptance by the assignee of all of the terms and provisions of this Agreement,
(b) represents that such Assignment was made in accordance with all applicable
laws and regulations (including, without limitation, such minimum investment and
investor suitability requirements as may then be applicable under state
securities laws), and (c) is accompanied by a fee of $50.00 to reimburse the
Partnership for its costs respecting the Assignment.



                                 A-21

 









           10.3 SUBSTITUTION. An assignee of a Limited Partner Interest assigned
in accordance with the provisions of Section 10.1 or 10.2 hereof shall become a
Substitute Limited Partner if:

               (a) such assignee executes an instrument reasonably satisfactory
to the General Partner accepting and adopting the terms and provisions of this
Agreement;

               (b) in the case of Assignments other than by operation of law,
the assignor states his intention in writing to have his assignee become a
Substitute Limited Partner; and

               (c) the General Partners, in their sole discretion, consent in
writing to such substitution (which consent may be withheld).

           If all of the conditions of Section 10.1 or 10.2 and this section
10.3 shall have been met, the assignee of a Limited Partner Interest shall
become a Substitute Limited Partner as of the date as of which the General
Partners consent in writing to his admission to the Partnership as a Substitute
Limited Partner, which consent may be evidenced by the filing of an amendment to
the Certificate of Limited Partnership listing the name of such Substitute
Limited Partner. Such an amendment shall be filed no later than 15 days after
the completion of any fiscal quarter of the Partnership in which a Substitute
Limited Partner is admitted to the Partnership.

           An assignee of a Limited Partner Interest who does not become a
Substitute Limited Partner in accordance with this Section 10.3 and who desires
to make a further Assignment of his Interest shall be subject to all the
provisions of Sections 10.2, 10.3 and 10.4 hereof, to the same extent and in the
same manner as any Limited Partner desiring to make an Assignment of his
Interest. Failure or refusal of the General Partners to admit an assignee of a
Limited Partner Interest as a Substitute Limited Partner shall in no way affect
the right of such assignee to receive the share of the Profits or Losses for Tax
Purposes and distributions of Cash Flow and Net Cash Proceeds to which his
predecessor in interest would have been entitled in accordance with Section 8
hereof.

           10.4  PROHIBITED ASSIGNMENT.  No Limited Partner Interests may be 
Assigned or otherwise transferred:

               (a) to a non-resident alien;

               (b) to a minor or incompetent (unless a guardian, custodian or
conservator has been appointed to handle the affairs of such Person);

               (c) to any Person not permitted to be a transferee under law
including, in particular but without limitation, applicable state securities
laws which generally provide that, except in the case of a transfer by gift,
inheritance, intra-family transfer, or family dissolution, each transferee of
Limited Partner Interests must acquire not less than 100 Limited Partner
Interests, and that following a transfer of less than all his Limited Partner
Interests, each transferor must retain a sufficient number of Limited Partner
Interests to satisfy the minimum investment standards applicable to his initial
purchase of Limited Partner Interests;

               (d) to any Person if such Person would hold after such Assignment
less than 100 Limited Partner Interests unless the General Partners shall give
specific written consent to such Assignment;

               (e) to any Person if, in the opinion of Counsel to the
Partnership, such transfer would result in the assets of the Partnership being
"plan assets" or the transactions hereunder being prohibited transactions under
ERISA or the Code; or

               (f) to any Person if, in the opinion of Counsel to the
Partnership, such transfer would result in termination under the Code of the
Partnership's taxable year or of its status as a partnership.



                                 A-22

 









           Any such attempted Assignment without the express written consent of
the General Partners shall be void and ineffectual and shall not bind the
Partnership. In the case of a proposed Assignment which is prohibited solely
under clause (d) above, however, the Partnership shall be obligated to permit
such Assignment to become effective if and when, in the opinion of Counsel to
the Partnership, such Assignment would no longer have either of the adverse
consequences under the Code which are specified in that clause.

           10.5 STATUS OF AN ASSIGNING LIMITED PARTNER. Any Limited Partner
(other than the Corporate Limited Partner) who shall Assign all of his Interest
shall cease to be a Limited Partner of the Partnership shall no longer have any
of the rights or privileges of a Limited Partner, except that unless and until a
Substitute Limited Partner is admitted in his stead, such assigning Limited
Partner shall retain the statutory rights of an assignor of a limited partner
interest under the Massachusetts Uniform Limited Partnership Act.

        Section 11.   DISSOLUTION AND WINDING-UP.

           11.1  EVENTS CAUSING DISSOLUTION.  The Partnership shall be dissolved
and its affairs wound up on the first to occur of the following:

               (a) the Withdrawal of any General Partner, unless the remaining
General Partner or General Partners, or a Substitute General Partner admitted in
accordance with Section 9.5 or Section 13 hereof, agree to continue the
Partnership business pursuant to Section 9.5; or

               (b) an election to dissolve the Partnership made in writing by
the General Partners with the Consent of a majority in interest of the Limited
Partner Interests, or, subject to compliance with Section 13 hereof, made by a
majority in interest of the Limited Partner Interests, without action by the
General Partners; or

               (c) the sale or other disposition of all or substantially all of
the Assets unless the General Partners elect to continue the Partnership
business for the purpose of the receipt and collection of a note and payments
thereon or the collection of any other consideration to be received in exchange
for the Assets (which activities shall be deemed to be a part of the Terminating
Capital Transaction and the winding-up of the affairs of the Partnership); or

               (d)    the expiration of the Partnership term; or

               (e) any other event which causes the dissolution and/or winding
up of the Partnership under the Massachusetts Uniform Limited Partnership Act to
the extent not otherwise provided herein.

           11.2 DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Partnership, the General Partners, or if there is none, such other Person
required by law to wind up the Partnership's affairs, shall proceed with the
liquidation of the Partnership (including, without limitation, the sale or other
disposition of any remaining Assets and cancellation of the Certificate of
Limited Partnership), and the net proceeds of such liquidation shall be applied
and distributed in accordance with the provisions of Section 8.3(b) hereof.
During the period of dissolution and winding-up of the Partnership, the General
Partners or any Person performing such actions may exercise all of the powers
granted to the General Partners herein, and they may adopt such plan, method or
procedures as they may deem reasonable in order to effectuate an orderly
winding-up. If the General Partners shall perform the foregoing functions, they
shall be compensated therefor as provided in Sections 6.4 and 8 hereof, and if
such functions shall be performed by Persons other than the General Partners,
such Persons shall be entitled to reasonable compensation from the Partnership
for their services.



                                 A-23

 









        Section 12.   FISCAL MATTERS.

           12.1 TITLE TO ASSETS AND BANK ACCOUNTS. Except to the extent that
trustees, nominees or other agents are utilized as specified in Section
6.1(b)(2) hereof, the Properties and other Assets of the Partnership shall be
held in the name of the Partnership. The funds of the Partnership shall be
deposited in the name of the Partnership in such bank account or accounts as
shall be designated by the General Partners, and withdrawals therefrom shall be
made upon the signature of any General Partner or such Person or Persons as
shall be designated in writing by any General Partner. The funds of the
Partnership shall not be commingled with the funds of any other Person.

           12.2 MAINTENANCE OF AND ACCESS TO BASIC PARTNERSHIP DOCUMENTS. The
General Partners shall maintain at the Partnership's principal office in
Massachusetts the following documents: (a) current lists of the full name and
last known business address of each Partner and Unitholder set forth in
alphabetical order, (b) a copy of the Certificate of Limited Partnership and all
amendments thereto, together with executed copies of any powers of attorney
pursuant to which the Certificate or any such amendment has been executed, (c)
copies of the Partnership's federal, state and local income tax returns and
reports, if any, for the three most recent years, and (d) copies of this
Agreement as then in effect and of any financial statements of the Partnership
for the three most recent years. Such documents are subject to inspection and
copying at the reasonable request, and at the expense, of any Partner or
Unitholder during ordinary business hours. In addition, the Partnership will
furnish a list of the names and addresses of all Limited Partners and
Unitholders, together with their respective Capital Contributions and
Subscription Prices, to any Limited Partner or Unitholder who makes a written
request therefor to the Partnership, provided such Partner or Unitholder shall
pay the cost of reproducing and delivering such list. Except to the extent
requested by any Limited Partner or Unitholder, the General Partners shall have
no obligation to deliver or mail a copy of the Partnership's Certificate of
Limited Partnership or any amendment thereto to the Limited Partners or
Unitholders. Each Limited Partner shall also have the right to obtain from the
General Partners from time to time upon reasonable demand: (i) true and full
information regarding the status of the business and financial condition of the
Partnership; (ii) promptly after becoming available, a copy of the Partnership's
federal, state and local income tax returns for each year, and (iii) other
information regarding the affairs of the Partnership as is just and reasonable.

           12.3 FINANCIAL BOOKS AND ACCOUNTING. The General Partners shall keep
or cause to be kept complete and accurate financial books with respect to the
Partnership's business. Such books shall be kept on an accrual basis and the
Profits and Losses for Tax Purposes of the Partnership shall be determined for
each fiscal year in accordance with accounting methods followed for federal
income tax purposes. Except as otherwise provided herein, whenever a
proportionate part of the Profits or Losses for Tax Purposes of the Partnership
is credited or charged to a Partner's Capital Account, every item of income,
gain, loss or deduction entering into the computation of such Profits or Losses
shall be considered either credited or charged, as the case may be, and every
item of credit or tax preference related to such Profits or Losses and
applicable to the period during which such Profits or Losses were realized shall
be allocated to such Capital Account in the same proportion.

           12.4  PARTNERSHIP EXPENSES.

               (a) The Partnership shall reimburse the General Partners and
their Affiliates for organizational and offering expenses incurred by the
General Partners and such Affiliates, provided that in no event shall the amount
of organizational and offering expenses paid directly or indirectly by the
Partnership exceed 4% of the gross proceeds of the offering of Units, and the
General Partners shall pay for any organizational and offering expenses in
excess of such 4% amount. For purposes hereof, "organizational and offering
expenses" shall mean those expenses incurred in connection with, and in
preparing the Partnership for, qualification under the federal and state
securities laws and subsequently offering and distributing the Units to the
public, including certain marketing expenses but not sales commissions or
reimbursement for due diligence expenses paid by the Partnership to Krupp
Securities Corporation and selected dealers in connection with the offering of
Units. In addition, the Partnership shall


                                 A-24

 









pay or reimburse up to an additional 0.5% of the gross proceeds for due
diligence expenses of the Sales Agent and prospective selected dealers.

               (b) Subject to the foregoing, the Partnership shall pay all
expenses (which expenses shall be billed directly to the Partnership) of the
Partnership which may include but are not limited to: (i) all costs of personnel
(excluding rent or depreciation, utilities, capital equipment, and other
administrative items) employed full- or part-time by the Partnership and
involved in the business of the Partnership and allocated pro rata to their
administrative services performed on behalf of the Partnership, in______ Persons
who may also be officers or employees of the General Partners or their
Affiliates (other than Controlling Persons); (ii) all costs of borrowed money,
taxes and assessments on Partnership _______ties and other taxes applicable to
the Partnership; (iii) legal, audit, accounting, brokerage and other fees; (iv)
printing, engraving and other expenses and taxes incurred in connection with the
issuance, distribution, transfer, registration and recording of documents
evidencing ownership of an Interest or Unit or in connection with the business
of the Partnership; (v) fees and expenses paid to independent contractors,
mortgage bankers, brokers and servicers, leasing agents, consultants, on-site
property managers and other property management personnel (other than
Controlling Persons and other officers of the General Partners or their
Affiliates), real estate brokers, insurance brokers and other agents; (vi)
expenses in connection with the disposition, replacement, alteration, repair,
remodeling, refurbishment, leasing, refinancing, and operation of Partnership
Properties (including the costs and expenses of foreclosures, insurance
premiums, real estate brokerage and leasing commissions and of maintenance of
such property); (vii) expenses of organizing, revising, amending, converting,
modifying or terminating the Partnership; (viii) expenses in connection with
distributions made by the Partnership to, and communications and bookkeeping and
clerical work necessary in maintaining relations with Limited Partners and
Unitholders, including the costs of printing and mailing to such Persons
evidences of ownership of Limited Partner Interests or Units and reports of
meetings of the Partnership, and of preparation of proxy statements and
solicitations of proxies in connection therewith; (ix) expenses in connection
with preparing and mailing reports required to be furnished to Limited Partners
and Unitholders for investor, tax reporting or other purposes, or which reports
the General Partners deem the furnishing thereof to Limited Partners or
Unitholders to be in the best interests of the Partnership; (x) accounting,
computer, statistical or bookkeeping costs necessary for the maintenance of the
books and records of the Partnership; and (xi) the cost of preparation and
dissemination of the informational material and documentation relating to
potential sale, or other disposition of Partnership Assets. Other than as
specifically described above in this Section and in Section 6.4 hereof, the
Partnership shall not pay the General Partners for any other items generally
considered to be the General Partners' overhead and expenses.

               (c) Except for organizational and offering expenses, the
Partnership shall not reimburse the General Partners or their Affiliates except
for reimbursement of the actual cost to the General Partners or their Affiliates
of goods, materials and services used for or by the Partnership and obtained
from Persons unaffiliated with the General Partners and their Affiliates;
provided, however, subject to the limitations stated below, the General Partners
and their Affiliates may receive reimbursement for the administrative services
necessary to the prudent operation of the Partnership, such as legal,
accounting, computer, transfer agent and other services which could be performed
directly for the Partnership by independent parties. The amounts charged to the
Partnership for such administrative services will not exceed the lesser of (i)
the actual costs to the General Partners or their Affiliates, or (ii) 90% of
those which the Partnership would be required to pay to independent parties for
comparable services in the same or comparable geographic locations. As part of
the Partnership's annual report to the Limited Partners and Unitholders, an
itemized breakdown will be included of such reimbursements, all of which shall
be verified by the Accountants. Such verification shall at minimum provide (i) a
review of the records of individual employees, the costs of whose services were
reimbursed, and (ii) a review of the specific nature of the work performed by
each such employee. The methods of verification shall be performed in accordance
with generally accepted auditing standards and shall accordingly include such
tests of the accounting records and such other auditing procedures which the
Accountants consider appropriate in the circumstance. The additional costs of
such verification will be itemized by the Accountants on a
partnership-by-partnership basis and may be reimbursed to the General Partners
and their Affiliates by the Partnership only to the


                                 A-25

 









extent that such reimbursement, when added to the cost for administrative
services rendered, does not exceed 90% of the competitive rate for such services
as determined above.

               (d) Any agreements, contracts and arrangements in addition to
those authorized by Section 6.4 hereof may be entered into with a General
Partner or an Affiliate of the General Partners subject to the following
additional conditions:

                  (A) any such agreements contracts or arrangements shall be
embodied in a written contract which precisely describe the subject matter
thereof and all compensation to be paid therefor;

                  (B) neither a General Partner ( in any capacity other than as
General Partner) nor any such Affiliate may act as paying or purchasing agent
for the Partnership and no funds of the Partnership may be paid to a General
Partner or any such Affiliate by way of reimbursement for Partnership expenses
except as permitted by this Section 12.4;

                  (C) any such agreements, contracts or arrangements shall be
fully and promptly disclosed to all Partners in the reports provided for in
Section 12.6(a) hereof (stating the compensation paid and to be paid by the
Partnership); and

                  (D) any such agreements, contracts or arrangements shall be
terminable by either party, without penalty, upon 60 days' prior written notice.

           12.5 FISCAL YEAR. Except as may otherwise be determined from time to
time by the General Partners, the Partnership's fiscal year for federal income
tax and financial reporting purposes shall end on December 31 of each year.

           12.6  REPORTS, ACCOUNTING DECISIONS AND FEDERAL TAX ELECTIONS.

               (a)    REPORTS TO LIMITED PARTNERS.

                  (i) QUARTERLY REPORTS. Within 60 days after the end of each of
the first three quarters of each fiscal year, the General Partners shall send to
each Person who was a Limited Partner or Unitholder at any time during the
quarter then ended (i) a balance sheet (which need not be audited), (ii) a
statement of operations (which need not be audited), (iii) a Cash Flow statement
(which need not be audited), (iv) a statement describing (A) any new agreement,
contract or arrangement required to be reported by Section 6.1(b)(4), and (B)
the amount of all fees and other compensation and distributions paid by the
Partnership for such quarter to any General Partner or any Affiliate of any
General Partner, (v) a report in narrative form summarizing the status of the
Partnership's investments, (vi) a report of the activities of the Partnership
during such fiscal quarter, and (vii) if the Partnership is then required to
file quarterly reports on Form 10-Q with the Securities and Exchange Commission,
a copy of each such report. Until the Capital Contributions to the Partnership
derived from the offering of Units shall be fully invested, except for reserves,
each quarterly report (or a special report distributed prior to or concurrently
with such quarterly report) will also contain a report on real property and MBS
acquisitions made by the Partnership during the period covered by the report
including (A) a description of the Properties or MBS purchased, (B) a
description of the geographic locale of any Property and of the market upon
which the success of operations is dependent, (C) the appraised value of any
Property, (D) the actual purchase price and terms, (E) the cash expended from
Capital Contributions to acquire each Asset, and (F) the amount of Capital
Contributions which then remains unexpended, stated both in terms of dollar
amount and percentage of the total amount of Capital Contributions derived from
the offering of Units.

                  (ii) ANNUAL REPORTS. Within 120 days after the end of each
fiscal year, the General Partners shall send to each Person who was a Limited
Partner or Unitholder at any time during the fiscal year then ended a report in
narrative form summarizing the status of the Partnership's investments


                                 A-26

 









and containing (i) a balance sheet as of the end of such fiscal year and
statements of operations, Partners' equity and changes in financial position for
such fiscal year, all of which shall be prepared in accordance with generally
accepted accounting principles and accompanied by an auditor's report containing
an opinion of the Accountants, (ii) a cash flow statement (which need not be
audited), (iii) a report summarizing the fees and other remuneration paid by the
Partnership for such fiscal year to any General Partner or any Affiliate of any
General Partner, (iv) a schedule of the most recent Appraised Values of the
Properties and an estimate by the General Partners of the value of the Units,
and (v) a statement (which need not be audited) showing the Distributable Cash
Flow and the Net Cash Proceeds from any Capital Transaction or Terminating
Capital Transaction distributed per Interest during such fiscal year. Such
report shall separately identify (to the extent then applicable) distributions
from (a) cash flow from operations during the period, (b) cash flow from
operations during a prior period which had been held as reserves, (c) net cash
proceeds arising from disposition or refinancing of property and investments,
(d) lease payments on net leases with builders and sellers, and (e) reserves
from the gross proceeds of the offering of Units. Until the Capital
Contributions of the Partnership derived from the offering of Units shall be
fully invested, the annual report shall also contain a report on real property
and MBS acquisitions providing the information specified above for quarterly
reports, unless such information shall have previously been or shall
concurrently be provided in a quarterly or special report to the Limited
Partners and Unitholders.

               (b) TAX RETURNS AND TAX INFORMATION. The General Partners shall:

                  (i) have the Accountants prepare the tax returns (federal,
state and local, if any) of the Partnership for each fiscal year within 75 days
after the end of each calendar year in which such fiscal year was completed; and

                  (ii) deliver to each Partner and Unitholder within 75 days
after the end of each calendar year the information necessary to prepare his
federal income tax return, and a state tax return to the extent required in each
state where the Partnership then owns a Property, for the calendar year during
which such fiscal year was completed.

               (c) ACCOUNTING DECISIONS. All decisions as to accounting matters,
except as specifically provided to the contrary herein, shall be made by the
General Partners in accordance with generally accepted accounting principles and
procedures applied in a consistent manner. The General Partners may rely upon
the advice of the Accountants as to whether such decisions are in accordance
with generally accepted accounting principles.

               (d) FEDERAL TAX ELECTIONS. The Partnership, in the sole
discretion of the General Partners, may take elections for federal tax purposes
as follows:

                  (i) In case of a transfer of all or part of the Interest of a
Partner, the Partnership, in the absolute discretion of the General Partners,
may timely elect pursuant to Section 754 of the Code (or corresponding
provisions of future law) and pursuant to similar provisions of applicable state
or local income tax laws, to adjust the basis of the assets of the Partnership.
In such event, any basis adjustment attributable to such election shall be
allocated solely to the transferee.

                  (ii) The General Partners may elect accelerated depreciation
methods under the Code, or may elect straight-line depreciation over a period as
long as 45 years if in their judgment the determination of the percentage of
tax-exempt investors becomes too cumbersome.

                  (iii) All other elections required or permitted to be made by
the Partnership under the Code shall be made by General Partners in such manner
as will, in the opinion of the Accountants, be most advantageous to a majority
of the Limited Partner Interests. The Partnership shall, to the extent permitted
by applicable law and regulations, elect to treat as an expense for federal
income tax purposes all amounts incurred by it for real estate taxes, interest
and other charges which may, in accordance with applicable law and regulations,
be considered as expenses.


                                 A-27

 









               (e) TAX MATTERS PARTNER. The Krupp Corporation is hereby
designated as the "Tax Matters Partner" under Section 6231(a)(7) of the Code, to
manage administrative and judicial tax proceedings conducted at the Partnership
level by the Internal Revenue Service with respect to Partnership matters. Any
Partner has the right to participate in such administrative or judicial
proceedings relating to the determination of partnership items at the
Partnership level. The Krupp Corporation as Tax Matters Partner shall inform
each other Partner and each Unitholder of all administrative and judicial
proceedings for an adjustment at the Partnership level of partnership items,
shall forward to each other Partner and to each Unitholder within 30 days after
receipt all notices received from the Internal Revenue Service regarding the
commencement of a Partnership-level auditor or a final Partnership
administrative adjustment, and shall perform all other duties imposed by
Sections (6231 and 6232 of the Code on The Krupp Corporation as Tax Matters
Partner. Expenses of such administrative or judicial proceedings undertaken by
the Tax Matters Partner will be paid out of Partnership assets. Each other
Partner or Unitholder who elects to participate in such proceedings will be
responsible for any expenses incurred by such Partner or Unitholder in
connection with such participation. Further, the cost of any adjustments to a
Partner or Unitholder and the cost of any resulting audits or adjustments of a
Partner's or Unitholder's tax return will be borne solely by the affected
Partner or Unitholder.

               (f) REPORTS TO FEDERAL AND STATE AUTHORITIES. The General
Partners shall cause to be prepared and timely filed with appropriate federal
and state regulatory and administrative bodies, all reports required to be filed
with such entities under then current applicable laws, rules and regulations.
Such reports shall be prepared on the accounting or reporting basis required by
such regulatory bodies. Any Limited Partner or Unitholder shall be provided with
a copy of any such report upon request without expense to him.

        Section 13.   MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS AND 
                      UNITHOLDERS.

           13.1  MEETINGS.

               (a) Meetings of the Limited Partners and Unitholders for any
purpose may be called by the General Partners and shall be called by the General
Partners upon receipt of a request in writing signed by the holders of 10% or
more of the Limited Partner Interests. Notice of any such meeting shall be sent
within ten days after receipt of such request. Such request shall state the
purpose of the proposed meeting and the matters proposed to be acted upon at the
meeting. Such meeting shall be held at the principal office of the Partnership,
or at such other place as may be designated by the General Partners, or, if
called upon the request of Limited Partners or Unitholders, as designated by
such Limited Partners or Unitholders. In addition, upon receipt of a request in
writing signed by the holders of 10% or more of the Limited Partner Interests,
the General Partners shall submit any matter (upon which the Limited Partners
and Unitholders are entitled to act) to the Limited Partners and Unitholders for
a vote by written consent without a meeting.

               (b) A notice of any such meeting shall be given either personally
or by mail, not less than 15 days nor more than 60 days before the date of the
meeting, to each Limited Partner and Unitholder. Such notice shall state the
place, date and hour of the meeting, and shall indicate that it is being issued
at or by the direction of the Partner or Partners calling the meeting. The
notice shall state the purpose or purposes of the meeting. If a meeting is
adjourned to another time or place, and if any announcement of the adjournment
of time or place made at the meeting, it shall not be necessary to give notice
of the adjourned meeting. The presence in person or by proxy of a majority in
interest of the Limited Partner Interests shall constitute a quorum at all
meetings, provided, however, that if there be no such quorum, holders of a
majority in interest of such Limited Partner Interests so represented may
adjourn the meeting from time to time without further notice, until a quorum
shall have been obtained. No notice of the time, place or purpose of any meeting
need to be given with respect to any Limited Partner Interest which is
represented by proxy or by a Limited Partner or Unitholder who attends in person
(except when Limited Partner or Unitholder attends a meeting for the express
purpose of objecting at the beginning of the meeting to the transaction of any
business on the ground that the meeting is not lawfully called or convened), or


                                 A-28

 









with respect to any Limited Partner Interest entitled to such notice if a waiver
of such notice, in writing, has been executed and filed with the records of the
meeting, either before or after the time thereof.

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

               (d) A Limited Partner or Unitholder shall be entitled to cast one
vote for each Limited Partner Interest or Unit which he owns: (i) at a meeting,
in person, by written proxy or by a signed writing directing the manner in which
he desires that his vote be cast, which writing must be received by the General
Partners (or the Limited Partners or Unitholders calling the meeting) prior to
such meeting, or (ii) without a meeting, by a signed writing directing the
manner in which he desires that his vote be cast, which writing must be received
by the General Partners (or the Limited Partners or Unitholders soliciting such
vote) prior to the date upon which the votes of Limited Partners and Unitholders
as to be counted. Any Limited Partner or Unitholder may waive notice of or
attendance at any meeting and may attend by telephone or any other electronic
communication device or may execute a signed written consent. Only the votes of
Limited Partners and Unitholders of record on a record date, if established
pursuant to clause (c) above, whether at a meeting or otherwise, shall be
counted. The laws of The Commonwealth of Massachusetts pertaining to the
validity and use of corporate proxies shall govern the validity and use of
proxies given by Limited Partners and Unitholders.

               (e) At each meeting, the Limited Partners and Unitholders present
or represented by proxy may adopt such rules for the conduct of such meeting as
they shall deem appropriate, provided that such rules shall not be inconsistent
with the provisions hereof.

           13.2 VOTING RIGHTS OF LIMITED PARTNERS AND UNITHOLDERS. Subject to
Section 13.3, a majority in interest of the Limited Partner Interests, without
the concurrence of the General Partners, may (a) amend this Agreement, subject
to the provisions of Section 14 hereof and to the conditions that such amendment
may not in any manner allow the Limited Partners and Unitholders to take part in
the control of the Partnership's business, (b) dissolve the Partnership, (c)
remove any General Partner and elect a replacement therefor, or (d) approve or
disapprove the sale of all or substantially al the assets of the Partnership.
For purposes of exercising such rights, each Limited Partner Interest shall have
one vote, PROVIDED that Limited Partner Interests held by the General Partners
or their Affiliates shall not be voted and shall be deemed not to be outstanding
for purposes of calculating applicable percentage requirements.

           13.3 CONDITIONS TO ACTION BY LIMITED PARTNERS AND UNITHOLDERS. The
rights of the Limited Partners and Unitholders pursuant to Section 13.2 hereof
shall not be effective or be exercised in any manner (i) to subject the Limited
Partners or Unitholders to liability as general partners under the Massachusetts
Uniform Limited Partnership Act or under the laws of such other jurisdictions in
which the Partnership is qualified or owns a Property, or (ii) to change the
Partnership's status for tax purposes. Any action taken pursuant to Section 13.2
shall be void if any Partner, within 45 days after such action is taken, obtains
a temporary restraining order, preliminary injunction or declaratory judgment
from a court of competent jurisdiction or an opinion of counsel selected by a
majority in interest of the Limited Partners and Unitholders on grounds that
such action, if given effect, would have one or more of the prohibited effects
referred to in this Section 13.3. For purposes of this Section 13.3, counsel
will be deemed to have been selected by a majority in interest of the Limited
Partners and Unitholders if such counsel is affirmatively approved in writing by
a majority in interest of the Limited Partners and Unitholders within 45 days of
the date that the holders of 10% or more of the interests of the Limited
Partners and Unitholder propose counsel for this purpose.

           13.4 VALUATION OF INTEREST OF GENERAL PARTNER. In the event of
removal of any General Partner pursuant to Section 13.2 hereof, its Interest as
a General Partner in the Partnership shall be


                                 A-29

 









appraised by two independent appraisers, one selected by the removed or
withdrawing General Partner and one by the Limited Partners and Unitholders. In
the event that such two appraisers are unable to agree on the value of such
General Partner's Interest, they shall jointly appoint a third independent
appraiser whose determination shall be final and binding. The Partnership shall
pay such General Partner for the value of its Interest as so determined by
delivery of a promissory note bearing interest at the then base-rate of Bank of
New England, N.A., Boston, Massachusetts, with interest payable annually in cash
and principal payable from any cash thereafter received by the Partnership from
the sale of Partnership Assets and prior to any distribution being made to the
Partners pursuant to Section 8.3 of this Agreement. Any amounts received
pursuant to this Section 13.4 shall constitute complete and full discharge for
all amounts owing to such General Partner on account of its Interest in the
Partnership. For purposes of this Section 13.4, the independent appraiser
selected by the Limited Partners and Unitholders shall be selected in the
following manner: a list of three qualified MAI (Member of Appraisal Institute)
appraisers shall be obtained (by a General Partner not being removed or
withdrawn) from the Boston chapter of the American Institute of Real Estate
Appraisers and one of said three appraisers shall be selected by random number
and proposed by such General Partner for selection by the Limited Partners and
Unitholders. Such appraiser shall be deemed selected by the Limited Partners and
Unitholders unless objected to in writing by a majority in interest of the
Limited Partner Interests within 45 days after notification thereof is sent in
writing such General Partner.

        Section 14.   AMENDMENTS.

           (a) In addition to the right of the Limited Partners and Unitholders
to amend this Agreement pursuant to Section 13 hereof, the General Partners may
propose an amendment to this Agreement. The General Partners shall submit to all
of the Partners in writing the text of any such proposed amendment to this
Agreement and a statement by the General Partners of the purpose of any such
amendment. The General Partners may include in any submission a statement of the
view of the General Partners as to the proposed amendment. Upon the Consent of
the General Partners and of a majority in interest of the Limited Partner
Interests, such amendment shall take effect, except that no amendment adopted in
accordance with either Section 13 or 14 hereof shall increase the liability of
any Partner or Unitholder or adversely affect any Partner's or Unitholder's
share of distributions of cash or allocations of Profits or Losses for Tax
Purposes of the Partnership without in each case the approval of the Partner or
Unitholder involved, and except that any amendment of this Section 14 must be
approved by a unanimous vote with respect to all Limited Partner Interests. A
written approval may not be withdrawn or voided once it is filed with the
General Partners.

           (b) In addition to any amendments otherwise authorized herein, this
Agreement may be amended from time to time by the General Partners without the
consent of any of the Limited Partners: (i) to add to the representations,
duties or obligations of the General Partners or surrender any right or power
granted to the General Partners herein, for the benefit of the Limited Partners;
(ii) to cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Agreement
which will not be inconsistent with the provisions of this Agreement; (iii) to
preserve the status of the Partnership as a "partnership" for federal income tax
purposes; (iv) to delete or add any provision of this Agreement required to be
so deleted or added by the Staff of the Securities and Exchange Commission or
other federal agency or by a state "Blue Sky" commissioner or similar such
official, which addition or deletion is deemed by such Commission, agency or
official to be for the benefit or protection of the Limited Partners; or (v) to
permit the Units to fall within any exclusion from the definition of "plan
assets" contained in Section 2550.401b-(1) of Title 29 of the Code of Federal
Regulations.

           (c) In the event that the U.S. Treasury Department revises the
Regulations under Code section 704(b), the General Partners shall, upon the
advice of counsel that the Partnership's allocations are not consistent in any
material respect with the provisions of any such revised Regulations, submit to
the Limited Partners a proposed amendment to the Partnership Agreement that in
the sole discretion of the General Partners will make such allocations contained
in the Partnership Agreement consistent with the


                                 A-30

 









requirements of any such revised Regulations, and such an amendment shall be
adopted upon the consent of a majority in interest of the Limited Partner
Interests notwithstanding any other provisions of this Section 14 of the
Partnership Agreement.

        Section 15.   POWER OF ATTORNEY.

               (a) APPOINTMENT. Each of the Limited Partners hereby makes,
constitutes and appoints the General Partners of the Partnership and each of
them, and each person who shall hereafter become a General Partner during the
term of the Partnership and any continuation of the Partnership pursuant to
Section 9.5 and Section 11, with full power of substitution, the true and lawful
attorney-in-fact of, and in the name, place and stead of, such Limited Partner,
with the power from time to time to execute, acknowledge, make, swear to,
verify, deliver, record and/or publish:

                  (i) this Agreement of Limited Partnership and the Certificate
of Limited Partnership under the laws of the Commonwealth of Massachusetts or
any other jurisdiction, that may be required by this Agreement or by the laws of
Massachusetts or any other jurisdiction, any subsequent amendment to this
Agreement and the Certificate of Limited Partnership (including, but not limited
to, amendments reflecting the addition of any signatory hereto as a Partner, or
any admission or substitution of other Partners, or reflecting the Capital
Contribution made by any signatory hereto or by any other Partner), or any other
document required from time to time to admit a Partner, to effect the
substitution of a Partner, or to effect the substitution of any Limited
Partner's assignee as a Limited Partner.

                  (ii) any other document required to reflect any action of the
Partners duly taken in the manner provided for this Agreement, whether or not
such Limited Partner voted in favor of or otherwise Consented to such action;

                  (iii) any other instrument, certificate or document which may
be required by any regulatory agency, laws of the United States, any state, or
any other jurisdiction in which the Partnership is doing or intends to do
business or which the General Partners deem advisable to file or record,
provided such instrument, certificate or document is not inconsistent with the
terms of this Agreement as then in effect;

                  (iv) any certificate of dissolution or cancellation of the
Certificate of Limited Partnership that may be necessary upon the termination of
the Partnership; and

                  (v) any instrument or papers required to continue or terminate
the business of the Partnership pursuant to Sections 9.5 and 11 hereof;

provided that no General Partner shall take any action as attorney-in-fact for
any Limited Partner which could in any way increase the liability of such
Limited Partner beyond their liability expressly set forth in this Agreement or
alter the rights of Limited Partner sunder Section 8 of this Agreement, unless
(in either case) the Limited Partner has given a Power of Attorney to a General
Partner expressly for such purpose.

               (b)    AMENDMENTS TO AGREEMENT AND CERTIFICATE.

                  (i) Each of the Limited Partners is aware that the terms of
this Agreement permit certain amendments of this Agreement to be effected and
certain other actions to be taken or omitted by, or with respect to, the
Partnership, in each case with the approval of less than all the Limited
Partners if a specified percentage of the Partners shall have voted in favor of,
or otherwise Consented to, such action. If, as, and when:

                      (A) an amendment of this Agreement is proposed or an
action is proposed to be taken or omitted by, or with respect to, the
Partnership which requires, under the terms of this Agreement, the Consent of a
specified percentage in interest (but less than all) of the Partners;


                                 A-31

 









                      (B) Partners holding the percentage of interest specified
in this Agreement as being required for such amendment or action have Consented
to such amendment or action in the manner contemplated by this Agreement; and

                      (C) a Limited Partner has failed or refused to Consent to
such amendment or action (hereinafter referred to as a "non-consenting Limited
Partner"), then each non-consenting Limited Partner agrees that each
attorney-in-fact specified in Section 15(a) above, with full power of
substitution, is hereby authorized and empowered to execute, acknowledge, make,
swear to, verify, deliver, record, file and/or publish, for and in behalf of
such non-consenting Limited Partner, and in his name, place and stead, any and
all instruments and documents which may be necessary or appropriate to permit
such amendment to be lawfully made or action lawfully taken or omitted. Each
consenting and non-consenting Limited Partner is fully aware that he and each
other Limited Partner have executed this special power of attorney and that each
Limited Partner will rely on the effectiveness of such powers with a view to the
orderly administration of the Partnership's affairs.

                  (ii) any amendment to this Agreement (and to the Certificate
of Limited Partnership) substituting a Limited Partner, or adding a Limited or
General Partner, may be signed by any General Partner. Any amendment reflecting
the determination of the remaining General Partner or Partners to continue the
business of the Partnership upon the Withdrawal of a General Partner need be
signed only by one General Partner. The execution of any such amendment on
behalf of a Limited Partner or any proposed substitute or added Limited Partner
may be affected by his attorney-in-fact.

               (c)    POWER COUPLED WITH AN INTEREST.  The foregoing grant of 
authority:

                  (i) is a special power of attorney coupled with an interest in
favor of the General Partners and as such shall be irrevocable and shall survive
the death or insanity of each Limited Partner;

                  (ii) may be exercised for each Limited Partner by a signature
of any General Partner of the Partnership or by listing the names of all of the
Limited Partners, including such Limited Partner, and executing any instrument
with a single signature of any General Partner acting as attorney-in-fact for
all of them; and

                  (iii) shall survive the Assignment by any Limited Partner of
the whole or any portion of his interest (including the assignment by the
Corporate Limited Partner to the Unitholders under Section 7.6 hereof), except
that, where the assignee of the whole thereof has furnished a power of attorney
and has been approved by the General Partners for admission to the Partnership
as a Substitute Limited Partner, this power of attorney shall survive such
Assignment with respect to the assignor for the sole purpose of establishing a
General Partner to execute, acknowledge and file any instrument necessary to
effect such substitution and shall thereafter terminate with respect to any
Partner who assigns his entire Interest.

               (d) POWER OF ATTORNEY BY SUBSTITUTE INVESTOR LIMITED PARTNER. A
similar power of attorney shall be one of the instruments which the General
Partners shall require an assignee of a Limited Partner to execute as a
condition to the admission of such assignee as a Substitute Limited Partner.

        Section 16.   GENERAL PROVISIONS.

           16.1 NOTICES, APPROVALS AND CONSENTS. All notices, approvals,
Consents or other communications hereunder shall be in writing and signed by the
party giving the same, and shall be deemed to have been given when the same are
(a) deposited in the United States mail and sent by first class mail, postage
prepaid, or (b) delivered. In each case, said mailing or delivering shall be
made to the parties at the addressees set forth below or at such other addresses
as such parties may designate by notice to the Partnership:


                                 A-32

 









                  (i) If to the Partnership or any General Partner, at the
principal office of the Partnership;

                  (ii) If to the Corporate Limited Partner, at the address set
forth in Schedule A hereto or to such other address as may be designated by
notice from such Partner given in the manner hereby specified;

                  (iii) If to an Investor Limited Partner, at the address set
forth in Schedule A hereto or to such other address as may be designated by
notice from such Partner given in the manner specified; and

                  (iv) If to a Unitholder, at such address as he has most
recently furnished in writing to the Partnership.

           16.2 FURTHER ASSURANCES. The Partners will execute, acknowledge and
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.

           16.3 CAPTIONS. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any of the provisions thereof.

           16.4 BINDING EFFECT. Except to the extent required under the
Massachusetts Uniform Limited Partnership Act and for fees, rights to
reimbursement, and other compensation provided as such, none of the provisions
of this Agreement shall be for the benefit of or be enforceable by any creditor
of the Partnership.

           16.5 SEPARABILITY. If one or more of the provisions of this Agreement
or any application thereof shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and any other application thereof shall not in any way be
affected or impaired thereby, and such remaining provisions shall be interpreted
consistently with the omission of such invalid, illegal or unenforceable
provisions.

           16.6 INTEGRATION. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior contemporaneous agreements and understandings of the parties in connection
therewith which conflict with the express terms of this Agreement. No covenant,
representation or condition not expressed in this Agreement shall affect or be
effective to interpret, change or restrict the express provisions of this
Agreement.

           16.7  APPLICABLE LAW.  This Agreement shall be construed and enforced
in accordance with an governed by the laws of Massachusetts.

           16.8 COUNTERPARTS. This Agreement may be signed by each party hereto
upon a separate copy (including, in the case of the Limited Partners, a separate
subscription agreement or signature page executed by one or more such Partners),
in which event all such copies shall constitute a single counterpart of this
Agreement. However, no counterpart shall be binding unless accepted by one or
more of the General Partners, which acceptance shall evidenced by the filing of
the Certificate of Limited Partnership or an appropriate amendment thereto.

           16.9 CREDITORS. No creditor who makes a non-recourse loan to the
Partnership shall have or acquire at any time, as a result of making such loan,
any direct or indirect interest in the profits, capital or property of the
Partnership other than as a secured creditor.



                                 A-33

 









           16.10 INTERPRETATION. Unless the context in which words are used in
this Agreement otherwise indicates that such is the intent, words in the
singular shall include the plural and in the masculine shall include the
feminine and neuter and vice versa.

        Section 17.   DEFINITIONS.  The defined terms used in this Agreement
shall have the meanings specified below:

        "ACCOUNTANTS" means Coopers & Lybrand, Boston, Massachusetts, or a
successor thereto, or another firm of independent certified public accountants
selected by the General Partners.

        "ACQUISITION EXPENSES" means expenses (other that the Acquisition Fee)
incurred by the Partnership relating to selection and acquisition of Properties,
whether or not acquired, including the fees and expenses of lawyers, appraisers,
engineers, architects and accountants not affiliated with a General Partner,
travel and communications expenses, costs of appraisals, non-refundable option
payments on Property not acquired, accounting fees and expenses and title
insurance, but not fees and commissions paid by any Person to any Person in
connection with the selection or purchase of any Property by the Partnership,
whether designated as a real estate commission, acquisition fee, finder's fee,
selection fee, development fee, construction fee, non-recurring management fee,
consulting fee or any fee of similar nature however designated and however
treated for tax or accounting purposes, not any loan fees ("points"), not
development fees paid in connection with the actual development of a Property
after acquisition by the Partnership, not acquisition expenses incurred in
connection with the initial operation of any Property by the Partnership, and
not professional or contractor fees paid in connection with the expansion,
rehabilitation or other improvement of Properties following their acquisition by
the Partnership.

        "ACQUISITION FEE" means the fee described in Section 6.4(b) hereof.

        "ADJUSTED NET ASSET VALUE" means the book value of all assets, including
unpaid deferred interest but excluding any additional simple interest and
participations payable under the terms of the MBS, minus all liabilities of the
Partnership.

        "AFFILIATE" means, when used with reference to a specified Person, (i)
any Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with the specified
Person, (ii) any Person that is an officer of, partner in or trustee of, or
serves in a similar capacity with respect to, the specified Person or of which
the specified Person is an officer, partner or trustee, or with respect to which
the specified Person serves in a similar capacity, (iii) any Person that,
directly or indirectly, is the beneficial owner of 10% or more of any class of
equity securities of, or otherwise has a substantial beneficial interest in, the
specified Person or of which the specified Person is directly or indirectly the
owner of 10% or more of any class of equity securities or in which the specified
Person has a substantial beneficial interest, and (iv) any Immediate Family
Member of the specified Person. A Person who is a partner in a partnership or
joint venture with the Partnership shall not be deemed an Affiliate of the
Partnership or a General Partner if such Person is not otherwise an Affiliate of
the Partnership or such General Partner as defined in the preceding sentence.

        "AGREEMENT" means this Amended Agreement of Limited Partnership, as the
same may hereafter be amended from time to time.

        "APPRAISED VALUE" shall mean, as to any Property, market value thereof
based upon the expected use according to an appraisal made by an independent
qualified appraiser who is a member in good standing of the American Institute
of Real Estate Appraisers.

        "ASSETS" shall mean the Properties, MBS, or other assets acquired by 
the Partnership.

        "ASSIGN" means, with respect to an Interest or part thereof, to offer,
sell, assign, transfer, give, or otherwise dispose of, whether voluntarily or
involuntarily or by operation of law, except that in the case


                                 A-34

 









of a bona fide pledge or other hypothecation, no Assignment shall be deemed to
have occurred unless and until the secured party has exercised any of his rights
of foreclosure with respect thereto.

        "ASSIGNMENT" means any of the aforesaid transactions involving an
Interest or any part thereof.

        "BASIC MANAGEMENT FEE" means the fee described in Section 6.4(c) hereof.

        "CAPITAL ACCOUNT" means the capital accounts established and maintained
in accordance with Section 5.4 hereof.

        "CAPITAL CONTRIBUTION" means the amount of cash contributed to the
Partnership by a Partner, prior to the deduction of any offering expenses or
selling commissions.

        "CAPITAL TRANSACTION" means the repayment of principal and prepayment of
MBS to the extent classified as return of capital for federal income tax
purposes and the sale, exchange, condemnation, eminent domain taking, casualty
or other disposition of a Property or MBS, but not including the Terminating
Capital Transaction.

        "CASH FLOW" means, for a particular fiscal year, all Profits or Losses
for Tax Purposes from the operation of the Partnership for such fiscal year,
including repayment of principal and prepayment of MBS to the extent classified
as income or gain for federal income tax purposes but excluding Profits or
Losses for Tax Purposes for such fiscal year arising from a Capital Transaction
or the Terminating Capital Transaction, and shall be determined by adjusting
such Profits or Losses (to the extent not otherwise adjusted) as follows:

           (1) Depreciation of buildings, improvements and personal property
shall not be considered a deduction;

           (2) Amortization of any item for which there is not an associated
cash payment shall not be considered a deduction;

           (3) Principal and interest payments on a mortgage or other loan
payable by the Partnership shall be considered deductions;

           (4) Principal payments on all conditional sales contracts and other
secured obligations shall be considered a deduction;

           (5) If the General Partners shall so determine, reasonable reserves
shall be deducted to provide for replacements, improvements, capital
improvements or any other contingency of the Partnership;

           (6) Any amounts paid by the Partnership for capital expenditures or
replacements (and not withdrawn from a reserve fund established for such
purpose) shall be considered a deduction;

           (7) Amounts equal to accounts payable and accrued items payable at
the close of the Partnership fiscal year, to the extent not already deducted in
calculating Profits or Losses for Tax Purposes, shall be considered a deduction;

           (8) Amounts required to maintain reasonable working capital reserves
shall be considered a deduction;

           (9) The reimbursements and fees incurred and payable to the General
Partners hereunder (other than the Basic Management Fee and the Incentive Fee)
shall be considered a deduction, whether or not currently paid to the General
Partners;



                                 A-35

 









           (10) Property management fees and reimbursements paid to property
managers shall be considered as a deduction;

           (11) Capital Contributions to the Partnership and the Net Cash
Proceeds of any Capital Transaction or the Terminating Capital Transaction shall
not be included in Cash Flow of the Partnership and payments made from such
sources of funds shall be excluded in determining Cash Flow of the Partnership;
and

           (12) Any other cash receipts from the operation of the Partnership
not properly includable in Profits or Losses for Tax Purposes, any amounts
released from operating reserve accounts described in this Section 8.2(a) and
available for distribution, and the amount of the Basic Management Fee and the
Incentive Fee payable with respect to such fiscal year, shall be included in
Cash Flow of the Partnership.

        "CERTIFICATE OF LIMITED PARTNERSHIP" means the certificate of limited
partnership filed with the Secretary of State of The Commonwealth of
Massachusetts with respect to the Partnership, as the same may be amended from
time to time.

        "CODE" means the Internal Revenue Code of 1954, as amended, or
corresponding provisions of subsequent laws.

        "CONSENT" means either the consent given by vote at a meeting called and
held in accordance with the provisions of Section 13.1 hereof or the written
consent, as the case may be, of a Person to do the act or thing for which the
consent is solicited, or the act of granting such consent, as the context may
require.

        "CONTROLLING PERSON" means, with respect to any General Partner or its
Affiliates, any of its general partners, chairman, directors, president,
secretary, treasurer, or executive or senior vice presidents, or any Person
holding a 5% or more equity interest in the General Partner or such Affiliate or
having the power to direct or cause the direction of the General Partner of such
Affiliate or having the power to direct or cause the direction of the General
Partner or such Affiliate,whether through the ownership or voting securities, by
contract, or otherwise.

        "CORPORATE LIMITED PARTNER" means Krupp Depositary Corporation, or its
successor, which has acquired and will hold for its own account 100 Limited
Partner Interests and will acquire and hold up to 7,500,000 Limited Partner
Interests on behalf of those Persons who purchase Units, on the basis of one
Limited Partner Interest for each Unit, and will assign to those Persons its
rights, obligations, and interests with respect to such Limited Partner
Interests under Section 7.6 hereof.

        "COUNSEL TO THE PARTNERSHIP" means Gaston Snow & Ely Bartlett, Boston,
Massachusetts, or another law firm selected by the General Partners.

        "CUMULATIVE RETURN" means a return equal to twelve percent (12%) per
annum of the Invested Capital of the class comprised of the Limited Partners
calculated from the initial closing of the sale of Units through the most recent
fiscal year completed prior to the transaction giving rise to the computation.
In calculating whether the Cumulative Return has been satisfied, only
distributions by the Partnership of cash will be considered and no credit will
be given for tax benefits allocated to the Limited Partners.

        "DEPOSITARY" means the Corporate Limited Partner or another Person
selected by the General Partners.

        "DEPOSITARY RECEIPT" means a depositary receipt evidencing one or more 
Units.

        "DISTRIBUTABLE CASH FLOW" means Cash Flow less any Basic Management Fee 
and Incentive Fee payable for such year.



                                 A-36

 









        "ERISA" means the Employee Retirement Income Security Act of 1974, as 
amended.

        "FRONT-END FEES AND EXPENSES" means fees and expenses paid by any Person
for any services rendered during the Partnership's organizational or acquisition
phase including, without limitation, organizational and offering expenses,
Acquisition Fees and Acquisition Expenses.

        "GENERAL PARTNER" means any Person designated as a General Partner in
Schedule A of this Agreement or who becomes an additional or Substitute General
Partner as provided in this Agreement, in such Person's capacity as a General
Partner of the Partnership.

        "GENERAL PARTNERS" means every Person or Persons who serve(s) as a
General Partner, whether there be one or several.

        "IMMEDIATE FAMILY MEMBER" means with respect to any person, his spouse,
parent, parent-in-law, issue, brother, sister, brother-in-law, sister-in-law, or
child-in-law.

        "INCENTIVE FEE" means the fee described in Section 6.4(d) hereof.

        "INTEREST" means, with respect to a General Partner, the entire
ownership interest and, with respect to a Limited Partner, the ownership
interest representing an initial Capital Contribution of Twenty Dollars ($20.00)
(or a lesser amount in the event of a reduction in sales commissions with
respect to a single purchaser subscribing for more than $250,000 in Units),
including the right of such Partner to any and all benefits to which a Partner
may be entitled as provided in this Agreement, together with the obligations of
such Partner to comply with all the terms and provisions of this Agreement, but
excluding any claims which such Partner may have against the Partnership as a
creditor.

        "INVESTED CAPITAL" means, with respect to the General Partners, their
Capital Contributions and, with respect to the Limited Partners and Unitholders
$20.00 for each Limited Partner Interest or Unit, in either case reduced by any
amounts of cash distributed to such Partner or Unitholder pursuant to Clauses
First and Second of Section 8.3(a) hereof.

        "INVESTMENT IN ASSETS" means the amount of Capital Contributions
actually paid for or allocated to the purchase, development, construction, or
improvement of Assets acquired by the Partnership, including amounts paid for or
allocated to the purchase of Assets, working capital reserves allocable thereto
(except that working capital reserves in excess of 5% of the total Capital
Contributions shall not be included), and other cash payments such as interest
and taxes, but excluding Front-End Fees and Expenses.

        "INVESTOR LIMITED PARTNER" means any Unitholder who shall be admitted to
the Partnership as a Limited Partner, in the capacity of such Person as a
Limited Partner.

        "INVOLUNTARY WITHDRAWAL" means, with respect to any General Partner, the
Withdrawal of such General Partner from the Partnership pursuant to Section 9.2
hereof.

        "LIMITED PARTNER" means any Corporate Limited Partner, Investor Limited
Partner or Substitute Limited Partner in the capacity of such Person as a
Limited Partner.

        "MBS" has the meaning given in Section 3.2(b) hereof.

        "NASDAQ" means the National Association of Securities Dealers Automated 
Quotation system.

        "NET CASH PROCEEDS" of a Capital Transaction or the Terminating Capital
Transaction means the cash received by the Partnership as a result of such
Transaction, less (i) any amounts which are reinvested in accordance with
Section 6.1(c), (ii) all debts and liabilities of the Partnership required to be
paid as a result of the Transaction (including, amount other liabilities, any
fees and expenses payable pursuant to


                                 A-37

 









Section 6.4 hereof, and (iii) any reserves from contingent liabilities
(including fees then earned but not yet payable pursuant to Section 6.4 hereof),
to the extent deemed reasonable by the General Partners provided that, at the
expiration of such period as the General Partners shall deem advisable, the
balance of such reserves remaining after payment of such contingencies shall be
distributed in the manner provided in this Agreement for Net Cash Proceeds. In
the event the Partnership takes back a mortgage note in connection with any
Capital Transaction or the Terminating Capital Transaction, all payments
subsequently received in cash by the Partnership with respect to such note shall
be included in the Net Cash Proceeds of that Transaction, irrespective of the
extent to which any portion of such payments shall be treated by the Partnership
as principal or interest for tax or accounting purposes.

        "PARTNER" means any General Partner or Limited Partner.

        "PARTNERSHIP" means the limited partnership as formed in accordance with
this Agreement, as said limited partnership may from time to time be
constituted.

        "PERSON" means any individual, partnership, corporation, trust,
governmental official, body or agency, or other entity of any type.

        "PROFITS OR LOSSES FOR TAX PURPOSES" means profits or losses as
determined by the Partnership for federal income tax purposes, and items of
income, gain, loss, deduction, or credit entering into the computation thereof.

        "PROPERTY" means any real estate, buildings, improvements, fixtures and
related personal property acquired by the Partnership, and any equity interest
of the Partnership therein, whether direct or indirect, through a nominee, joint
venture or otherwise.

        "PROSPECTUS" means the Prospectus of the Partnership used in connection
with its public offering of Units, as supplemented or amended.

        "PURCHASE PRICE OF A PROPERTY" means the price paid upon or in
connection with the purchase of a particular Property, including the amount of
Acquisition Fees and Acquisition Expenses and any liens and mortgages on the
Property, but excluding points and prepaid interest.

        "QUALIFIED PLANS" means qualified pension, profit-sharing and other
employee retirement benefit plans (including Keogh Plans) and trusts, and bank
commingled trust funds for such plans.

        "REINVESTMENT AGENT" means LCS, Inc., and its successors or assigns, or
any other reinvestment agent selected in accordance with the terms of the
Reinvestment Plan.

        "REINVESTMENT PLAN" means the plan pursuant to which a Unitholder could
automatically reinvest its distributions in the Units available for sale, as
more fully described in the Reinvestment Plan which is Exhibit C to the
Prospectus.

        "SALES AGENT AGREEMENT" means the Sales Agent Agreement between the
Partnership and Krupp Securities Corporation entered into pursuant to Section
6.4(a) hereof.

        "SCHEDULE A" means Schedule A to this Agreement as amended from time to
time.

        "SUBSCRIPTION PRICE" means the amount of cash contributed to the
Partnership on behalf of a Unitholder, prior to the deduction of any offering
expenses or selling commissions.

        "SUBSTITUTE GENERAL PARTNER" means the assignee of a General Partner
Interest who is admitted to the Partnership as a General Partner pursuant to
Section 9.5 or Section 13.2 of this Agreement.



                                 A-38

 









        "SUBSTITUTE LIMITED PARTNER" means the assignee of a Limited Partner
Interest who is admitted to the Partnership as a Limited Partner pursuant to
Section 10.3 hereof.

        "TERMINATING CAPITAL TRANSACTION" means the sale, exchange,
condemnation, eminent domain taking, casualty or other disposition of all or
substantially all of the assets of the Partnership which results in the
dissolution of the Partnership pursuant to Section 11 of this Agreement. The
Terminating Capital Transaction shall also include the receipt and collection of
notes, if any, and payments thereon or any other consideration received or to be
received by the Partnership upon a sale or other disposition of all or
substantially all of the assets of the Partnership and all activities reasonably
related thereto. Such activities are deemed to be included in the winding up of
Partnership affairs, and all allocations and distributions therefrom shall be
governed by Sections 8.1(c) and (e) and 8.3(b) hereof.

        "UNIT" means the interest of a Unitholder in a Limited Partner Interest
of the Partnership. Each Unit will be evidenced by a Depositary Receipt and
represents (i) the assignment by the Corporate Limited Partner of its interest
in the corresponding Limited Partner Interest to the extent permitted by
Massachusetts law and (ii) the right to require the Corporate Limited Partner to
exercise any other rights with respect to such Limited Partner Interest at the
direction of the Unitholder.

        "UNITHOLDER" means any Person who holds Units in accordance with Section
6.1(d) or Section 7.2 hereof as reflected in the records of the Partnership and
the Depositary.

        "VOLUNTARY WITHDRAWAL" means, with respect to a General Partner, the
voluntary retirement or withdrawal of a General Partner from the Partnership, or
the voluntary sale, assignment, encumbrance or other disposition of all of his
General Partner Interest pursuant to Section 9.1 hereof. In the case of a
General Partner which is a partnership, a Voluntary Withdrawal shall be deemed
to have occurred when all general partners of such partnership shall have
voluntarily withdrawn therefrom as general partners or voluntarily sold or
otherwise disposed of all of their general partner interests therein.

        "WITHDRAWAL" means, with respect to a General Partner, the Voluntary or
Involuntary Withdrawal of such General Partner. "WITHDRAW" means to effect any
such Withdrawal.

        "WITHDRAWN GENERAL PARTNER" means a General Partner whose Withdrawal in
accordance with the provisions of this Agreement is effective.



        IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amended Agreement of Limited Partnership as of the date first specified above.

GENERAL PARTNERS                             CORPORATE LIMITED PARTNER

THE KRUPP CORPORATION                        KRUPP DEPOSITARY CORPORATION

By: /s/ DOUGLAS KRUPP                        By: /s/ DOUGLAS KRUPP
    ---------------------------------            -------------------------------
    Douglas Krupp, Co-Chairman of the            Douglas Krupp, President
    Board of Directors

THE KRUPP COMPANY LIMITED
    PARTNERSHIP-IV

By: /s/ GEORGE KRUPP
    ---------------------------------
    George Krupp, a General Partner



                                 A-39

 








                                                              SCHEDULE A



                     NAMES, BUSINESS ADDRESSES AND
                   CAPITAL CONTRIBUTIONS OF PARTNERS




       NAME AND BUSINESS ADDRESS                  CAPITAL CONTRIBUTION MADE
I.     GENERAL PARTNERS
       The Krupp Corporation
       470 Atlantic Avenue
       Boston, Massachusetts  02210                                    $ 75
       The Krupp Company Limited Partnership-IV
       470 Atlantic Avenue
       Boston, Massachusetts  02210                                   2,925
                                                                    -------
                                             Total                   $3,000
II.    CORPORATE LIMITED PARTNER
       Krupp Depositary Corporation
       470 Atlantic Avenue
       Boston, Massachusetts  02210                                  $2,000





                                 A-40