-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AWLqdVwTndAjUFpQsjbXPdytYV66mEVr9JWfYzksdfunvc+2Uvpr9fFoGi2Ai5dg 6Y0zAQpQuet2e7uHMTdyRQ== 0000897423-98-000228.txt : 19980921 0000897423-98-000228.hdr.sgml : 19980921 ACCESSION NUMBER: 0000897423-98-000228 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980918 SROS: NYSE GROUP MEMBERS: ARBOR REIT, L.P. GROUP MEMBERS: CAPITAL PARTNERSHIP GROUP MEMBERS: CHERWELL INVESTORS, INC. GROUP MEMBERS: FW HOSPITALITY, L.P. GROUP MEMBERS: GROUP 31, INC. GROUP MEMBERS: J. TAYLOR CRANDALL GROUP MEMBERS: KEYSTONE INC ET AL GROUP MEMBERS: KEYSTONE, INC. GROUP MEMBERS: MC INVESTMENT CORPORATION GROUP MEMBERS: MHX INVESTORS, L.P. GROUP MEMBERS: PENOBSCOT PARTNERS, L.P. GROUP MEMBERS: PTJ MERCHANT BANKING PARTNERS, L.P. GROUP MEMBERS: ROBERT M. BASS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MERISTAR HOTELS & RESORTS INC CENTRAL INDEX KEY: 0001059341 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 510379982 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-54565 FILM NUMBER: 98711953 BUSINESS ADDRESS: STREET 1: 1010 WISCONSIN AVE NW CITY: WASHINGTON STATE: DC ZIP: 20007 BUSINESS PHONE: 2029654455 MAIL ADDRESS: STREET 1: 1010 WISCONSIN AVE N W CITY: WASHINGTON STATE: DC ZIP: 20007 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KEYSTONE INC ET AL CENTRAL INDEX KEY: 0000924069 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 201 MAIN ST STREET 2: STE 3100 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173908400 MAIL ADDRESS: STREET 1: 201 MAIN ST STREET 2: STE 2600 CITY: FORT WORTH STATE: TX ZIP: 76102 SC 13D 1 MERISTAR HOTELS & RESORTS, INC. SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13D** Under the Securities Exchange Act of 1934 (Amendment No. )* MeriStar Hotels & Resorts, Inc. (Name of Issuer) Common Stock, Par Value $0.01 Per Share (Title of Class of Securities) 589988104 (Cusip Number) J. Taylor Crandall 201 Main Street, Suite 3100 Fort Worth, Texas 76102 (817) 390-8500 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 8, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). **The total number of shares of Stock reported herein is 3,221,411 shares, which constitutes approximately 12.7% of the total number of shares outstanding. All ownership percentages set forth herein assume that there are 25,428,758 shares outstanding. 1. Name of Reporting Person: FW Hospitality, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: OO -- Contributions From Partners 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 764,067 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 764,067 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 764,067 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 3.0% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised through its general partner, Group III 31, L.L.C. 1. Name of Reporting Person: Arbor REIT, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: OO -- Contributions from Partners 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 764,067 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 764,067 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 764,067 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 3.0% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised through its general partner, Group Investors, L.L.C. 1. Name of Reporting Person: MHX Investors, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: OO -- Contributions from Partners 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 764,066 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 764,066 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 764,066 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 3.0% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised through its general partner, FW Group Genpar, Inc. 1. Name of Reporting Person: Cherwell Investors, Inc. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 61,912 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 61,912 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 61,912 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 0.2% 14. Type of Reporting Person: CO - ------------ (1) Power is exercised by its sole stockholder, Acadia Partners, L.P. 1. Name of Reporting Person: Group 31, Inc. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: 4,067 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 4,067 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 4,067 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): < 0.1% 14. Type of Reporting Person: CO - ------------ (1) Power is exercised by its president and sole shareholder, J. Taylor Crandall. 1. Name of Reporting Person: MC Investment Corporation 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 45 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 45 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 45 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): < 0.1% 14. Type of Reporting Person: CO - ------------ (1) Power is exercised by its sole stockholder, Penobscot Partners, L.P. 1. Name of Reporting Person: Penobscot Partners, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 87,848 (1) (2) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 87,848 (1) (2) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 87,848(2) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 0.3% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised by its sole general partner, PTJ Merchant Banking Partners, L.P. (2) Solely in its capacity as the sole stockholder of MC Investment Corporation with respect to 45 shares of Stock. 1. Name of Reporting Person: PTJ Merchant Banking Partners, L.P. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Delaware 7. Sole Voting Power: 204,514 (1) (2) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 204,514 (1) (2) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 204,514 (2) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 0.8% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised by its managing general partner, PTJ, Inc. (2) Solely in its capacity as the sole general partner of Penobscot Partners, L.P. with respect to 87,848 shares of Stock. 1. Name of Reporting Person: J. Taylor Crandall 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: PF 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: USA 7. Sole Voting Power: 1,030,493 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 1,030,493 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,030,493 (1) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 4.0% 14. Type of Reporting Person: IN - ------------ (1) Solely in his capacity as (i) president and sole shareholder of Acadia MGP, Inc., in its capacity as the controlling entity of Acadia Partners, L.P., with respect to 61,912 shares of Stock owned directly by Cherwell Investors, Inc., (ii) president and sole shareholder of Group 31, Inc. with respect to 4,067 shares of Stock, (iii) president and sole stockholder of PTJ, Inc., in its capacity as general partner of PTJ Merchant Banking Partners, L.P., with respect to 204,514 shares of Stock, and (iv) sole member of Group III 31, L.L.C., in its capacity as general partner of FW Hospitality, L.P., with respect to 764,067 shares of Stock. 1. Name of Reporting Person: Capital Partnership 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: 45,754 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 45,754 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 45,754 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 0.2% 14. Type of Reporting Person: PN - ------------ (1) Power is exercised by its managing partner, Margaret Lee Bass 1980 Trust. 1. Name of Reporting Person: Keystone, Inc. 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: Not Applicable 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: Texas 7. Sole Voting Power: 193,367 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 193,367 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 193,367 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): .7% 14. Type of Reporting Person: CO - ------------ (1) Power is exercised through its president and sole director, Robert M. Bass. 1. Name of Reporting Person: Robert M. Bass 2. Check the Appropriate Box if a Member of a Group: (a) / / (b) / X / 3. SEC Use Only 4. Source of Funds: PF 5. Check box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): / / 6. Citizenship or Place of Organization: USA 7. Sole Voting Power: 270,885 (1) Number of Shares Beneficially 8. Shared Voting Power: -0- Owned By Each Reporting 9. Sole Dispositive Power: 270,885 (1) Person With 10. Shared Dispositive Power: -0- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 270,885 (1) 12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares: / / 13. Percent of Class Represented by Amount in Row (11): 1.1% 14. Type of Reporting Person: IN - ------------ (1) Solely in his capacity as president and sole director of Keystone, Inc. with respect to 193,367 shares of Stock. Item 1. SECURITY AND ISSUER. This statement relates to shares of common stock, par value $0.01 per share (the "Stock"), of MeriStar Hotels & Resorts, Inc. (the "Issuer"). The principal executive offices of the Issuer are located at 1010 Wisconsin Avenue NW, Washington D.C. 20007. Item 2. IDENTITY AND BACKGROUND. (a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General Rules and Regulations under the Act, the undersigned hereby file this Schedule 13D Statement on behalf of FW Hospitality, L.P., a Delaware limited partnership ("Hospitality"), Arbor REIT, L.P., a Delaware limited partnership ("Arbor"), MHX Investors, L.P., a Delaware limited partnership ("MHX"), Cherwell Investors, Inc., a Delaware corporation ("Cherwell"), Group 31, Inc., a Texas corporation ("Group 31"), MC Investment Corporation, a Delaware corporation ("MCI"), Penobscot Partners, L.P., a Delaware limited partnership ("Penobscot"), PTJ Merchant Banking Partners, L.P., a Delaware limited partnership ("PTJ Merchant"), J. Taylor Crandall ("Crandall"), Capital Partnership, a Texas general partnership ("Capital"), Keystone, Inc., a Texas corporation ("Keystone"), and Robert M. Bass ("R. Bass"). Hospitality, Arbor, MHX, Cherwell, Group 31, MCI, Penobscot, PTJ Merchant, Crandall, Capital, Keystone and R. Bass are sometimes hereinafter collectively referred to as the "Reporting Persons." The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Act, although neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that a group exists. Additionally, pursuant to Instruction C of Schedule 13D, information is included herein with respect to the following persons (collectively, "Item 2 Persons"), Group III 31, L.L.C., a Delaware limited liability company ("Group III"), Group Investors, L.L.C., a Delaware limited liability company ("Group Investors"), FW Group Genpar, Inc., a Texas corporation ("FW Group"), Mark A. Wolfson ("Wolfson"), David G. Brown ("Brown"), Acadia Partners, L.P., a Delaware limited partnership ("Acadia"), Acadia FW Partners, L.P., a Delaware limited partnership ("Acadia FW"), Acadia MGP, Inc., a Texas corporation ("Acadia MGP"), Daniel L. Doctoroff ("Doctoroff"), Steven B. Gruber ("Gruber"), Glenn R. August ("August"), John R. Monsky ("Monsky"), Bradford E. Bernstein ("Bernstein"), PTJ, Inc., a Delaware corporation ("PTJ"), W. R. Cotham ("Cotham"), James N. Alexander ("Alexander"), Thomas R. Delatour, Jr. ("Delatour"), Anthony P. Scotto ("Scotto"), Margaret Lee Bass 1980 Trust, a trust existing under the laws of Texas ("MLBT"), and Panther City Investment Company, a Texas corporation ("Panther City"). (b) - (c) REPORTING PERSONS HOSPITALITY Hospitality is a Delaware limited partnership, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. The principal business address of Hospitality, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. ARBOR Arbor is a Delaware limited partnership, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. The principal business address of Arbor, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. MHX Arbor is a Delaware limited partnership, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. The principal business address of Arbor, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. CHERWELL Cherwell is a Delaware corporation, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. The principal business address of Cherwell, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of the Act, the name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of Cherwell are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Crandall 201 Main St., Ste. 3100 Vice President and Chief Fort Worth, Texas 76102 Operating Officer of Keystone Doctoroff 65 E. 55th Street Managing Director of New York, NY 10022 Oak Hill Partners, Inc. Gruber 65 E. 55th Street Managing Director of New York, NY 10022 Oak Hill Partners, Inc. Monsky 65 E. 55th Street Managing Director of New York, NY 10022 Oak Hill Partners, Inc. Bernstein 65 E. 55th Street Employee of Oak New York, NY 10022 Hill Partners, Inc. Keystone is a Texas corporation, the principal businesses of which are investment in marketable securities, real estate investment and development, ownership and operation of oil and gas properties (through Bass Enterprises Production Co. ["BEPCO"]), the ownership and operation of gas processing plants and carbon black plants (through various partnerships) and the ownership of interests in entities engaged in a wide variety of businesses. The principal business address of Keystone, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76012. Pursuant to Instruction C to Schedule 13D of the Act, the name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of Keystone are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT R. Bass 201 Main St., Ste. 3100 President of Keystone Fort Worth, Texas 76102 Crandall See above. See above. Brown 201 Main St., Ste. 3100 Vice President- Fort Worth, Texas 76102 Finance of Keystone Doctoroff See above. See above. Gruber See above. See above. Wolfson 201 Main St., Ste. 3100 Vice President of and Fort Worth, Texas 76102 Consultant to Keystone Cotham 201 Main St., Ste. 2600 Vice President/ Fort Worth, Texas 76102 Controller of BEPCO Reese 201 Main St., Suite 2600 Treasurer of BEPCO Fort Worth, Texas 76102 Alexander 201 Main St., Ste. 3100 Vice President of Fort Worth, Texas 76102 Keystone Carl 201 Main St., Ste. 3100 Vice President of Fort Worth, Texas 76102 Keystone Monsky See above. See above. Delatour 201 Main St., Ste. 3100 Vice President of Fort Worth, Texas 76102 Keystone Oak Hill Partners, Inc. is a Delaware corporation, the principal business of which is serving as an investment consultant to Acadia Partners, L.P. ("Acadia"). Acadia is a Delaware limited partnership, formed to invest in public and private debt and equity securities. The principal business address of Oak Hill Partners, Inc. is 65 E. 55th Street, New York, NY 10022. BEPCO is a Texas corporation, the principal business of which is oil exploration and drilling and producing hydrocarbons. The principal business address of BEPCO, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. GROUP 31 Group 31 is a Texas corporation, the principal business of which is the purchase, sale, exchange, acquisition and holding of investment securities. The principal business address of Group 31, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of the Act, the name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of Group 31 are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Crandall See above. See above. Brown See above. See above. Cotham See above. See above. Reese See above. See above. Alexander See above. See above. Wolfson See above. See above. Pinson 201 Main St., Ste. 3100 Employee of BEPCO Fort Worth, Texas 76102 Delatour See above. See above. MCI MCI is a Delaware corporation, the principal business of which is investing in public and private debt and equity securities. The principal business address of MCI, which also serves as its principal office, is 65 East 55th Street, 32nd Floor, New York, New York 10022. Pursuant to Instruction C to Schedule 13D of the Act, the name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of MCI are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Doctoroff See above. See above. Gruber See above. See above. PENOBSCOT Penobscot is a Delaware limited partnership, formed to invest in public and private debt and equity securities. The principal business address of Penobscot, which also serves as its principal office, is 65 East 55th Street, 32nd Floor, New York, New York 10022. PTJ MERCHANT PTJ Merchant is a Delaware limited partnership, the principal business of which is serving as the general partner of Penobscot and activities related thereto. The principal business address of PTJ Merchant, which also serves as its principal office, is 65 East 55th Street, 32nd Floor, New York, New York 10022. CRANDALL See above. CAPITAL Capital is a Texas general partnership, the principal business of which is investing in public and private debt and equity securities. The principal business address of Capital, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. KEYSTONE See above. R. BASS See above. ITEM 2 PERSONS Pursuant to Instruction C to Schedule 13D of the Act, information with respect to the Item 2 Persons is set forth below. GROUP III Group III is a Delaware limited liability company, the principal business of which is the purchase, sale, acquisition and holding of investment securities. Group III also serves as the sole general partner of FW Hospitality. The principal business address of Group III, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. Crandall is the sole member of Group III. GROUP INVESTORS Group Investors is a Delaware limited liability company, the principal business of which is the purchase, sale, acquisition and holding of investment securities. Group Investors also serves as the sole general partner of Arbor. The principal business address of Group III, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. Wolfson is the sole member of Group III. FW GROUP FW Group is a Texas corporation, the principal business of which is the purchase, sale, acquisition and holding of investment securities. FW Group also serves as the sole general partner of MHX. The principal business address of FW Group, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. The name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of FW Group are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Crandall See above. See above. Brown See above. See above. Cotham See above. See above. Reese See above. See above. Alexander See above. See above. Wolfson See above. See above. Delatour See above. See above. WOLFSON See above. BROWN See above. ACADIA Acadia is a Delaware limited partnership, formed to invest in public and private debt and equity securities. Acadia is also the sole shareholder of Cherwell. The principal business address of Acadia, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. ACADIA FW Acadia FW is a Delaware limited partnership, the principal business of which is serving as the sole general partner of Acadia and activities related thereto. The principal business address of Acadia FW, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. ACADIA MGP Acadia MGP is a Texas corporation, the principal business of which is serving as the managing general partner of Acadia FW and activities related thereto. The principal business address of Acadia MGP, which also serves as its principal office, is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. The name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of Acadia MGP are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Crandall See above. See above. Doctoroff See above. See above. Gruber See above. See above. Cotham See above. See above. Monsky See above. See above. DOCTOROFF See above. GRUBER See above. AUGUST See above. MONSKY See above. BERNSTEIN See above. PTJ PTJ is a Delaware corporation, the principal business of which is serving as general partner of PTJ Merchant and activities related thereto. The principal business address of PTJ, which also serves as its principal office, is 65 East 55th Street, 32nd Floor, New York, New York 10022. The name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of PTJ are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Crandall See above. See above. Doctoroff See above. See above. Gruber See above. See above. Cotham See above. See above. Scotto 65 E. 55th Street Employee of Oak New York, NY 10022 Hill Partners, Inc. Monsky See above. See above. COTHAM See above. ALEXANDER See above. DELATOUR See above. SCOTTO See above. MLBT MLBT is a trust existing under the laws of the State of Texas. The address of MLBT is 201 Main Street, Suite 3100, Fort Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of the Act, information with respect to its trustee, Panther City, is set forth below. PANTHER CITY Panther City is a Texas corporation. Panther City is a private trust company that serves as trustee of various trusts. The principal business address of Panther City, which also serves as its principal office, is 201 Main Street, Suite 2700, Fort Worth, Texas 76102. Pursuant to Instruction C to Schedule 13D of the Act, the name, residence or business address, and present principal occupation or employment of each director, executive officer and controlling person of Panther City are as follows: RESIDENCE OR PRINCIPAL OCCUPATION NAME BUSINESS ADDRESS OR EMPLOYMENT Cotham See above. See above. William P. Hallman, Jr. 201 Main St., Ste. 2500 Director of the law firm of Fort Worth, Texas 76102 Kelly, Hart & Hallman, P.C. Also included herein is information with respect to the number of shares of the Stock beneficially owned by the following persons (who shall also be referred to as "Item 2 Persons"), William H. Bohnsack, Jr. ("Bohnsack"), Scott Krase ("Krase"), Ty Wallach ("Wallach"), Oak Hill Partners, Inc. ("Oak Hill"), John Stevenson ("Stevenson"), Trust for the Benefit of Walker Delatour ("Walker Trust"), Trust for the Benefit of William Delatour ("William Trust"), and William Janes ("Janes"). (d) None of the entities or persons identified in this Item 2 has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the entities or persons identified in this Item 2 has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) All of the natural persons identified in this Item 2 are citizens of the United States of America. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source and amount of the funds used by the Reporting Persons to purchase shares of Stock are as follows: REPORTING PERSON SOURCE OF FUNDS AMOUNT OF FUNDS Hospitality Contributions from Partners $ 1,686,655.33 Arbor Contributions from Partners $ 1,686,655.50 MHX Contributions from Partners $ 1,686,653.13 Cherwell Not Applicable(1) Not Applicable Group 31 Not Applicable(2) Not Applicable MCI Not Applicable(3) Not Applicable Penobscot Not Applicable(4) Not Applicable PTJ Merchant Not Applicable(5) Not Applicable Crandall Personal Funds(6) $ 3,081.40 Capital Not Applicable(7) Not Applicable Keystone Not Applicable(8) Not Applicable R. Bass Personal Funds(9) $ 32,055.08 Item 2 Persons Not Applicable(10) Not Applicable (1) 53,068 shares of the Stock were acquired by Cherwell on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (2) 4,067 shares of the Stock were acquired by Group 31 on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (3) 39 shares of the Stock were acquired by MCI on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (4) 75,260 shares of the Stock were acquired by Penobscot on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (5) 100,000 shares of the Stock were acquired by PTJ Merchant on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (6) 6,507 shares of the Stock were acquired by Crandall on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (7) 45,754 shares of the Stock were acquired by Capital on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (8) 193,367 shares of the Stock were acquired by Keystone on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (9) 67,720 shares of the Stock were acquired by R. Bass on August 3, 1998 in connection with a spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. (10) All Item 2 Persons acquired shares of the Stock on August 3, 1998 in connection with the spin-off of the Issuer by CapStar Hotel Company; thus, no funds were expended in acquiring these shares. Item 4. PURPOSE OF TRANSACTION. The Reporting Persons acquired and continue to hold the Stock reported herein for investment purposes. Depending on market conditions and other factors that the Reporting Persons may deem material to their respective investment decisions, the Reporting Persons may purchase additional Stock in the open market or in private transactions. Depending on these same factors, the Reporting Persons may sell all or a portion of the Stock on the open market or in private transactions. Except as set forth in this Item 4, the Item 2 Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) REPORTING PERSONS HOSPITALITY Hospitality beneficially owns 764,067 shares of the Stock, which constitutes approximately 3.0% of the outstanding shares of Stock. ARBOR Arbor beneficially owns 764,067 shares of the Stock, which constitutes approximately 3.0% of the outstanding shares of Stock. MHX MHX beneficially owns 764,066 shares of the Stock, which constitutes approximately 3.0% of the outstanding shares of Stock. CHERWELL Cherwell beneficially owns 61,912 shares of the Stock, which constitutes approximately 0.2% of the outstanding shares of Stock. GROUP 31 Group 31 beneficially owns 4,067 shares of the Stock, which constitutes less than 0.1% of the outstanding shares of Stock. MCI MCI beneficially owns 45 shares of the Stock, which constitutes less than 0.1% of the outstanding shares of Stock. PENOBSCOT Because of its position as the sole stockholder of MCI, and because of its direct ownership of 87,803 shares of Stock, Penobscot may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 87,848 shares of the Stock, which constitutes approximately 0.3% of the outstanding shares of Stock. PTJ MERCHANT Because of its position as the sole general partner of Penobscot, and because of its direct ownership of 116,666 shares of Stock, PTJ Merchant may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 204,514 shares of the Stock, which constitutes approximately 0.8% of the outstanding shares of Stock. CRANDALL Because of his position as the president of each of Acadia MGP, Group 31 and PTJ, because of his position as the sole member of Group III, and because of his direct ownership of 7,592 shares of the Stock, Crandall may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 1,030,493 shares of Stock, which constitutes approximately 4.0% of the outstanding shares of Stock. CAPITAL Capital beneficially owns 45,754 shares of the Stock, which constitutes approximately 0.2% of the outstanding shares of the Stock. KEYSTONE The number of shares of the Stock that Keystone owns beneficially is 193,367, which constitutes approximately 0.7% of the outstanding shares of the Stock. R. BASS Because of his position as sole director of Keystone, and because of his direct ownership of 77,518 shares of the Stock, R. Bass may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of 270,885 shares of Stock, which constitutes approximately 1.1% of the outstanding shares of Stock. ITEM 2 PERSONS Information with respect to the Item 2 persons is attached hereto as Schedule I. (b) REPORTING PERSONS HOSPITALITY Acting through its general partner, Hospitality has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 764,067 shares of Stock. ARBOR Acting through its general partner, Arbor has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 764,067 shares of Stock. MHX Acting through its general partner, MHX has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 764,066 shares of Stock. CHERWELL Acting through its president, Cherwell has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 61,912 shares of the Stock. GROUP 31 Acting through Crandall, its President, Group 31 has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 4,067 shares of the Stock. MCI Acting through its sole stockholder, MCI has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 45 shares of the Stock. PENOBSCOT Acting through its sole general partner, and in its capacity as the sole stockholder of MCI with respect to 45 shares of the Stock, Penobscot has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 87,848 shares of Stock. PTJ MERCHANT In its capacity as the sole general partner of Penobscot, and acting through its managing general partner, PTJ Merchant has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 204,514 shares of Stock. CRANDALL In his capacity as the sole member of Group III, Crandall has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 764,067 shares of Stock. In his capacity as the president and sole shareholder of Acadia MGP, Crandall has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 61,912 shares of Stock. In his capacity as the president and sole shareholder of Group 31, Crandall has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 4,067 shares of Stock. In his capacity as the president and sole stockholder of PTJ, Crandall has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 204,514 shares of Stock. In his individual capacity, Crandall has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 7,592 shares of Stock. CAPITAL Acting through its managing partner, MLBT, Capital has the sole power to vote or to direct the vote and to dispose or direct the disposition of 45,754 shares of the Stock. KEYSTONE Acting through R. Bass, its president and sole director, Keystone has the sole power to vote or to direct the vote and to dispose or to direct the disposition of 193,367 shares of the Stock. R. BASS In his capacity as the sole director and president of Keystone, R. Bass has sole power to vote or to direct the vote and to dispose or to direct the disposition of 193,367 shares of Stock. In his individual capacity, R. Bass has sole power to vote or to direct the vote and to dispose or to direct the disposition of 77,518 shares of Stock. ITEM 2 PERSONS Information with respect to the Item 2 Persons is attached hereto as Schedule I. (c) During the past sixty days, the Reporting persons have purchased shares of Stock in open market transactions on the New York Stock Exchange as follows: REPORTING NO. OF SHARES PRICE PER PERSON DATE PURCHASED SHARE Hospitality 09/08/98 200,000 $ 2.27 Arbor 09/08/98 200,000 2.27 MHX 09/08/98 200,000 2.27 Hospitality 09/09/98 230,733 2.27 Arbor 09/09/98 230,734 2.27 MHX 09/09/98 230,733 2.27 Hospitality 09/14/98 3,333 2.08 Arbor 09/14/98 3,333 2.08 MHX 09/14/98 3,334 2.08 Hospitality 09/15/98 146,667 2.16 Arbor 09/15/98 146,667 2.16 MHX 09/15/98 146,666 2.16 Hospitality 09/16/98 183,334 2.10 Arbor 09/16/98 183,333 2.10 MHX 09/16/98 183,333 2.10 In addition, on or prior to August 31, 1998, the following Reporting Persons and Item 2 Persons exercised rights to purchase the number of shares of the Stock set forth opposite their names at a subscription price of $2.84 per share. Such rights were distributed by the Issuer to all of its stockholders on August 13, 1998, and entitled each stockholder to purchase one share of the Stock at $2.84 for every six shares of the Stock already owned. Name Number of Shares Cherwell 8,844 MCI 6 Penobscot 12,543 PTJ Merchant 16,666 Crandall 1,085 Bass 11,287 August 11,172 Gruber 847 Oak Hill 2,022 Stevenson 285 Delatour 791 Walker Trust 536 William Trust 536 Except as set forth in this paragraph (c), to the best of the knowledge of each of the Reporting Persons, none of the persons named in response to paragraph (a) has effected any transactions in the Stock during the past 60 days. (d) Each of the Reporting Persons affirms that no person other than such Reporting Person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Stock owned by such Reporting Person. (e) Not applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Except as set forth herein or in the Exhibit filed or to be filed herewith, there are no contracts, arrangements, understandings or relationships with respect to the Stock owned by the Item 2 Persons. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 99.1 -- Agreement pursuant to Rule 13d-1(k)(1)(iii). Exhibit 99.2 -- Limited Partnership Agreement of FW Hospitality, L.P. Exhibit 99.3 -- Limited Partnership Agreement of Arbor REIT, L.P. Exhibit 99.4 -- Limited Partnership Agreement of MHX Investors, L.P. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATED: September 18, 1998 FW HOSPITALITY, L.P. By: GROUP III 31, L.L.C., general partner By: /s/ J. Taylor Crandall J. Taylor Crandall, sole member ARBOR REIT, L.P. By: GROUP INVESTORS, L.L.C., general partner By: /s/ Mark A. Wolfson Mark A. Wolfson, sole member MHX INVESTORS, L.P. By: FW GROUP GENPAR, INC., general partner By: /s/ W. R. Cotham W. R. Cotham, Vice President /s/ W. R. Cotham W. R. COTHAM As Vice President of each of CHERWELL INVESTORS, INC., GROUP 31, INC. and MC INVESTMENT CORPORATION PENOBSCOT PARTNERS, L.P. By: PTJ MERCHANT BANKING PARTNERS, L.P., general partner By: PTJ, INC., managing general partner By: /s/ W.R. Cotham W. R. Cotham, Vice President PTJ MERCHANT BANKING PARTNERS, L.P. By: PTJ, INC., managing general partner By: /s/ W.R. Cotham W. R. Cotham, Vice President /s/ J. Taylor Crandall J. TAYLOR CRANDALL CAPITAL PARTNERSHIP By: MARGARET LEE BASS 1980 TRUST, Managing Partner By: PANTHER CITY INVESTMENT COMPANY, Trustee By:/s/ W. R. Cotham KEYSTONE, INC. By: /s/ W.R. Cotham W.R. Cotham, Vice President /s/ W.R. Cotham W.R. COTHAM As Attorney-in-Fact for: ROBERT M. BASS (1) (1) A Power of Attorney authorizing W.R. Cotham, et al., to act on behalf of Robert M. Bass previously has been filed with the Securities and Exchange Commission. SCHEDULE I Item 5(a) The following persons beneficially own the number of shares of Stock set forth opposite their names: Name Number of Shares FW Group 590 Wolfson 7,117 Brown 7,615 Doctoroff 67,882 Gruber 67,033 August 78,204 Monsky 12,731 Bernstein 33,770 Alexander 2,034 Delatour 5,540 Scotto 2,034 Bohnsack 8,305 Krase 6,846 Wallach 491 Oak Hill 14,154 Stevenson 1,993 Walker Trust 3,754 William Trust 3,754 William Janes 9,151 Item 5(b) The persons listed above have the sole power to vote or to direct the vote and to dispose or to direct the disposition of the number of shares of Stock set forth opposite their names. EXHIBIT INDEX EXHIBIT DESCRIPTION 99.1 Agreement pursuant to Rule 13d-1(k)(1)(iii), filed herewith 99.2 Limited Partnership Agreement of FW Hospitality, L.P. 99.3 Limited Partnership Agreement of Arbor REIT, L.P. 99.4 Limited Partnership Agreement of MHX Investors, L.P. EX-99.1 2 JOINT FILING AGRMT FOR SCHED. 13D Exhibit 99.1 Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the undersigned agrees that the statement to which this Exhibit is attached is filed on behalf of each of them in the capacities set forth below. FW HOSPITALITY, L.P. By: GROUP III 31, L.L.C., general partner By: /s/ J. Taylor Crandall J. Taylor Crandall, sole member ARBOR REIT, L.P. By: GROUP INVESTORS, L.L.C., general partner By: /s/ Mark A. Wolfson Mark A. Wolfson, sole member MHX INVESTORS, L.P. By: FW GROUP GENPAR, INC., general partner By: /s/ W. R. Cotham W. R. Cotham, Vice President /s/ W. R. Cotham W. R. COTHAM As Vice President of each of CHERWELL INVESTORS, INC., GROUP 31, INC. and MC INVESTMENT CORPORATION PENOBSCOT PARTNERS, L.P. By: PTJ MERCHANT BANKING PARTNERS, L.P., general partner By: PTJ, INC., managing general partner By: /s/ W.R. Cotham W. R. Cotham, Vice President PTJ MERCHANT BANKING PARTNERS, L.P. By: PTJ, INC., managing general partner By: /s/ W.R. Cotham W. R. Cotham, Vice President /s/ J. Taylor Crandall J. TAYLOR CRANDALL CAPITAL PARTNERSHIP By: MARGARET LEE BASS 1980 TRUST, Managing Partner By: PANTHER CITY INVESTMENT COMPANY, Trustee By:/s/ W. R. Cotham KEYSTONE, INC. By: /s/ W. R. Cotham W.R. Cotham, Vice President /s/ W. R. Cotham W.R. COTHAM As Attorney-in-Fact for: ROBERT M. BASS (1) (1) A Power of Attorney authorizing W.R. Cotham, et al., to act on behalf of Robert M. Bass previously has been filed with the Securities and Exchange Commission. EX-99.2 3 LIMITED PARTNERSHIP AGREEMENT FOR FW HOSPITALITY, L.P. Exhibit 99.2 LIMITED PARTNERSHIP AGREEMENT OF FW HOSPITALITY, L.P. This Limited Partnership Agreement ("Agreement") of FW Hospitality, L.P. is made and entered into effective as of the 5th day of August, 1998 (the "Effective Date"), by and among Group III 31, L.L.C., a Delaware limited liability company ("Group III 31"), as the general partner and W. R. Cotham, Nominee ("Nominee"), as the nominee limited partner. WITNESSETH: For and in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the adequacy, receipt, and sufficiency of which are hereby acknowledged, Group III 31 and Nominee (collectively, the "Partners" and individually, a "Partner") hereby agree as follows: ARTICLE I ORGANIZATION AND PURPOSE Section 1.01. Formation of Limited Partnership. The Partners hereby agree to become partners and to form a limited partnership (the "Partnership") pursuant to Del. Code Ann 17-101 et seq., known as the Delaware Revised Uniform Limited Partnership Act (the "Act"). Group III 31 shall be the general partner and is hereinafter sometimes referred to in such capacity as the "General Partner." Nominee shall be the limited partner and together with any beneficial owners of the interest held by Nominee admitted as limited partners pursuant to this Agreement are hereinafter referred to individually as a "Limited Partner" and collectively as the "Limited Partners." Section 1.02. Name. The name of the Partnership shall be FW Hospitality, L.P. All business and affairs of the Partnership shall be conducted solely under, and all Partnership Assets (as that term is defined in Section 1.04) shall be held solely in, such name unless otherwise determined by the General Partner. Section 1.03. Effective Date and Term. The Partnership shall be in effect for a term beginning on the Effective Date and shall continue under this Agreement (as amended from time to time) until dissolved upon the occurrence of an event that causes the dissolution of the Partnership in accordance with the provisions of this Agreement (unless reconstituted as provided herein), and thereafter to the extent provided by applicable law, until wound up and terminated as provided herein. Section 1.04. Purposes and Scope of Business. The business and purposes of the Partnership are to make investments of any kind and to do all things permitted under the Act, specifically including, without limitation, acquiring securities of any type or kind in each of MeriStar Hospitality Corp. and MeriStar Hotels and Resorts, Inc. Subject to the terms and conditions of this Agreement, the Partnership shall have the power and authority to do all such other acts and things as may be necessary, desirable, expedient, convenient for, or incidental to, the furtherance and accomplishment of the foregoing objectives and purposes and for the protection and benefit of the Partnership. The assets of the Partnership, whether now or hereafter owned, are hereinafter sometimes referred to as the "Partnership Assets". Section 1.05. Documents. The General Partner, or anyone designated by the General Partner, is hereby authorized to execute a certificate of limited partnership of the Partnership ("Certificate of Limited Partnership") in accordance with the Act and cause the same to be filed in the office of the Secretary of State of the State of Delaware in accordance with the provisions of the Act. The Partnership shall promptly execute and duly file with the proper offices in each state in which the Partnership may conduct the activities hereinafter authorized, one or more certificates as required by the laws of each such state in order that the Partnership may lawfully conduct the business, purposes, and activities herein authorized in each such state, and the Partnership shall take any other action or measures necessary in such state or states for the Partnership to conduct such activities. Section 1.06. Principal Place of Business. The principal place of business of the Partnership shall be 201 Main Street, Suite 3100, Fort Worth, Texas 76102 or at such other place or places as may be approved by the General Partner. The General Partner shall be responsible for maintaining at the Partnership's principal place of business those records required by the Act to be maintained there. Section 1.07. Registered Agent and Office. The Registered Agent (as defined in the Act) for the Partnership in Delaware shall be Corporation Service Company. The Registered Office (as defined in the Act) of the Partnership shall be 1013 Centre Road, Wilmington, Delaware 19805. ARTICLE II OPERATIONS Section 2.01. Management of Partnership. (a) The right to manage, control, and conduct the business and affairs of the Partnership shall be vested solely in the General Partner. Except as provided in Sections 2.01(b) and 7.01, the Limited Partners shall not take part in the management of the affairs of the Partnership and under no circumstances may any Limited Partner control the Partnership business or sign for or bind the Partnership. Without limiting the generality of the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the General Partner shall have the exclusive authority to act for and on behalf of the Partnership, and no third party shall ever be required to inquire into the authority of the General Partner to take such action on behalf of the Partnership. Except as expressly limited in this Agreement, the General Partner shall have the rights, authority, and powers of general partners with respect to the Partnership business and the Partnership Assets as set forth in the Act as in effect upon the Effective Date of this Agreement. The General Partner shall not be required to devote its full time and attention to the business of the Partnership, but only such time as it deems necessary for the proper conduct of the Partnership's affairs. (b) No act shall be taken, sum expended or obligation incurred by the General Partner for or on behalf of the Partnership with respect to a matter within the scope of any of the following major decisions ("Major Decisions") affecting, directly or indirectly, the Partnership, or the Partnership Assets, unless approved as described in subsection 2.01(c): (i) Financing or refinancing of the Partnership or the Partnership Assets; (ii) Selling, exchanging, or otherwise disposing of all or substantially all of the Partnership Assets; or (iii) Admitting a New Partner (as defined in Section 5.05) to the Partnership. (c) No Major Decision may be made or effected by or on behalf of the Partnership without the approval of the Partners holding a majority of all Percentage Interests (as defined in Section 4.01) in the Partnership. As used in this Agreement, "Approved by the Partners", "Approval of the Partners", and other like terms shall mean the approval or consent of the Partners holding a majority of the Percentage Interests in the Partnership. Any Partner may at any time propose a Major Decision to the other Partners by giving written notice to the other Partners. Within ten (10) days after receipt of such notice, each Partner shall indicate, in writing, to the requesting Partner, his or its approval or disapproval of such Major Decision; provided, that, in the event any Partner does not respond in such 10-day period, such Partner shall be deemed to have disapproved such Major Decision. If any Partner or Partners holding a majority of the Percentage Interests in the Partnership approve of, consent to, or otherwise take any action contemplated by this Section 2.01(c), such action shall neither require any further polling of any other Partners, nor require any further approval, consent, or action of any other Partners. Section 2.02. Affiliates. The General Partner shall have the right to cause the Partnership to enter into contracts or otherwise deal with any affiliates of any Partner in any capacity, including, without limitation, in connection with the financing, management, and development of the Partnership Assets, except that the terms of any such arrangement shall be commercially reasonable and competitive with amounts that would be paid to third parties on an "arms-length" basis. Section 2.03. Expenses. The Partnership shall pay or reimburse the General Partner and the Tax Matters Partner (as defined in Section 2.05) for all direct, out-of-pocket expenses incurred by it with respect to its duties under Section 2.01 and Section 2.05 to the Partnership, including, without limitation, salaries, accounting expenses, insurance premiums attributable directly to the Partnership, legal fees, and other direct costs associated with the formation and operation of the Partnership. Section 2.04. Exculpations, Indemnities. (a) Neither the Partners, the Tax Matters Partner, their affiliates nor any of their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually a "Covered Person") shall be liable to the Partnership, any Partner, or any other person for any act or omission taken or suffered by such Covered Person in good faith and in the belief that such act or omission is in or is not opposed to the best interests of the Partnership, provided, that such act or omission is not fraud, willful misconduct, or a knowing violation of this Agreement by such Covered Person. No Covered Person shall be liable to the Partnership, any Partner, or any other person for any action taken by any other Partner, nor shall any Covered Person be liable to the Partnership, any other Partner, or any other person for any action of any employee or agent of the Covered Person, provided, such action is within the scope of the purposes of the Partnership and the Covered Person seeking exculpation satisfies the parameters of the preceding sentence. (b) To the fullest extent allowed or permitted under any provision of applicable law, including, without limitation, the Act, the Partnership shall indemnify, defend, and hold harmless each Partner, its affiliates and their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually an "Indemnitee") to the extent of the Partnership Assets, from and against any losses, expenses, judgments, fines, settlements, and damages incurred by the Partnership or such Indemnitee arising out of any claim based upon acts (including, without limitation, negligent acts) performed or omitted to be performed by the Partnership or such Indemnitee in connection with the business of the Partnership, including, without limitation, costs, expenses, and attorneys' fees expended in the settlement or defense of any such claim. All decisions of the Partnership concerning any action allowed or permitted under applicable law concerning the indemnity of any person or entity by the Partnership shall be made as Approved by the Partners. Section 2.05. Tax Matters Partner. The General Partner shall act as the "Tax Matters Partner" for federal income tax purposes. The Tax Matters Partner shall mean the Partner (a) designated as the "tax matters partner" within the meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law, collectively the "Code") and (b) whose responsibilities as Tax Matters Partner include, where appropriate, commencing on behalf of the Partnership certain judicial proceedings regarding Partnership federal income tax items and informing all Partners of any administrative or judicial proceeding involving federal income taxes. In exercising its responsibilities as Tax Matters Partner, the General Partner shall have the final decision making authority with respect to all federal income tax matters involving the Partnership. Any direct out-of-pocket expense incurred by the Tax Matters Partner in carrying out its responsibilities and duties under this Agreement shall be allocated to and charged to the Partnership as an expense of the Partnership for which the Tax Matters Partner shall be reimbursed. ARTICLE III FINANCING Section 3.01. Capital Contributions. The Partners may, but shall not be obligated to, make capital contributions ("Capital Contributions") at such times, in such manner and in such amounts as the General Partner may determine, subject to the Approval of the Partners, provided, however, that each Partner shall have the right to contribute his share of any Capital Contribution pro rata in accordance with his existing Percentage Interest. Section 3.02. Capital Accounts. The amount of a Partner's capital account ("Capital Account") in the Partnership shall be determined in accordance with Regulations Section 1.704-1(b)(2)(iv), including by: (a) crediting to such account (i) all contributions to the Partnership made by or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property contributed (less any liabilities assumed by the Partnership or to which any property may be subject) and (ii) all gains and income of the Partnership allocated to such Partner or his or its predecessor in interest; and (b) debiting to such account (i) all distributions from the Partnership made to or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property distributed (less any liabilities assumed by the Partner or to which any property may be subject) and (ii) all losses and deductions of the Partnership allocated to such Partner or his or its predecessor in interest. Section 3.03. Limited Liability of Limited Partners. Notwithstanding anything contained in this Agreement to the contrary, the liability of each Limited Partner for any of the debts, losses, or obligations of the Partnership shall be limited to the amount of the sum of such Limited Partner's capital contributions pursuant to Section 3.01 hereof. Accordingly, no Limited Partner shall be obligated to provide additional capital to the Partnership or its creditors by way of contribution, loan, or otherwise beyond the amount of the capital contributions required of such Limited Partner pursuant to Section 3.01 hereof. Except as provided in the Act, no Limited Partner shall have any personal liability whatsoever, whether to the Partnership or any third party, for the debts of the Partnership or any of its losses beyond the amount of the Limited Partner's capital contributions. Section 3.04. Treatment of Capital Contributions. Except as provided in this Agreement to the contrary, no Partner shall be entitled to interest on his or its contributions to the capital of the Partnership nor shall any Partner be entitled to demand the return of all or any part of such contributions to the capital of the Partnership. Section 3.05. Benefits of Agreement. Nothing in this Agreement, and, without limiting the generality of the foregoing, in this Article III, expressed or implied, is intended or shall be construed to give to any creditor of the Partnership or to any creditor of any Partner or any other person or entity whatsoever, other than the Partners and the Partnership, any legal or equitable right, remedy, or claim under or in respect of this Agreement or any covenant, condition, or provision herein contained, and such provisions are and shall be held to be for the sole and exclusive benefit of the Partners and the Partnership. ARTICLE IV ACCOUNTING, ALLOCATIONS, AND CURRENT DISTRIBUTIONS Section 4.01. Percentage Interests. Except as adjusted pursuant to Section 4.02, for purposes of allocating profits and losses in accordance with Section 4.03, and for purposes of distributions under Section 4.08, each Partner shall have the percentage interest in the Partnership (collectively the "Percentage Interests" and individually, a "Percentage Interest") set forth on such Partner's signature page attached hereto. Section 4.02. Adjustments to Percentage Interests. (a) If (i) more than a de minimis contribution or distribution is made other than pro rata by Percentage Interests, as among the Partners, or (ii) a New Partner is admitted to the Partnership in accordance with Section 5.05 (with each such event described in Section 4.02(a)(i) or (ii) being referred to as an "Adjusting Event"), then the Percentage Interests of the Partners shall be immediately adjusted such that the Percentage Interest of each Partner equals a fraction, expressed as a percentage, in which the numerator equals the Current Value (as defined in Section 4.02(b)) of such Partner's interest in the Partnership, and the denominator equals the Net Value of the Partnership Assets (as defined in Section 4.02(b)). If the Percentage Interests of any Partners are adjusted pursuant to this Section 4.02(a), no Partner shall have the right to modify, rectify, or undo such adjustments thereafter, and such adjustments shall be made without the need for any further act or writing to effect any such adjustment. Each Partner hereby appoints the General Partner as his or its duly authorized agent and attorney-in-fact for purposes of preparing and executing any amendments to this Agreement necessary or desirable to reflect any adjustment of Percentage Interests under this Section 4.02(a). The rights granted to any Partner under this Section 4.02 shall be such Partner's sole and exclusive remedy for seeking relief with respect to any Adjusting Event. (b) For purposes of this Agreement, the "Net Value of the Partnership Assets" shall mean the net fair market value of all of the Partnership Assets at the time the Adjusting Event occurs, as determined by the General Partner in its sole discretion, and such Net Value of the Partnership Assets shall include the value of the contributions made in connection with the Adjusting Event. The Partners agree that because of the difficulty of valuing an interest in the Partnership due to the unique nature of the Partnership Assets, the General Partner is granted the sole discretion to determine such values and shall take into account whatever factors it deems appropriate to reflect such values, including, without limitation, the dollar value of all contributions to date and any other reasonable methods for determining the value of all of the Partnership Assets at the time of the Adjusting Event. Without limiting the foregoing, the General Partner may deem the Net Value of the Partnership Assets to equal the historical net cost of those assets. The "Current Value" of any Partner's interest in the Partnership shall be a dollar amount equal to the sum of (i) an amount equal to such Partner's Percentage Interest immediately prior to the Adjusting Event multiplied by the Net Value of the Partnership Assets determined above excluding the net fair market value (as determined by the General Partner) of any contributions associated with the Adjusting Event, plus (ii) the net fair market value (as determined by the General Partner) of any contributions made by such Partner associated with the Adjusting Event. Each Partner's Percentage Interest shall be immediately adjusted to reflect such valuation by the General Partner, effective as of the date of such Adjusting Event. (c) Notwithstanding anything contained in this Agreement to the contrary, if the Partnership's interest in any partnership or any investment entity it has invested in (each, an "Investment Entity"), be diminished, or if the Partnership's interest in an Investment Entity would have been diminished but for one or more Contributing Partners, due to a failure by the Partnership to contribute funds to an Investment Entity (a "Diminishment") which is in turn due to the failure of a Non-Contributing Partner to contribute his or its pro rata portion of a Call, then the Percentage Interests of the Non-Contributing Partners may be reallocated as determined by the General Partner in its sole discretion by decreasing the Percentage Interests of those Non-Contributing Partners, and increasing the Percentage Interests of the Contributing Partners, or if none, then the other Partners, such that any loss of the Partnership's interest in an Investment Entity which actually occurred or which would have otherwise occurred to the Partnership due to the Diminishment which is in excess of the aggregate decrease in Percentage Interest of the Non-Contributing Partners pursuant to Section 4.02(a) is borne solely by the Non-Contributing Partners. Section 4.03. Tax Status, Reports, and Allocations. (a) Notwithstanding any provision contained in this Agreement to the contrary, solely for federal income tax purposes, each of the Partners hereby recognizes that the Partnership will be subject to all provisions of Subchapter K of the Code; provided, however, that the filing of United States Partnership Returns of Income shall not be construed to extend the purposes of the Partnership or expand the obligations or liabilities of the Partners. (b) The General Partner or, at its discretion, an accountant ("Accountant") selected by the General Partner shall prepare or cause to be prepared all tax returns and statements, if any, that must be filed on behalf of the Partnership with any taxing authority and shall timely file such returns or statements. (c) For accounting and federal and (if any) state income tax purposes, all income, deductions, credits, gains and losses shall be allocated to the Partners pro rata in accordance with their respective Percentage Interests. (d) Notwithstanding subsection (c) above, any loss or deductions attributable to any Partnership recourse liability (as defined in Regulations Section 1.752-1(a)(i)) ("Recourse Debt") must be specially allocated to any Partner who bears the economic risk of loss with respect to the Recourse Debt to which such loss or deductions are attributable. If any allocations are made to any Partner pursuant to the foregoing sentence, then after any allocations required by Sections 4.04 and 4.05 hereof have been made but prior to allocations pursuant to Section 4.03(c), income shall be allocated to such Partner until on a cumulative basis an aggregate amount of income equal to such cumulative deductions and losses has been allocated to each such Partner. Section 4.04. Certain Gross Asset Value/Tax Differences. In accordance with Section 704(c) of the Code and the applicable Regulations thereunder, income, gain, loss, deduction, and tax depreciation with respect to any property contributed to the capital of the Partnership, or with respect to any property which has a Gross Asset Value different than its adjusted tax basis, shall, solely for income tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted tax basis of such property to the Partnership and the Gross Asset Value of such property. Section 4.05. Minimum Gain and Income Offsets. (a) Definitions. (i) "Partner Minimum Gain" shall be "partner nonrecourse debt minimum gain," as defined in Regulations Section 1.704-2(i)(2) and determined in accordance with Regulations Sections 1.704-2(i)(3) and 1.704-2(k). (ii) "Partner Nonrecourse Debt" has the meaning set forth in Regulations Sections 1.704-2(b)(4) and 1.704-2(i). (iii) "Partner Nonrecourse Deduction" has the meaning set forth in Regulations Section 1.704-2(i). (iv) "Partnership Minimum Gain" has the meaning set forth in Regulations Section 1.704-2(d) and shall be determined in accordance with the provisions of Regulations Section 1.704-2(k). (v) "Regulations" means the temporary and permanent Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). (b) Minimum Gain. (i) Notwithstanding any other provision of this Agreement to the contrary, if the Partnership Minimum Gain on the last day of any fiscal year is less than the Partnership Minimum Gain on the last day of the immediately preceding fiscal year, then (before any other allocation of Partnership items for such year under this Agreement, other than as provided in paragraph (ii) below) there shall be specially allocated to each Partner items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain (determined in accordance with Regulations Section 1.704-2(g)). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2)(i) and (iii). This Section 4.05(b)(i) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith. (ii) Subsequent to any allocations under Section 4.05(b)(i) above, other than allocations of gain from the disposition of property subject to Partner Nonrecourse Debt, if Partner Minimum Gain on the last day of any fiscal year is less than the Partner Minimum Gain on the last day of the immediately preceding fiscal year, then, except as provided herein, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to that Partner's share, if any, (determined in accordance with Regulations Section 1.704-2(i)(4)) of the net decrease in Partner Minimum Gain (such net decrease to be determined in a manner consistent with the provisions of Regulations Section 1.704-2(d) and 1.704-2(g)(3)). The items to be so allocated shall be determined in accordance with the provisions of Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii) and (iii). Notwithstanding the foregoing, no such special allocations of income and gain shall be made to the extent that the net decrease in Partner Minimum Gain described above arises because the liability ceases to be Partner Nonrecourse Debt due to a conversion, refinancing, or other change in the debt instrument that causes it to become partially or wholly a nonrecourse liability within the meaning of Regulations Section 1.752-1(a)(2). This Section 4.05(b)(ii) is intended to comply with the chargeback and other provisions of Regulations Section 1.704-2(i) and shall be interpreted consistently therewith. (c) Qualified Income Offset. Notwithstanding any other provision of this Agreement, if during any fiscal year any Partner (i) is allocated pursuant to Code Section 706(d) or Regulations Section 1.751-1(b)(2)(ii) any loss, items of loss, deductions, or Code Section 705(a)(2)(B) expenditures, (ii) is distributed any cash or property from the Partnership and such distributions exceed offsetting increases to such Partner's Capital Account that are reasonably expected to occur during such year, or (iii) receives any other adjustment, allocation, or distribution described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) and, as a result of such adjustment, allocation, or distribution, such Partner has a Qualified Income Offset Amount (as hereinafter defined), then items of income and gain (including gross income) for such fiscal year or other period (and, if necessary, subsequent fiscal years) shall (prior to any allocation pursuant to Section 4.03 hereof) be allocated to such Partner in an amount equal to his Qualified Income Offset Amount; provided, however, that any allocation of income or gain shall be required under this sentence only if and to the extent that such Partner would have a Qualified Income Offset Amount after all other allocations provided for in this Agreement have been tentatively made as if Sections 4.05(b) and (c) were not contained herein. As used herein, the term "Qualified Income Offset Amount" for a Partner means the excess, if any, of (x) the negative balance a Partner has in its Capital Account following the adjustment, allocation, or distribution described in the preceding sentence, over (y) the maximum amount that it is obligated (or is deemed to be obligated) to restore to the Partnership upon liquidation as determined in accordance with Regulations Sections 1.704-2(f), (g), and (i). This Section 4.05(c) is intended to satisfy the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. Section 4.06. Accounting. (a) The fiscal year of the Partnership shall end on the last day of December of each year. (b) The books of account of the Partnership shall be kept and maintained at all times at the principal place of business of the Partnership or at such other place or places approved by the General Partner. The books of account shall be maintained according to federal income tax principles using the accrual method of accounting, consistently applied, and shall show all items of income and expense. (c) If requested by any Partner, the General Partner shall cause a balance sheet of the Partnership dated as of the end of the fiscal year and a related statement of income or loss for the Partnership for such fiscal year to be prepared by the Accountant and furnished, at the expense of the Partnership, to each of the Partners on an annual basis, within ninety (90) days after the close of each fiscal year. (d) Each Partner shall have the right at reasonable times and upon reasonable advance notice during usual business hours to audit, examine, and make copies of or extracts from the books of account of the Partnership. Such right may be exercised through any agent or employee of such Partner designated by him or it or by an independent certified public accountant designated by such Partner. Each Partner shall bear all expenses incurred in any examination made on behalf of such Partner. Section 4.07. Bank Accounts. Funds of the Partnership shall be deposited in a Partnership account or accounts in the bank or banks as selected by the General Partner. Withdrawals from bank accounts shall only be made by the General Partner or such other parties as may be approved by the General Partner. Section 4.08. Current Distributions to Partners. Except as provided in Section 6.05 in connection with the termination and liquidation of the Partnership, the General Partner shall distribute funds at such times and in such amounts as it may determine, in its sole discretion, except that such funds shall be distributed by the General Partner to the Partners in accordance with their respective Percentage Interests at the time of the distribution. In determining the amount of funds to distribute pursuant to this Section 4.08, the General Partner may consider such factors as the need to allocate funds to any reserves for Partnership contingencies or any other Partnership purposes that the General Partner deems necessary or appropriate. The General Partner, in its sole discretion, may distribute undivided interests in Partnership Assets in- kind, provided, that such distribution shall be pro rata in accordance with the Partners' relative Percentage Interests. Section 4.09. Changes in Percentage Interests. If a Partner's Percentage Interest changes during any fiscal year, the allocations to be made pursuant to this Agreement shall be made in accordance with Section 706 of the Code, using any convention permitted by Section 706 of the Code and the Regulations promulgated thereunder and selected by the General Partner so as to equitably effectuate the allocations of this Article IV. Section 4.10. Tax Withholding. (a) If at any time requested by the General Partner, each Partner and each Substituted Partner (as defined in Section 5.03) shall deliver to the Partnership (i) an affidavit in form specified in Treasury Regulations Section 1.1445-2(b)(2)(iii) or otherwise in form satisfactory to the General Partner that the applicable Partner is not a "foreign person" within the meaning of Section 1445(e)(3) of the Code or otherwise subject to withholding under the provisions of any federal, state, local, foreign or other law, (ii) a withholding certificate issued by the United States Internal Revenue Service ("IRS") pursuant to Section 1445 of the Code, (iii) any other certificate that the General Partner may reasonably request with respect to any such laws, (iv) any other form reasonably requested by the General Partner relating to any Partner's status under any applicable law, and/or (v) a copy of any tax return or similar document of the applicable Partner that the General Partner may reasonably request with respect to any such law. (b) To the extent that any person (including without limitation the Master Partnership, the Partnership or the General Partner) is required by any applicable law to withhold or to make tax payments on behalf of or with respect to amounts distributed or distributable to, items allocated or allocable to, or otherwise for any Partner (each a "Tax Liability"), the General Partner may cause the Partnership to make such tax payments (each a "Tax Advance") as so required. The Partnership and the Master Partnership may be subject to provisions in the Master Agreement or otherwise that correspond to this Section 4.10; any payments corresponding to Tax Advances made directly or indirectly on behalf of the Partnership shall be deemed made on behalf of each Partner, pro rata in accordance with its relative Percentage Interest. At least ten (10) days, if commercially possible, prior to making a Tax Advance on behalf of or with respect to a Partner, the General Partner shall first notify such affected Partner. All Tax Advances made or deemed made on behalf of a Partner from any amount not otherwise distributable to such Partner shall be deemed to be a recourse loan to such Partner by the Partnership and shall be due and payable immediately after such Tax Advance is made by the Partnership, and if not repaid within three (3) days after the Tax Advance is made by the Partnership, the Tax Advance shall bear interest beginning on such third day at a rate equal to the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate permitted by law until repaid. (c) Notwithstanding anything to the contrary contained herein or in any other agreement between or among Partners, each Partner hereby agrees to indemnify, defend, and hold harmless the Master Partnership, the Partnership, the General Partner, their respective Affiliates, and any other person who directly or indirectly makes a Tax Advance or corresponding payment on behalf of such Partner from and against any Tax Liability of or with respect to such Partner, at any time, and this indemnity and hold harmless provision shall survive this Agreement and the termination of the Partnership; provided however, that the General Partner and its Affiliates shall not be indemnified hereunder for any Tax Liabilities to the extent any of them has withheld or withdrawn funds from the Partnership for purposes of making Tax Advances to satisfy such Tax Liabilities, and misappropriated or converted the funds so withheld or withdrawn. In the event of any claimed over-withholding, such Partner shall be limited to an action against the applicable government agencies for refund and hereby waives any claim or right of action against the General Partner or the Partnership on account of such withholding. (d) A payment to the Partnership or otherwise by a Partner with respect to any Tax Advance relating to such Partner shall not be deemed to be a capital contribution by such Partner and will in no way be considered in the calculations used to determine distributions under this Agreement. The General Partner may, and is hereby authorized to, withhold from any distributions or payments otherwise due to a Partner from the Partnership under this Agreement the amount of any Tax Advance made on behalf of such Partner that as of such date has neither been repaid to the Partnership nor been previously offset hereunder, and any amount withheld under this Section 4.10 shall be deemed for all purposes of this Agreement to have been distributed or paid to such Partner. If any Partner does not repay any Tax Advance within thirty (30) days of the General Partner giving such Partner a written final demand for payment, then such Partner's Percentage Interest may be forfeited in the sole discretion of the General Partner, and each Partner hereby grants the General Partner power of attorney, which shall survive each Partner's disability, to execute all documents to reflect such forfeiture; provided, however, that the applicable Partner shall remain liable to the Partnership or other Partners, as applicable, on a recourse basis for the full amount of the Tax Advance unpaid plus accrued, unpaid interest. Any Partner who does not repay a Tax Advance after a written final demand has been given by the General Partner shall pay, in addition to the Tax Advance and applicable interest, all expenses, including without limitation reasonable attorneys fees, incurred by the Partnership, the General Partner, and/or any other Partner in collecting the Tax Advance plus interest and/or pursuing any other remedy provided in this Section 4.10 and otherwise in this Agreement. ARTICLE V ASSIGNMENT Section 5.01. Prohibited Transfer. Except as specifically provided in this Article V and in Section 7.01, no Limited Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership unless prior written consent is obtained from the General Partner, and no General Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership without obtaining prior written Approval of the Partners. Any attempt so to transfer or encumber any such interest shall be null and void, ab initio. The Partners will be excused from accepting the performance of and rendering performance to any person other than the Partner hereunder (including any trustee or assignee of or for such Partner) as to whom such prior written consent has not been rendered. Section 5.02. Further Restrictions on Transfer. (a) In the event of any assignment or transfer permitted under this Article, the interest so assigned or transferred shall remain subject to all terms and provisions of this Agreement; the assignee or transferee shall be deemed, by accepting the interest so assigned or transferred, to have assumed all the obligations hereunder relating to the interests or rights so assigned or transferred and shall agree in writing to the foregoing if requested by the General Partner. Any transferee or assignee of the interest of a Partner shall be entitled only to receive distributions hereunder until such transferee or assignee has been admitted as a Substituted Partner; provided, however, that such transferee or assignee shall be subject to the Additional Capital Contribution provisions of Article III and that the Percentage Interest of such transferee or assignee shall be subject to reallocation pursuant to Section 4.02 in the event of an Adjusting Event. Until such transferee or assignee (other than an existing Partner) is admitted to the Partnership as a Substituted Partner, the Partner transferring all or any portion of his or its interest to such assignee or transferee shall remain primarily and directly liable for the performance of all his or its obligations under this Agreement. After the admission of such assignee or transferee as a Substituted Partner, such transferor Partner shall only be primarily and directly liable under this Agreement or otherwise for any obligations or liabilities accruing prior to the effective time of the admission of such Substituted Partner, unless such transferor Partner is released in writing from such obligations or liabilities by the General Partner and such release is Approved by the Partners. (b) Any Partner making or offering to make a transfer of all or any part of his or its interest in the Partnership shall indemnify and hold harmless the Partnership and all other Partners from and against any costs, damages, claims, suits, or fees suffered or incurred by the Partnership or any such other Partner arising out of or resulting from any claims by the transferee of such Partnership interest or any offerees of such Partnership interest in connection with such transfer or offer. Section 5.03. Substituted Partner. Except as otherwise provided in Section 7.01 hereof, an assignee or transferee (other than an existing Partner) of the interest of a Partner may be admitted as a substitute partner ("Substituted Partner") only with the written consent of the General Partner, which such consent shall be granted or denied in the sole discretion of the General Partner. Unless the assignee is already a General Partner, any assignee of a Partnership interest to whose admission such consent is given shall become and shall have only the rights and duties of a Limited Partner and the assigned Partnership interest shall thereafter be a Limited Partner's interest. Upon the receipt by the General Partner of an appropriate supplement to this Agreement pursuant to which such Substituted Partner agrees to be bound by all the terms and provisions of this Agreement, the General Partner shall reflect the admission of a Substituted Partner and the withdrawal of the transferring Partner, if appropriate, by preparing a supplemental exhibit, dated as of the date of such admission and withdrawal, and by filing it with the records of the Partnership. Any Substituted Partner shall, if required by the General Partner, prior to such admission, also execute any other documents requested by the General Partner, including, without limitation, an irrevocable power of attorney in form satisfactory to the General Partner appointing the General Partner as such person's attorney-in-fact with full power to execute, swear to, acknowledge, and file all certificates and other instruments necessary to carry out the provisions of this Agreement, including, without limitation, such undertakings as the General Partner may require for the payment of all fees and costs necessary to effect any such transfer and admission. Upon admission, such Substituted Partner shall be subject to all provisions of this Agreement in the place and stead of his assignor as if the Substituted Partner originally was a party to this Agreement. Section 5.04. Basis Adjustment. The Tax Matters Partner may cause, in its sole and absolute discretion, the Partnership to elect pursuant to Section 754 of the Code and the Regulations thereunder to adjust the basis of the Partnership Assets as provided by Sections 743 or 734 of the Code and the Regulations thereunder. Section 5.05. Admission of Additional Partners. (a) When Approved by the Partners, a new Partner (each a "New Partner") may be admitted to the Partnership. Such New Partner shall (i) be admitted for fair value, as determined by the General Partner in its reasonable discretion and in a manner consistent with the reallocation of Percentage Interests set forth in Section 4.02, and (ii) execute an appropriate supplement to this Agreement and to Exhibit A pursuant to which he agrees to be bound by all the terms and provisions of this Agreement. (b) Upon the receipt of the supplement described in Section 5.05(a), the General Partner shall reflect the admission of the New Partner and the reallocation of Percentage Interests in the records of the Partnership. The admission of a New Partner shall not cause the dissolution of the Partnership. Upon the admission of a New Partner pursuant to Section 5.05(a), the Percentage Interests shall be reallocated, with the New Partner receiving the Percentage Interest calculated in accordance with Section 4.02 that reflects, as determined by the General Partner in his sole discretion, the ratio of Current Value of the New Partner's contribution to the Net Value of the Partnership Assets, and with the Percentage Interests of each existing Partner being adjusted in accordance with Section 4.02. Section 5.06. Other Restricted Transfers. Notwithstanding any other provision herein to the contrary, unless prior written consent is given by the General Partner, no transfer of any interest in the Partnership may be made to any person who is related (within the meaning of Regulations Section 1.752-4(b)) to any lender of the Partnership whose loan constitutes a nonrecourse liability of the Partnership. ARTICLE VI WITHDRAWAL, DISSOLUTION, TERMINATION, AND LIQUIDATION Section 6.01. Withdrawal. No Limited Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written consent of the General Partner and, except as provided in Section 7.01 hereof, no General Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written Approval of the Partners. Retirement or withdrawal by any Partner in contravention of this Section 6.01 shall subject such Partner to liability for all damages caused any other Partner (other than a Partner who is, at the time of such withdrawal, in default under this Agreement) by such retirement or withdrawal and the consequential dissolution of the Partnership. Any notice of withdrawal must be in writing. Section 6.02. Dissolution of the Partnership. The Partnership shall be dissolved upon the occurrence of any of the following: (a) The withdrawal, as defined in the Act, of a General Partner, unless: (i) the remaining General Partner, if any, elects in writing within ninety (90) days after such event to reconstitute the Partnership, to continue as the General Partner, and to continue the Partnership and its business, or (ii) there is no remaining or Successor General Partner (as defined in Section 7.01), then within ninety (90) days after such event, all of the Limited Partners agree to appoint in writing a successor General Partner, as of the date of the withdrawal of the General Partner, and agree to reconstitute the Partnership and continue the business of the Partnership, and such successor General Partner agrees in writing to accept such election, or (iii) the withdrawal of the General Partner results from its removal by the Limited Partners as provided in Section 7.01 and a Successor General Partner is appointed by the Limited Partners as provided in Section 7.01; (b) The sale or other disposition, not including an exchange, of substantially all of the assets of the Partnership (except under circumstances where all or a portion of the purchase price is payable after the closing of the sale or other disposition); (c) December 31, 2048, unless extended by the consent of all Partners; or (d) When Approved by the Partners. Except as expressly provided, nothing contained in this Section 6.02 is intended to grant to any Partner the right to dissolve the Partnership at will (by retirement, resignation, withdrawal, or otherwise) or to exonerate any Partner from liability to the Partnership and the remaining Partners if he or it dissolves the Partnership at will. Section 6.03. Continuation of Partnership. If the Partnership is continued as provided in Section 6.02(a)(i), (ii) or (iii), then, as of the date of withdrawal, the General Partner with respect to which an event of withdrawal under Section 6.02 has occurred (or his or its estate or successor in interest) (the "Withdrawing General Partner") shall have none of the powers of a General Partner under this Agreement or applicable law and shall have only the rights and powers of an assignee of a Partner hereunder to share in any Partnership profits, losses, gains, and distributions in accordance with his or its Percentage Interest and shall have no other rights or powers of a Partner hereunder; provided, however, that any Withdrawing General Partner shall be subject to the Additional Capital Contribution provisions of Article III, that the Percentage Interest of such Withdrawing General Partner shall be subject to reallocation under Section 4.02 in the event of any Adjusting Event, and that any Withdrawing General Partner who was removed by the Limited Partners pursuant to Section 7.01 shall become a Limited Partner if its interest is so converted as provided in Section 7.01. Section 6.04. Death, etc. of a Limited Partner, Divorce of a Partner. (a) The death, disability, withdrawal, termination (in the case of a Limited Partner that is a partnership or a trust), dissolution (in the case of a Limited Partner that is a corporation or limited liability company), retirement, or adjudication as a bankrupt of a Limited Partner (the "Withdrawing Limited Partner") shall not dissolve the Partnership, but, subject to the provisions of Section 6.04(b), the rights of such Withdrawing Limited Partner to share in the profits and losses of the Partnership and to receive distributions of Partnership funds shall, upon the happening of such an event, pass to the Withdrawing Limited Partner's estate, legal representative, or successors in interest, as the case may be, subject to this Agreement, and the Partnership shall continue as a limited partnership. (b) Upon the occurrence of an event described in Section 6.04(a), the General Partner shall, in its sole discretion, elect to either continue the Partnership business (i) with the successors, assigns, heirs, devises, beneficiaries, estate, or other transferee of such Withdrawing Limited Partner (collectively, the "Distributees") as provided in Section 6.04(c) or (ii) with the Partnership purchasing the interest of such Withdrawing Limited Partner from all of his or its Distributees as provided in Section 6.04(d). (c) If the General Partner elects to proceed pursuant to Section 6.04(b)(i), the Distributees of such Withdrawing Limited Partner shall succeed to his or its interest in the Partnership, shall be admitted as Limited Partners if approved by the General Partner in its sole discretion, and shall be bound by the terms and provisions of the Agreement; provided, however, if the interest of such Withdrawing Limited Partner passes, either at the time of an occurrence described in Section 6.04(a) or subsequent thereto, to more than one Distributee, then within sixty (60) days after the distribution to more than one Distributee, the Distributees shall appoint one person, firm, or corporation as the agent of and for such Distributees (the "Agent"). Such Agent shall be responsible for collecting, receiving, and making all payments and Additional Capital Contributions required under this Agreement, shall vote the entire interest of the Distributees if such vote is required by this Agreement, the Act, or applicable law and shall perform all other obligations of such Distributees performable by reason of or arising from their interest in the Partnership as Limited Partners; provided, that the Agent shall not be admitted as a Partner of the Partnership nor shall such Agent be entitled to exercise any voting rights hereunder unless such rights are approved by the General Partner in its sole discretion. All payments and/or disbursements due to the Distributees for or arising from their interest in the Partnership shall be deemed to have been validly made to such Distributees by paying the same to such Agent. In the event that the Distributees for any reason fail to designate such agent in writing in the manner and within the time prescribed and fail to cure such default after ten (10) days written notice from the General Partner to correct such default, the General Partner shall retain any funds or property otherwise distributable to such Distributees under this Agreement and shall appoint an Agent of and for the Distributees. To the fullest extent allowed by applicable law, the defaulting Distributees will indemnify, defend, and hold harmless such Agent, the General Partner, and the Partners from and against any losses, expenses, judgments, fines, settlements, and damages incurred by any of them with respect to the provisions of this Section 6.04(c). (d) If the General Partner elects to proceed pursuant to Section 6.04(b)(ii), then the General Partner shall cause the Partnership to purchase the interest of such Withdrawing Limited Partner in the Partnership from his or its Distributees at a price equal to the Current Value of such interest, determined as though the effective date of the withdrawal of such Withdrawing Limited Partner were an Adjusting Event. (e) If, upon the divorce of any individual Partner, the spouse of any such Partner receives an interest in the Partnership pursuant to the terms of any divorce property settlement agreement, divorce decree, or otherwise, then the Partnership shall have the right, as determined by the General Partner, to purchase the interest of such spouse in the Partnership at a price equal to the Current Value of such interest, determined as though the effective date of such divorce were an Adjusting Event. Section 6.05. Termination and Liquidation of the Partnership. (a) Upon dissolution of the Partnership unless continued pursuant to Section 6.02, the Partnership shall be terminated as rapidly as business circumstances will permit. At the direction of the General Partner, or a Partner Approved by the Partners if the dissolution of the Partnership is caused by the withdrawal of the General Partner (the General Partner or the other Partner, as the case may be, being herein called the "Terminating Partner"), a full accounting of the assets and liabilities of the Partnership shall be taken and a statement of the Partnership Assets and a statement of each Partner's Capital Account shall be furnished to all Partners as soon as is reasonably practicable. The Terminating Partner shall take such action as is necessary so that the Partnership's business shall be terminated, its liabilities discharged, and its assets distributed as hereinafter described. The Terminating Partner may sell all of the Partnership Assets or distribute the Partnership Assets in kind; provided, however, that the Terminating Partner shall ascertain the Net Value of the Partnership Assets by appraisal or other reasonable means of all Partnership Assets remaining unsold and each Partner's Capital Account shall be charged or credited, as the case may be, as if such Partnership Assets had been sold at the Net Value of the Partnership Assets and the income, gains, losses, deductions, and credits realized thereby had been allocated to the Partners in accordance with Article IV hereof. A reasonable period of time shall be allowed for the orderly termination of the Partnership to minimize the normal losses of a liquidation process. (b) After the payment of all expenses of liquidation and of all debts and liabilities of the Partnership in such order or priority as provided by law (including any debts or liabilities to Partners, who shall be treated as secured or unsecured creditors, as may be the case, to the extent permitted by law, for sums loaned to the Partnership, if any, as distinguished from capital contributions) and after all resulting items of Partnership income, gain, credit, loss, or deduction are credited or debited to the Capital Accounts of the Partners in accordance with Articles III and IV hereof, all remaining Partnership Assets shall then be distributed among the Partners in accordance with relative Capital Account balances. Upon termination, a Partner may not demand and receive cash in return for such Partner's capital contributions and no Partner shall have any obligation to restore any deficit that may then exist in that Partner's Capital Account. Distribution on termination may be made by the distribution to each Partner of an undivided interest in any asset of the Partnership that has not been sold at the time of termination of the Partnership. Section 6.06. General Partners Not Personally Liable. No General Partner nor any affiliate of any General Partner shall be personally liable for the return of the Capital Contributions of any Partner, and such return shall be made solely from available Partnership Assets, if any, and each Limited Partner hereby waives any and all claims it may have against any General Partner or any such affiliate in this regard. Section 6.07. Provisions Cumulative. All provisions of this Agreement relating to the dissolution, liquidation, and termination of the Partnership shall be cumulative to the extent not inconsistent with other provisions herein; that is, the exercise or use of one of the provisions hereof shall not preclude the exercise or use of any other provision of this Agreement to the extent not inconsistent therewith. ARTICLE VII GENERAL Section 7.01. Removal and Replacement of General Partner. (a) The General Partner may be removed and replaced at any time upon the Approval of the Partners by sending the General Partner a written notice of such removal. In the event of the removal of the General Partner, a successor General Partner ("Successor General Partner") shall be selected by Approval of the Partners. The Limited Partners, by Approval of the Partners, shall have the right to transfer a portion of their interests to such Successor General Partner and such interest shall be converted to that of a general partner. The removal will not be effective until the Successor General Partner has been admitted to the Partnership as a General Partner, such admission to be Approved by the Partners. After the admission of the Successor General Partner, the Successor General Partner shall have all the rights, powers, and obligations of a General Partner under this Agreement and all references in this Agreement to the "General Partner" shall refer to the Successor General Partner appointed in this Section 7.01. Third parties shall be conclusively deemed entitled to rely upon the representation of Group III 31 that Group III 31 is the General Partner unless such third parties have actual notice of its replacement. (b) Following the replacement of the General Partner, the Limited Partners may, as is Approved by the Partners, convert such Partner's interest into a Limited Partner's interest. The Successor General Partner shall have the authority to execute and file all documents necessary to signify such conversion. The General Partner hereby appoints the Successor General Partner as his or its attorney-in-fact to execute and file all documents signifying such conversion including, without limitation, an amendment to the Certificate of Limited Partnership. Section 7.02. Competing Business. Notwithstanding anything to the contrary contained in or inferable from this Agreement, the Act, or any other statute or principle of law, neither the Partners nor any of their shareholders, directors, officers, employees, partners, agents, family members, or affiliates (each a "Partner Affiliate") shall be prohibited or restricted in any way from investing in or conducting, either directly or indirectly, and may invest in and/or conduct, either directly or indirectly, businesses of any nature whatsoever, including the ownership and operation of businesses or properties similar to or in the same geographical area as those held by the Partnership. Any investment in or conduct of any such businesses by a Partner or any Partner Affiliate shall not give rise to any claim for an accounting by the other Partners or the Partnership or any right to claim any interest therein or the profits therefrom. Section 7.03. LIMITED PARTNER REPRESENTATIONS. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EACH LIMITED PARTNER HEREBY REPRESENTS AND WARRANTS TO THE PARTNERSHIP, THE GENERAL PARTNER, AND TO EACH OFFICER, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AND AGENT OF THE GENERAL PARTNER THAT: (a) THE INTEREST IN THE PARTNERSHIP OF SUCH LIMITED PARTNER IS ACQUIRED FOR INVESTMENT PURPOSES ONLY FOR HIS OR ITS OWN ACCOUNT AND NOT WITH A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION, REOFFER, RESALE, OR OTHER DISPOSITION NOT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER (THE "1933 ACT") AND APPLICABLE STATE SECURITIES LAWS; (b) SUCH LIMITED PARTNER, ALONE OR TOGETHER WITH HIS OR ITS REPRESENTATIVES, POSSESSES SUCH EXPERTISE, KNOWLEDGE, AND SOPHISTICATION IN FINANCIAL AND BUSINESS MATTERS GENERALLY, AND IN THE TYPE OF TRANSACTIONS IN WHICH THE PARTNERSHIP PROPOSES TO ENGAGE IN PARTICULAR, THAT HE OR IT IS CAPABLE OF EVALUATING THE MERITS AND ECONOMIC RISKS OF ACQUIRING AND HOLDING HIS OR ITS PARTNERSHIP INTEREST, AND THAT HE OR IT IS ABLE TO BEAR ALL SUCH ECONOMIC RISKS NOW AND IN THE FUTURE; (c) SUCH LIMITED PARTNER HAS HAD ACCESS TO ALL OF THE INFORMATION WITH RESPECT TO THE INTEREST ACQUIRED BY HIM OR IT UNDER THIS AGREEMENT THAT HE OR IT DEEMS NECESSARY TO MAKE A COMPLETE EVALUATION THEREOF AND HAS HAD THE OPPORTUNITY TO QUESTION THE GENERAL PARTNER CONCERNING SUCH INTEREST; (d) SUCH LIMITED PARTNER'S DECISION TO ACQUIRE HIS OR ITS INTEREST FOR INVESTMENT HAS BEEN BASED SOLELY UPON THE EVALUATION MADE BY HIM OR IT; (e) SUCH LIMITED PARTNER IS AWARE THAT HE OR IT MUST BEAR THE ECONOMIC RISK OF HIS OR ITS INVESTMENT IN THE PARTNERSHIP FOR AN INDEFINITE PERIOD OF TIME BECAUSE INTERESTS IN THE PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE SECURITIES LAWS OF ANY STATES, AND, THEREFORE, CANNOT BE SOLD UNLESS SUCH INTERESTS ARE SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE; (f) SUCH LIMITED PARTNER IS AWARE THAT ONLY THE PARTNERSHIP CAN TAKE ACTION TO REGISTER SUCH INTEREST IN THE PARTNERSHIP AND THE PARTNERSHIP IS UNDER NO SUCH OBLIGATION AND DOES NOT PROPOSE TO ATTEMPT TO DO SO; AND (g) SUCH LIMITED PARTNER IS AWARE THAT THIS AGREEMENT PROVIDES RESTRICTIONS ON THE ABILITY OF A LIMITED PARTNER TO SELL, TRANSFER, ASSIGN, MORTGAGE, HYPOTHECATE, OR OTHERWISE ENCUMBER HIS OR ITS INTEREST IN THE PARTNERSHIP. Section 7.04. Notice. (a) All notices, demands, or requests provided for or permitted to be given pursuant to this Agreement must be in writing. (b) All notices, demands, and requests to be sent to a Partner, any Distributee(s) (or their Agent) of the interest of a Partner, or any Substituted Partner pursuant to this Agreement shall be deemed to have been properly given or served if: (i) personally delivered, (ii) deposited prepaid for next day delivery by Federal Express, or other similar overnight courier services, addressed to such Partner, (iii) deposited in the United States mail, addressed to such Partner, prepaid and registered or certified with return receipt requested, or (iv) transmitted via telecopier or other similar device to the attention of such Partner, all at the address or telecopy number for such Partner set forth on such Partner's signature page attached hereto (as may be changed in accordance with subsection (d) below). (c) All notices, demands, and requests so given shall be deemed received: (i) when personally delivered, (ii) twenty-four (24) hours after being deposited for next day delivery with an overnight courier, (iii) forty-eight (48) hours after being deposited in the United States mail, or (iv) twelve (12) hours after being telecopied or otherwise transmitted and receipt has been confirmed. (d) The Partners, any Substituted Partners, and their respective Distributee(s)(or their Agent) shall have the right from time to time, and at any time during the term of this Agreement, to change their respective addresses and each shall have the right to specify as his or its address any other address within the United States of America by giving to the other parties at least thirty (30) days written notice thereof, in the manner prescribed in Section 7.04(b); provided, however, that to be effective, any such notice must be actually received (as evidenced by a return receipt). (e) All distributions to any Partner shall be made at the address to which notices are to be sent unless otherwise specified in writing by such Partner. Section 7.05. Amendments. Amendments and supplements may be made to or restatements made of this Agreement or the Certificate of Limited Partnership (or any exhibits or schedules attached to any of them), from time to time by the General Partner, without the consent of any of the other Partners, to effect any Major Decisions Approved by the Partners or any amendments which amend this Agreement to admit Substituted Partners, to reflect the removal and replacement of the General Partner, to reflect adjustments to the Percentage Interests of the Partners following an Adjusting Event, to reflect other transfers, assignments, admissions, withdrawals, conversions, or removals authorized by this Agreement, or to effect any non-material amendments to this Agreement or the Certificate of Limited Partnership. All other amendments to this Agreement and the Certificate of Limited Partnership shall require the Approval of the Partners. Section 7.06. Powers of Attorney. Each Limited Partner hereby constitutes and appoints the General Partner, with full power of substitution, as his or its true and lawful attorney-in-fact and empowers and authorizes such attorney, in the name, place, and stead of such Limited Partner, to make, execute, sign, swear to, acknowledge, and file in all necessary or appropriate places all documents (and all amendments or supplements to or restatements of such documents necessitated by valid amendments to or actions permitted under this Agreement) relating to the Partnership and its activities, including, without limitation: (a) any amendments to this Agreement approved as provided herein, (b) the Certificate of Limited Partnership and any amendments thereto, under the laws of the State of Delaware or in any other state or jurisdiction in which such filing is deemed advisable by the General Partner, (c) any applications, forms, certificates, reports, or other documents, or amendments thereto which may be requested or required by any federal, state, or local governmental agency, securities exchange, securities association, self-regulatory organization, or similar institution and which are deemed necessary or advisable by the General Partner, (d) any other instrument which may be required to be filed or recorded in any state or county or by any governmental agency, or which the General Partner deems advisable to file or record, including, without limitation, certificates of assumed name and documents to qualify foreign limited partnerships in other jurisdictions, (e) any documents which may be required to effect the continuation of the Partnership, the admission of New Partners, Substituted Partners, or Distributees, the withdrawal of any Partner, the purchase of the interest in the Partnership of any ex-spouse of a Partner, or the dissolution and termination of the Partnership, (f) any and all reports, schedules, certificates, forms and other documents, including, but not limited to, Schedules 13D and 13F, Forms 3 and 4, and any other such forms as may be required to be filed by the Partnership under the Securities Exchange Act of 1934, Federal Reserve U-1s, notes, drafts, credit or loan agreements, financing statements, security agreements, bank resolutions, and any and all other documents and instruments as may be necessary or desirable in the sole discretion of the attorney so acting, all in carrying out the purposes of the Partnership, (g) making certain elections contained in the Code or state law governing taxation of limited partnerships, and (h) performing any and all other ministerial duties or functions necessary for the conduct of the business of the Partnership. Each Limited Partner hereby ratifies, confirms, and adopts as his own, all actions that may be taken by such attorney-in-fact pursuant to this Section 7.06. Each Limited Partner acknowledges that this Agreement permits certain amendments to be made and certain other actions to be taken or omitted to be taken by less than all of the Partners if approved in accordance with the provisions hereof. By their execution hereof, each Limited Partner also grants the General Partner a power of attorney to execute any and all documents necessary to reflect any action that is approved in accordance with the provisions hereof. This power of attorney is coupled with an interest and shall continue notwithstanding the subsequent incapacity or death of the Limited Partner. Each Limited Partner shall execute and deliver to the General Partner an executed and appropriately notarized power of attorney in such form consistent with the provisions of this Section 7.06 as the General Partner may request. Section 7.07. GOVERNING LAWS AND VENUE. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTNERS HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. Section 7.08. Rule of Construction. The general rule of construction for interpreting a contract, which provides that the provisions of a contract should be construed against the party preparing the contract, is waived by the parties. Each party acknowledges that he or it was represented by separate legal counsel in this matter who participated in the preparation of this Agreement or he or it had the opportunity to retain counsel to participate in the preparation of this Agreement but chose not to do so. Section 7.09. Entire Agreement. This Agreement, including all exhibits to this Agreement and, if any, exhibits to such exhibits, contains the entire agreement among the parties relative to the matters contained in this Agreement. Section 7.10. Waiver. No consent or waiver, express or implied, by any Partner to or for any breach or default by any other Partner in the performance by such other Partner of his or its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligations of such other Partner under this Agreement. Failure on the part of any Partner to complain of any act or failure to act of any of the other Partners or to declare any of the other Partners in default, regardless of how long such failure continues, shall not constitute a waiver by such Partner of his or its rights hereunder. Section 7.11. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby, and the intent of this Agreement shall be enforced to the greatest extent permitted by law. Section 7.12. Binding Agreement. Subject to the restrictions on transfers and encumbrances set forth in this Agreement, this Agreement shall inure to the benefit of and be binding upon the undersigned Partners and their respective legal representatives, successors, and assigns. Whenever, in this Agreement, a reference to any party or Partner is made, such reference shall be deemed to include a reference to the legal representatives, successors, and assigns of such party or Partner. Section 7.13. Tense and Gender. Unless the context clearly indicates otherwise, the singular shall include the plural and vice versa. Whenever the masculine, feminine, or neuter gender is used inappropriately in this Agreement, this Agreement shall be read as if the appropriate gender was used. Section 7.14. Captions. Captions are included solely for convenience of reference and if there is any conflict between captions and the text of this Agreement, the text shall control. Section 7.15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which when taken together shall constitute a single counterpart instrument. Executed signature pages to any counterpart instrument may be detached and affixed to a single counterpart, which single counterpart with multiple executed signature pages affixed thereto constitutes the original counterpart instrument. All of these counterpart pages shall be read as though one and they shall have the same force and effect as if all of the parties had executed a single signature page. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Each of the undersigned has executed and delivered this Agreement in Fort Worth, Texas, to be effective as of the Effective Date. GENERAL PARTNER 201 Main Street GROUP III 31, L.L.C., Suite 3100 a Delaware limited liability company Fort Worth, Texas 76102 By: /s/ W. R. Cotham W. R. Cotham, Vice President LIMITED PARTNER 201 Main Street Suite 2600 Fort Worth, Texas 76102 /s/ W. R. Cotham W. R. Cotham, Nominee EXHIBIT A TO THE LIMITED PARTNERSHIP AGREEMENT OF FW HOSPITALITY, L.P. INITIAL CAPITAL PERCENTAGE GENERAL PARTNER CONTRIBUTION INTEREST Group III 31 $ 10.00 1.00% LIMITED PARTNER Nominee $ 990.00 99.00% $ 1,000.00 100.00% EX-99.3 4 LIMITED PARTNERSHIP AGREEMENT FOR ARBOR REIT, L.P. Exhibit 99.3 LIMITED PARTNERSHIP AGREEMENT OF ARBOR REIT, L.P. This Limited Partnership Agreement ("Agreement") of Arbor REIT, L.P. is made and entered into effective as of the 5th day of August, 1998 (the "Effective Date"), by and among Group Investors, L.L.C., a Delaware limited liability company ("Group Investors"), as the general partner and W. R. Cotham, Nominee ("Nominee"), as the nominee limited partner. WITNESSETH: For and in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the adequacy, receipt, and sufficiency of which are hereby acknowledged, Group Investors and Nominee (collectively, the "Partners" and individually, a "Partner") hereby agree as follows: ARTICLE I ORGANIZATION AND PURPOSE Section 1.01. Formation of Limited Partnership. The Partners hereby agree to become partners and to form a limited partnership (the "Partnership") pursuant to Del. Code Ann 17-101 et seq., known as the Delaware Revised Uniform Limited Partnership Act (the "Act"). Group Investors shall be the general partner and is hereinafter sometimes referred to in such capacity as the "General Partner." Nominee shall be the limited partner and together with any beneficial owners of the interest held by Nominee admitted as limited partners pursuant to this Agreement are hereinafter referred to individually as a "Limited Partner" and collectively as the "Limited Partners." Section 1.02. Name. The name of the Partnership shall be Arbor REIT, L.P. All business and affairs of the Partnership shall be conducted solely under, and all Partnership Assets (as that term is defined in Section 1.04) shall be held solely in, such name unless otherwise determined by the General Partner. Section 1.03. Effective Date and Term. The Partnership shall be in effect for a term beginning on the Effective Date and shall continue under this Agreement (as amended from time to time) until dissolved upon the occurrence of an event that causes the dissolution of the Partnership in accordance with the provisions of this Agreement (unless reconstituted as provided herein), and thereafter to the extent provided by applicable law, until wound up and terminated as provided herein. Section 1.04. Purposes and Scope of Business. The business and purposes of the Partnership are to make investments of any kind and to do all things permitted under the Act, specifically including, without limitation, acquiring securities of any type or kind in each of MeriStar Hospitality Corp. and MeriStar Hotels and Resorts, Inc. Subject to the terms and conditions of this Agreement, the Partnership shall have the power and authority to do all such other acts and things as may be necessary, desirable, expedient, convenient for, or incidental to, the furtherance and accomplishment of the foregoing objectives and purposes and for the protection and benefit of the Partnership. The assets of the Partnership, whether now or hereafter owned, are hereinafter sometimes referred to as the "Partnership Assets". Section 1.05. Documents. The General Partner, or anyone designated by the General Partner, is hereby authorized to execute a certificate of limited partnership of the Partnership ("Certificate of Limited Partnership") in accordance with the Act and cause the same to be filed in the office of the Secretary of State of the State of Delaware in accordance with the provisions of the Act. The Partnership shall promptly execute and duly file with the proper offices in each state in which the Partnership may conduct the activities hereinafter authorized, one or more certificates as required by the laws of each such state in order that the Partnership may lawfully conduct the business, purposes, and activities herein authorized in each such state, and the Partnership shall take any other action or measures necessary in such state or states for the Partnership to conduct such activities. Section 1.06. Principal Place of Business. The principal place of business of the Partnership shall be 201 Main Street, Suite 3100, Fort Worth, Texas 76102 or at such other place or places as may be approved by the General Partner. The General Partner shall be responsible for maintaining at the Partnership's principal place of business those records required by the Act to be maintained there. Section 1.07. Registered Agent and Office. The Registered Agent (as defined in the Act) for the Partnership in Delaware shall be Corporation Service Company. The Registered Office (as defined in the Act) of the Partnership shall be 1013 Centre Road, Wilmington, Delaware 19805. ARTICLE II OPERATIONS Section 2.01. Management of Partnership. (a) The right to manage, control, and conduct the business and affairs of the Partnership shall be vested solely in the General Partner. Except as provided in Sections 2.01(b) and 7.01, the Limited Partners shall not take part in the management of the affairs of the Partnership and under no circumstances may any Limited Partner control the Partnership business or sign for or bind the Partnership. Without limiting the generality of the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the General Partner shall have the exclusive authority to act for and on behalf of the Partnership, and no third party shall ever be required to inquire into the authority of the General Partner to take such action on behalf of the Partnership. Except as expressly limited in this Agreement, the General Partner shall have the rights, authority, and powers of general partners with respect to the Partnership business and the Partnership Assets as set forth in the Act as in effect upon the Effective Date of this Agreement. The General Partner shall not be required to devote its full time and attention to the business of the Partnership, but only such time as it deems necessary for the proper conduct of the Partnership's affairs. (b) No act shall be taken, sum expended or obligation incurred by the General Partner for or on behalf of the Partnership with respect to a matter within the scope of any of the following major decisions ("Major Decisions") affecting, directly or indirectly, the Partnership, or the Partnership Assets, unless approved as described in subsection 2.01(c): (i) Financing or refinancing of the Partnership or the Partnership Assets; (ii) Selling, exchanging, or otherwise disposing of all or substantially all of the Partnership Assets; or (iii) Admitting a New Partner (as defined in Section 5.05) to the Partnership. (c) No Major Decision may be made or effected by or on behalf of the Partnership without the approval of the Partners holding a majority of all Percentage Interests (as defined in Section 4.01) in the Partnership. As used in this Agreement, "Approved by the Partners", "Approval of the Partners", and other like terms shall mean the approval or consent of the Partners holding a majority of the Percentage Interests in the Partnership. Any Partner may at any time propose a Major Decision to the other Partners by giving written notice to the other Partners. Within ten (10) days after receipt of such notice, each Partner shall indicate, in writing, to the requesting Partner, his or its approval or disapproval of such Major Decision; provided, that, in the event any Partner does not respond in such 10-day period, such Partner shall be deemed to have disapproved such Major Decision. If any Partner or Partners holding a majority of the Percentage Interests in the Partnership approve of, consent to, or otherwise take any action contemplated by this Section 2.01(c), such action shall neither require any further polling of any other Partners, nor require any further approval, consent, or action of any other Partners. Section 2.02. Affiliates. The General Partner shall have the right to cause the Partnership to enter into contracts or otherwise deal with any affiliates of any Partner in any capacity, including, without limitation, in connection with the financing, management, and development of the Partnership Assets, except that the terms of any such arrangement shall be commercially reasonable and competitive with amounts that would be paid to third parties on an "arms-length" basis. Section 2.03. Expenses. The Partnership shall pay or reimburse the General Partner and the Tax Matters Partner (as defined in Section 2.05) for all direct, out-of-pocket expenses incurred by it with respect to its duties under Section 2.01 and Section 2.05 to the Partnership, including, without limitation, salaries, accounting expenses, insurance premiums attributable directly to the Partnership, legal fees, and other direct costs associated with the formation and operation of the Partnership. Section 2.04. Exculpations, Indemnities. (a) Neither the Partners, the Tax Matters Partner, their affiliates nor any of their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually a "Covered Person") shall be liable to the Partnership, any Partner, or any other person for any act or omission taken or suffered by such Covered Person in good faith and in the belief that such act or omission is in or is not opposed to the best interests of the Partnership, provided, that such act or omission is not fraud, willful misconduct, or a knowing violation of this Agreement by such Covered Person. No Covered Person shall be liable to the Partnership, any Partner, or any other person for any action taken by any other Partner, nor shall any Covered Person be liable to the Partnership, any other Partner, or any other person for any action of any employee or agent of the Covered Person, provided, such action is within the scope of the purposes of the Partnership and the Covered Person seeking exculpation satisfies the parameters of the preceding sentence. (b) To the fullest extent allowed or permitted under any provision of applicable law, including, without limitation, the Act, the Partnership shall indemnify, defend, and hold harmless each Partner, its affiliates and their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually an "Indemnitee") to the extent of the Partnership Assets, from and against any losses, expenses, judgments, fines, settlements, and damages incurred by the Partnership or such Indemnitee arising out of any claim based upon acts (including, without limitation, negligent acts) performed or omitted to be performed by the Partnership or such Indemnitee in connection with the business of the Partnership, including, without limitation, costs, expenses, and attorneys' fees expended in the settlement or defense of any such claim. All decisions of the Partnership concerning any action allowed or permitted under applicable law concerning the indemnity of any person or entity by the Partnership shall be made as Approved by the Partners. Section 2.05. Tax Matters Partner. The General Partner shall act as the "Tax Matters Partner" for federal income tax purposes. The Tax Matters Partner shall mean the Partner (a) designated as the "tax matters partner" within the meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law, collectively the "Code") and (b) whose responsibilities as Tax Matters Partner include, where appropriate, commencing on behalf of the Partnership certain judicial proceedings regarding Partnership federal income tax items and informing all Partners of any administrative or judicial proceeding involving federal income taxes. In exercising its responsibilities as Tax Matters Partner, the General Partner shall have the final decision making authority with respect to all federal income tax matters involving the Partnership. Any direct out-of-pocket expense incurred by the Tax Matters Partner in carrying out its responsibilities and duties under this Agreement shall be allocated to and charged to the Partnership as an expense of the Partnership for which the Tax Matters Partner shall be reimbursed. ARTICLE III FINANCING Section 3.01. Capital Contributions. The Partners may, but shall not be obligated to, make capital contributions ("Capital Contributions") at such times, in such manner and in such amounts as the General Partner may determine, subject to the Approval of the Partners, provided, however, that each Partner shall have the right to contribute his share of any Capital Contribution pro rata in accordance with his existing Percentage Interest. Section 3.02. Capital Accounts. The amount of a Partner's capital account ("Capital Account") in the Partnership shall be determined in accordance with Regulations Section 1.704-1(b)(2)(iv), including by: (a) crediting to such account (i) all contributions to the Partnership made by or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property contributed (less any liabilities assumed by the Partnership or to which any property may be subject) and (ii) all gains and income of the Partnership allocated to such Partner or his or its predecessor in interest; and (b) debiting to such account (i) all distributions from the Partnership made to or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property distributed (less any liabilities assumed by the Partner or to which any property may be subject) and (ii) all losses and deductions of the Partnership allocated to such Partner or his or its predecessor in interest. Section 3.03. Limited Liability of Limited Partners. Notwithstanding anything contained in this Agreement to the contrary, the liability of each Limited Partner for any of the debts, losses, or obligations of the Partnership shall be limited to the amount of the sum of such Limited Partner's capital contributions pursuant to Section 3.01 hereof. Accordingly, no Limited Partner shall be obligated to provide additional capital to the Partnership or its creditors by way of contribution, loan, or otherwise beyond the amount of the capital contributions required of such Limited Partner pursuant to Section 3.01 hereof. Except as provided in the Act, no Limited Partner shall have any personal liability whatsoever, whether to the Partnership or any third party, for the debts of the Partnership or any of its losses beyond the amount of the Limited Partner's capital contributions. Section 3.04. Treatment of Capital Contributions. Except as provided in this Agreement to the contrary, no Partner shall be entitled to interest on his or its contributions to the capital of the Partnership nor shall any Partner be entitled to demand the return of all or any part of such contributions to the capital of the Partnership. Section 3.05. Benefits of Agreement. Nothing in this Agreement, and, without limiting the generality of the foregoing, in this Article III, expressed or implied, is intended or shall be construed to give to any creditor of the Partnership or to any creditor of any Partner or any other person or entity whatsoever, other than the Partners and the Partnership, any legal or equitable right, remedy, or claim under or in respect of this Agreement or any covenant, condition, or provision herein contained, and such provisions are and shall be held to be for the sole and exclusive benefit of the Partners and the Partnership. ARTICLE IV ACCOUNTING, ALLOCATIONS, AND CURRENT DISTRIBUTIONS Section 4.01. Percentage Interests. Except as adjusted pursuant to Section 4.02, for purposes of allocating profits and losses in accordance with Section 4.03, and for purposes of distributions under Section 4.08, each Partner shall have the percentage interest in the Partnership (collectively the "Percentage Interests" and individually, a "Percentage Interest") set forth on such Partner's signature page attached hereto. Section 4.02. Adjustments to Percentage Interests. (a) If (i) more than a de minimis contribution or distribution is made other than pro rata by Percentage Interests, as among the Partners, or (ii) a New Partner is admitted to the Partnership in accordance with Section 5.05 (with each such event described in Section 4.02(a)(i) or (ii) being referred to as an "Adjusting Event"), then the Percentage Interests of the Partners shall be immediately adjusted such that the Percentage Interest of each Partner equals a fraction, expressed as a percentage, in which the numerator equals the Current Value (as defined in Section 4.02(b)) of such Partner's interest in the Partnership, and the denominator equals the Net Value of the Partnership Assets (as defined in Section 4.02(b)). If the Percentage Interests of any Partners are adjusted pursuant to this Section 4.02(a), no Partner shall have the right to modify, rectify, or undo such adjustments thereafter, and such adjustments shall be made without the need for any further act or writing to effect any such adjustment. Each Partner hereby appoints the General Partner as his or its duly authorized agent and attorney-in-fact for purposes of preparing and executing any amendments to this Agreement necessary or desirable to reflect any adjustment of Percentage Interests under this Section 4.02(a). The rights granted to any Partner under this Section 4.02 shall be such Partner's sole and exclusive remedy for seeking relief with respect to any Adjusting Event. (b) For purposes of this Agreement, the "Net Value of the Partnership Assets" shall mean the net fair market value of all of the Partnership Assets at the time the Adjusting Event occurs, as determined by the General Partner in its sole discretion, and such Net Value of the Partnership Assets shall include the value of the contributions made in connection with the Adjusting Event. The Partners agree that because of the difficulty of valuing an interest in the Partnership due to the unique nature of the Partnership Assets, the General Partner is granted the sole discretion to determine such values and shall take into account whatever factors it deems appropriate to reflect such values, including, without limitation, the dollar value of all contributions to date and any other reasonable methods for determining the value of all of the Partnership Assets at the time of the Adjusting Event. Without limiting the foregoing, the General Partner may deem the Net Value of the Partnership Assets to equal the historical net cost of those assets. The "Current Value" of any Partner's interest in the Partnership shall be a dollar amount equal to the sum of (i) an amount equal to such Partner's Percentage Interest immediately prior to the Adjusting Event multiplied by the Net Value of the Partnership Assets determined above excluding the net fair market value (as determined by the General Partner) of any contributions associated with the Adjusting Event, plus (ii) the net fair market value (as determined by the General Partner) of any contributions made by such Partner associated with the Adjusting Event. Each Partner's Percentage Interest shall be immediately adjusted to reflect such valuation by the General Partner, effective as of the date of such Adjusting Event. (c) Notwithstanding anything contained in this Agreement to the contrary, if the Partnership's interest in any partnership or any investment entity it has invested in (each, an "Investment Entity"), be diminished, or if the Partnership's interest in an Investment Entity would have been diminished but for one or more Contributing Partners, due to a failure by the Partnership to contribute funds to an Investment Entity (a "Diminishment") which is in turn due to the failure of a Non-Contributing Partner to contribute his or its pro rata portion of a Call, then the Percentage Interests of the Non-Contributing Partners may be reallocated as determined by the General Partner in its sole discretion by decreasing the Percentage Interests of those Non-Contributing Partners, and increasing the Percentage Interests of the Contributing Partners, or if none, then the other Partners, such that any loss of the Partnership's interest in an Investment Entity which actually occurred or which would have otherwise occurred to the Partnership due to the Diminishment which is in excess of the aggregate decrease in Percentage Interest of the Non-Contributing Partners pursuant to Section 4.02(a) is borne solely by the Non-Contributing Partners. Section 4.03. Tax Status, Reports, and Allocations. (a) Notwithstanding any provision contained in this Agreement to the contrary, solely for federal income tax purposes, each of the Partners hereby recognizes that the Partnership will be subject to all provisions of Subchapter K of the Code; provided, however, that the filing of United States Partnership Returns of Income shall not be construed to extend the purposes of the Partnership or expand the obligations or liabilities of the Partners. (b) The General Partner or, at its discretion, an accountant ("Accountant") selected by the General Partner shall prepare or cause to be prepared all tax returns and statements, if any, that must be filed on behalf of the Partnership with any taxing authority and shall timely file such returns or statements. (c) For accounting and federal and (if any) state income tax purposes, all income, deductions, credits, gains and losses shall be allocated to the Partners pro rata in accordance with their respective Percentage Interests. (d) Notwithstanding subsection (c) above, any loss or deductions attributable to any Partnership recourse liability (as defined in Regulations Section 1.752-1(a)(i)) ("Recourse Debt") must be specially allocated to any Partner who bears the economic risk of loss with respect to the Recourse Debt to which such loss or deductions are attributable. If any allocations are made to any Partner pursuant to the foregoing sentence, then after any allocations required by Sections 4.04 and 4.05 hereof have been made but prior to allocations pursuant to Section 4.03(c), income shall be allocated to such Partner until on a cumulative basis an aggregate amount of income equal to such cumulative deductions and losses has been allocated to each such Partner. Section 4.04. Certain Gross Asset Value/Tax Differences. In accordance with Section 704(c) of the Code and the applicable Regulations thereunder, income, gain, loss, deduction, and tax depreciation with respect to any property contributed to the capital of the Partnership, or with respect to any property which has a Gross Asset Value different than its adjusted tax basis, shall, solely for income tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted tax basis of such property to the Partnership and the Gross Asset Value of such property. Section 4.05. Minimum Gain and Income Offsets. (a) Definitions. (i) "Partner Minimum Gain" shall be "partner nonrecourse debt minimum gain," as defined in Regulations Section 1.704-2(i)(2) and determined in accordance with Regulations Sections 1.704-2(i)(3) and 1.704-2(k). (ii) "Partner Nonrecourse Debt" has the meaning set forth in Regulations Sections 1.704-2(b)(4) and 1.704-2(i). (iii) "Partner Nonrecourse Deduction" has the meaning set forth in Regulations Section 1.704-2(i). (iv) "Partnership Minimum Gain" has the meaning set forth in Regulations Section 1.704-2(d) and shall be determined in accordance with the provisions of Regulations Section 1.704-2(k). (v) "Regulations" means the temporary and permanent Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). (b) Minimum Gain. (i) Notwithstanding any other provision of this Agreement to the contrary, if the Partnership Minimum Gain on the last day of any fiscal year is less than the Partnership Minimum Gain on the last day of the immediately preceding fiscal year, then (before any other allocation of Partnership items for such year under this Agreement, other than as provided in paragraph (ii) below) there shall be specially allocated to each Partner items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain (determined in accordance with Regulations Section 1.704-2(g)). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2)(i) and (iii). This Section 4.05(b)(i) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith. (ii) Subsequent to any allocations under Section 4.05(b)(i) above, other than allocations of gain from the disposition of property subject to Partner Nonrecourse Debt, if Partner Minimum Gain on the last day of any fiscal year is less than the Partner Minimum Gain on the last day of the immediately preceding fiscal year, then, except as provided herein, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to that Partner's share, if any, (determined in accordance with Regulations Section 1.704-2(i)(4)) of the net decrease in Partner Minimum Gain (such net decrease to be determined in a manner consistent with the provisions of Regulations Section 1.704-2(d) and 1.704-2(g)(3)). The items to be so allocated shall be determined in accordance with the provisions of Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii) and (iii). Notwithstanding the foregoing, no such special allocations of income and gain shall be made to the extent that the net decrease in Partner Minimum Gain described above arises because the liability ceases to be Partner Nonrecourse Debt due to a conversion, refinancing, or other change in the debt instrument that causes it to become partially or wholly a nonrecourse liability within the meaning of Regulations Section 1.752-1(a)(2). This Section 4.05(b)(ii) is intended to comply with the chargeback and other provisions of Regulations Section 1.704-2(i) and shall be interpreted consistently therewith. (c) Qualified Income Offset. Notwithstanding any other provision of this Agreement, if during any fiscal year any Partner (i) is allocated pursuant to Code Section 706(d) or Regulations Section 1.751-1(b)(2)(ii) any loss, items of loss, deductions, or Code Section 705(a)(2)(B) expenditures, (ii) is distributed any cash or property from the Partnership and such distributions exceed offsetting increases to such Partner's Capital Account that are reasonably expected to occur during such year, or (iii) receives any other adjustment, allocation, or distribution described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) and, as a result of such adjustment, allocation, or distribution, such Partner has a Qualified Income Offset Amount (as hereinafter defined), then items of income and gain (including gross income) for such fiscal year or other period (and, if necessary, subsequent fiscal years) shall (prior to any allocation pursuant to Section 4.03 hereof) be allocated to such Partner in an amount equal to his Qualified Income Offset Amount; provided, however, that any allocation of income or gain shall be required under this sentence only if and to the extent that such Partner would have a Qualified Income Offset Amount after all other allocations provided for in this Agreement have been tentatively made as if Sections 4.05(b) and (c) were not contained herein. As used herein, the term "Qualified Income Offset Amount" for a Partner means the excess, if any, of (x) the negative balance a Partner has in its Capital Account following the adjustment, allocation, or distribution described in the preceding sentence, over (y) the maximum amount that it is obligated (or is deemed to be obligated) to restore to the Partnership upon liquidation as determined in accordance with Regulations Sections 1.704-2(f), (g), and (i). This Section 4.05(c) is intended to satisfy the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. Section 4.06. Accounting. (a) The fiscal year of the Partnership shall end on the last day of December of each year. (b) The books of account of the Partnership shall be kept and maintained at all times at the principal place of business of the Partnership or at such other place or places approved by the General Partner. The books of account shall be maintained according to federal income tax principles using the accrual method of accounting, consistently applied, and shall show all items of income and expense. (c) If requested by any Partner, the General Partner shall cause a balance sheet of the Partnership dated as of the end of the fiscal year and a related statement of income or loss for the Partnership for such fiscal year to be prepared by the Accountant and furnished, at the expense of the Partnership, to each of the Partners on an annual basis, within ninety (90) days after the close of each fiscal year. (d) Each Partner shall have the right at reasonable times and upon reasonable advance notice during usual business hours to audit, examine, and make copies of or extracts from the books of account of the Partnership. Such right may be exercised through any agent or employee of such Partner designated by him or it or by an independent certified public accountant designated by such Partner. Each Partner shall bear all expenses incurred in any examination made on behalf of such Partner. Section 4.07. Bank Accounts. Funds of the Partnership shall be deposited in a Partnership account or accounts in the bank or banks as selected by the General Partner. Withdrawals from bank accounts shall only be made by the General Partner or such other parties as may be approved by the General Partner. Section 4.08. Current Distributions to Partners. Except as provided in Section 6.05 in connection with the termination and liquidation of the Partnership, the General Partner shall distribute funds at such times and in such amounts as it may determine, in its sole discretion, except that such funds shall be distributed by the General Partner to the Partners in accordance with their respective Percentage Interests at the time of the distribution. In determining the amount of funds to distribute pursuant to this Section 4.08, the General Partner may consider such factors as the need to allocate funds to any reserves for Partnership contingencies or any other Partnership purposes that the General Partner deems necessary or appropriate. The General Partner, in its sole discretion, may distribute undivided interests in Partnership Assets in- kind, provided, that such distribution shall be pro rata in accordance with the Partners' relative Percentage Interests. Section 4.09. Changes in Percentage Interests. If a Partner's Percentage Interest changes during any fiscal year, the allocations to be made pursuant to this Agreement shall be made in accordance with Section 706 of the Code, using any convention permitted by Section 706 of the Code and the Regulations promulgated thereunder and selected by the General Partner so as to equitably effectuate the allocations of this Article IV. Section 4.10. Tax Withholding. (a) If at any time requested by the General Partner, each Partner and each Substituted Partner (as defined in Section 5.03) shall deliver to the Partnership (i) an affidavit in form specified in Treasury Regulations Section 1.1445-2(b)(2)(iii) or otherwise in form satisfactory to the General Partner that the applicable Partner is not a "foreign person" within the meaning of Section 1445(e)(3) of the Code or otherwise subject to withholding under the provisions of any federal, state, local, foreign or other law, (ii) a withholding certificate issued by the United States Internal Revenue Service ("IRS") pursuant to Section 1445 of the Code, (iii) any other certificate that the General Partner may reasonably request with respect to any such laws, (iv) any other form reasonably requested by the General Partner relating to any Partner's status under any applicable law, and/or (v) a copy of any tax return or similar document of the applicable Partner that the General Partner may reasonably request with respect to any such law. (b) To the extent that any person (including without limitation the Master Partnership, the Partnership or the General Partner) is required by any applicable law to withhold or to make tax payments on behalf of or with respect to amounts distributed or distributable to, items allocated or allocable to, or otherwise for any Partner (each a "Tax Liability"), the General Partner may cause the Partnership to make such tax payments (each a "Tax Advance") as so required. The Partnership and the Master Partnership may be subject to provisions in the Master Agreement or otherwise that correspond to this Section 4.10; any payments corresponding to Tax Advances made directly or indirectly on behalf of the Partnership shall be deemed made on behalf of each Partner, pro rata in accordance with its relative Percentage Interest. At least ten (10) days, if commercially possible, prior to making a Tax Advance on behalf of or with respect to a Partner, the General Partner shall first notify such affected Partner. All Tax Advances made or deemed made on behalf of a Partner from any amount not otherwise distributable to such Partner shall be deemed to be a recourse loan to such Partner by the Partnership and shall be due and payable immediately after such Tax Advance is made by the Partnership, and if not repaid within three (3) days after the Tax Advance is made by the Partnership, the Tax Advance shall bear interest beginning on such third day at a rate equal to the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate permitted by law until repaid. (c) Notwithstanding anything to the contrary contained herein or in any other agreement between or among Partners, each Partner hereby agrees to indemnify, defend, and hold harmless the Master Partnership, the Partnership, the General Partner, their respective Affiliates, and any other person who directly or indirectly makes a Tax Advance or corresponding payment on behalf of such Partner from and against any Tax Liability of or with respect to such Partner, at any time, and this indemnity and hold harmless provision shall survive this Agreement and the termination of the Partnership; provided however, that the General Partner and its Affiliates shall not be indemnified hereunder for any Tax Liabilities to the extent any of them has withheld or withdrawn funds from the Partnership for purposes of making Tax Advances to satisfy such Tax Liabilities, and misappropriated or converted the funds so withheld or withdrawn. In the event of any claimed over-withholding, such Partner shall be limited to an action against the applicable government agencies for refund and hereby waives any claim or right of action against the General Partner or the Partnership on account of such withholding. (d) A payment to the Partnership or otherwise by a Partner with respect to any Tax Advance relating to such Partner shall not be deemed to be a capital contribution by such Partner and will in no way be considered in the calculations used to determine distributions under this Agreement. The General Partner may, and is hereby authorized to, withhold from any distributions or payments otherwise due to a Partner from the Partnership under this Agreement the amount of any Tax Advance made on behalf of such Partner that as of such date has neither been repaid to the Partnership nor been previously offset hereunder, and any amount withheld under this Section 4.10 shall be deemed for all purposes of this Agreement to have been distributed or paid to such Partner. If any Partner does not repay any Tax Advance within thirty (30) days of the General Partner giving such Partner a written final demand for payment, then such Partner's Percentage Interest may be forfeited in the sole discretion of the General Partner, and each Partner hereby grants the General Partner power of attorney, which shall survive each Partner's disability, to execute all documents to reflect such forfeiture; provided, however, that the applicable Partner shall remain liable to the Partnership or other Partners, as applicable, on a recourse basis for the full amount of the Tax Advance unpaid plus accrued, unpaid interest. Any Partner who does not repay a Tax Advance after a written final demand has been given by the General Partner shall pay, in addition to the Tax Advance and applicable interest, all expenses, including without limitation reasonable attorneys fees, incurred by the Partnership, the General Partner, and/or any other Partner in collecting the Tax Advance plus interest and/or pursuing any other remedy provided in this Section 4.10 and otherwise in this Agreement. ARTICLE V ASSIGNMENT Section 5.01. Prohibited Transfer. Except as specifically provided in this Article V and in Section 7.01, no Limited Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership unless prior written consent is obtained from the General Partner, and no General Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership without obtaining prior written Approval of the Partners. Any attempt so to transfer or encumber any such interest shall be null and void, ab initio. The Partners will be excused from accepting the performance of and rendering performance to any person other than the Partner hereunder (including any trustee or assignee of or for such Partner) as to whom such prior written consent has not been rendered. Section 5.02. Further Restrictions on Transfer. (a) In the event of any assignment or transfer permitted under this Article, the interest so assigned or transferred shall remain subject to all terms and provisions of this Agreement; the assignee or transferee shall be deemed, by accepting the interest so assigned or transferred, to have assumed all the obligations hereunder relating to the interests or rights so assigned or transferred and shall agree in writing to the foregoing if requested by the General Partner. Any transferee or assignee of the interest of a Partner shall be entitled only to receive distributions hereunder until such transferee or assignee has been admitted as a Substituted Partner; provided, however, that such transferee or assignee shall be subject to the Additional Capital Contribution provisions of Article III and that the Percentage Interest of such transferee or assignee shall be subject to reallocation pursuant to Section 4.02 in the event of an Adjusting Event. Until such transferee or assignee (other than an existing Partner) is admitted to the Partnership as a Substituted Partner, the Partner transferring all or any portion of his or its interest to such assignee or transferee shall remain primarily and directly liable for the performance of all his or its obligations under this Agreement. After the admission of such assignee or transferee as a Substituted Partner, such transferor Partner shall only be primarily and directly liable under this Agreement or otherwise for any obligations or liabilities accruing prior to the effective time of the admission of such Substituted Partner, unless such transferor Partner is released in writing from such obligations or liabilities by the General Partner and such release is Approved by the Partners. (b) Any Partner making or offering to make a transfer of all or any part of his or its interest in the Partnership shall indemnify and hold harmless the Partnership and all other Partners from and against any costs, damages, claims, suits, or fees suffered or incurred by the Partnership or any such other Partner arising out of or resulting from any claims by the transferee of such Partnership interest or any offerees of such Partnership interest in connection with such transfer or offer. Section 5.03. Substituted Partner. Except as otherwise provided in Section 7.01 hereof, an assignee or transferee (other than an existing Partner) of the interest of a Partner may be admitted as a substitute partner ("Substituted Partner") only with the written consent of the General Partner, which such consent shall be granted or denied in the sole discretion of the General Partner. Unless the assignee is already a General Partner, any assignee of a Partnership interest to whose admission such consent is given shall become and shall have only the rights and duties of a Limited Partner and the assigned Partnership interest shall thereafter be a Limited Partner's interest. Upon the receipt by the General Partner of an appropriate supplement to this Agreement pursuant to which such Substituted Partner agrees to be bound by all the terms and provisions of this Agreement, the General Partner shall reflect the admission of a Substituted Partner and the withdrawal of the transferring Partner, if appropriate, by preparing a supplemental exhibit, dated as of the date of such admission and withdrawal, and by filing it with the records of the Partnership. Any Substituted Partner shall, if required by the General Partner, prior to such admission, also execute any other documents requested by the General Partner, including, without limitation, an irrevocable power of attorney in form satisfactory to the General Partner appointing the General Partner as such person's attorney-in-fact with full power to execute, swear to, acknowledge, and file all certificates and other instruments necessary to carry out the provisions of this Agreement, including, without limitation, such undertakings as the General Partner may require for the payment of all fees and costs necessary to effect any such transfer and admission. Upon admission, such Substituted Partner shall be subject to all provisions of this Agreement in the place and stead of his assignor as if the Substituted Partner originally was a party to this Agreement. Section 5.04. Basis Adjustment. The Tax Matters Partner may cause, in its sole and absolute discretion, the Partnership to elect pursuant to Section 754 of the Code and the Regulations thereunder to adjust the basis of the Partnership Assets as provided by Sections 743 or 734 of the Code and the Regulations thereunder. Section 5.05. Admission of Additional Partners. (a) When Approved by the Partners, a new Partner (each a "New Partner") may be admitted to the Partnership. Such New Partner shall (i) be admitted for fair value, as determined by the General Partner in its reasonable discretion and in a manner consistent with the reallocation of Percentage Interests set forth in Section 4.02, and (ii) execute an appropriate supplement to this Agreement and to Exhibit A pursuant to which he agrees to be bound by all the terms and provisions of this Agreement. (b) Upon the receipt of the supplement described in Section 5.05(a), the General Partner shall reflect the admission of the New Partner and the reallocation of Percentage Interests in the records of the Partnership. The admission of a New Partner shall not cause the dissolution of the Partnership. Upon the admission of a New Partner pursuant to Section 5.05(a), the Percentage Interests shall be reallocated, with the New Partner receiving the Percentage Interest calculated in accordance with Section 4.02 that reflects, as determined by the General Partner in his sole discretion, the ratio of Current Value of the New Partner's contribution to the Net Value of the Partnership Assets, and with the Percentage Interests of each existing Partner being adjusted in accordance with Section 4.02. Section 5.06. Other Restricted Transfers. Notwithstanding any other provision herein to the contrary, unless prior written consent is given by the General Partner, no transfer of any interest in the Partnership may be made to any person who is related (within the meaning of Regulations Section 1.752-4(b)) to any lender of the Partnership whose loan constitutes a nonrecourse liability of the Partnership. ARTICLE VI WITHDRAWAL, DISSOLUTION, TERMINATION, AND LIQUIDATION Section 6.01. Withdrawal. No Limited Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written consent of the General Partner and, except as provided in Section 7.01 hereof, no General Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written Approval of the Partners. Retirement or withdrawal by any Partner in contravention of this Section 6.01 shall subject such Partner to liability for all damages caused any other Partner (other than a Partner who is, at the time of such withdrawal, in default under this Agreement) by such retirement or withdrawal and the consequential dissolution of the Partnership. Any notice of withdrawal must be in writing. Section 6.02. Dissolution of the Partnership. The Partnership shall be dissolved upon the occurrence of any of the following: (a) The withdrawal, as defined in the Act, of a General Partner, unless: (i) the remaining General Partner, if any, elects in writing within ninety (90) days after such event to reconstitute the Partnership, to continue as the General Partner, and to continue the Partnership and its business, or (ii) there is no remaining or Successor General Partner (as defined in Section 7.01), then within ninety (90) days after such event, all of the Limited Partners agree to appoint in writing a successor General Partner, as of the date of the withdrawal of the General Partner, and agree to reconstitute the Partnership and continue the business of the Partnership, and such successor General Partner agrees in writing to accept such election, or (iii) the withdrawal of the General Partner results from its removal by the Limited Partners as provided in Section 7.01 and a Successor General Partner is appointed by the Limited Partners as provided in Section 7.01; (b) The sale or other disposition, not including an exchange, of substantially all of the assets of the Partnership (except under circumstances where all or a portion of the purchase price is payable after the closing of the sale or other disposition); (c) December 31, 2048, unless extended by the consent of all Partners; or (d) When Approved by the Partners. Except as expressly provided, nothing contained in this Section 6.02 is intended to grant to any Partner the right to dissolve the Partnership at will (by retirement, resignation, withdrawal, or otherwise) or to exonerate any Partner from liability to the Partnership and the remaining Partners if he or it dissolves the Partnership at will. Section 6.03. Continuation of Partnership. If the Partnership is continued as provided in Section 6.02(a)(i), (ii) or (iii), then, as of the date of withdrawal, the General Partner with respect to which an event of withdrawal under Section 6.02 has occurred (or his or its estate or successor in interest) (the "Withdrawing General Partner") shall have none of the powers of a General Partner under this Agreement or applicable law and shall have only the rights and powers of an assignee of a Partner hereunder to share in any Partnership profits, losses, gains, and distributions in accordance with his or its Percentage Interest and shall have no other rights or powers of a Partner hereunder; provided, however, that any Withdrawing General Partner shall be subject to the Additional Capital Contribution provisions of Article III, that the Percentage Interest of such Withdrawing General Partner shall be subject to reallocation under Section 4.02 in the event of any Adjusting Event, and that any Withdrawing General Partner who was removed by the Limited Partners pursuant to Section 7.01 shall become a Limited Partner if its interest is so converted as provided in Section 7.01. Section 6.04. Death, etc. of a Limited Partner, Divorce of a Partner. (a) The death, disability, withdrawal, termination (in the case of a Limited Partner that is a partnership or a trust), dissolution (in the case of a Limited Partner that is a corporation or limited liability company), retirement, or adjudication as a bankrupt of a Limited Partner (the "Withdrawing Limited Partner") shall not dissolve the Partnership, but, subject to the provisions of Section 6.04(b), the rights of such Withdrawing Limited Partner to share in the profits and losses of the Partnership and to receive distributions of Partnership funds shall, upon the happening of such an event, pass to the Withdrawing Limited Partner's estate, legal representative, or successors in interest, as the case may be, subject to this Agreement, and the Partnership shall continue as a limited partnership. (b) Upon the occurrence of an event described in Section 6.04(a), the General Partner shall, in its sole discretion, elect to either continue the Partnership business (i) with the successors, assigns, heirs, devises, beneficiaries, estate, or other transferee of such Withdrawing Limited Partner (collectively, the "Distributees") as provided in Section 6.04(c) or (ii) with the Partnership purchasing the interest of such Withdrawing Limited Partner from all of his or its Distributees as provided in Section 6.04(d). (c) If the General Partner elects to proceed pursuant to Section 6.04(b)(i), the Distributees of such Withdrawing Limited Partner shall succeed to his or its interest in the Partnership, shall be admitted as Limited Partners if approved by the General Partner in its sole discretion, and shall be bound by the terms and provisions of the Agreement; provided, however, if the interest of such Withdrawing Limited Partner passes, either at the time of an occurrence described in Section 6.04(a) or subsequent thereto, to more than one Distributee, then within sixty (60) days after the distribution to more than one Distributee, the Distributees shall appoint one person, firm, or corporation as the agent of and for such Distributees (the "Agent"). Such Agent shall be responsible for collecting, receiving, and making all payments and Additional Capital Contributions required under this Agreement, shall vote the entire interest of the Distributees if such vote is required by this Agreement, the Act, or applicable law and shall perform all other obligations of such Distributees performable by reason of or arising from their interest in the Partnership as Limited Partners; provided, that the Agent shall not be admitted as a Partner of the Partnership nor shall such Agent be entitled to exercise any voting rights hereunder unless such rights are approved by the General Partner in its sole discretion. All payments and/or disbursements due to the Distributees for or arising from their interest in the Partnership shall be deemed to have been validly made to such Distributees by paying the same to such Agent. In the event that the Distributees for any reason fail to designate such agent in writing in the manner and within the time prescribed and fail to cure such default after ten (10) days written notice from the General Partner to correct such default, the General Partner shall retain any funds or property otherwise distributable to such Distributees under this Agreement and shall appoint an Agent of and for the Distributees. To the fullest extent allowed by applicable law, the defaulting Distributees will indemnify, defend, and hold harmless such Agent, the General Partner, and the Partners from and against any losses, expenses, judgments, fines, settlements, and damages incurred by any of them with respect to the provisions of this Section 6.04(c). (d) If the General Partner elects to proceed pursuant to Section 6.04(b)(ii), then the General Partner shall cause the Partnership to purchase the interest of such Withdrawing Limited Partner in the Partnership from his or its Distributees at a price equal to the Current Value of such interest, determined as though the effective date of the withdrawal of such Withdrawing Limited Partner were an Adjusting Event. (e) If, upon the divorce of any individual Partner, the spouse of any such Partner receives an interest in the Partnership pursuant to the terms of any divorce property settlement agreement, divorce decree, or otherwise, then the Partnership shall have the right, as determined by the General Partner, to purchase the interest of such spouse in the Partnership at a price equal to the Current Value of such interest, determined as though the effective date of such divorce were an Adjusting Event. Section 6.05. Termination and Liquidation of the Partnership. (a) Upon dissolution of the Partnership unless continued pursuant to Section 6.02, the Partnership shall be terminated as rapidly as business circumstances will permit. At the direction of the General Partner, or a Partner Approved by the Partners if the dissolution of the Partnership is caused by the withdrawal of the General Partner (the General Partner or the other Partner, as the case may be, being herein called the "Terminating Partner"), a full accounting of the assets and liabilities of the Partnership shall be taken and a statement of the Partnership Assets and a statement of each Partner's Capital Account shall be furnished to all Partners as soon as is reasonably practicable. The Terminating Partner shall take such action as is necessary so that the Partnership's business shall be terminated, its liabilities discharged, and its assets distributed as hereinafter described. The Terminating Partner may sell all of the Partnership Assets or distribute the Partnership Assets in kind; provided, however, that the Terminating Partner shall ascertain the Net Value of the Partnership Assets by appraisal or other reasonable means of all Partnership Assets remaining unsold and each Partner's Capital Account shall be charged or credited, as the case may be, as if such Partnership Assets had been sold at the Net Value of the Partnership Assets and the income, gains, losses, deductions, and credits realized thereby had been allocated to the Partners in accordance with Article IV hereof. A reasonable period of time shall be allowed for the orderly termination of the Partnership to minimize the normal losses of a liquidation process. (b) After the payment of all expenses of liquidation and of all debts and liabilities of the Partnership in such order or priority as provided by law (including any debts or liabilities to Partners, who shall be treated as secured or unsecured creditors, as may be the case, to the extent permitted by law, for sums loaned to the Partnership, if any, as distinguished from capital contributions) and after all resulting items of Partnership income, gain, credit, loss, or deduction are credited or debited to the Capital Accounts of the Partners in accordance with Articles III and IV hereof, all remaining Partnership Assets shall then be distributed among the Partners in accordance with relative Capital Account balances. Upon termination, a Partner may not demand and receive cash in return for such Partner's capital contributions and no Partner shall have any obligation to restore any deficit that may then exist in that Partner's Capital Account. Distribution on termination may be made by the distribution to each Partner of an undivided interest in any asset of the Partnership that has not been sold at the time of termination of the Partnership. Section 6.06. General Partners Not Personally Liable. No General Partner nor any affiliate of any General Partner shall be personally liable for the return of the Capital Contributions of any Partner, and such return shall be made solely from available Partnership Assets, if any, and each Limited Partner hereby waives any and all claims it may have against any General Partner or any such affiliate in this regard. Section 6.07. Provisions Cumulative. All provisions of this Agreement relating to the dissolution, liquidation, and termination of the Partnership shall be cumulative to the extent not inconsistent with other provisions herein; that is, the exercise or use of one of the provisions hereof shall not preclude the exercise or use of any other provision of this Agreement to the extent not inconsistent therewith. ARTICLE VII GENERAL Section 7.01. Removal and Replacement of General Partner. (a) The General Partner may be removed and replaced at any time upon the Approval of the Partners by sending the General Partner a written notice of such removal. In the event of the removal of the General Partner, a successor General Partner ("Successor General Partner") shall be selected by Approval of the Partners. The Limited Partners, by Approval of the Partners, shall have the right to transfer a portion of their interests to such Successor General Partner and such interest shall be converted to that of a general partner. The removal will not be effective until the Successor General Partner has been admitted to the Partnership as a General Partner, such admission to be Approved by the Partners. After the admission of the Successor General Partner, the Successor General Partner shall have all the rights, powers, and obligations of a General Partner under this Agreement and all references in this Agreement to the "General Partner" shall refer to the Successor General Partner appointed in this Section 7.01. Third parties shall be conclusively deemed entitled to rely upon the representation of Group Investors that Group Investors is the General Partner unless such third parties have actual notice of its replacement. (b) Following the replacement of the General Partner, the Limited Partners may, as is Approved by the Partners, convert such Partner's interest into a Limited Partner's interest. The Successor General Partner shall have the authority to execute and file all documents necessary to signify such conversion. The General Partner hereby appoints the Successor General Partner as his or its attorney-in-fact to execute and file all documents signifying such conversion including, without limitation, an amendment to the Certificate of Limited Partnership. Section 7.02. Competing Business. Notwithstanding anything to the contrary contained in or inferable from this Agreement, the Act, or any other statute or principle of law, neither the Partners nor any of their shareholders, directors, officers, employees, partners, agents, family members, or affiliates (each a "Partner Affiliate") shall be prohibited or restricted in any way from investing in or conducting, either directly or indirectly, and may invest in and/or conduct, either directly or indirectly, businesses of any nature whatsoever, including the ownership and operation of businesses or properties similar to or in the same geographical area as those held by the Partnership. Any investment in or conduct of any such businesses by a Partner or any Partner Affiliate shall not give rise to any claim for an accounting by the other Partners or the Partnership or any right to claim any interest therein or the profits therefrom. Section 7.03. LIMITED PARTNER REPRESENTATIONS. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EACH LIMITED PARTNER HEREBY REPRESENTS AND WARRANTS TO THE PARTNERSHIP, THE GENERAL PARTNER, AND TO EACH OFFICER, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AND AGENT OF THE GENERAL PARTNER THAT: (a) THE INTEREST IN THE PARTNERSHIP OF SUCH LIMITED PARTNER IS ACQUIRED FOR INVESTMENT PURPOSES ONLY FOR HIS OR ITS OWN ACCOUNT AND NOT WITH A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION, REOFFER, RESALE, OR OTHER DISPOSITION NOT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER (THE "1933 ACT") AND APPLICABLE STATE SECURITIES LAWS; (b) SUCH LIMITED PARTNER, ALONE OR TOGETHER WITH HIS OR ITS REPRESENTATIVES, POSSESSES SUCH EXPERTISE, KNOWLEDGE, AND SOPHISTICATION IN FINANCIAL AND BUSINESS MATTERS GENERALLY, AND IN THE TYPE OF TRANSACTIONS IN WHICH THE PARTNERSHIP PROPOSES TO ENGAGE IN PARTICULAR, THAT HE OR IT IS CAPABLE OF EVALUATING THE MERITS AND ECONOMIC RISKS OF ACQUIRING AND HOLDING HIS OR ITS PARTNERSHIP INTEREST, AND THAT HE OR IT IS ABLE TO BEAR ALL SUCH ECONOMIC RISKS NOW AND IN THE FUTURE; (c) SUCH LIMITED PARTNER HAS HAD ACCESS TO ALL OF THE INFORMATION WITH RESPECT TO THE INTEREST ACQUIRED BY HIM OR IT UNDER THIS AGREEMENT THAT HE OR IT DEEMS NECESSARY TO MAKE A COMPLETE EVALUATION THEREOF AND HAS HAD THE OPPORTUNITY TO QUESTION THE GENERAL PARTNER CONCERNING SUCH INTEREST; (d) SUCH LIMITED PARTNER'S DECISION TO ACQUIRE HIS OR ITS INTEREST FOR INVESTMENT HAS BEEN BASED SOLELY UPON THE EVALUATION MADE BY HIM OR IT; (e) SUCH LIMITED PARTNER IS AWARE THAT HE OR IT MUST BEAR THE ECONOMIC RISK OF HIS OR ITS INVESTMENT IN THE PARTNERSHIP FOR AN INDEFINITE PERIOD OF TIME BECAUSE INTERESTS IN THE PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE SECURITIES LAWS OF ANY STATES, AND, THEREFORE, CANNOT BE SOLD UNLESS SUCH INTERESTS ARE SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE; (f) SUCH LIMITED PARTNER IS AWARE THAT ONLY THE PARTNERSHIP CAN TAKE ACTION TO REGISTER SUCH INTEREST IN THE PARTNERSHIP AND THE PARTNERSHIP IS UNDER NO SUCH OBLIGATION AND DOES NOT PROPOSE TO ATTEMPT TO DO SO; AND (g) SUCH LIMITED PARTNER IS AWARE THAT THIS AGREEMENT PROVIDES RESTRICTIONS ON THE ABILITY OF A LIMITED PARTNER TO SELL, TRANSFER, ASSIGN, MORTGAGE, HYPOTHECATE, OR OTHERWISE ENCUMBER HIS OR ITS INTEREST IN THE PARTNERSHIP. Section 7.04. Notice. (a) All notices, demands, or requests provided for or permitted to be given pursuant to this Agreement must be in writing. (b) All notices, demands, and requests to be sent to a Partner, any Distributee(s) (or their Agent) of the interest of a Partner, or any Substituted Partner pursuant to this Agreement shall be deemed to have been properly given or served if: (i) personally delivered, (ii) deposited prepaid for next day delivery by Federal Express, or other similar overnight courier services, addressed to such Partner, (iii) deposited in the United States mail, addressed to such Partner, prepaid and registered or certified with return receipt requested, or (iv) transmitted via telecopier or other similar device to the attention of such Partner, all at the address or telecopy number for such Partner set forth on such Partner's signature page attached hereto (as may be changed in accordance with subsection (d) below). (c) All notices, demands, and requests so given shall be deemed received: (i) when personally delivered, (ii) twenty-four (24) hours after being deposited for next day delivery with an overnight courier, (iii) forty-eight (48) hours after being deposited in the United States mail, or (iv) twelve (12) hours after being telecopied or otherwise transmitted and receipt has been confirmed. (d) The Partners, any Substituted Partners, and their respective Distributee(s)(or their Agent) shall have the right from time to time, and at any time during the term of this Agreement, to change their respective addresses and each shall have the right to specify as his or its address any other address within the United States of America by giving to the other parties at least thirty (30) days written notice thereof, in the manner prescribed in Section 7.04(b); provided, however, that to be effective, any such notice must be actually received (as evidenced by a return receipt). (e) All distributions to any Partner shall be made at the address to which notices are to be sent unless otherwise specified in writing by such Partner. Section 7.05. Amendments. Amendments and supplements may be made to or restatements made of this Agreement or the Certificate of Limited Partnership (or any exhibits or schedules attached to any of them), from time to time by the General Partner, without the consent of any of the other Partners, to effect any Major Decisions Approved by the Partners or any amendments which amend this Agreement to admit Substituted Partners, to reflect the removal and replacement of the General Partner, to reflect adjustments to the Percentage Interests of the Partners following an Adjusting Event, to reflect other transfers, assignments, admissions, withdrawals, conversions, or removals authorized by this Agreement, or to effect any non-material amendments to this Agreement or the Certificate of Limited Partnership. All other amendments to this Agreement and the Certificate of Limited Partnership shall require the Approval of the Partners. Section 7.06. Powers of Attorney. Each Limited Partner hereby constitutes and appoints the General Partner, with full power of substitution, as his or its true and lawful attorney-in-fact and empowers and authorizes such attorney, in the name, place, and stead of such Limited Partner, to make, execute, sign, swear to, acknowledge, and file in all necessary or appropriate places all documents (and all amendments or supplements to or restatements of such documents necessitated by valid amendments to or actions permitted under this Agreement) relating to the Partnership and its activities, including, without limitation: (a) any amendments to this Agreement approved as provided herein, (b) the Certificate of Limited Partnership and any amendments thereto, under the laws of the State of Delaware or in any other state or jurisdiction in which such filing is deemed advisable by the General Partner, (c) any applications, forms, certificates, reports, or other documents, or amendments thereto which may be requested or required by any federal, state, or local governmental agency, securities exchange, securities association, self-regulatory organization, or similar institution and which are deemed necessary or advisable by the General Partner, (d) any other instrument which may be required to be filed or recorded in any state or county or by any governmental agency, or which the General Partner deems advisable to file or record, including, without limitation, certificates of assumed name and documents to qualify foreign limited partnerships in other jurisdictions, (e) any documents which may be required to effect the continuation of the Partnership, the admission of New Partners, Substituted Partners, or Distributees, the withdrawal of any Partner, the purchase of the interest in the Partnership of any ex-spouse of a Partner, or the dissolution and termination of the Partnership, (f) any and all reports, schedules, certificates, forms and other documents, including, but not limited to, Schedules 13D and 13F, Forms 3 and 4, and any other such forms as may be required to be filed by the Partnership under the Securities Exchange Act of 1934, Federal Reserve U-1s, notes, drafts, credit or loan agreements, financing statements, security agreements, bank resolutions, and any and all other documents and instruments as may be necessary or desirable in the sole discretion of the attorney so acting, all in carrying out the purposes of the Partnership, (g) making certain elections contained in the Code or state law governing taxation of limited partnerships, and (h) performing any and all other ministerial duties or functions necessary for the conduct of the business of the Partnership. Each Limited Partner hereby ratifies, confirms, and adopts as his own, all actions that may be taken by such attorney-in-fact pursuant to this Section 7.06. Each Limited Partner acknowledges that this Agreement permits certain amendments to be made and certain other actions to be taken or omitted to be taken by less than all of the Partners if approved in accordance with the provisions hereof. By their execution hereof, each Limited Partner also grants the General Partner a power of attorney to execute any and all documents necessary to reflect any action that is approved in accordance with the provisions hereof. This power of attorney is coupled with an interest and shall continue notwithstanding the subsequent incapacity or death of the Limited Partner. Each Limited Partner shall execute and deliver to the General Partner an executed and appropriately notarized power of attorney in such form consistent with the provisions of this Section 7.06 as the General Partner may request. Section 7.07. GOVERNING LAWS AND VENUE. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTNERS HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. Section 7.08. Rule of Construction. The general rule of construction for interpreting a contract, which provides that the provisions of a contract should be construed against the party preparing the contract, is waived by the parties. Each party acknowledges that he or it was represented by separate legal counsel in this matter who participated in the preparation of this Agreement or he or it had the opportunity to retain counsel to participate in the preparation of this Agreement but chose not to do so. Section 7.09. Entire Agreement. This Agreement, including all exhibits to this Agreement and, if any, exhibits to such exhibits, contains the entire agreement among the parties relative to the matters contained in this Agreement. Section 7.10. Waiver. No consent or waiver, express or implied, by any Partner to or for any breach or default by any other Partner in the performance by such other Partner of his or its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligations of such other Partner under this Agreement. Failure on the part of any Partner to complain of any act or failure to act of any of the other Partners or to declare any of the other Partners in default, regardless of how long such failure continues, shall not constitute a waiver by such Partner of his or its rights hereunder. Section 7.11. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby, and the intent of this Agreement shall be enforced to the greatest extent permitted by law. Section 7.12. Binding Agreement. Subject to the restrictions on transfers and encumbrances set forth in this Agreement, this Agreement shall inure to the benefit of and be binding upon the undersigned Partners and their respective legal representatives, successors, and assigns. Whenever, in this Agreement, a reference to any party or Partner is made, such reference shall be deemed to include a reference to the legal representatives, successors, and assigns of such party or Partner. Section 7.13. Tense and Gender. Unless the context clearly indicates otherwise, the singular shall include the plural and vice versa. Whenever the masculine, feminine, or neuter gender is used inappropriately in this Agreement, this Agreement shall be read as if the appropriate gender was used. Section 7.14. Captions. Captions are included solely for convenience of reference and if there is any conflict between captions and the text of this Agreement, the text shall control. Section 7.15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which when taken together shall constitute a single counterpart instrument. Executed signature pages to any counterpart instrument may be detached and affixed to a single counterpart, which single counterpart with multiple executed signature pages affixed thereto constitutes the original counterpart instrument. All of these counterpart pages shall be read as though one and they shall have the same force and effect as if all of the parties had executed a single signature page. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Each of the undersigned has executed and delivered this Agreement in Fort Worth, Texas, to be effective as of the Effective Date. GENERAL PARTNER 201 Main Street GROUP INVESTORS , L.L.C., Suite 3100 a Delaware limited liability company Fort Worth, Texas 76102 By: /s/ W. R. Cotham W. R. Cotham, Vice President LIMITED PARTNER 201 Main Street Suite 2600 Fort Worth, Texas 76102 /s/ W. R. Cotham W. R. Cotham, Nominee EXHIBIT A TO THE LIMITED PARTNERSHIP AGREEMENT OF ARBOR REIT, L.P. INITIAL CAPITAL PERCENTAGE GENERAL PARTNER CONTRIBUTION INTEREST Group Investors $ 10.00 1.00% LIMITED PARTNER Nominee $ 990.00 99.00% $ 1,000.00 100.00% EX-99.4 5 LIMITED PARTNERSHIP AGREEMENT FOR MHX INVESTORS, L.P. Exhibit 99.4 LIMITED PARTNERSHIP AGREEMENT OF MHX INVESTORS, L.P. This Limited Partnership Agreement ("Agreement") of MHX Investors, L.P. is made and entered into effective as of the 5th day of August, 1998 (the "Effective Date"), by and among FW Group Genpar, Inc., a Texas corporation ("FW Group"), as the general partner and W. R. Cotham, Nominee ("Nominee"), as the nominee limited partner. WITNESSETH: For and in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the adequacy, receipt, and sufficiency of which are hereby acknowledged, FW Group and Nominee (collectively, the "Partners" and individually, a "Partner") hereby agree as follows: ARTICLE I ORGANIZATION AND PURPOSE Section 1.01. Formation of Limited Partnership. The Partners hereby agree to become partners and to form a limited partnership (the "Partnership") pursuant to Del. Code Ann 17-101 et seq., known as the Delaware Revised Uniform Limited Partnership Act (the "Act"). FW Group shall be the general partner and is hereinafter sometimes referred to in such capacity as the "General Partner." Nominee shall be the limited partner and together with any beneficial owners of the interest held by Nominee admitted as limited partners pursuant to this Agreement are hereinafter referred to individually as a "Limited Partner" and collectively as the "Limited Partners." Section 1.02. Name. The name of the Partnership shall be MHX Investors, L.P. All business and affairs of the Partnership shall be conducted solely under, and all Partnership Assets (as that term is defined in Section 1.04) shall be held solely in, such name unless otherwise determined by the General Partner. Section 1.03. Effective Date and Term. The Partnership shall be in effect for a term beginning on the Effective Date and shall continue under this Agreement (as amended from time to time) until dissolved upon the occurrence of an event that causes the dissolution of the Partnership in accordance with the provisions of this Agreement (unless reconstituted as provided herein), and thereafter to the extent provided by applicable law, until wound up and terminated as provided herein. Section 1.04. Purposes and Scope of Business. The business and purposes of the Partnership are to make investments of any kind and to do all things permitted under the Act, specifically including, without limitation, acquiring securities of any type or kind in each of MeriStar Hospitality Corp. and MeriStar Hotels and Resorts, Inc. Subject to the terms and conditions of this Agreement, the Partnership shall have the power and authority to do all such other acts and things as may be necessary, desirable, expedient, convenient for, or incidental to, the furtherance and accomplishment of the foregoing objectives and purposes and for the protection and benefit of the Partnership. The assets of the Partnership, whether now or hereafter owned, are hereinafter sometimes referred to as the "Partnership Assets". Section 1.05. Documents. The General Partner, or anyone designated by the General Partner, is hereby authorized to execute a certificate of limited partnership of the Partnership ("Certificate of Limited Partnership") in accordance with the Act and cause the same to be filed in the office of the Secretary of State of the State of Delaware in accordance with the provisions of the Act. The Partnership shall promptly execute and duly file with the proper offices in each state in which the Partnership may conduct the activities hereinafter authorized, one or more certificates as required by the laws of each such state in order that the Partnership may lawfully conduct the business, purposes, and activities herein authorized in each such state, and the Partnership shall take any other action or measures necessary in such state or states for the Partnership to conduct such activities. Section 1.06. Principal Place of Business. The principal place of business of the Partnership shall be 201 Main Street, Suite 3100, Fort Worth, Texas 76102 or at such other place or places as may be approved by the General Partner. The General Partner shall be responsible for maintaining at the Partnership's principal place of business those records required by the Act to be maintained there. Section 1.07. Registered Agent and Office. The Registered Agent (as defined in the Act) for the Partnership in Delaware shall be Corporation Service Company. The Registered Office (as defined in the Act) of the Partnership shall be 1013 Centre Road, Wilmington, Delaware 19805. ARTICLE II OPERATIONS Section 2.01. Management of Partnership. (a) The right to manage, control, and conduct the business and affairs of the Partnership shall be vested solely in the General Partner. Except as provided in Sections 2.01(b) and 7.01, the Limited Partners shall not take part in the management of the affairs of the Partnership and under no circumstances may any Limited Partner control the Partnership business or sign for or bind the Partnership. Without limiting the generality of the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the General Partner shall have the exclusive authority to act for and on behalf of the Partnership, and no third party shall ever be required to inquire into the authority of the General Partner to take such action on behalf of the Partnership. Except as expressly limited in this Agreement, the General Partner shall have the rights, authority, and powers of general partners with respect to the Partnership business and the Partnership Assets as set forth in the Act as in effect upon the Effective Date of this Agreement. The General Partner shall not be required to devote its full time and attention to the business of the Partnership, but only such time as it deems necessary for the proper conduct of the Partnership's affairs. (b) No act shall be taken, sum expended or obligation incurred by the General Partner for or on behalf of the Partnership with respect to a matter within the scope of any of the following major decisions ("Major Decisions") affecting, directly or indirectly, the Partnership, or the Partnership Assets, unless approved as described in subsection 2.01(c): (i) Financing or refinancing of the Partnership or the Partnership Assets; (ii) Selling, exchanging, or otherwise disposing of all or substantially all of the Partnership Assets; or (iii) Admitting a New Partner (as defined in Section 5.05) to the Partnership. (c) No Major Decision may be made or effected by or on behalf of the Partnership without the approval of the Partners holding a majority of all Percentage Interests (as defined in Section 4.01) in the Partnership. As used in this Agreement, "Approved by the Partners", "Approval of the Partners", and other like terms shall mean the approval or consent of the Partners holding a majority of the Percentage Interests in the Partnership. Any Partner may at any time propose a Major Decision to the other Partners by giving written notice to the other Partners. Within ten (10) days after receipt of such notice, each Partner shall indicate, in writing, to the requesting Partner, his or its approval or disapproval of such Major Decision; provided, that, in the event any Partner does not respond in such 10-day period, such Partner shall be deemed to have disapproved such Major Decision. If any Partner or Partners holding a majority of the Percentage Interests in the Partnership approve of, consent to, or otherwise take any action contemplated by this Section 2.01(c), such action shall neither require any further polling of any other Partners, nor require any further approval, consent, or action of any other Partners. Section 2.02. Affiliates. The General Partner shall have the right to cause the Partnership to enter into contracts or otherwise deal with any affiliates of any Partner in any capacity, including, without limitation, in connection with the financing, management, and development of the Partnership Assets, except that the terms of any such arrangement shall be commercially reasonable and competitive with amounts that would be paid to third parties on an "arms-length" basis. Section 2.03. Expenses. The Partnership shall pay or reimburse the General Partner and the Tax Matters Partner (as defined in Section 2.05) for all direct, out-of-pocket expenses incurred by it with respect to its duties under Section 2.01 and Section 2.05 to the Partnership, including, without limitation, salaries, accounting expenses, insurance premiums attributable directly to the Partnership, legal fees, and other direct costs associated with the formation and operation of the Partnership. Section 2.04. Exculpations, Indemnities. (a) Neither the Partners, the Tax Matters Partner, their affiliates nor any of their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually a "Covered Person") shall be liable to the Partnership, any Partner, or any other person for any act or omission taken or suffered by such Covered Person in good faith and in the belief that such act or omission is in or is not opposed to the best interests of the Partnership, provided, that such act or omission is not fraud, willful misconduct, or a knowing violation of this Agreement by such Covered Person. No Covered Person shall be liable to the Partnership, any Partner, or any other person for any action taken by any other Partner, nor shall any Covered Person be liable to the Partnership, any other Partner, or any other person for any action of any employee or agent of the Covered Person, provided, such action is within the scope of the purposes of the Partnership and the Covered Person seeking exculpation satisfies the parameters of the preceding sentence. (b) To the fullest extent allowed or permitted under any provision of applicable law, including, without limitation, the Act, the Partnership shall indemnify, defend, and hold harmless each Partner, its affiliates and their respective shareholders, officers, directors, partners, members, managers, employees or agents (individually an "Indemnitee") to the extent of the Partnership Assets, from and against any losses, expenses, judgments, fines, settlements, and damages incurred by the Partnership or such Indemnitee arising out of any claim based upon acts (including, without limitation, negligent acts) performed or omitted to be performed by the Partnership or such Indemnitee in connection with the business of the Partnership, including, without limitation, costs, expenses, and attorneys' fees expended in the settlement or defense of any such claim. All decisions of the Partnership concerning any action allowed or permitted under applicable law concerning the indemnity of any person or entity by the Partnership shall be made as Approved by the Partners. Section 2.05. Tax Matters Partner. The General Partner shall act as the "Tax Matters Partner" for federal income tax purposes. The Tax Matters Partner shall mean the Partner (a) designated as the "tax matters partner" within the meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law, collectively the "Code") and (b) whose responsibilities as Tax Matters Partner include, where appropriate, commencing on behalf of the Partnership certain judicial proceedings regarding Partnership federal income tax items and informing all Partners of any administrative or judicial proceeding involving federal income taxes. In exercising its responsibilities as Tax Matters Partner, the General Partner shall have the final decision making authority with respect to all federal income tax matters involving the Partnership. Any direct out-of-pocket expense incurred by the Tax Matters Partner in carrying out its responsibilities and duties under this Agreement shall be allocated to and charged to the Partnership as an expense of the Partnership for which the Tax Matters Partner shall be reimbursed. ARTICLE III FINANCING Section 3.01. Capital Contributions. The Partners may, but shall not be obligated to, make capital contributions ("Capital Contributions") at such times, in such manner and in such amounts as the General Partner may determine, subject to the Approval of the Partners, provided, however, that each Partner shall have the right to contribute his share of any Capital Contribution pro rata in accordance with his existing Percentage Interest. Section 3.02. Capital Accounts. The amount of a Partner's capital account ("Capital Account") in the Partnership shall be determined in accordance with Regulations Section 1.704-1(b)(2)(iv), including by: (a) crediting to such account (i) all contributions to the Partnership made by or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property contributed (less any liabilities assumed by the Partnership or to which any property may be subject) and (ii) all gains and income of the Partnership allocated to such Partner or his or its predecessor in interest; and (b) debiting to such account (i) all distributions from the Partnership made to or on behalf of such Partner or his or its predecessor in interest, including the fair market value of any property distributed (less any liabilities assumed by the Partner or to which any property may be subject) and (ii) all losses and deductions of the Partnership allocated to such Partner or his or its predecessor in interest. Section 3.03. Limited Liability of Limited Partners. Notwithstanding anything contained in this Agreement to the contrary, the liability of each Limited Partner for any of the debts, losses, or obligations of the Partnership shall be limited to the amount of the sum of such Limited Partner's capital contributions pursuant to Section 3.01 hereof. Accordingly, no Limited Partner shall be obligated to provide additional capital to the Partnership or its creditors by way of contribution, loan, or otherwise beyond the amount of the capital contributions required of such Limited Partner pursuant to Section 3.01 hereof. Except as provided in the Act, no Limited Partner shall have any personal liability whatsoever, whether to the Partnership or any third party, for the debts of the Partnership or any of its losses beyond the amount of the Limited Partner's capital contributions. Section 3.04. Treatment of Capital Contributions. Except as provided in this Agreement to the contrary, no Partner shall be entitled to interest on his or its contributions to the capital of the Partnership nor shall any Partner be entitled to demand the return of all or any part of such contributions to the capital of the Partnership. Section 3.05. Benefits of Agreement. Nothing in this Agreement, and, without limiting the generality of the foregoing, in this Article III, expressed or implied, is intended or shall be construed to give to any creditor of the Partnership or to any creditor of any Partner or any other person or entity whatsoever, other than the Partners and the Partnership, any legal or equitable right, remedy, or claim under or in respect of this Agreement or any covenant, condition, or provision herein contained, and such provisions are and shall be held to be for the sole and exclusive benefit of the Partners and the Partnership. ARTICLE IV ACCOUNTING, ALLOCATIONS, AND CURRENT DISTRIBUTIONS Section 4.01. Percentage Interests. Except as adjusted pursuant to Section 4.02, for purposes of allocating profits and losses in accordance with Section 4.03, and for purposes of distributions under Section 4.08, each Partner shall have the percentage interest in the Partnership (collectively the "Percentage Interests" and individually, a "Percentage Interest") set forth on such Partner's signature page attached hereto. Section 4.02. Adjustments to Percentage Interests. (a) If (i) more than a de minimis contribution or distribution is made other than pro rata by Percentage Interests, as among the Partners, or (ii) a New Partner is admitted to the Partnership in accordance with Section 5.05 (with each such event described in Section 4.02(a)(i) or (ii) being referred to as an "Adjusting Event"), then the Percentage Interests of the Partners shall be immediately adjusted such that the Percentage Interest of each Partner equals a fraction, expressed as a percentage, in which the numerator equals the Current Value (as defined in Section 4.02(b)) of such Partner's interest in the Partnership, and the denominator equals the Net Value of the Partnership Assets (as defined in Section 4.02(b)). If the Percentage Interests of any Partners are adjusted pursuant to this Section 4.02(a), no Partner shall have the right to modify, rectify, or undo such adjustments thereafter, and such adjustments shall be made without the need for any further act or writing to effect any such adjustment. Each Partner hereby appoints the General Partner as his or its duly authorized agent and attorney-in-fact for purposes of preparing and executing any amendments to this Agreement necessary or desirable to reflect any adjustment of Percentage Interests under this Section 4.02(a). The rights granted to any Partner under this Section 4.02 shall be such Partner's sole and exclusive remedy for seeking relief with respect to any Adjusting Event. (b) For purposes of this Agreement, the "Net Value of the Partnership Assets" shall mean the net fair market value of all of the Partnership Assets at the time the Adjusting Event occurs, as determined by the General Partner in its sole discretion, and such Net Value of the Partnership Assets shall include the value of the contributions made in connection with the Adjusting Event. The Partners agree that because of the difficulty of valuing an interest in the Partnership due to the unique nature of the Partnership Assets, the General Partner is granted the sole discretion to determine such values and shall take into account whatever factors it deems appropriate to reflect such values, including, without limitation, the dollar value of all contributions to date and any other reasonable methods for determining the value of all of the Partnership Assets at the time of the Adjusting Event. Without limiting the foregoing, the General Partner may deem the Net Value of the Partnership Assets to equal the historical net cost of those assets. The "Current Value" of any Partner's interest in the Partnership shall be a dollar amount equal to the sum of (i) an amount equal to such Partner's Percentage Interest immediately prior to the Adjusting Event multiplied by the Net Value of the Partnership Assets determined above excluding the net fair market value (as determined by the General Partner) of any contributions associated with the Adjusting Event, plus (ii) the net fair market value (as determined by the General Partner) of any contributions made by such Partner associated with the Adjusting Event. Each Partner's Percentage Interest shall be immediately adjusted to reflect such valuation by the General Partner, effective as of the date of such Adjusting Event. (c) Notwithstanding anything contained in this Agreement to the contrary, if the Partnership's interest in any partnership or any investment entity it has invested in (each, an "Investment Entity"), be diminished, or if the Partnership's interest in an Investment Entity would have been diminished but for one or more Contributing Partners, due to a failure by the Partnership to contribute funds to an Investment Entity (a "Diminishment") which is in turn due to the failure of a Non-Contributing Partner to contribute his or its pro rata portion of a Call, then the Percentage Interests of the Non-Contributing Partners may be reallocated as determined by the General Partner in its sole discretion by decreasing the Percentage Interests of those Non-Contributing Partners, and increasing the Percentage Interests of the Contributing Partners, or if none, then the other Partners, such that any loss of the Partnership's interest in an Investment Entity which actually occurred or which would have otherwise occurred to the Partnership due to the Diminishment which is in excess of the aggregate decrease in Percentage Interest of the Non-Contributing Partners pursuant to Section 4.02(a) is borne solely by the Non-Contributing Partners. Section 4.03. Tax Status, Reports, and Allocations. (a) Notwithstanding any provision contained in this Agreement to the contrary, solely for federal income tax purposes, each of the Partners hereby recognizes that the Partnership will be subject to all provisions of Subchapter K of the Code; provided, however, that the filing of United States Partnership Returns of Income shall not be construed to extend the purposes of the Partnership or expand the obligations or liabilities of the Partners. (b) The General Partner or, at its discretion, an accountant ("Accountant") selected by the General Partner shall prepare or cause to be prepared all tax returns and statements, if any, that must be filed on behalf of the Partnership with any taxing authority and shall timely file such returns or statements. (c) For accounting and federal and (if any) state income tax purposes, all income, deductions, credits, gains and losses shall be allocated to the Partners pro rata in accordance with their respective Percentage Interests. (d) Notwithstanding subsection (c) above, any loss or deductions attributable to any Partnership recourse liability (as defined in Regulations Section 1.752-1(a)(i)) ("Recourse Debt") must be specially allocated to any Partner who bears the economic risk of loss with respect to the Recourse Debt to which such loss or deductions are attributable. If any allocations are made to any Partner pursuant to the foregoing sentence, then after any allocations required by Sections 4.04 and 4.05 hereof have been made but prior to allocations pursuant to Section 4.03(c), income shall be allocated to such Partner until on a cumulative basis an aggregate amount of income equal to such cumulative deductions and losses has been allocated to each such Partner. Section 4.04. Certain Gross Asset Value/Tax Differences. In accordance with Section 704(c) of the Code and the applicable Regulations thereunder, income, gain, loss, deduction, and tax depreciation with respect to any property contributed to the capital of the Partnership, or with respect to any property which has a Gross Asset Value different than its adjusted tax basis, shall, solely for income tax purposes, be allocated among the Partners so as to take into account any variation between the adjusted tax basis of such property to the Partnership and the Gross Asset Value of such property. Section 4.05. Minimum Gain and Income Offsets. (a) Definitions. (i) "Partner Minimum Gain" shall be "partner nonrecourse debt minimum gain," as defined in Regulations Section 1.704-2(i)(2) and determined in accordance with Regulations Sections 1.704-2(i)(3) and 1.704-2(k). (ii) "Partner Nonrecourse Debt" has the meaning set forth in Regulations Sections 1.704-2(b)(4) and 1.704-2(i). (iii) "Partner Nonrecourse Deduction" has the meaning set forth in Regulations Section 1.704-2(i). (iv) "Partnership Minimum Gain" has the meaning set forth in Regulations Section 1.704-2(d) and shall be determined in accordance with the provisions of Regulations Section 1.704-2(k). (v) "Regulations" means the temporary and permanent Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). (b) Minimum Gain. (i) Notwithstanding any other provision of this Agreement to the contrary, if the Partnership Minimum Gain on the last day of any fiscal year is less than the Partnership Minimum Gain on the last day of the immediately preceding fiscal year, then (before any other allocation of Partnership items for such year under this Agreement, other than as provided in paragraph (ii) below) there shall be specially allocated to each Partner items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain (determined in accordance with Regulations Section 1.704-2(g)). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2)(i) and (iii). This Section 4.05(b)(i) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith. (ii) Subsequent to any allocations under Section 4.05(b)(i) above, other than allocations of gain from the disposition of property subject to Partner Nonrecourse Debt, if Partner Minimum Gain on the last day of any fiscal year is less than the Partner Minimum Gain on the last day of the immediately preceding fiscal year, then, except as provided herein, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent fiscal years) in an amount equal to that Partner's share, if any, (determined in accordance with Regulations Section 1.704-2(i)(4)) of the net decrease in Partner Minimum Gain (such net decrease to be determined in a manner consistent with the provisions of Regulations Section 1.704-2(d) and 1.704-2(g)(3)). The items to be so allocated shall be determined in accordance with the provisions of Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii) and (iii). Notwithstanding the foregoing, no such special allocations of income and gain shall be made to the extent that the net decrease in Partner Minimum Gain described above arises because the liability ceases to be Partner Nonrecourse Debt due to a conversion, refinancing, or other change in the debt instrument that causes it to become partially or wholly a nonrecourse liability within the meaning of Regulations Section 1.752-1(a)(2). This Section 4.05(b)(ii) is intended to comply with the chargeback and other provisions of Regulations Section 1.704-2(i) and shall be interpreted consistently therewith. (c) Qualified Income Offset. Notwithstanding any other provision of this Agreement, if during any fiscal year any Partner (i) is allocated pursuant to Code Section 706(d) or Regulations Section 1.751-1(b)(2)(ii) any loss, items of loss, deductions, or Code Section 705(a)(2)(B) expenditures, (ii) is distributed any cash or property from the Partnership and such distributions exceed offsetting increases to such Partner's Capital Account that are reasonably expected to occur during such year, or (iii) receives any other adjustment, allocation, or distribution described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) and, as a result of such adjustment, allocation, or distribution, such Partner has a Qualified Income Offset Amount (as hereinafter defined), then items of income and gain (including gross income) for such fiscal year or other period (and, if necessary, subsequent fiscal years) shall (prior to any allocation pursuant to Section 4.03 hereof) be allocated to such Partner in an amount equal to his Qualified Income Offset Amount; provided, however, that any allocation of income or gain shall be required under this sentence only if and to the extent that such Partner would have a Qualified Income Offset Amount after all other allocations provided for in this Agreement have been tentatively made as if Sections 4.05(b) and (c) were not contained herein. As used herein, the term "Qualified Income Offset Amount" for a Partner means the excess, if any, of (x) the negative balance a Partner has in its Capital Account following the adjustment, allocation, or distribution described in the preceding sentence, over (y) the maximum amount that it is obligated (or is deemed to be obligated) to restore to the Partnership upon liquidation as determined in accordance with Regulations Sections 1.704-2(f), (g), and (i). This Section 4.05(c) is intended to satisfy the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. Section 4.06. Accounting. (a) The fiscal year of the Partnership shall end on the last day of December of each year. (b) The books of account of the Partnership shall be kept and maintained at all times at the principal place of business of the Partnership or at such other place or places approved by the General Partner. The books of account shall be maintained according to federal income tax principles using the accrual method of accounting, consistently applied, and shall show all items of income and expense. (c) If requested by any Partner, the General Partner shall cause a balance sheet of the Partnership dated as of the end of the fiscal year and a related statement of income or loss for the Partnership for such fiscal year to be prepared by the Accountant and furnished, at the expense of the Partnership, to each of the Partners on an annual basis, within ninety (90) days after the close of each fiscal year. (d) Each Partner shall have the right at reasonable times and upon reasonable advance notice during usual business hours to audit, examine, and make copies of or extracts from the books of account of the Partnership. Such right may be exercised through any agent or employee of such Partner designated by him or it or by an independent certified public accountant designated by such Partner. Each Partner shall bear all expenses incurred in any examination made on behalf of such Partner. Section 4.07. Bank Accounts. Funds of the Partnership shall be deposited in a Partnership account or accounts in the bank or banks as selected by the General Partner. Withdrawals from bank accounts shall only be made by the General Partner or such other parties as may be approved by the General Partner. Section 4.08. Current Distributions to Partners. Except as provided in Section 6.05 in connection with the termination and liquidation of the Partnership, the General Partner shall distribute funds at such times and in such amounts as it may determine, in its sole discretion, except that such funds shall be distributed by the General Partner to the Partners in accordance with their respective Percentage Interests at the time of the distribution. In determining the amount of funds to distribute pursuant to this Section 4.08, the General Partner may consider such factors as the need to allocate funds to any reserves for Partnership contingencies or any other Partnership purposes that the General Partner deems necessary or appropriate. The General Partner, in its sole discretion, may distribute undivided interests in Partnership Assets in- kind, provided, that such distribution shall be pro rata in accordance with the Partners' relative Percentage Interests. Section 4.09. Changes in Percentage Interests. If a Partner's Percentage Interest changes during any fiscal year, the allocations to be made pursuant to this Agreement shall be made in accordance with Section 706 of the Code, using any convention permitted by Section 706 of the Code and the Regulations promulgated thereunder and selected by the General Partner so as to equitably effectuate the allocations of this Article IV. Section 4.10. Tax Withholding. (a) If at any time requested by the General Partner, each Partner and each Substituted Partner (as defined in Section 5.03) shall deliver to the Partnership (i) an affidavit in form specified in Treasury Regulations Section 1.1445-2(b)(2)(iii) or otherwise in form satisfactory to the General Partner that the applicable Partner is not a "foreign person" within the meaning of Section 1445(e)(3) of the Code or otherwise subject to withholding under the provisions of any federal, state, local, foreign or other law, (ii) a withholding certificate issued by the United States Internal Revenue Service ("IRS") pursuant to Section 1445 of the Code, (iii) any other certificate that the General Partner may reasonably request with respect to any such laws, (iv) any other form reasonably requested by the General Partner relating to any Partner's status under any applicable law, and/or (v) a copy of any tax return or similar document of the applicable Partner that the General Partner may reasonably request with respect to any such law. (b) To the extent that any person (including without limitation the Master Partnership, the Partnership or the General Partner) is required by any applicable law to withhold or to make tax payments on behalf of or with respect to amounts distributed or distributable to, items allocated or allocable to, or otherwise for any Partner (each a "Tax Liability"), the General Partner may cause the Partnership to make such tax payments (each a "Tax Advance") as so required. The Partnership and the Master Partnership may be subject to provisions in the Master Agreement or otherwise that correspond to this Section 4.10; any payments corresponding to Tax Advances made directly or indirectly on behalf of the Partnership shall be deemed made on behalf of each Partner, pro rata in accordance with its relative Percentage Interest. At least ten (10) days, if commercially possible, prior to making a Tax Advance on behalf of or with respect to a Partner, the General Partner shall first notify such affected Partner. All Tax Advances made or deemed made on behalf of a Partner from any amount not otherwise distributable to such Partner shall be deemed to be a recourse loan to such Partner by the Partnership and shall be due and payable immediately after such Tax Advance is made by the Partnership, and if not repaid within three (3) days after the Tax Advance is made by the Partnership, the Tax Advance shall bear interest beginning on such third day at a rate equal to the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate permitted by law until repaid. (c) Notwithstanding anything to the contrary contained herein or in any other agreement between or among Partners, each Partner hereby agrees to indemnify, defend, and hold harmless the Master Partnership, the Partnership, the General Partner, their respective Affiliates, and any other person who directly or indirectly makes a Tax Advance or corresponding payment on behalf of such Partner from and against any Tax Liability of or with respect to such Partner, at any time, and this indemnity and hold harmless provision shall survive this Agreement and the termination of the Partnership; provided however, that the General Partner and its Affiliates shall not be indemnified hereunder for any Tax Liabilities to the extent any of them has withheld or withdrawn funds from the Partnership for purposes of making Tax Advances to satisfy such Tax Liabilities, and misappropriated or converted the funds so withheld or withdrawn. In the event of any claimed over-withholding, such Partner shall be limited to an action against the applicable government agencies for refund and hereby waives any claim or right of action against the General Partner or the Partnership on account of such withholding. (d) A payment to the Partnership or otherwise by a Partner with respect to any Tax Advance relating to such Partner shall not be deemed to be a capital contribution by such Partner and will in no way be considered in the calculations used to determine distributions under this Agreement. The General Partner may, and is hereby authorized to, withhold from any distributions or payments otherwise due to a Partner from the Partnership under this Agreement the amount of any Tax Advance made on behalf of such Partner that as of such date has neither been repaid to the Partnership nor been previously offset hereunder, and any amount withheld under this Section 4.10 shall be deemed for all purposes of this Agreement to have been distributed or paid to such Partner. If any Partner does not repay any Tax Advance within thirty (30) days of the General Partner giving such Partner a written final demand for payment, then such Partner's Percentage Interest may be forfeited in the sole discretion of the General Partner, and each Partner hereby grants the General Partner power of attorney, which shall survive each Partner's disability, to execute all documents to reflect such forfeiture; provided, however, that the applicable Partner shall remain liable to the Partnership or other Partners, as applicable, on a recourse basis for the full amount of the Tax Advance unpaid plus accrued, unpaid interest. Any Partner who does not repay a Tax Advance after a written final demand has been given by the General Partner shall pay, in addition to the Tax Advance and applicable interest, all expenses, including without limitation reasonable attorneys fees, incurred by the Partnership, the General Partner, and/or any other Partner in collecting the Tax Advance plus interest and/or pursuing any other remedy provided in this Section 4.10 and otherwise in this Agreement. ARTICLE V ASSIGNMENT Section 5.01. Prohibited Transfer. Except as specifically provided in this Article V and in Section 7.01, no Limited Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership unless prior written consent is obtained from the General Partner, and no General Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any encumbrance of all or any part of his or its interest in the Partnership without obtaining prior written Approval of the Partners. Any attempt so to transfer or encumber any such interest shall be null and void, ab initio. The Partners will be excused from accepting the performance of and rendering performance to any person other than the Partner hereunder (including any trustee or assignee of or for such Partner) as to whom such prior written consent has not been rendered. Section 5.02. Further Restrictions on Transfer. (a) In the event of any assignment or transfer permitted under this Article, the interest so assigned or transferred shall remain subject to all terms and provisions of this Agreement; the assignee or transferee shall be deemed, by accepting the interest so assigned or transferred, to have assumed all the obligations hereunder relating to the interests or rights so assigned or transferred and shall agree in writing to the foregoing if requested by the General Partner. Any transferee or assignee of the interest of a Partner shall be entitled only to receive distributions hereunder until such transferee or assignee has been admitted as a Substituted Partner; provided, however, that such transferee or assignee shall be subject to the Additional Capital Contribution provisions of Article III and that the Percentage Interest of such transferee or assignee shall be subject to reallocation pursuant to Section 4.02 in the event of an Adjusting Event. Until such transferee or assignee (other than an existing Partner) is admitted to the Partnership as a Substituted Partner, the Partner transferring all or any portion of his or its interest to such assignee or transferee shall remain primarily and directly liable for the performance of all his or its obligations under this Agreement. After the admission of such assignee or transferee as a Substituted Partner, such transferor Partner shall only be primarily and directly liable under this Agreement or otherwise for any obligations or liabilities accruing prior to the effective time of the admission of such Substituted Partner, unless such transferor Partner is released in writing from such obligations or liabilities by the General Partner and such release is Approved by the Partners. (b) Any Partner making or offering to make a transfer of all or any part of his or its interest in the Partnership shall indemnify and hold harmless the Partnership and all other Partners from and against any costs, damages, claims, suits, or fees suffered or incurred by the Partnership or any such other Partner arising out of or resulting from any claims by the transferee of such Partnership interest or any offerees of such Partnership interest in connection with such transfer or offer. Section 5.03. Substituted Partner. Except as otherwise provided in Section 7.01 hereof, an assignee or transferee (other than an existing Partner) of the interest of a Partner may be admitted as a substitute partner ("Substituted Partner") only with the written consent of the General Partner, which such consent shall be granted or denied in the sole discretion of the General Partner. Unless the assignee is already a General Partner, any assignee of a Partnership interest to whose admission such consent is given shall become and shall have only the rights and duties of a Limited Partner and the assigned Partnership interest shall thereafter be a Limited Partner's interest. Upon the receipt by the General Partner of an appropriate supplement to this Agreement pursuant to which such Substituted Partner agrees to be bound by all the terms and provisions of this Agreement, the General Partner shall reflect the admission of a Substituted Partner and the withdrawal of the transferring Partner, if appropriate, by preparing a supplemental exhibit, dated as of the date of such admission and withdrawal, and by filing it with the records of the Partnership. Any Substituted Partner shall, if required by the General Partner, prior to such admission, also execute any other documents requested by the General Partner, including, without limitation, an irrevocable power of attorney in form satisfactory to the General Partner appointing the General Partner as such person's attorney-in-fact with full power to execute, swear to, acknowledge, and file all certificates and other instruments necessary to carry out the provisions of this Agreement, including, without limitation, such undertakings as the General Partner may require for the payment of all fees and costs necessary to effect any such transfer and admission. Upon admission, such Substituted Partner shall be subject to all provisions of this Agreement in the place and stead of his assignor as if the Substituted Partner originally was a party to this Agreement. Section 5.04. Basis Adjustment. The Tax Matters Partner may cause, in its sole and absolute discretion, the Partnership to elect pursuant to Section 754 of the Code and the Regulations thereunder to adjust the basis of the Partnership Assets as provided by Sections 743 or 734 of the Code and the Regulations thereunder. Section 5.05. Admission of Additional Partners. (a) When Approved by the Partners, a new Partner (each a "New Partner") may be admitted to the Partnership. Such New Partner shall (i) be admitted for fair value, as determined by the General Partner in its reasonable discretion and in a manner consistent with the reallocation of Percentage Interests set forth in Section 4.02, and (ii) execute an appropriate supplement to this Agreement and to Exhibit A pursuant to which he agrees to be bound by all the terms and provisions of this Agreement. (b) Upon the receipt of the supplement described in Section 5.05(a), the General Partner shall reflect the admission of the New Partner and the reallocation of Percentage Interests in the records of the Partnership. The admission of a New Partner shall not cause the dissolution of the Partnership. Upon the admission of a New Partner pursuant to Section 5.05(a), the Percentage Interests shall be reallocated, with the New Partner receiving the Percentage Interest calculated in accordance with Section 4.02 that reflects, as determined by the General Partner in his sole discretion, the ratio of Current Value of the New Partner's contribution to the Net Value of the Partnership Assets, and with the Percentage Interests of each existing Partner being adjusted in accordance with Section 4.02. Section 5.06. Other Restricted Transfers. Notwithstanding any other provision herein to the contrary, unless prior written consent is given by the General Partner, no transfer of any interest in the Partnership may be made to any person who is related (within the meaning of Regulations Section 1.752-4(b)) to any lender of the Partnership whose loan constitutes a nonrecourse liability of the Partnership. ARTICLE VI WITHDRAWAL, DISSOLUTION, TERMINATION, AND LIQUIDATION Section 6.01. Withdrawal. No Limited Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written consent of the General Partner and, except as provided in Section 7.01 hereof, no General Partner shall at any time retire or withdraw from the Partnership without obtaining the prior written Approval of the Partners. Retirement or withdrawal by any Partner in contravention of this Section 6.01 shall subject such Partner to liability for all damages caused any other Partner (other than a Partner who is, at the time of such withdrawal, in default under this Agreement) by such retirement or withdrawal and the consequential dissolution of the Partnership. Any notice of withdrawal must be in writing. Section 6.02. Dissolution of the Partnership. The Partnership shall be dissolved upon the occurrence of any of the following: (a) The withdrawal, as defined in the Act, of a General Partner, unless: (i) the remaining General Partner, if any, elects in writing within ninety (90) days after such event to reconstitute the Partnership, to continue as the General Partner, and to continue the Partnership and its business, or (ii) there is no remaining or Successor General Partner (as defined in Section 7.01), then within ninety (90) days after such event, all of the Limited Partners agree to appoint in writing a successor General Partner, as of the date of the withdrawal of the General Partner, and agree to reconstitute the Partnership and continue the business of the Partnership, and such successor General Partner agrees in writing to accept such election, or (iii) the withdrawal of the General Partner results from its removal by the Limited Partners as provided in Section 7.01 and a Successor General Partner is appointed by the Limited Partners as provided in Section 7.01; (b) The sale or other disposition, not including an exchange, of substantially all of the assets of the Partnership (except under circumstances where all or a portion of the purchase price is payable after the closing of the sale or other disposition); (c) December 31, 2048, unless extended by the consent of all Partners; or (d) When Approved by the Partners. Except as expressly provided, nothing contained in this Section 6.02 is intended to grant to any Partner the right to dissolve the Partnership at will (by retirement, resignation, withdrawal, or otherwise) or to exonerate any Partner from liability to the Partnership and the remaining Partners if he or it dissolves the Partnership at will. Section 6.03. Continuation of Partnership. If the Partnership is continued as provided in Section 6.02(a)(i), (ii) or (iii), then, as of the date of withdrawal, the General Partner with respect to which an event of withdrawal under Section 6.02 has occurred (or his or its estate or successor in interest) (the "Withdrawing General Partner") shall have none of the powers of a General Partner under this Agreement or applicable law and shall have only the rights and powers of an assignee of a Partner hereunder to share in any Partnership profits, losses, gains, and distributions in accordance with his or its Percentage Interest and shall have no other rights or powers of a Partner hereunder; provided, however, that any Withdrawing General Partner shall be subject to the Additional Capital Contribution provisions of Article III, that the Percentage Interest of such Withdrawing General Partner shall be subject to reallocation under Section 4.02 in the event of any Adjusting Event, and that any Withdrawing General Partner who was removed by the Limited Partners pursuant to Section 7.01 shall become a Limited Partner if its interest is so converted as provided in Section 7.01. Section 6.04. Death, etc. of a Limited Partner, Divorce of a Partner. (a) The death, disability, withdrawal, termination (in the case of a Limited Partner that is a partnership or a trust), dissolution (in the case of a Limited Partner that is a corporation or limited liability company), retirement, or adjudication as a bankrupt of a Limited Partner (the "Withdrawing Limited Partner") shall not dissolve the Partnership, but, subject to the provisions of Section 6.04(b), the rights of such Withdrawing Limited Partner to share in the profits and losses of the Partnership and to receive distributions of Partnership funds shall, upon the happening of such an event, pass to the Withdrawing Limited Partner's estate, legal representative, or successors in interest, as the case may be, subject to this Agreement, and the Partnership shall continue as a limited partnership. (b) Upon the occurrence of an event described in Section 6.04(a), the General Partner shall, in its sole discretion, elect to either continue the Partnership business (i) with the successors, assigns, heirs, devises, beneficiaries, estate, or other transferee of such Withdrawing Limited Partner (collectively, the "Distributees") as provided in Section 6.04(c) or (ii) with the Partnership purchasing the interest of such Withdrawing Limited Partner from all of his or its Distributees as provided in Section 6.04(d). (c) If the General Partner elects to proceed pursuant to Section 6.04(b)(i), the Distributees of such Withdrawing Limited Partner shall succeed to his or its interest in the Partnership, shall be admitted as Limited Partners if approved by the General Partner in its sole discretion, and shall be bound by the terms and provisions of the Agreement; provided, however, if the interest of such Withdrawing Limited Partner passes, either at the time of an occurrence described in Section 6.04(a) or subsequent thereto, to more than one Distributee, then within sixty (60) days after the distribution to more than one Distributee, the Distributees shall appoint one person, firm, or corporation as the agent of and for such Distributees (the "Agent"). Such Agent shall be responsible for collecting, receiving, and making all payments and Additional Capital Contributions required under this Agreement, shall vote the entire interest of the Distributees if such vote is required by this Agreement, the Act, or applicable law and shall perform all other obligations of such Distributees performable by reason of or arising from their interest in the Partnership as Limited Partners; provided, that the Agent shall not be admitted as a Partner of the Partnership nor shall such Agent be entitled to exercise any voting rights hereunder unless such rights are approved by the General Partner in its sole discretion. All payments and/or disbursements due to the Distributees for or arising from their interest in the Partnership shall be deemed to have been validly made to such Distributees by paying the same to such Agent. In the event that the Distributees for any reason fail to designate such agent in writing in the manner and within the time prescribed and fail to cure such default after ten (10) days written notice from the General Partner to correct such default, the General Partner shall retain any funds or property otherwise distributable to such Distributees under this Agreement and shall appoint an Agent of and for the Distributees. To the fullest extent allowed by applicable law, the defaulting Distributees will indemnify, defend, and hold harmless such Agent, the General Partner, and the Partners from and against any losses, expenses, judgments, fines, settlements, and damages incurred by any of them with respect to the provisions of this Section 6.04(c). (d) If the General Partner elects to proceed pursuant to Section 6.04(b)(ii), then the General Partner shall cause the Partnership to purchase the interest of such Withdrawing Limited Partner in the Partnership from his or its Distributees at a price equal to the Current Value of such interest, determined as though the effective date of the withdrawal of such Withdrawing Limited Partner were an Adjusting Event. (e) If, upon the divorce of any individual Partner, the spouse of any such Partner receives an interest in the Partnership pursuant to the terms of any divorce property settlement agreement, divorce decree, or otherwise, then the Partnership shall have the right, as determined by the General Partner, to purchase the interest of such spouse in the Partnership at a price equal to the Current Value of such interest, determined as though the effective date of such divorce were an Adjusting Event. Section 6.05. Termination and Liquidation of the Partnership. (a) Upon dissolution of the Partnership unless continued pursuant to Section 6.02, the Partnership shall be terminated as rapidly as business circumstances will permit. At the direction of the General Partner, or a Partner Approved by the Partners if the dissolution of the Partnership is caused by the withdrawal of the General Partner (the General Partner or the other Partner, as the case may be, being herein called the "Terminating Partner"), a full accounting of the assets and liabilities of the Partnership shall be taken and a statement of the Partnership Assets and a statement of each Partner's Capital Account shall be furnished to all Partners as soon as is reasonably practicable. The Terminating Partner shall take such action as is necessary so that the Partnership's business shall be terminated, its liabilities discharged, and its assets distributed as hereinafter described. The Terminating Partner may sell all of the Partnership Assets or distribute the Partnership Assets in kind; provided, however, that the Terminating Partner shall ascertain the Net Value of the Partnership Assets by appraisal or other reasonable means of all Partnership Assets remaining unsold and each Partner's Capital Account shall be charged or credited, as the case may be, as if such Partnership Assets had been sold at the Net Value of the Partnership Assets and the income, gains, losses, deductions, and credits realized thereby had been allocated to the Partners in accordance with Article IV hereof. A reasonable period of time shall be allowed for the orderly termination of the Partnership to minimize the normal losses of a liquidation process. (b) After the payment of all expenses of liquidation and of all debts and liabilities of the Partnership in such order or priority as provided by law (including any debts or liabilities to Partners, who shall be treated as secured or unsecured creditors, as may be the case, to the extent permitted by law, for sums loaned to the Partnership, if any, as distinguished from capital contributions) and after all resulting items of Partnership income, gain, credit, loss, or deduction are credited or debited to the Capital Accounts of the Partners in accordance with Articles III and IV hereof, all remaining Partnership Assets shall then be distributed among the Partners in accordance with relative Capital Account balances. Upon termination, a Partner may not demand and receive cash in return for such Partner's capital contributions and no Partner shall have any obligation to restore any deficit that may then exist in that Partner's Capital Account. Distribution on termination may be made by the distribution to each Partner of an undivided interest in any asset of the Partnership that has not been sold at the time of termination of the Partnership. Section 6.06. General Partners Not Personally Liable. No General Partner nor any affiliate of any General Partner shall be personally liable for the return of the Capital Contributions of any Partner, and such return shall be made solely from available Partnership Assets, if any, and each Limited Partner hereby waives any and all claims it may have against any General Partner or any such affiliate in this regard. Section 6.07. Provisions Cumulative. All provisions of this Agreement relating to the dissolution, liquidation, and termination of the Partnership shall be cumulative to the extent not inconsistent with other provisions herein; that is, the exercise or use of one of the provisions hereof shall not preclude the exercise or use of any other provision of this Agreement to the extent not inconsistent therewith. ARTICLE VII GENERAL Section 7.01. Removal and Replacement of General Partner. (a) The General Partner may be removed and replaced at any time upon the Approval of the Partners by sending the General Partner a written notice of such removal. In the event of the removal of the General Partner, a successor General Partner ("Successor General Partner") shall be selected by Approval of the Partners. The Limited Partners, by Approval of the Partners, shall have the right to transfer a portion of their interests to such Successor General Partner and such interest shall be converted to that of a general partner. The removal will not be effective until the Successor General Partner has been admitted to the Partnership as a General Partner, such admission to be Approved by the Partners. After the admission of the Successor General Partner, the Successor General Partner shall have all the rights, powers, and obligations of a General Partner under this Agreement and all references in this Agreement to the "General Partner" shall refer to the Successor General Partner appointed in this Section 7.01. Third parties shall be conclusively deemed entitled to rely upon the representation of FW Group that FW Group is the General Partner unless such third parties have actual notice of its replacement. (b) Following the replacement of the General Partner, the Limited Partners may, as is Approved by the Partners, convert such Partner's interest into a Limited Partner's interest. The Successor General Partner shall have the authority to execute and file all documents necessary to signify such conversion. The General Partner hereby appoints the Successor General Partner as his or its attorney-in-fact to execute and file all documents signifying such conversion including, without limitation, an amendment to the Certificate of Limited Partnership. Section 7.02. Competing Business. Notwithstanding anything to the contrary contained in or inferable from this Agreement, the Act, or any other statute or principle of law, neither the Partners nor any of their shareholders, directors, officers, employees, partners, agents, family members, or affiliates (each a "Partner Affiliate") shall be prohibited or restricted in any way from investing in or conducting, either directly or indirectly, and may invest in and/or conduct, either directly or indirectly, businesses of any nature whatsoever, including the ownership and operation of businesses or properties similar to or in the same geographical area as those held by the Partnership. Any investment in or conduct of any such businesses by a Partner or any Partner Affiliate shall not give rise to any claim for an accounting by the other Partners or the Partnership or any right to claim any interest therein or the profits therefrom. Section 7.03. LIMITED PARTNER REPRESENTATIONS. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EACH LIMITED PARTNER HEREBY REPRESENTS AND WARRANTS TO THE PARTNERSHIP, THE GENERAL PARTNER, AND TO EACH OFFICER, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AND AGENT OF THE GENERAL PARTNER THAT: (a) THE INTEREST IN THE PARTNERSHIP OF SUCH LIMITED PARTNER IS ACQUIRED FOR INVESTMENT PURPOSES ONLY FOR HIS OR ITS OWN ACCOUNT AND NOT WITH A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION, REOFFER, RESALE, OR OTHER DISPOSITION NOT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER (THE "1933 ACT") AND APPLICABLE STATE SECURITIES LAWS; (b) SUCH LIMITED PARTNER, ALONE OR TOGETHER WITH HIS OR ITS REPRESENTATIVES, POSSESSES SUCH EXPERTISE, KNOWLEDGE, AND SOPHISTICATION IN FINANCIAL AND BUSINESS MATTERS GENERALLY, AND IN THE TYPE OF TRANSACTIONS IN WHICH THE PARTNERSHIP PROPOSES TO ENGAGE IN PARTICULAR, THAT HE OR IT IS CAPABLE OF EVALUATING THE MERITS AND ECONOMIC RISKS OF ACQUIRING AND HOLDING HIS OR ITS PARTNERSHIP INTEREST, AND THAT HE OR IT IS ABLE TO BEAR ALL SUCH ECONOMIC RISKS NOW AND IN THE FUTURE; (c) SUCH LIMITED PARTNER HAS HAD ACCESS TO ALL OF THE INFORMATION WITH RESPECT TO THE INTEREST ACQUIRED BY HIM OR IT UNDER THIS AGREEMENT THAT HE OR IT DEEMS NECESSARY TO MAKE A COMPLETE EVALUATION THEREOF AND HAS HAD THE OPPORTUNITY TO QUESTION THE GENERAL PARTNER CONCERNING SUCH INTEREST; (d) SUCH LIMITED PARTNER'S DECISION TO ACQUIRE HIS OR ITS INTEREST FOR INVESTMENT HAS BEEN BASED SOLELY UPON THE EVALUATION MADE BY HIM OR IT; (e) SUCH LIMITED PARTNER IS AWARE THAT HE OR IT MUST BEAR THE ECONOMIC RISK OF HIS OR ITS INVESTMENT IN THE PARTNERSHIP FOR AN INDEFINITE PERIOD OF TIME BECAUSE INTERESTS IN THE PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE SECURITIES LAWS OF ANY STATES, AND, THEREFORE, CANNOT BE SOLD UNLESS SUCH INTERESTS ARE SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE; (f) SUCH LIMITED PARTNER IS AWARE THAT ONLY THE PARTNERSHIP CAN TAKE ACTION TO REGISTER SUCH INTEREST IN THE PARTNERSHIP AND THE PARTNERSHIP IS UNDER NO SUCH OBLIGATION AND DOES NOT PROPOSE TO ATTEMPT TO DO SO; AND (g) SUCH LIMITED PARTNER IS AWARE THAT THIS AGREEMENT PROVIDES RESTRICTIONS ON THE ABILITY OF A LIMITED PARTNER TO SELL, TRANSFER, ASSIGN, MORTGAGE, HYPOTHECATE, OR OTHERWISE ENCUMBER HIS OR ITS INTEREST IN THE PARTNERSHIP. Section 7.04. Notice. (a) All notices, demands, or requests provided for or permitted to be given pursuant to this Agreement must be in writing. (b) All notices, demands, and requests to be sent to a Partner, any Distributee(s) (or their Agent) of the interest of a Partner, or any Substituted Partner pursuant to this Agreement shall be deemed to have been properly given or served if: (i) personally delivered, (ii) deposited prepaid for next day delivery by Federal Express, or other similar overnight courier services, addressed to such Partner, (iii) deposited in the United States mail, addressed to such Partner, prepaid and registered or certified with return receipt requested, or (iv) transmitted via telecopier or other similar device to the attention of such Partner, all at the address or telecopy number for such Partner set forth on such Partner's signature page attached hereto (as may be changed in accordance with subsection (d) below). (c) All notices, demands, and requests so given shall be deemed received: (i) when personally delivered, (ii) twenty-four (24) hours after being deposited for next day delivery with an overnight courier, (iii) forty-eight (48) hours after being deposited in the United States mail, or (iv) twelve (12) hours after being telecopied or otherwise transmitted and receipt has been confirmed. (d) The Partners, any Substituted Partners, and their respective Distributee(s)(or their Agent) shall have the right from time to time, and at any time during the term of this Agreement, to change their respective addresses and each shall have the right to specify as his or its address any other address within the United States of America by giving to the other parties at least thirty (30) days written notice thereof, in the manner prescribed in Section 7.04(b); provided, however, that to be effective, any such notice must be actually received (as evidenced by a return receipt). (e) All distributions to any Partner shall be made at the address to which notices are to be sent unless otherwise specified in writing by such Partner. Section 7.05. Amendments. Amendments and supplements may be made to or restatements made of this Agreement or the Certificate of Limited Partnership (or any exhibits or schedules attached to any of them), from time to time by the General Partner, without the consent of any of the other Partners, to effect any Major Decisions Approved by the Partners or any amendments which amend this Agreement to admit Substituted Partners, to reflect the removal and replacement of the General Partner, to reflect adjustments to the Percentage Interests of the Partners following an Adjusting Event, to reflect other transfers, assignments, admissions, withdrawals, conversions, or removals authorized by this Agreement, or to effect any non-material amendments to this Agreement or the Certificate of Limited Partnership. All other amendments to this Agreement and the Certificate of Limited Partnership shall require the Approval of the Partners. Section 7.06. Powers of Attorney. Each Limited Partner hereby constitutes and appoints the General Partner, with full power of substitution, as his or its true and lawful attorney-in-fact and empowers and authorizes such attorney, in the name, place, and stead of such Limited Partner, to make, execute, sign, swear to, acknowledge, and file in all necessary or appropriate places all documents (and all amendments or supplements to or restatements of such documents necessitated by valid amendments to or actions permitted under this Agreement) relating to the Partnership and its activities, including, without limitation: (a) any amendments to this Agreement approved as provided herein, (b) the Certificate of Limited Partnership and any amendments thereto, under the laws of the State of Delaware or in any other state or jurisdiction in which such filing is deemed advisable by the General Partner, (c) any applications, forms, certificates, reports, or other documents, or amendments thereto which may be requested or required by any federal, state, or local governmental agency, securities exchange, securities association, self-regulatory organization, or similar institution and which are deemed necessary or advisable by the General Partner, (d) any other instrument which may be required to be filed or recorded in any state or county or by any governmental agency, or which the General Partner deems advisable to file or record, including, without limitation, certificates of assumed name and documents to qualify foreign limited partnerships in other jurisdictions, (e) any documents which may be required to effect the continuation of the Partnership, the admission of New Partners, Substituted Partners, or Distributees, the withdrawal of any Partner, the purchase of the interest in the Partnership of any ex-spouse of a Partner, or the dissolution and termination of the Partnership, (f) any and all reports, schedules, certificates, forms and other documents, including, but not limited to, Schedules 13D and 13F, Forms 3 and 4, and any other such forms as may be required to be filed by the Partnership under the Securities Exchange Act of 1934, Federal Reserve U-1s, notes, drafts, credit or loan agreements, financing statements, security agreements, bank resolutions, and any and all other documents and instruments as may be necessary or desirable in the sole discretion of the attorney so acting, all in carrying out the purposes of the Partnership, (g) making certain elections contained in the Code or state law governing taxation of limited partnerships, and (h) performing any and all other ministerial duties or functions necessary for the conduct of the business of the Partnership. Each Limited Partner hereby ratifies, confirms, and adopts as his own, all actions that may be taken by such attorney-in-fact pursuant to this Section 7.06. Each Limited Partner acknowledges that this Agreement permits certain amendments to be made and certain other actions to be taken or omitted to be taken by less than all of the Partners if approved in accordance with the provisions hereof. By their execution hereof, each Limited Partner also grants the General Partner a power of attorney to execute any and all documents necessary to reflect any action that is approved in accordance with the provisions hereof. This power of attorney is coupled with an interest and shall continue notwithstanding the subsequent incapacity or death of the Limited Partner. Each Limited Partner shall execute and deliver to the General Partner an executed and appropriately notarized power of attorney in such form consistent with the provisions of this Section 7.06 as the General Partner may request. Section 7.07. GOVERNING LAWS AND VENUE. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTNERS HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. Section 7.08. Rule of Construction. The general rule of construction for interpreting a contract, which provides that the provisions of a contract should be construed against the party preparing the contract, is waived by the parties. Each party acknowledges that he or it was represented by separate legal counsel in this matter who participated in the preparation of this Agreement or he or it had the opportunity to retain counsel to participate in the preparation of this Agreement but chose not to do so. Section 7.09. Entire Agreement. This Agreement, including all exhibits to this Agreement and, if any, exhibits to such exhibits, contains the entire agreement among the parties relative to the matters contained in this Agreement. Section 7.10. Waiver. No consent or waiver, express or implied, by any Partner to or for any breach or default by any other Partner in the performance by such other Partner of his or its obligations under this Agreement shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Partner of the same or any other obligations of such other Partner under this Agreement. Failure on the part of any Partner to complain of any act or failure to act of any of the other Partners or to declare any of the other Partners in default, regardless of how long such failure continues, shall not constitute a waiver by such Partner of his or its rights hereunder. Section 7.11. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby, and the intent of this Agreement shall be enforced to the greatest extent permitted by law. Section 7.12. Binding Agreement. Subject to the restrictions on transfers and encumbrances set forth in this Agreement, this Agreement shall inure to the benefit of and be binding upon the undersigned Partners and their respective legal representatives, successors, and assigns. Whenever, in this Agreement, a reference to any party or Partner is made, such reference shall be deemed to include a reference to the legal representatives, successors, and assigns of such party or Partner. Section 7.13. Tense and Gender. Unless the context clearly indicates otherwise, the singular shall include the plural and vice versa. Whenever the masculine, feminine, or neuter gender is used inappropriately in this Agreement, this Agreement shall be read as if the appropriate gender was used. Section 7.14. Captions. Captions are included solely for convenience of reference and if there is any conflict between captions and the text of this Agreement, the text shall control. Section 7.15. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which when taken together shall constitute a single counterpart instrument. Executed signature pages to any counterpart instrument may be detached and affixed to a single counterpart, which single counterpart with multiple executed signature pages affixed thereto constitutes the original counterpart instrument. All of these counterpart pages shall be read as though one and they shall have the same force and effect as if all of the parties had executed a single signature page. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Each of the undersigned has executed and delivered this Agreement in Fort Worth, Texas, to be effective as of the Effective Date. GENERAL PARTNER 201 Main Street FW GROUP GENPAR, INC., Suite 3100 a Texas corporation Fort Worth, Texas 76102 By: /s/ W. R. Cotham W. R. Cotham, Vice President LIMITED PARTNER 201 Main Street Suite 2600 Fort Worth, Texas 76102 /s/ W. R. Cotham W. R. Cotham, Nominee EXHIBIT A TO THE LIMITED PARTNERSHIP AGREEMENT OF MHX INVESTORS, L.P. INITIAL CAPITAL PERCENTAGE GENERAL PARTNER CONTRIBUTION INTEREST FW Group $ 10.00 1.00% LIMITED PARTNER Nominee $ 990.00 99.00% $ 1,000.00 100.00% -----END PRIVACY-ENHANCED MESSAGE-----