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                                                          EXHIBIT 10.2



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                                      THIRD

                              AMENDED AND RESTATED

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                        SLC OPERATING LIMITED PARTNERSHIP





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                                TABLE OF CONTENTS


ARTICLE 1

         Definitions..........................................................4
         1.1      Definitions.................................................4

ARTICLE 2

         Continuation and Business of the Partnership........................17
         2.1      Continuation...............................................17
         2.2      Name.......................................................18
         2.3      Character of the Business..................................18
         2.4      Location of Principal Place of Business....................18
         2.5      Registered Agent and Registered Office.....................18
         2.6      Restatement of Agreement...................................19

ARTICLE 3

         Term................................................................19
         3.1      Commencement...............................................19
         3.2      Dissolution................................................19

ARTICLE 4

         Capital Contributions...............................................19
         4.1      Capital Contributions; OP Units............................19
         4.2      Redemption of OP Units Held by Limited Partner.  ..........21
         4.3      Percentage Interests.......................................21
         4.4      Purchase Rights............................................22
         4.5      No Third Party Beneficiaries...............................22
         4.6      No Interest on or Return of Capital Contribution...........22

ARTICLE 5

         Indemnification.....................................................22
         5.1      Indemnification of the General Partner.....................22
         5.2      Indemnification of Limited Partners........................23
         5.3      Notice of Claims...........................................25
         5.4      Third Party Claims.........................................25
         5.5      Indemnification Pursuant to Formation Agreement............26


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ARTICLE 6

         Allocations, Distributions and Other Tax and Accounting Matters.....26
         6.1      Allocations................................................26
         6.2      Distributions..............................................31
         6.3      Books of Account...........................................32
         6.4      Reports....................................................32
         6.5      Tax Elections and Returns..................................33
         6.6      Tax Matters Partner........................................33
         6.7      Withholding Payments Required By Law.......................33

ARTICLE 7

         Rights, Duties and Restrictions of the General Partner..............34
         7.1      Powers and Duties of the General Partner...................34
         7.2      Reimbursement of the General Partner.......................38
         7.3      Outside Activities of the General Partner..................38
         7.4      Contracts with Affiliates..................................38
         7.5      Title to Partnership Assets................................39
         7.6      Reliance by Third Parties..................................39
         7.7      Liability of the General Partner...........................39
         7.8      Other Matters Concerning the General Partner...............40
         7.9      Operation of SLT in Accordance with REIT Requirements......40
         7.10     Replacement of General Partner.............................41

ARTICLE 8

         Dissolution, Liquidation and Winding-Up.............................41
         8.1      Accounting.................................................41
         8.2      Distribution on Dissolution................................41
         8.3      Documentation of Liquidation...............................43

ARTICLE 9

         Transfer............................................................43
         9.1      General Partner............................................43
         9.2      Transfers by Limited Partners..............................44
         9.3      Certain Restrictions on Transfer...........................45
         9.4      Effective Dates of Transfers...............................45
         9.5      Transfer...................................................46
         9.6      Nevada Gaming Control Act..................................46


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ARTICLE 10

         Rights and Obligations of the Limited Partners......................47
         10.1     No Participation in Management.............................47
         10.2     Bankruptcy of a Limited Partner............................47
         10.3     No Withdrawal..............................................47
         10.4     Conflicts..................................................47
         10.5     Provision of Information...................................48
         10.6     Power of Attorney..........................................49
         10.7     Ownership of Units.........................................50
         10.8     Waiver of Fiduciary Duty...................................50

ARTICLE 11

         Amendment of Partnership Agreement, Meetings........................51
         11.1     Amendments.................................................51
         11.2     Meetings of the Partners; Notices to Partners..............52
         11.3     Mergers ...................................................53

ARTICLE 12

         General Provisions..................................................53
         12.1     No Liability of Directors and Others.......................53
         12.2     Notices....................................................53
         12.3     Controlling Law............................................53
         12.4     Execution of Counterparts..................................54
         12.5     Severability...............................................54
         12.6     Entire Agreement...........................................54
         12.7     Paragraph Headings.........................................54
         12.8     Gender, Etc................................................54
         12.9     Number of Days.............................................54
         12.10    Partners Not Agents........................................55
         12.11    Assurances.................................................55
         12.12    Waiver of Partition........................................55


                                LIST OF EXHIBITS

Exhibit

    A     List of Partners, Percentage Interests and OP Units

    A-1   List of Class A Limited Partners, Percentage Interests and Class A OP
          Units

    A-2   List of Class B Limited Partners, Percentage Interests and Class B OP
          Units


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    B             Notice Addresses of Partners


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         THE LIMITED PARTNERSHIP INTERESTS REFERRED TO IN THIS AGREEMENT HAVE
         NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
         ANY STATE SECURITIES LAWS. REFERENCE IS MADE TO ARTICLE 9 OF THIS
         AGREEMENT FOR PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE
         OR OTHER TRANSFER OF THESE INTERESTS.


                                      THIRD

                              AMENDED AND RESTATED

                          LIMITED PARTNERSHIP AGREEMENT

                                       OF

                        SLC OPERATING LIMITED PARTNERSHIP


                  THIS THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT (this "Agreement") is made and entered into as of the Effective Time
(as defined below), by and among Starwood Hotels & Resorts Worldwide, Inc., a
Maryland corporation ("SLC"), as General Partner, and the persons whose names
are set forth on Exhibit A, Exhibit A-1 and Exhibit A-2 hereto, as each such
Exhibit may be amended from time to time, as limited partners, pursuant to the
provisions of the Delaware Revised Uniform Limited Partnership Act (the "Act").


                                    RECITALS


A. SLC, Columbus Operators, Inc., Hotel Investors of Arizona, Inc., Hotel
Investors of Michigan, Inc., Hotel Investors of Virginia, Inc., Western Host,
Inc., Hotel Investors Corporation of Nevada, Inc., Hotel Investors of Nebraska,
Inc., Berl Holdings, L.P., Starwood-Apollo Hotel Partners VIII, L.P.,
Starwood-Apollo Hotel Partners IX, L.P., Starwood-Nomura Hotel Investors, L.P.,
Starwood/Wichita Investors, L.P., Starwood-Huntington Partners, L.P., and
Woodstar Partners I, L.P., were the parties to that certain Limited Partnership
Agreement of SLC Operating Limited Partnership, dated as of December 15, 1994
(hereinafter, the "Original Agreement" and the "Partnership," respectively).

         B. Firebird Consolidated Partners, L.P., was admitted as a limited
partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment dated March 24, 1995.


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         C. The Original Agreement was restated by that certain Amended and
Restated Limited Partnership Agreement of SLC Operating Limited Partnership by
and between SLC, as General Partner, and the General Partners and the Limited
Partners of the Partnership, as such groups were then constituted, dated as of
June 29, 1995 (the "Original Restated Agreement").

         D. The Original Restated Agreement was amended by that certain
Amendment by and between SLC, as General Partner, and the General Partners and
the Limited Partners of the Partnership, as such groups were then constituted,
dated as of May 14, 1996.

         E. Philadelphia HSR Limited Partnership ("HSR") was admitted as a
limited partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment (Operating Partnership) dated as of June 3, 1996.

         F. Starwood/Wichita Investors, L.P., Berl Holdings, L.P.,
Starwood-Huntington, L.P., Woodstar Partners I, L.P., and Wichita Harvey
Partners, Ltd., transferred their respective interests in the Partnership to SRL
Holdings, Inc., Starwood Capital Group I, L.P., Starwood Opportunity Fund II,
L.P., Moonwood Investment Partners, L.P., Woodstar II, L.P., Hospitality
Partners, Bristol Hotel Management Corp., and Edward J. Rohling, and each such
Person was admitted as a limited partner of the Partnership pursuant to that
certain Admission of Limited Partners Agreement dated as of June 4, 1996.

         G. Philadelphia HIR Limited Partnership ("HIR") was admitted as a
limited partner of the Partnership pursuant to that certain Admission of Limited
Partner, Consent and Amendment (Operating Partnership) dated as of July 1, 1996.

         H. Starwood-Apollo Hotel Partners VIII, L.P., transferred its interest
in the Partnership to SAHI, Inc., Starwood Hotel Investors, L.P., and AP-GP
Midstar Hotels VIII, Inc.; Starwood-Apollo Hotel Partners IX, L.P., transferred
its interest in the Partnership to SAHI, Inc., Starwood Hotel Investors, L.P.,
and AP-GP Midstar Hotels IX, Inc.; Starwood Hotel Investors, L.P., transferred
its interest in the Partnership to Starwood Hotel Investors II, L.P., SAHI, Inc.
and AP-GP Master Midstar, L.P.; and AP-GP Midstar Hotels VIII, Inc., AP-GP
Midstar Hotels IX, Inc., and AP-GP Master Midstar, L.P., transferred their
respective interests in the Partnership to Apollo Real Estate Investment Fund,
L.P., and each of Starwood Hotel Investors II, L.P., SAHI, Inc. and Apollo Real
Estate Investment Fund was admitted as a limited partner of the Partnership
pursuant to that certain Admission of Limited Partners Agreement dated as of
December 12, 1996;

         I. Starwood-Nomura Hotel Investors, L.P., SRL Holdings, Inc., Starwood
Capital Group, L.P., Moonwood Investment Partners, L.P., Woodstar Partners II,
L.P., Berl Holdings I, Inc., SAHI, Inc., and Harveywood Hotel Investors II,
L.P., transferred their interests in the Partnership to Burden Direct Investment
Fund I., L.P., Ziff Investors Partnership, L.P., II, Carly Simon, Lambster
Partners Limited Partners, Montrose Corporation, Star Investors G.P., Meridian
Investment Group, 1985 Trust f/b/o Clate Joseph Korsant, 1985 Trust f/b/o Justin
Frederick Korsant, Jack Nash, the Nash Family Partnership, Brainard Holdings,
Inc., Lowell D. Kraff, Max C. Chapman, Alan Schwartz, Geoffrey T. Boisi, Gregory
Beer, Charles E. Mueller, James A.


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Kleeman, Steve Goldman, Mike Mueller, James R. Gates, John Z. Kukral, John F.
Couture, Barry S. Sternlicht, the Barry S. Sternlicht Family Spray Trust I, the
Barry S. Sternlicht Family Spray Trust II, the Barry S. Sternlicht Family Spray
Trust III, James G. Babb, III, Madison F. Grose, the Madison F. Grose
Irrevocable Insurance Trust, Merrick R. Kleeman, JDE Revocable Trust u/a dated
December 31, 1996, Eugene A. Gorab, Jerome C. Silvey, Geoffrey Beer, Jay
Sugarman, Jennifer Albero, Steven Fiore, James Oldham, Jeff Dishner, Ellis F.
Rinaldi, and J. Peter Paganelli and each such Person was admitted as a limited
partner of the Partnership pursuant to forty-four (44) separate Admission of
Limited Partner Agreements each dated as of December 31, 1996.

         J. The Prudential Insurance Company of America, on behalf of Prudential
Property Investment Separate Account II, Eleanor Mendell, as Trustee of the Gary
Mendell Family Trust, Gary Mendell, Ellen-Jo Mendell, Stephen Mendell, Judith K.
Rushmore, Murray Dow II, Westport Hospitality, Inc., Zapco Interest Holdings,
LP, Zapco Holdings, Inc., Zapco Holdings, Inc. Deferred Compensation Plan Trust,
Orna L. Shulman, Arthur Green, Michael Hall, Mark Rosinsky, Randi Rosinsky, John
Daily, Felix Cacciato, Thomas Clearwater, Harvey Moore, and Tracy Driscoll
(collectively, the "HEI Contributors") were each admitted as a limited partner
of the Partnership pursuant to that certain Admission of Limited Partners,
Consent and Amendment (Operating Partnership) dated as of February 14, 1997.

         K. Gary Mendell, Stephen Mendell, Judith K. Rushmore, Murray Dow II,
and Westport Hospitality, Inc. (collectively with the HEI Contributors, the "HEI
Parties"), were each admitted as a Class A Limited Partner pursuant to that
certain Admission of Class A Limited Partners, Consent and Amendment (Operating
Partnership) dated as of February 14, 1997.

         L. The Hermitage, L.P. was admitted as a limited partner of the
Partnership pursuant to that certain Admission of Limited Partners, Consent and
Amendment (Operating Partnership) dated as of March 11, 1997.

         M. The Original Restated Agreement, as amended, was restated by that
certain Second Amended and Restated Limited Partnership Agreement of SLC
Operating Limited Partnership by and between SLC, as General Partner, and the
Limited Partners of the Partnership, as such group was then constituted, dated
as of November 14, 1997 (the "Second Restated Agreement"). Effective as of that
date, each of Columbus Operators, Inc., Hotel Investors of Arizona, Inc., Hotel
Investors of Michigan, Inc., Hotel Investors of Virginia, Inc., Western Host,
Inc., Hotel Investors Corporation of Nevada, Inc., and Hotel Investors of
Nebraska, Inc. transferred its respective interest in the Partnership to SLC and
withdrew as a General Partner of the Partnership.

         N. The Second Restated Agreement was amended by that certain First
Amendment to Second Amended and Restated Limited Partnership Agreement of SLC
Operating Limited Partnership by and between SLC, as General Partner, and the
Limited Partners of the Partnership, as such group was then constituted, dated
as of January 1, 1998.

         O. WHWE L.L.C., Woodstar Investor Partnership and Nomura Asset Capital
Corporation were each admitted as a Class B Limited Partner, and the Second
Restated


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Agreement was amended, pursuant to that certain Certificate of Admission of SLC
Operating Limited Partnership dated as of January 2, 1998.

         P. To the extent required pursuant to the terms of the Second Restated
Agreement, as amended, the Limited Partners consent to the restructuring of SLT
and SLC and the transactions occurring in connection therewith as more fully
described in the Restructuring Agreement (as defined below) and the Joint Proxy
Statement (as defined below).

         Q. The parties hereto have agreed to amend and restate the Second
Restated Agreement, as previously amended, in its entirety to reflect the
foregoing and to make other necessary or appropriate changes.

            NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:


                                    ARTICLE 1
                                   Definitions

            1.1 Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings as set forth below:

                "Accountants" shall mean the national firm or firms of
independent certified public accountants selected by the General Partner on
behalf of the Partnership to audit the books and records of the Partnership and
to prepare statements and reports in connection therewith.

                "Act" shall mean the Delaware Revised Uniform Limited
Partnership Act, as the same may hereafter be amended from time to time.

                "Adjusted Capital Account Deficit" shall mean, with respect to
any Partner or holder of OP Units other than the General Partner, the deficit
balance, if any, in such holder's Capital Account as of the end of any relevant
fiscal year and after giving effect to the following adjustments:

                     (a) credit to such Capital Account any amounts which such
holder is obligated or treated as obligated to restore with respect to any
deficit balance in such Capital Account pursuant to Section 1.704-1(b)(2)(ii)(c)
of the Regulations, or is deemed to be obligated to restore with respect to any
deficit balance pursuant to the penultimate sentences of Sections 1.704-2(g)(1)
and 1.704-2(i)(5) of the Regulations; and

                     (b) debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.


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This definition of Adjusted Capital Account Deficit is intended to comply with
the requirements of the alternate test for economic effect contained in Section
1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently
therewith.

                "Administrative Expenses" shall mean: (a) all administrative and
operating costs and expenses of the Partnership; (b) those administrative costs
and expenses of the General Partner, including, but not limited to, salaries and
other remunerations paid to trustees, officers and employees of the General
Partner and accounting and legal expenses undertaken by the General Partner on
behalf or for the benefit of the Partnership; and (c) all expenses which the
Partnership hereby assumes and agrees to pay as incurred for the benefit of the
Partnership, including (i) costs and expenses relating to the formation and
continuation of the Partnership and continuity of existence of the General
Partner, including taxes (other than the General Partner's federal and state
income and franchise taxes, if any), fees and assessments associated therewith,
any and all costs, expenses or fees payable to any director or trustee of the
General Partner, (ii) to the extent funded by the General Partner for payment by
the Partnership, costs and expenses relating to any offer or registration of
securities by the General Partner the net proceeds of which are to be
contributed or loaned to the Partnership and all statements, reports, fees and
expenses incidental thereto, including underwriting discounts and selling
commissions applicable to any such offer of securities, (iii) costs and expenses
associated with the preparation and filing of any periodic reports by the
General Partner under federal, state or local laws or regulations, including
filings with the SEC, (iv) costs and expenses associated with compliance by the
General Partner with laws, rules and regulations promulgated by any regulatory
body, including the SEC, and (v) all other costs of the General Partner incurred
in the course of its business on behalf of the Partnership including, but not
limited to, any indemnification obligations of the General Partner (other than
indemnification pursuant to Section 9.1 and 9.2 of the Formation Agreement). The
foregoing notwithstanding, "Administrative Expenses" shall not include
administrative costs and expenses of the General Partner not properly allocable
to the business of the Partnership.

                "Affected Gain" shall have the meaning set forth in Section
6.1(c)(ii) hereof.

                "Affiliate" shall mean, with respect to any Partner (or as to
any other Person the Affiliates of whom are relevant for purposes of any of the
provisions of this Agreement): (a) any member of the Immediate Family of such
Partner or Person; (b) any trustee or beneficiary of a Partner which is a trust;
(c) any trust for the benefit of any Person referred to in the preceding clauses
(a) and (b); or (d) any Entity which directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, any
Partner or Person referred to in the preceding clauses (a) through (c).

                "Agreement" shall mean this Limited Partnership Agreement, as
amended, modified, supplemented or restated from time to time, as the context
requires.

                "Articles of Incorporation" shall mean the Amended and Restated
Articles of Incorporation of the General Partner, as the same may be amended,
modified, supplemented, restated or superseded from time to time.


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                "Audited Financial Statements" shall mean financial statements
(balance sheet, statement of income, statement of partners equity and statement
of cash flows) prepared in accordance with GAAP and accompanied by an
independent auditor's report containing an opinion thereon.

                "Bankruptcy" shall mean, with respect to any Person: (a) the
commencement by such Person of any petition, case or proceeding seeking relief
under any provision or chapter of the federal Bankruptcy Code or any other
federal or state law relating to insolvency, bankruptcy or reorganization; (b)
an adjudication that such Person is insolvent or bankrupt; (c) the entry of an
order for relief under the federal Bankruptcy Code with respect to such Person;
(d) the filing of any such petition or the commencement of any such case or
proceeding against such Person, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing; or (e) the filing of an answer by such Person admitting the allegations
of any such petition.

                "Business Day" shall mean any day that is not a Saturday, Sunday
or a day on which banking institutions in the State of California or the State
of New York are authorized or obligated by law or executive order to close.

                "Capital Account" shall mean, as to any Partner or holder of OP
Units, a book account maintained in accordance with the following provisions:

                     (a) to each Partner's or holder of OP Unit's Capital
Account there shall be credited the amount of cash contributed by the Partner or
holder, the initial Gross Asset value of any other asset contributed by such
Partner or holder to the capital of the Partnership (net of liabilities secured
by contributed property that the Partnership assumes or takes subject to), such
Partner's or holder's distributive share of Net Income and any other items of
income or gain allocated to such Partner or holder, the amount of any
Partnership liabilities assumed by the Partner or holder or secured by
distributed assets that such Partner or holder takes subject to and any other
items in the nature of income or gain that are allocated to such Partner or
holder pursuant to Section 6.1 hereof; and

                     (b) to each Partner's or holder of OP Unit's Capital
Account there shall be debited the amount of cash distributed to the Partner or
holder, the Gross Asset Value of any Partnership asset distributed to such
Partner or holder pursuant to any provision of this Agreement, such Partner's or
holder's distributive share of Net Losses and any other items in the nature of
expenses or losses that are allocated to such Partner pursuant to Section 6.1
hereof.

In the event that a Partner's Partnership Interest or a holder of OP Unit's OP
Units or portion thereof is transferred within the meaning of Section
1.704-1(b)(2)(iv)(f) of the Regulations, the transferee shall succeed to the
Capital Account of the transferor to the extent that it relates to the
Partnership Interest, OP Units or portion thereof so transferred. In the event
that the Gross Asset Values of Partnership assets are adjusted, as contemplated
in paragraph (b) or (c) of the definition of "Gross Asset Value," the Capital
Accounts of the Partners and holders of OP Units shall be adjusted to reflect
the aggregate net adjustments as if the Partnership sold all of its properties
for


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their fair market values and recognized gain or loss for federal income tax
purposes equal to the amount of such aggregate net adjustment. This definition
of Capital Accounts is intended to comply with the maintenance of capital
account provisions of Section 1.704-1(b) of the Regulations and shall be
interpreted and applied in a manner consistent therewith.

                "Capital Contribution" shall mean, with respect to any Partner,
the amount of cash and the initial Gross Asset Value of any Contributed Property
(net of liabilities to which such property is subject).

                "Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State, as amended from time to time in accordance with the terms of this
Agreement and the Act.

                "Class A Limited Partners" shall mean those Persons listed under
the heading "Class A Limited Partners" on Exhibit A-1 hereto in their respective
capacities as Class A Limited Partners hereof, their permitted successors or
assigns as Class A Limited Partners hereof, and any Person who, at the time of
reference thereto, is a Class A Limited Partner of the Partnership.

                "Class A OP Units" shall have the meaning set forth in Section
4.1(c) hereof.

                "Class A Preferred Return" shall mean, with respect to any
Special Class A Distribution that is not paid within five (5) Business Days of
when due, an amount calculated as interest equal to the rate of interest most
recently announced by Citibank, N.A. (or any successor to substantially all of
its assets and business), as its prime rate, plus 8%, compounded annually.

                "Class B Limited Partners" shall mean those Persons listed under
the heading "Class B Limited Partners" on Exhibit A-2 hereto in their respective
capacities as Class B Limited Partners hereof, their permitted successors or
assigns as Class B Limited Partners hereof, and any Person who, at the time of
reference thereto, is a Class B Limited partner of the Partnership.

                "Class B Liquidation Preference Distribution" shall mean, with
respect to a Class B OP Unit, an amount equal to the "fair market value" of one
RP Ordinary Unit, which shall accrue only in the event of the dissolution and
liquidation of the Partnership not preceded or accompanied, within ninety (90)
days of such dissolution and liquidation, by a liquidation and dissolution of
the Realty Partnership. Such fair market value shall be determined in good faith
by the General Partner as of the effective date of such liquidation and
dissolution or, if no such effective date applies, as of the date of the first
liquidating distribution pursuant to Section 8.2 hereof. In the event of any
change in (a) the nature or amount of securities constituting a Starwood Unit,
(b) the correspondence of the number of OP Ordinary Units to the number of
Starwood Units outstanding or (c) the correspondence of the number of RP
Ordinary Units to the number of Starwood Units outstanding, the amount of the
Class B Liquidation Preference


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Distribution that shall accrue with respect to each Class B OP Unit as a
function of the fair market value of each RP Ordinary Unit shall be equitably
adjusted.

                "Class B OP Special Distribution" shall mean, with respect to a
Class B OP Unit, an amount equal to the sum, in cash, of the fair market value
of all operating and liquidating distributions by the Realty Partnership with
respect to RP Ordinary Units on or after January 2, 1998 (whether pursuant to
Section 6.2 or 8.2 of the Realty Partnership Agreement) in an amount per Class B
OP Unit equal to the amount so distributed in respect of each RP Ordinary Unit.
In the event of any change in (a) the nature or amount of securities
constituting a Starwood Unit, (b) the correspondence of the number of OP
Ordinary Units to the number of Starwood Units outstanding or (c) the
correspondence of the number of RP Ordinary Units to the number of Starwood
Units outstanding, the amount of the Class B OP Special Distribution that shall
accrue with respect to each Class B OP Unit as a function of the amount of the
corresponding distribution on the RP Ordinary Units shall be equitably adjusted.
Class B OP Special Distributions shall be made only with respect to Class B OP
Units and shall be due at the same time as such operating or liquidating
distributions are made by the Realty Partnership.

                "Class B OP Units" shall have the meaning set forth in Section
4.1(c) hereof.

                "Class B Shares" shall mean the Class B shares of beneficial
interest, par value $0.01 per share, of SLT.

                "Code" shall mean the Internal Revenue Code of 1986, as amended
and in effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.

                "Commission" shall mean the Nevada Gaming Commission.

                "Consent of the Class A Limited Partners" shall mean the written
consent of a Majority-In-Interest of the Class A Limited Partners given in
accordance with Section 11.2 hereof, which consent shall be obtained prior to
the taking of any action for which it is required by this Agreement and which
shall not be unreasonably withheld or delayed provided all distributions to the
Class A Limited Partners under Section 6.2 hereof are then current.

                "Consent of the Limited Partners" shall mean the written consent
of a Majority-In-Interest of the Limited Partners given in accordance with
Section 11.2 hereof, which consent shall be obtained prior to the taking of any
action for which it is required by this Agreement and may be given or withheld
by a Majority-In-Interest of the Limited Partners, unless otherwise expressly
provided herein, in their sole and absolute discretion.

                "Contributed Property" shall mean any property or other asset in
such form as may be permitted by the Act, but excluding cash, contributed or
deemed contributed to the Partnership with respect to the Partnership Interest
held by each Partner.


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                "Control" shall mean the ability, whether by the direct or
indirect ownership of shares or other equity interests, by contract or
otherwise, to elect a majority of the directors of a corporation, to select the
managing partner of a partnership, or otherwise to select, or have the power to
remove and then select, a majority of those persons exercising governing
authority over an Entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in the
case of a trust, any trustee thereof or any Person having the right to select
any such trustee shall be deemed to have control of such trust.

                "Corporation Shares" shall mean the common shares of beneficial
interest, par value $0.01 per share, of the General Partner.

                "Depreciation" shall mean, with respect to any asset of the
Partnership for any fiscal year or other period, the depreciation or
amortization, as the case may be, allowed or allowable for federal income tax
purposes in respect of such asset for such fiscal year or other period, except
that if the Gross Asset Value of an asset differs from its adjusted tax basis
for federal income tax purposes at the beginning of such fiscal year or other
period, Depreciation shall be an amount that bears the same ratio to such
beginning book value as the federal income tax depreciation, amortization or
other cost recovery deduction for such fiscal year or other period bears to such
beginning adjusted tax basis and if such adjusted tax basis is zero, the
Depreciation shall be based on the method of depreciation, amortization or other
cost recovery deduction utilized in preparing the financial statements of the
Partnership.

                "Effective Time" shall have the meaning set forth in Section 1.2
of the Restructuring Agreement.

                "Entity" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, real estate investment trust or association.

                "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and as interpreted by the applicable
regulations thereunder (or any corresponding provisions of succeeding laws and
regulations).

                "Exchange Rights Agreement" shall mean any Exchange Rights
Agreement by and among SLT and/or SLC and one or more Limited Partners which is
intended to provide for the rights of such Limited Partners to tender OP Units
in exchange for Starwood Units, other securities, cash or a combination of the
foregoing.

                "Excluded Liabilities" shall have the meaning set forth in
Section 5.2(c) hereof.

                "Formation Agreement" shall mean that certain Formation
Agreement by and among SLT, SLC, Starwood Capital Group, L.P., Berl Holdings,
L.P., Woodstar Partners I,


                                       -9-
<PAGE>   15
L.P., Starwood-Apollo Hotel Partners VIII, L.P., Starwood-Apollo Hotel Partners
IX, L.P., Starwood-Nomura Hotel Investors, L.P., Starwood/Wichita Investors,
L.P., and Starwood-Huntington Partners, L.P., dated as of November 11, 1994, and
any amendments or modifications thereof or side letters thereto.

                "GAAP" shall mean generally accepted accounting principles in
the United States, as in effect from time to time.

                "General Partner" shall mean SLC or its duly admitted successors
and assigns as general partner of the Partnership at the time of reference
thereto.

                "Gross Asset Value" shall mean, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:

                     (a) the initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be the gross fair market value of such
asset at the time of its contribution as reasonably determined by the General
Partner and the contributing Partner;

                     (b) the Gross Asset values of all Partnership assets shall
be adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, immediately prior to the following events:

                         (i) a Capital Contribution (other than a de minimis
Capital Contribution) to the Partnership by a new or existing Partner as
consideration for a Partnership Interest;

                         (ii) the distribution by the Partnership to a Partner
of more than a de minimis amount of Partnership property as consideration for
the redemption of a Partnership Interest;

                         (iii) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and

                         (iv) any other event as to which the General Partner
reasonably determines that an adjustment is necessary or appropriate to reflect
the relative economic interests of the Partners;

                     (c) the Gross Asset Values of Partnership assets
distributed to any Partner shall be the gross fair market values of such assets
as reasonably determined by the General Partner as of the date of distribution;
and

                     (d) the Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the


                                      -10-
<PAGE>   16
Regulations; provided, however, that Gross Asset Values shall not be adjusted
pursuant to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this paragraph (d).

At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partner's Capital Accounts.

                "HEI Contribution Agreement" shall mean that certain
Contribution Agreement dated January 15, 1997, by and among the HEI Property
Companies, SLC, the Partnership, SLT Financing Partnership, a Delaware general
partnership, SLT, the Realty Partnership, and certain other parties.

                "HEI Contributors" shall have the meaning set forth in Recital J
hereto.

                "HEI Parties" shall have the meaning set forth in Recital K
hereto.

                "HEI Property Companies" shall mean Westport Norfolk Associates
Limited Partnership, a Delaware limited partnership, Pruwest Norfolk, L.L.C., a
Delaware limited liability company, Westport BWI, L.L.C., a Delaware limited
liability company, Pruwest Baltimore, L.L.C., a Delaware limited liability
company, Westport Raritan, L.L.C., a Delaware limited liability company, Pruwest
Edison, L.L.C., a Delaware limited liability company, Westport Novi, L.L.C., a
Delaware limited liability company, Pruwest Novi, L.L.C., a Delaware limited
liability company, Westport Park Ridge, L.P., a Delaware limited partnership,
Westport Park Ridge, L.L.C., a Delaware limited liability company, Westport Long
Beach, L.L.C., a Delaware limited liability company, Westport Charleston,
L.L.C., a Delaware limited liability company, Westport Santa Rosa, L.L.C., a
Delaware limited liability company, Westport Crystal City, L.L.C., a Delaware
limited liability company, Prudential, Atlanta Hotel Associates, LP, a
Connecticut limited partnership, Virginia Hotel Associates, L.P., a Delaware
limited partnership, BW Hotel Realty, L.P., a Maryland limited partnership,
Edison Hotel Associates, L.P., a New Jersey limited partnership, Novi Hotel
Associates, L.P., a Delaware limited partnership, Park Ridge Hotel Associates,
L.P., a Delaware limited partnership, Long Beach Hotel Associates, L.L.C., a New
Jersey limited liability company, Charleston Hotel Associates, L.L.C., a New
Jersey limited liability company, Santa Rosa Hotel Associates, L.L.C., a New
Jersey limited liability company, Crystal City Hotel Associates, L.L.C., a New
Jersey limited liability company, and Prudential HEI Joint Venture, a joint
venture.

                "HIR" shall have the meaning set forth in Recital G hereto.

                "HSR" shall have the meaning set forth in Recital E hereto.

                "Immediate Family" shall mean, with respect to any Person, such
Person's spouse (then current or former), parents, parents-in-law, descendants,
brothers and sisters


                                      -11-
<PAGE>   17
(whether by whole or half-blood), first cousins, brothers-in-law and
sisters-in-law (whether by whole or half-blood), ancestors and lineal
descendants.

                "Indemnitee" shall mean any Person who is, or at any time on or
after December 15, 1994 was (a) a General Partner, or (b) an employee, trustee,
director, officer, stockholder or Liquidating Trustee of the Partnership or the
General Partner.

                "Inns Ancillary Notes" shall have the meaning provided in
Paragraph 2(f) of that certain Bond Purchase Agreement by and among The First
National Bank of Boston, HSR, HIR, the Realty Partnership and the Partnership
dated February 26, 1996.

                "Issuance Percentage" of SLT or SLC, as the case may be, shall
mean the relative values of the Class B Shares and the Corporation Shares,
respectively, stated as a percentage of the sum of the values of the Starwood
Units, and as most recently determined by SLT and SLC. This definition shall be
appropriately modified to take into account any change in the nature or amount
of securities constituting a Starwood Unit.

                "Joint Proxy Statement" means the Joint Proxy Statement of SLT
and SLC dated December 3, 1998, constituting the Joint Proxy Statement of SLT
and SLC for their respective 1998 annual meetings.

                "Lien" shall mean any liens, security interests, mortgages,
deeds of trust, pledges, options, rights of first offer or first refusal and any
other similar encumbrances of any nature whatsoever.

                "Limited Partners" shall mean those Persons listed under the
heading "Limited Partners" on the signature pages hereto in their respective
capacities as limited partners of the Partnership, their permitted successors or
assigns as limited partners hereof, and any Person who, at the time of reference
thereto, is a limited partner of the Partnership. Such term shall include Class
A Limited Partners and Class B Limited Partners except where the context
otherwise requires.

                "Liquidating Trustee" shall mean such individual or Entity which
is selected as the Liquidating Trustee hereunder by the General Partner, which
individual or Entity may include the General Partner or an Affiliate of the
General Partner, provided that such Liquidating Trustee agrees in writing to be
bound by the terms of this Agreement. The Liquidating Trustee shall be empowered
to give and receive notices, reports and payments in connection with the
dissolution, liquidation and/or winding up of the Partnership and shall hold and
exercise such other rights and powers granted to the General Partner herein or
under the Act as are necessary or required to conduct the winding-up and
liquidation of the Partnership's affairs and to authorize all parties to deal
with the Liquidating Trustee in connection with the dissolution, liquidation
and/or winding-up of the Partnership.

                "Majority-In-Interest of the Class A Limited Partners" shall
mean Class A Limited Partner(s) who hold in the aggregate more than 50% of the
Percentage Interests then


                                      -12-
<PAGE>   18
allocable to and held by the Class A Limited Partners, as a class (but excluding
any Partnership Interest acquired by the General Partner, or any Person holding
as a nominee of a General Partner or any Person controlled by a General
Partner).

                "Majority-In-Interest of the Limited Partners" shall mean
Limited Partner(s) who hold in the aggregate more than 50% of the Percentage
Interests then allocable to and held by the Limited Partners, as a class (but
excluding any Partnership Interests acquired by the General Partner, or any
Person holding as a nominee of a General Partner or any Person controlled by a
General Partner).

                "Minimum Gain Attributable to Partner Nonrecourse Debt" shall
mean "partner nonrecourse debt minimum gain" as determined in accordance with
Section 1.704-2(i)(2) of the Regulations.

                "Net Cash Flow" shall mean, with respect to any fiscal period of
the Partnership, the excess, if any, of "Receipts" over "Expenditures." For
purposes hereof, the term "Receipts" means the sum of all cash receipts of the
Partnership from all sources for such period and any amounts held as reserves as
of the last day of such period which the General Partner reasonably deems to be
in excess of reserves as determined below. The term "Expenditures" means the sum
of (a) all cash expenditures of the Partnership for any purpose, including
operating expenses and capital expenditures for such period, (b) the amount of
all payments of principal, premium, if any, and interest on account of any
indebtedness of the Partnership, and (c) such additions to cash reserves as of
the last day of such period as the General Partner deems necessary or
appropriate for any capital, operating or other expenditure, including, without
limitation, contingent liabilities; but the term "Expenditures" shall not
include amounts paid from cash reserves previously established by the
Partnership.

                "Net Income" or "Net Loss" shall mean, for each fiscal year or
other applicable period, an amount equal to the Partnership's net income or loss
for such year or period as determined for federal income tax purposes by the
Accountants, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a) of the Code shall be included in taxable
income or loss), with the following adjustments: (a) by including as an item of
gross income any tax-exempt income received by the Partnership; (b) by treating
as a deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Section 709(b) of the Code)
or to promote the sale of interests in the Partnership and by treating
deductions for any losses incurred in connection with the sale or exchange of
Partnership property disallowed pursuant to Section 267(a)(1) or Section 707(b)
of the Code as expenditures described in Section 705(a)(2)(B) of the Code); (c)
in lieu of depreciation, depletion, amortization and other cost recovery
deductions taken into account in computing total income or loss, there shall be
taken into account Depreciation; (d) gain or loss resulting from any disposition
of Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which


                                      -13-
<PAGE>   19
requires that the Capital Accounts of the Partnership be adjusted pursuant to
Sections 1.704-1(b)(2)(iv)(e), (f) and (m) of the Regulations, the amount of
such adjustment is to be taken into account as additional Net Income or Net Loss
pursuant to Section 6.1 hereof; and (f) excluding any items specially allocated
pursuant to Section 6.1(b) hereof.

                "Nonrecourse Deductions" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations and shall be determined in
accordance with Section 1.704-2(c) of the Regulations.

                "OP Ordinary Units" shall mean units representing the interest
of a Partner in the capital, allocations of Net Income and Net Loss and
distributions of the Partnership other than units, such as Class A OP Units and
Class B OP Units, entitled to receive priority distributions under this
Agreement.

                "OP Units" shall have the meaning set forth in Section 4.1(c)
hereof, and such term shall include Class A OP Units and Class B OP Units except
where the context otherwise requires.

                "Original Agreement" shall have the meaning set forth in Recital
A hereof.

                "Original Restated Agreement" shall have the meaning set forth
in Recital C hereof.

                "Partner Nonrecourse Debt" shall have the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.

                "Partner Nonrecourse Deductions" shall have the meaning set
forth in Section 1.704-2(i)(2) of the Regulations and the amount of Partner
Nonrecourse Deductions with respect to a Partner Nonrecourse Debt shall be
determined in accordance with the rules of Section 1.704-2(i) of the
Regulations.

                "Partners" shall mean the General Partner and the Limited
Partners, their duly admitted successors or assigns or any Person who is a
partner of the Partnership at the time of reference thereto.

                "Partnership" shall mean the limited partnership formed under
the Act pursuant to the Original Agreement and as continued pursuant to this
Agreement and any successor thereto.

                "Partnership Interest" shall mean the ownership interest of a
Partner in the Partnership from time to time, including each Partner's
Percentage Interest and such Partner's OP Units.

                "Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations and the amount of Partnership Minimum
Gain (and any net


                                      -14-
<PAGE>   20
increase or decrease thereof) for a fiscal year or other period shall be
determined in accordance with the rules of Section 1.704-2(d) of the
Regulations.

                "Partnership Record Date" means the record date established by
the General Partner for distribution of Net Cash Flow pursuant to Section 6.2
hereof, which record date shall be the same as the record date established by
the General Partner for distribution to its shareholders of some or all of its
portion of such distribution.

                "Percentage Interest" shall mean, with respect to any Partner,
the percentage ownership interest of such Partner in such items of the
Partnership as to which the term "Percentage Interest" is applied in this
Agreement, as provided in Section 4.3 hereof.

                "Person" shall mean any natural person or Entity.

                "Property" shall mean any property acquired by or contributed to
the Partnership or any property owned by an Entity in which the Partnership has
an ownership interest.

                "Purchase Rights" shall have the meaning set forth in Section
4.4 hereof.

                "Realty Partnership" shall mean SLT Realty Limited Partnership,
a Delaware limited partnership.

                "Realty Partnership Agreement" shall mean the Third Amended and
Restated Limited Partnership Agreement of the Realty Partnership, as the same
may be amended from time to time.

                "Registration Rights Agreement" shall mean any Registration
Rights Agreement by and among SLT and/or SLC and one or more Limited Partners,
which is intended to set forth the rights of such Limited Partner or Limited
Partners or other holders of OP Units, and the obligations of SLT and/or SLC, to
cause the registration of certain securities pursuant to the Securities Act of
1933, as amended.

                "Regulations" shall mean the income tax regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations), and may, in the sole
discretion of the General Partner, include temporary and/or proposed income tax
regulations.

                "Regulatory Allocations" shall have the meaning set forth in
Section 6.1(b)(viii) hereof.

                "REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.


                                      -15-
<PAGE>   21
                "REIT Requirements" shall mean the requirements for SLT to
qualify as a REIT under the Code and Regulations. "REIT Requirements" shall also
include the ownership limitation provisions set forth in Article VI of the
Declaration of Trust of SLT, dated August 25, 1969, as amended and restated as
of the Effective Time, and as the same may be further amended, modified,
supplemented, restated or superseded from time to time, and in Article TENTH of
the Articles of Incorporation.

                "Restricted Entity" shall mean any "employee benefit plan" as
defined in and subject to ERISA, any "plan" as defined in and subject to Section
4975 of the Code, or any entity any portion or all of the assets of which are
deemed pursuant to United States Department of Labor Regulation Section
2510.3-101 or otherwise pursuant to ERISA or the Code to be, for any purpose of
ERISA or Section 4975 of the Code, assets of any such "employee benefit plan" or
"plan" which invests in such entity.

                "Restructuring Agreement" shall mean that certain Agreement and
Plan of Restructuring by and among SLT, the General Partner and ST Acquisition
Trust, a Maryland real estate investment trust, dated as of September 16, 1998,
and any amendments or modifications thereof.

                "Rights" shall mean the rights of a Limited Partner as set forth
in an Exchange Rights Agreement and/or a Registration Rights Agreement. No
provision of this Agreement shall be interpreted as granting any Partner or
holder of OP Units any Rights or any rights or interest in or to the Exchange
Rights Agreement or the Registration Rights Agreement.

                "RP Ordinary Units" shall mean units representing the interest
of a Partner in the capital, allocations of Net Income and Net Loss and
distributions of the Realty Partnership other than units, such as Class A RP
Units (as such term is defined in the Realty Partnership Agreement), entitled to
receive priority distributions under the Realty Partnership Agreement.

                "SEC" shall mean the United States Securities and Exchange
Commission.

                "Second Restated Agreement" shall have the meaning set forth in
Recital M hereto.

                "Section 704(c) Tax Items" shall have the meaning set forth in
Section 6.1(c)(iii) hereof.

                "Shares" shall mean the common stock, par value $0.01 per share,
of the General Partner.

                "SLC" shall mean Starwood Hotels & Resorts Worldwide, Inc., a
Maryland corporation.

                "SLT" shall mean Starwood Hotels & Resorts, a Maryland real
estate investment trust.


                                      -16-
<PAGE>   22
                "Special Class A Distribution" shall mean, with respect to a
Class A OP Unit, the fair market value, in cash, of any operating or liquidating
distribution in cash or other property made by the Realty Partnership with
respect to an RP Ordinary Unit. Special Class A Distributions shall be made only
with respect to Class A OP Units and shall accrue and be due at the time
operating or liquidating distributions are made by the Realty Partnership.

                "Starwood Unit" shall mean one Share of the General Partner and
one Class B Share (as defined in the Realty Partnership Agreement) of SLT that
are subject to an intercompany agreement between the General Partner and SLT.

                "Starwood Unit Closing Price" shall mean, with respect to a
particular date, the last reported sales price regular way on such date of a
Starwood Unit or, in case no such reported sale takes place on such date, the
average of the reported closing bid and asked prices regular way on such date of
a Starwood Unit, in either case on the New York Stock Exchange or, if the
Starwood Units are not then listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the Starwood Units are then
listed or admitted to trading or, if not then listed or admitted to trading on
any national securities exchange, the closing sale price on such date of a
Starwood Unit or, in case no reported sale takes place on such date, then the
average of the closing bid and asked prices on such date of the Starwood Units,
on NASDAQ or any comparable system. If the Starwood Units are not then quoted on
NASDAQ or any comparable system, the Board of Trustees of SLT and the Board of
Directors of SLC shall in good faith determine the Starwood Unit Closing Price.

                "Suites Ancillary Notes" shall have the meaning provided in
Paragraph 2(f) of that certain Bond Purchase Agreement by and among the First
National Bank of Boston, HSR, HIR, the Realty Partnership and the Partnership
dated February 26, 1996.

                "Tax Items" shall have the meaning set forth in Section
6.1(c)(i) hereof.

                "Tax Payment Loan" shall have the meaning set forth in Section
6.7(a) hereof.

                "Tax Payment Loan Date" shall have the meaning set forth in
Section 6.7(a) hereof.

                "Withholding Tax Act" shall have the meaning set forth in
Section 6.7(a) hereof.

                                    ARTICLE 2

                  Continuation and Business of the Partnership

            2.1 Continuation. The parties hereto do hereby continue the limited
partnership formed pursuant to the Original Agreement and pursuant to the
provisions of the Act and upon the terms and conditions set forth herein. The
parties hereto agree that the rights and


                                      -17-
<PAGE>   23
liabilities of the Partners shall be as provided herein. The parties hereto
shall immediately execute and deliver all certificates and other documents and
do all filings, recording and publishing and other acts as in the judgment of
the General Partner may be appropriate to comply with all of the requirements
for the continuation of the Partnership as a limited partnership under the Act
and the qualification of the Partnership in any jurisdiction in which the
Partnership owns property or conducts business.

            2.2 Name. The name of the Partnership shall be SLC Operating Limited
Partnership, or such other name as shall be chosen from time to time by the
General Partner in its sole and absolute discretion; provided, however, that the
General Partner may not choose the name (or any derivative thereof) of any
Limited Partner without the prior written consent of such Limited Partner.

            2.3 Character of the Business. The purpose of the Partnership shall
be to acquire, hold, own, develop, redevelop, construct, improve, maintain,
operate, manage, sell, lease, rent, transfer, encumber, mortgage, convey,
exchange and otherwise dispose of or deal with the Properties and any other real
and personal property of all kinds; to undertake such other activities as may be
necessary, desirable or appropriate to the business of the Partnership; to
engage in such other activities as shall be necessary, desirable or appropriate
to effectuate the foregoing purposes; and to otherwise engage in any enterprise
or business in which a limited partnership may engage or conduct under the Act.
The Partnership shall have all powers necessary, desirable or appropriate to
accomplish the purposes enumerated. In connection with the foregoing, but
subject to the terms and conditions of this Agreement, the Partnership shall
have full power and authority to enter into, perform and carry out contracts of
any kind, to borrow money and to issue evidences of indebtedness, whether or not
secured by Liens, and, directly or indirectly, to acquire and construct
additional Properties necessary or useful in connection with its business.

            2.4 Location of Principal Place of Business. The location of the
principal place of business of the Partnership shall be at 777 Westchester
Avenue, White Plains, New York 10604, or such other location as shall be
selected from time to time by the General Partner in its sole and absolute
discretion; provided, however, that the General Partner shall notify the
Partners of any change in the location of the principal place of business of the
Partnership within thirty (30) days thereafter.

            2.5 Registered Agent and Registered Office. The registered agent of
the Partnership shall be The Corporation Trust Company or such other Person as
the General Partner may select in its sole and absolute discretion. The
registered office of the Partnership in the State of Delaware shall be c/o The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801 or such other location as the
General Partner may from time to time select in its sole discretion; provided,
however, that the General Partner shall notify the Limited Partners of any
change in the registered office or registered agent of the Partnership within
thirty (30) days thereafter.


                                      -18-
<PAGE>   24
            2.6 Restatement of Agreement. This Agreement amended and restates
the Second Restated Agreement, including the amendments thereto, in its entirety
effective as of the date first above written and, effective as of such date, the
Second Restated Agreement and the amendments thereto shall be of no further
force or effect.

                                    ARTICLE 3

                                      Term

            3.1 Commencement. The Partnership's term commenced upon the filing
of the Certificate with the Secretary of State of Delaware on December 15, 1994.

            3.2 Dissolution. The Partnership shall continue until dissolved and
terminated upon the occurrence of the earliest of the following events:

                (a) the death, dissolution, termination, withdrawal, retirement,
expulsion or Bankruptcy of the General Partner, unless the Partnership's
business is continued as provided in Section 9.1 hereof;

                (b) the election to dissolve the Partnership made in writing by
the General Partner;

                (c) the sale or other disposition of all or substantially all of
the assets of the Partnership unless the General Partner elects to continue the
Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of any other consideration to be received in
exchange for the assets of the Partnership (which activities shall be deemed to
be part of the winding up of the affairs of the Partnership);

                (d) the entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Act, which decree is final and not
subject to appeal; or

                (e) December 31, 2094.


                                    ARTICLE 4

                              Capital Contributions

            4.1 Capital Contributions; OP Units.

                (a) As of the date first above written, the Partners have the
Percentage Interests in the Partnership as set forth in Exhibits A, A-1 and A-2,
which Percentage Interests shall be adjusted to the extent necessary to reflect
properly exchanges, redemptions or conversions of Partnership Interests, Capital
Contributions, the issuance of additional Partnership Interests or any other
event having an effect on a Partner's Percentage Interest, in each case to the


                                      -19-
<PAGE>   25
extent permitted by and in accordance with this Agreement. Except to the extent
specifically set forth in this Agreement with respect to the General Partner,
the Partners shall have no obligation to make any additional Capital
Contributions or loans to the Partnership, even if the failure to do so could
result in the Bankruptcy or insolvency of the Partnership or any other adverse
consequence to the Partnership.

                (b) The General Partner shall, from time to time, contribute
cash or Property to the Partnership such that the interest of the General
Partner in Net Income and Net Loss shall at all times be at least 1% and the
Capital Account balance of the General Partner shall be at least the lesser of
$500,000 or 1% of the total positive Capital Account balances for the
Partnership.

                (c) The interest of a Partner (or an assignee of a Partner) in
capital, allocations of Net Income, Net Loss and distributions shall be
evidenced by the issuance to such Partner (or assignee) of one or more "OP
Units." The interest of a Class A Limited Partner (or an assignee of a Class A
Limited Partner) in capital, allocations of Net Income, Net Loss and
distributions, including Special Class A Distributions and Class A Preferred
Return, if any, shall be evidenced by the issuance to such Class A Limited
Partner (or assignee) of one or more "Class A OP Units." The interest of a Class
B Limited Partner (or an assignee of a Class B Limited Partner) in capital,
allocations of Net Income, Net Loss and distributions, including Class B OP
Special Distributions and Class B Liquidation Preference Distributions, if any,
shall be evidenced by the issuance to such Class B Limited Partner (or assignee)
of one or more "Class B OP Units." The aggregate total of all OP Units, Class A
OP Units and Class B OP Units outstanding and the ownership of such OP Units,
Class A OP Units and Class B OP Units by each Partner, Class A Limited Partner
and Class B Limited Partner are as set forth on Exhibit A, Exhibit A-1 and
Exhibit A-2 hereto, which Exhibits shall be updated by the General Partner to
reflect changes in the holdings of OP Units, Class A OP Units and Class B OP
Units by the Partners.

                (d) From time to time, the General Partner may cause the
Partnership to issue additional Partnership Interests to existing or
newly-admitted Partners (including the General Partner) for fair value in
exchange for additional Capital Contributions (including Capital Contributions
pursuant to Section 4.1(b)). Without limiting the generality of the foregoing,
if (i) the General Partner contributes to the Partnership the net proceeds to
the General Partner from any offering or sale of Starwood Units (including,
without limitation, any issuance of Starwood Units pursuant to the exercise of
options, warrants, convertible securities, or similar rights to acquire Starwood
Units), the Partnership shall issue to the General Partner OP Units equal in
number to the number of Starwood Units issued in such offering or sale, and (ii)
if the General Partner or SLT issues Starwood Units to any Person in exchange
for services, then the Partnership shall issue an equal number of OP Units to
the General Partner effective no later than the date on which the value of the
Starwood Units is includable in the gross income of such Person.

                (e) The General Partner is hereby authorized to cause the
Partnership to issue Partnership Interests in one or more classes or one or more
series of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights,


                                      -20-
<PAGE>   26
powers and duties, including rights, powers and duties senior to the
then-existing Partnership Interests and OP Units, as shall be determined by the
General Partner in its sole and absolute discretion, including (i) the
allocation of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests and (ii) the rights of each
such class or series of Partnership Interests to share in Partnership
distributions (including liquidating distributions).

                (f) In the event of any change in the outstanding number of
Starwood Units by reason of any share dividend, split, reverse split,
recapitalization, merger, consolidation or combination, the number of OP Units
held by each Partner (or assignee) shall be proportionately adjusted such that,
to the extent possible, one OP Unit remains the equivalent of one Share without
dilution.

                (g) No fractional OP Units shall remain outstanding. In lieu of
issuing a fractional OP Unit to a holder of OP Units, the number of OP Units to
be held by such holder shall be rounded to the nearest whole OP Unit, or, at the
option of the General Partner, the holder shall be paid cash equal to the fair
market value of such fractional OP Unit.

            4.2 Redemption of OP Units Held by Limited Partner. The General
Partner is hereby authorized to cause the Partnership to redeem all or any
portion of the OP Units held by any Limited Partner whenever the General
Partner, in its sole discretion, believes such redemption to be reasonably
necessary or appropriate in order to prevent the Partnership from being
characterized as a "publicly traded partnership" pursuant to Section 7704 of the
Code and the Regulations thereunder. Any redemption of OP Units pursuant to this
Section 4.2 shall be made from the Limited Partners in reverse order of their
respective ownership of OP Units, that is, first from the Limited Partner or
Limited Partners with the fewest OP Units, and, second, if required, from the
Limited Partner or Limited Partners with the next fewest OP Units, et cetera.
Notwithstanding the previous sentence, the General Partner is hereby authorized
to cause the Partnership to redeem all the OP Units held by a particular Limited
Partner who, because of the number of such Limited Partner's direct or indirect
beneficial owners or its structure, in the judgment of the General Partner in
its sole discretion, and whether or not in conjunction with any other Partner
(whether redeemed pursuant to this Section 4.2 or not), may cause the
Partnership to be characterized as a "publicly traded partnership" pursuant to
Section 7704 of the Code and the Regulations thereunder. The redemption price of
any OP Unit redeemed pursuant to this Section 4.2 shall be equal to the product
of (a) 115% of the average of the Starwood Unit Closing Price for the ten (10)
trading day period ending five (5) days prior to the date of such redemption,
multiplied by (b) the then Issuance Percentage of SLC. Any redemption of a
Limited Partner shall be effective upon the date specified in a notice to such
Limited Partner, or, if later, five (5) days after such notice. No redemption
pursuant to this Section 4.2 shall be made unless the Realty Partnership
concurrently effects a comparable redemption.

            4.3 Percentage Interests. The Percentage Interest of a Limited
Partner shall be equal to the percentage obtained by dividing (a) the Capital
Contributions allocable to the OP Units held by such Partner (including OP Units
held by assignees of such Partner who have not been admitted as Partners) by (b)
the total Capital Contributions of all Partners. The Percentage


                                      -21-
<PAGE>   27
Interest of the General Partner shall be equal to 100 less the total of the
Percentage Interests held by the Limited Partners.

            4.4 Purchase Rights. If the General Partner grants, issues or sells
any options, convertible securities or rights to purchase shares, warrants, or
other property pro rata to the record holders of Shares (collectively, "Purchase
Rights"), then the Partners shall, to the extent practicable and consistent with
the other provisions of this Agreement, be entitled to acquire from the
Partnership interests in the Partnership that are substantially similar in
amount, tone and tenor to the Purchase Rights to which such Partners would be
entitled if such Partners had converted their Partnership Interests into
Starwood Units immediately prior to the grant, issue or sale of the Purchase
Rights.

            4.5 No Third Party Beneficiaries. No creditor or other third party
shall have the right to enforce any right or obligation of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder
or at law or in equity, it being understood and agreed that the provisions of
this Agreement shall be solely for the benefit of, and may be enforced solely
by, the parties hereto and their respective successors and assigns. None of the
rights or obligations of the Partners herein set forth to make Capital
Contributions or loans to the Partnership shall be deemed an asset of the
Partnership for any purpose by any creditor or other third party, nor may such
rights or obligations be sold, transferred or assigned by the Partnership or
pledged or encumbered by the Partnership to secure any debt or other obligation
of the Partnership or of any of the Partners.

            4.6 No Interest on or Return of Capital Contribution. No Partner
shall be entitled to interest on its Capital Contribution or Capital Account.
Except as provided herein or by law, no Partner shall have any right to demand
or receive the return of its Capital Contribution.


                                    ARTICLE 5

                                 Indemnification

            5.1 Indemnification of the General Partner.

                (a) To the fullest extent permitted by law, the Partnership
shall and does hereby indemnify an Indemnitee from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings
(including arbitration and mediation proceedings), civil, criminal,
administrative or investigative, that relate, directly or indirectly, to the
formation, business or operations of the Partnership in which any Indemnitee may
be involved, or is threatened to be involved, as a party, witness or otherwise,
by reason of the fact that such Person was an Indemnitee, whether or not the
same shall proceed to judgment or be settled or otherwise be brought to a
conclusion, except only if and to the extent that it is finally adjudicated that
the act or omission of the Indemnitee was material to the matter giving rise to
the proceeding and was committed with fraud, gross


                                      -22-
<PAGE>   28
negligence or willful misconduct. The termination of any proceeding by judgment,
order or settlement does not create a presumption that the Indemnitee did not
meet the requisite standard of conduct set forth in this Section 5.1(a). Any
indemnification pursuant to this Section 5.1 shall be made only out of the
assets of the Partnership and no Partner shall have any personal liability
therefor. The provisions of this Section 5.1 are for the benefit of the
Indemnitees, their heirs, successors, assigns, personal representatives and
administrators, and shall not be deemed to create any rights for the benefit of
any other Persons. The foregoing notwithstanding, the General Partner (or any
former General Partner) shall not be entitled to indemnification from the
Partnership with respect to matters provided for in Sections 9.1 and 9.2 of the
Formation Agreement.

                (b) Reasonable expenses incurred by an Indemnitee who is a party
or witness in a proceeding shall be paid or reimbursed by the Partnership in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership, as authorized in this Section 5.1, has been met, and (ii) a
written undertaking by or on behalf of the Indemnitee to repay the amount paid
or reimbursed if it shall ultimately be determined that such Indemnitee is not
entitled to be indemnified hereunder.

                (c) The indemnification provided by this Section 5.1 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity. The Partnership shall
purchase and maintain insurance, on behalf of the Indemnitees, against any
liability that may be asserted against or expenses that may be incurred by such
Person in connection with the Partnership's activities, regardless of whether
the Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement. An Indemnitee shall not be
denied indemnification in whole or in part under this Section 5.1 solely because
the Indemnitee had an interest in the transaction with respect to which the
indemnification applies.

                (d) For purposes of this Section 5.1, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 5.1; and actions taken
or omitted by the Indemnitee with respect to an employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Partnership.

            5.2 Indemnification of Limited Partners.

                (a) From and after the date hereof, the Partnership shall
indemnify and hold harmless each Limited Partner, its Affiliates, employees,
officers, directors and agents against and from all liability, demands, claims,
actions or causes of action, assessments, losses, fines,


                                      -23-
<PAGE>   29
penalties, costs, damages and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and expenses) sustained or incurred
by such Limited Partner or Affiliate or any assignee or successor thereof
(including, without limitation, any permitted assignee of a Limited Partner
under Article 9 hereof) as a result of or arising out of any action, suit or
proceeding (including mediation and arbitration proceedings) (i) arising out of
or relating to the operation of the Partnership's business or the Limited
Partner being a Partner in the Partnership (excluding, specifically, actions,
suits or proceedings arising out of actual or alleged breaches of a Partner's
representations, warranties or covenants hereunder or pursuant to the Formation
Agreement or arising out of acts by a Limited Partner other than in its capacity
as such) and (ii) naming a Limited Partner or any of its Affiliates as a party
to such proceeding. Any indemnification pursuant to this Section 5.2(a) shall be
made only out of the assets of the Partnership and no Partner shall have any
personal liability therefor. The provisions of this Section 5.2(a) are for the
benefit of the Limited Partners, their Affiliates, employees, officers,
directors and agents, and shall not be deemed to create any rights for the
benefit of any other Persons.

                (b) The foregoing notwithstanding, the Partnership shall
indemnify the Class A Limited Partners in respect of all federal or state income
tax consequences to them arising from the Special Class A Distributions and the
distribution described in Section 8.2(a)(iii) hereof being subject to federal or
state income tax in a manner that is less favorable than comparable
distributions with respect to RP Ordinary Units. Any indemnification pursuant to
the preceding sentence shall be computed on a cumulative basis from and after
February 14, 1997, and shall be grossed up for any income tax consequences of
such indemnification so as to put the Class A Limited Partners in the same
after-tax position they would have been in had they been Partners in the Realty
Partnership as to such distributions. All calculations of the indemnification
payments shall be computed as if the Class A Limited Partners had no sources of
income, loss or gain other than from the comparable distributions with respect
to RP Ordinary Units and pay tax at the highest applicable federal and state tax
rates. The provisions of this Section 5.2(b) shall be in addition to and not in
limitation of the indemnification provided to Limited Partners pursuant to
Section 5.2(a) above.

                (c) Also notwithstanding the foregoing, the Partnership shall
indemnify and hold harmless the HEI Parties of and from liabilities of the HEI
Property Companies whose Property Company Interests have been acquired by the
Partnership except for any undisclosed material liability of any such HEI
Property Company as of February 14, 1997 (collectively, the "Excluded
Liabilities"); provided, however, that the Excluded Liabilities shall not
include:

                         (i) any liability incurred in the ordinary course of
         operating the applicable hotel prior to February 14, 1997;
                         (ii) any liability disclosed by the Transaction
         Documents, the schedules or exhibits thereto, any supplement to such
         schedules or exhibits delivered to the Starwood Parties prior to
         February 14, 1997, the agreements, reports or other documents referred
         to in any of the foregoing, the Financial Statements, the financial
         statements prepared in connection with the Net Working Capital
         adjustment provided for in Article IV of the HEI Contribution
         Agreement;


                                      -24-
<PAGE>   30
                         (iii) any liability of which the Starwood Parties
         otherwise had Knowledge prior to February 14, 1997; or

                         (iv) any liability incurred on or after February 14,
         1997;

and the Partnership shall be obligated to hold the HEI Parties harmless from all
such enumerated liabilities. The provisions of this Section 5.2(c) shall be in
addition to and not in limitation of the indemnifications provided to Limited
Partners pursuant to Section 5.2(a) and 5.2(b) above. Any capitalized term in
this Section 5.2(c) not otherwise defined in this Agreement shall have the
meaning set forth in the HEI Contribution Agreement.

            5.3 Notice of Claims. If any Person believes that it is entitled to
indemnification under this Article 5, such Person shall so notify the
Partnership promptly in writing describing such claim for indemnification, the
amount thereof, if known, and the method of computation, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such claim shall have occurred; provided, however, that the
omission by such indemnified party to give notice as provided herein shall not
relieve the Partnership of its indemnification obligation under this Article 5
except to the extent that the Partnership is materially damaged as a result of
such failure to give notice. If any action at law or suit in equity is
instituted by or against a third party with respect to which any of the Persons
entitled to indemnification under this Article 5 intends to make a claim for
indemnification under this Article 5, any such Person shall promptly notify the
Partnership of such action or suit. Any Person entitled to indemnification
hereunder shall use reasonable efforts to minimize the amount of any claim for
indemnification hereunder.

            5.4 Third Party Claims. In the event of any claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceeding by a third party, the indemnified Person shall give such notice
thereof to the Partnership not later than twenty (20) Business Days prior to the
time any response to the asserted claim is required, if possible, and in any
event within fifteen (15) Business Days following the date such indemnified
Person has actual knowledge thereof; provided, however, that the omission by
such indemnified Person to give notice as provided herein shall not relieve the
Partnership of its indemnification obligation under this Article 5 except to the
extent that the Partnership is materially damaged as a result of such failure to
give notice. In the event of any such claim for indemnification resulting from
or in connection with a claim or legal proceeding by a third party, the
Partnership may, at its sole cost and expense, assume the defense thereof;
provided, however, that counsel for the Partnership, who shall conduct the
defense of such claim or legal proceeding, shall be reasonably satisfactory to
the indemnified Person; and provided, further, that if the defendants in any
such actions include both the indemnified Persons and the Partnership and the
indemnified Persons shall have reasonably concluded that there may be legal
defenses or rights available to them which have not been waived and are in
actual or potential conflict with those available to the Partnership, the
indemnified Persons shall have the right to select one law firm reasonably
acceptable to the Partnership to act as separate counsel, on behalf of such
indemnified Persons, at the expense of the Partnership. Unless the indemnified
Persons are represented by separate counsel pursuant to the second proviso of
the immediately preceding sentence, if the Partnership assumes the defense


                                      -25-
<PAGE>   31
of any such claim or legal proceeding, it shall not consent to entry of any
judgment, or enter into any settlement, that (a) is not subject to
indemnification in accordance with the provisions in this Article 5, (b)
provides for injunctive or other non-monetary relief affecting the indemnified
Persons or (c) does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such indemnified Persons of a release from all
liability with respect to such claim or legal proceeding, without the prior
written consent of the indemnified Persons (which consent, in the case of
clauses (b) and (c), shall not be unreasonably withheld or delayed); and
provided, further, that, unless the indemnified Persons are represented by
separate counsel pursuant to the second proviso of the immediately preceding
sentence, the indemnified Persons may, at their own expense, participate in any
such proceeding with the counsel of their choice without any right of control
thereof. So long as the Partnership is in good faith defending such claim or
proceeding, the indemnified Persons shall not compromise or settle such claim or
proceeding without the prior written consent of the Partnership, which consent
shall not be unreasonably withheld or delayed. If the Partnership does not
assume the defense of any such claim or litigation in accordance with the terms
hereof, the indemnified Persons may defend against such claim or litigation in
such manner as they may deem appropriate, including, without limitation,
settling such claim or litigation (after giving prior written notice of the same
to the Partnership and obtaining the prior written consent of the Partnership,
which consent shall not be unreasonably withheld or delayed) on such terms as
the indemnified Persons may deem appropriate, and the Partnership will promptly
indemnify the indemnified Persons in accordance with the provisions of this
Article 5.

            5.5 Indemnification Pursuant to Formation Agreement. If any
obligation pursuant to the indemnification provisions of Article IX of the
Formation Agreement would otherwise require the indemnifying Person to make a
cash payment to the indemnified Person then, subject to Article 9 hereof, in
lieu of making all or any portion of such cash payment, the indemnifying Person
may transfer OP Ordinary Units of equivalent value to the indemnified Person.
Indemnification through the transfer of OP Units pursuant to this Section 5.5
may only be made if (a) indemnification through the transfer of an equal number
of RP Units is being made pursuant to Section 5.5 of the Realty Partnership
Agreement or (b) the indemnifying Person otherwise makes arrangements for the
transfer to the indemnified Person (or its designee) of an equal number of RP
Units.


                                    ARTICLE 6

         Allocations, Distributions and Other Tax and Accounting Matters

            6.1 Allocations. The Net Income, Net Loss and other Partnership
items shall be allocated pursuant to the provisions of this Section 6.1.

                (a) Allocation of Net Income and Net Loss.

                         (i) Net Income. Except as otherwise provided herein,
Net Income for any fiscal year or other applicable period shall be allocated in
the following order and priority:


                                      -26-
<PAGE>   32
                             (A) first, to the General Partner, until the
         cumulative Net Income allocated pursuant to this Section 6.1(a)(i)(A)
         for the current and all prior periods equals the cumulative Net Loss
         allocated pursuant to Section 6.1(a)(ii)(C) for all prior periods;

                             (B) second, to the holders of OP Units, including
         Class A OP Units and Class B OP Units, to the extent of, in proportion
         to and in reverse order of their prior allocations of Net Loss pursuant
         to Section 6.1(a)(ii)(B) until the cumulative Net Income allocated
         pursuant to this Section 6.1(a)(i)(B) for the current and all prior
         periods equals the cumulative Net Loss allocated to such holders
         pursuant to Section 6.1(a)(ii)(B) for all prior periods;

                             (C) third, to the General Partner, until the
         cumulative Net Income allocated pursuant to this Section 6.1(a)(i)(C)
         for the current and all prior periods equals the cumulative Net Loss
         allocated pursuant to Section 6.1(a)(ii)(A) for all prior periods;

                             (D) fourth, to the holders of Class A OP Units
         until each holder of Class A OP Units has been allocated Net Income
         pursuant to this Section 6.1(a)(i)(D) in an amount equal to its Class A
         Preferred Return for the current and all prior periods;

                             (E) fifth, to the holders of Class A OP Units until
         each holder of Class A OP Units has been allocated Net Income pursuant
         to this Section 6.1(a)(i)(E) in an amount equal to the Net Income (as
         defined in the Realty Partnership Agreement) allocated to an RP
         Ordinary Unit for all prior periods (or portions thereof) from and
         after February 14, 1997 pursuant to Section 6.1(a)(i)(F) of the Realty
         Partnership Agreement, multiplied by the number of Class A OP Units
         held by such holder;

                             (F) sixth, to the holders of Class B OP Units until
         each holder of Class B OP Units has been allocated Net Income pursuant
         to this Section 6.1(a)(i)(F) in an amount equal to its accrued Class B
         OP Special Distributions, if any;

                             (G) seventh, to the holders of Class B OP Units
         until each holder of Class B OP Units has been allocated Net Income
         pursuant to this Section 6.1(a)(i)(G) in an amount equal to the excess
         of its accrued Class B Liquidation Preference Distributions, if any,
         over the portion of such holder's initial Capital Account balance
         allocable to the Class B Liquidation Preference Distribution;

                             (H) eighth, to the extent the Partnership has made
         distributions pursuant to Section 6.2(a)(iii) or Section 6.2(b) to the
         holders of OP Units, including Class A OP Units and Class B OP Units,
         in accordance with and


                                      -27-
<PAGE>   33
         in proportion to the distributions made under Section 6.2(a)(iii) or
         Section 6.2(b); and

                              (I) thereafter, to the General Partner.

                         (ii) Net Loss. Except as otherwise provided herein, Net
Loss of the Partnership for each fiscal year or other applicable period shall be
allocated in the following order and priority:

                              (A) first, to the General Partner, until the
         Capital Account balance of the General Partner has been reduced to the
         minimum capital account balance required pursuant to Section 4.1(b)
         hereof;

                              (B) second, to the holders of OP Units in
         accordance with their respective holdings of OP Units, provided that
         Net Losses shall not be allocated pursuant to this Section
         6.1(a)(ii)(B) to the extent that such allocations would cause any
         Limited Partner to have an Adjusted Capital Account Deficit as of the
         end of the fiscal year to which such Net Loss relates; and

                              (C) the balance, if any, to the General Partner.

                (b) Special Allocations. Notwithstanding any provisions of
Section 6.1(a) hereof, the following special allocations shall be made in the
following order:

                         (i) Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 6, if there is a net decrease in Partnership Minimum
Gain for any Partnership fiscal year (except as a result of conversion or
refinancing of Partnership indebtedness, certain capital contributions or
revaluation of the Partnership property as further outlined in Section
1.704-2(f) of the Regulations), each holder of OP Units shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that holder's share of the net decrease
in Partnership Minimum Gain as determined under Section 1.704-2(g) of the
Regulations. The items to be so allocated shall be determined in accordance with
Section 1.704-2(f) of the Regulations. This clause (i) is intended to comply
with the minimum gain chargeback requirement in said section of the Regulations
and shall be interpreted consistently therewith. Allocations pursuant to this
clause (i) shall be made in proportion to the respective amounts required to be
allocated to each holder of OP Units pursuant hereto.

                         (ii) Minimum Gain Chargeback Attributable to Partner
Nonrecourse Debt. Notwithstanding any other provision of this Article 6, if
there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt
during any fiscal year (other than due to the conversion, refinancing or other
change in the debt instrument causing it to become partially or wholly
nonrecourse, certain capital contributions, or certain revaluations of
Partnership property (as further outlined in Section 1.704-2(i)(4) of the
Regulations), each holder of OP Units shall be specially allocated items of
Partnership income and gain for such year (and, if


                                      -28-
<PAGE>   34
necessary, subsequent years) in an amount equal to the holder's share of the net
decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt as
determined under Section 1.704-2(i) of the Regulations. The items to be so
allocated shall be determined in accordance with Sections 1.704-2(i)(4) and
(j)(2) of the Regulations. This clause (ii) is intended to comply with the
minimum gain chargeback requirement with respect to Partner Nonrecourse Debt
contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this clause (ii) shall be made
in proportion to the respective amounts required to be allocated to each holder
of OP Units.

                         (iii) Qualified Income Offset. In the event a holder of
OP Units unexpectedly receives any adjustments, allocations or distributions
described in Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations,
and such holder has an Adjusted Capital Account Deficit, items of Partnership
income and gain shall be specially allocated to such holder in an amount and
manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly
as possible, provided that an allocation pursuant to this Section 6.1(b)(iii)
shall be made only if and to the extent that such holder would have Adjusted
Capital Account Deficit after all other allocations provided for in this Article
6 have been tentatively made as if this Section 6.1(b)(iii) were not in the
Agreement. This clause (iii) is intended to constitute a "qualified income
offset" under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted consistently therewith.

                         (iv) Gross Income Allocation. In the event any holder
of OP Units has a deficit Capital Account at the end of any fiscal year which is
in excess of the sum of (A) the amount such holder is obligated to restore
pursuant to any provision of this Agreement, and (B) the amount such holder is
deemed to be obligated to restore pursuant to the penultimate sentences of
Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such holder
shall be specially allocated items of Partnership income and gain in the amount
of such excess as quickly as possible, provided that an allocation pursuant to
this Section 6.1(b)(iv) shall be made only if and to the extent that such holder
would have a Capital Account Deficit in excess of such sum after all other
allocations provided for in this Article 6 have been made as if Section
6.1(b)(iii) hereof and this Section 6.1(b)(iv) were not in the Agreement.

                         (v) Nonrecourse Deductions. Nonrecourse Deductions for
any fiscal year or other applicable period shall be allocated to the holders of
OP Units in accordance with their respective holdings of OP Units. For purposes
of Section 1.752-3(a)(3) of the Regulations, "excess nonrecourse liabilities"
shall be allocated among the holders of OP Units in proportion to their
respective holdings of OP Units.

                         (vi) Partner Nonrecourse Deductions. Partner
Nonrecourse Deductions for any fiscal year or other applicable period shall be
specially allocated to the holder of OP Units that bears the economic risk of
loss with respect to the Partner Nonrecourse Debt in respect of which such
Partner Nonrecourse Deductions are attributable (as determined under Sections
1.704-2(b)(4) and (i)(1) of the Regulations).


                                      -29-
<PAGE>   35
                         (vii) Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or Section 743(b) of the Code is required, pursuant to Section
1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations,
to be taken into account in determining Capital Accounts, the amount of such
adjustment to Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to
holders of OP Units in accordance with their interests in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted
pursuant to such sections of the Regulations.

                         (viii) Curative Allocations. The Regulatory Allocations
shall be taken into account in allocating other items of income, gain, loss, and
deduction among the holders of OP Units so that, to the extent possible, the
cumulative net amount of allocations of Partnership items under Sections 6.1(a)
and 6.1(b) hereof shall be equal to the net amount that would have been
allocated to each holder of OP Units if the Regulatory Allocations had not
occurred. This subparagraph (viii) is intended to minimize to the extent
possible and to the extent necessary any economic distortions which may result
from application of the Regulatory Allocations and shall be interpreted in a
manner consistent therewith. For purposes hereof, "Regulatory Allocations" shall
mean the allocations provided under this Section 6.1(b) (other than this
subparagraph) and allocations pursuant to the last sentence of Section
6.1(a)(ii) hereof.

                         (ix) Varying Interests. In the event the number of OP
Units outstanding during a fiscal year changes, the allocations pursuant to this
Article 6 shall be made by the General Partner to take such varying interests
into account in any reasonable manner permitted under the Code and the
Regulations.

                (c) Tax Allocations.

                         (i) Generally. Subject to clauses (ii) and (iii)
hereof, items of income, gain, loss, deduction and credit to be allocated for
income tax purposes (collectively, "Tax Items") shall be allocated among the
holders of OP Units on the same basis as their respective book items.

                         (ii) Sections 1245/1250 Recapture. If any portion of
gain from the sale of property is treated as gain which is ordinary income by
virtue of the application of Sections 1245 or 1250 of the Code ("Affected
Gain"), then (A) such Affected Gain shall be allocated among the holders of OP
Units in the same proportion that the depreciation and amortization deductions
giving rise to the Affected Gain were allocated and (B) other Tax Items of gain
of the same character that would have been recognized, but for the application
of Sections 1245 and/or 1250 of the Code, shall be allocated away from those
holders of OP Units who are allocated Affected Gain pursuant to clause (A) so
that, to the extent possible, the other holders of OP Units are allocated the
same amount, and type, of capital gain that would have been allocated to them
had Sections 1245 and/or 1250 of the Code not applied. For purposes hereof, in
order to determine the proportionate allocations of depreciation and
amortization deductions for each


                                      -30-
<PAGE>   36
fiscal year or other applicable period, such deductions shall be deemed
allocated on the same basis as Net Income or Net Loss for such respective
period.

                         (iii) Allocations Respecting Section 704(c) of the Code
and Revaluations. Property contributed to the Partnership shall be subject to
Section 704(c) of the Code and the Regulations thereunder so that,
notwithstanding paragraph (b) hereof, taxable gain from disposition, taxable
loss from disposition and tax depreciation with respect to Partnership property
that is subject to Section 704(c) of the Code and/or Section 1.704-1(b)(2)
(iv)(f) of the Regulations (collectively "Section 704(c) Tax Items") shall be
allocated on a property by property basis in accordance with said Code Section
and/or the Regulations thereunder, as the case may be. The allocation of Section
704(c) Tax Items shall be made pursuant to any reasonable method selected by the
General Partner in its discretion authorized under Section 1.704-3 of the
Regulations. Allocations pursuant to this Section 6.1(c)(iii) are solely for
purposes of federal, state, and local taxes and shall not affect, or in any way
be taken into account in computing, the Capital Account or share of Net Income,
Net Loss, other items, or distributions of any holder of OP Units pursuant to
any provision of this Agreement.

                         (iv) Tax Credits and Other Items. Tax credits and other
items shall be allocated in accordance with the holdings of OP Units to the
extent permitted under Section 1.704-1(b)(4)(ii) of the Regulations or other
applicable provision of the Code and Regulations and otherwise in accordance
with such provisions.

                         (v) Ancillary Notes. Income, gain, loss or correlative
adjustments, if any, relating to the Suites Ancillary Notes or the disposition
thereof shall be specially allocated to HSR (or its assignees or
successors-in-interest). Income, gain, loss or correlative adjustments, if any,
relating to the Inns Ancillary Notes or the disposition thereof shall be
specially allocated to HSR (or its assignees or successors-in-interest).

                         (vi) Allocations on Liquidation. If the distributions
to holders of OP Units pursuant to Section 8.2(a) hereof would otherwise not be
in accordance with the positive balances in their Capital Accounts (after taking
into account all adjustments to such Capital Accounts for all periods), then
items of gross income and gross deduction for the fiscal year with respect to
which such distributions are being made (and, if necessary, for prior fiscal
years for which amended tax returns can and shall be filed) shall be reallocated
among the holders of OP Units such that the distributions to holders of OP Units
pursuant to Section 8.2(a) hereof are in accordance with the positive balances
in their Capital Accounts (after taking into account all adjustments to such
Capital Accounts for all periods).

            6.2 Distributions.

                (a) The General Partner shall cause the Partnership to
distribute all, or such portion as the General Partner may in its reasonable
discretion determine, of Net Cash Flow in accordance with the distribution rules
described below to the General Partner and to the holders of the applicable OP
Units who are holders on the Partnership Record Date with respect


                                      -31-
<PAGE>   37
to such distribution. From and after the date first above written, Net Cash Flow
shall be distributed:

                         (i) first, to the holders of Class A OP Units, pro rata
in accordance with holders' ownership of Class A OP Units, in an amount equal to
the excess, if any, of (A)(1) the cumulative Class A Preferred Return from
February 14, 1997 to the end of such fiscal year or other applicable period
ending on the Partnership Record Date, over (2) the sum of all prior
distributions to the holders of Class A OP Units pursuant to this Section
6.2(a)(i)(A), and then (B)(1) the cumulative Special Class A Distributions from
February 14, 1997 to the end of such fiscal year or other applicable period
ending on the Partnership Record Date, over (2) the sum of all prior
distributions to the holders of Class A OP Units pursuant to this Section
6.2(a)(i)(B), treating the distributed amounts as paying the oldest amounts due
first;

                         (ii) second, to the holders of Class B OP Units, pro
rata in accordance with the holders' ownership of Class B OP Units, in an amount
equal to the excess, if any, of (A) the total of all Class B OP Special
Distributions that have accrued as of the date of payment of such distribution,
less (B) the total of all previous distributions to the holders of Class B OP
Units in respect of such Class B OP Special Distributions pursuant to Section
8.2(a)(v) hereof, if any, and this Section 6.2(a)(ii);

                         (iii) third, to each holder of OP Units, in an amount
equal to the excess, if any, of (A) all distributions made or to be made as of
the Partnership Record Date by the General Partner to holders of Shares (on a
per Share to per OP Unit basis) over (B) the total amount of all previous
distributions made to the holders of OP Units pursuant to this Section
6.2(a)(iii); and

                         (iv) thereafter, to the General Partner.

                (b) If, as of any Partnership Record Date, the Net Cash Flow of
the Partnership is insufficient to make the distributions provided for under
Section 6.2(a)(i), (ii) or (iii) hereof, the General Partner shall ensure that
sufficient Net Cash Flow is available by reducing the amounts distributable to
it under Section 6.2(a) hereof and increasing the amount otherwise distributable
to holders of OP Units, and, to the extent necessary, by contributing additional
capital to the Partnership.

            6.3 Books of Account. At all times during the continuance of the
Partnership, the General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with GAAP, using the
calendar year as the fiscal and taxable year of the Partnership. In addition,
the Partnership shall keep all records required to be kept pursuant to the Act.

            6.4 Reports. The General Partner shall cause to be sent to the
Partners promptly after receipt of the same from the Accountants and in no event
later than one hundred five (105) days after the close of each fiscal year of
the Partnership, copies of Audited Financial Statements for the Partnership, or
of the General Partner if such statements are prepared solely on


                                      -32-
<PAGE>   38
a consolidated basis with the General Partner, for the immediately preceding
fiscal year of the Partnership. The Partnership shall also cause to be prepared
such reports and/or information as are necessary for SLT to determine its
qualification as a REIT and its compliance with REIT Requirements.

            6.5 Tax Elections and Returns. All elections required or
permitted to be made by the Partnership under any applicable tax law shall be
made by the General Partner in its sole and absolute discretion, except that the
General Partner shall, if requested by a Limited Partner, file an election on
behalf of the Partnership pursuant to Section 754 of the Code to adjust the
basis of the Partnership property in the case of a transfer of a Partnership
Interest or distribution from the Partnership, including transfers made in
connection with the exercise of the Rights, made in accordance with the
provisions of the Agreement. The General Partner shall be responsible for
preparing and filing all federal and state tax returns for the Partnership and
furnishing copies thereof to the Partners, together with required Partnership
schedules showing allocations of tax items, copies of all within the period of
time prescribed by law. The General Partner shall use reasonable efforts to make
available to the holders of OP Units final K-1's not later than September 15 of
each year.

            6.6 Tax Matters Partner. The General Partner is hereby designated as
the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code
(and any corresponding provisions of state and local law) for the Partnership;
provided, however, that (a) in exercising its authority as Tax Matters Partner,
the General Partner shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; and (b) the General Partner shall give
prompt notice to any notice partners under Section 6231 of the Code of the
receipt of any written notice that the Internal Revenue Service intends to
examine or audit Partnership income tax returns for any year, receipt of written
notice of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative adjustment relating to the
Partnership pursuant to Section 6223 of the Code, and receipt of any request
from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Partnership.

            6.7 Withholding Payments Required By Law.

                (a) Unless treated as a Tax Payment Loan (as hereinafter
defined), any amount paid by the Partnership for or with respect to any holder
of OP Units on account of any withholding tax or other tax payable with respect
to the income, profits or distributions of the Partnership pursuant to the Code,
the Regulations, or any state or local statute, regulation, notice, ruling or
ordinance requiring such payment (a "Withholding Tax Act") shall be treated as a
distribution to such holder for all purposes of this Agreement, consistent with
the character or source of the income, profits or cash which gave rise to the
payment or withholding obligation. To the extent that the amount required to be
remitted by the Partnership under the Withholding Tax Act exceeds the amount
then otherwise distributable to such holder, unless and to the extent that funds
shall have been provided by such holder pursuant to the last sentence of this
Section 6.7(a), the excess shall constitute a loan from the Partnership to such
holder (a "Tax Payment


                                      -33-
<PAGE>   39
Loan") which shall be payable upon demand and shall bear interest, from the date
that the Partnership makes the payment to the relevant taxing authority, at the
rate announced from time to time by Citibank, N.A. (or any successor thereto) as
its "prime rate," plus 4% per annum, compounded monthly (but in no event higher
than the highest interest rate permitted by applicable law). So long as any Tax
Payment Loan to any holder of OP Units or the interest thereon remains unpaid,
the Partnership shall make future distributions due to such holder under this
Agreement by applying the amount of any such distributions first to the payment
of any unpaid interest on such Tax Payment Loan and then to the repayment of the
principal thereof, and no such future distributions shall be paid to such holder
until all of such principal and interest has been paid in full. If the amount
required to be remitted by the Partnership under the Withholding Tax Act exceeds
the amount then otherwise distributable to a holder of OP Units, the Partnership
shall notify such holder at least five (5) Business Days in advance of the date
upon which the Partnership would be required to make a Tax Payment Loan under
this Section 6.7(a) (the "Tax Payment Loan Date") and provide such holder the
opportunity to pay to the Partnership, on or before the Tax Payment Loan Date,
all or a portion of such deficit.

                (b) The General Partner shall have the authority to take all
actions necessary to enable the Partnership to comply with the provisions of any
Withholding Tax Act applicable to the Partnership and to carry out the
provisions of this Section 6.7. Nothing in this Section 6.7 shall create any
obligation on the General Partner to advance funds to the Partnership or to
borrow funds from third parties in order to make any payments on account of any
liability of the Partnership under a Withholding Tax Act.

                (c) In the event that a Tax Payment Loan is not paid by a holder
of OP Units within thirty (30) days after written demand therefor is made by the
General Partner, the General Partner may cause all distributions that would
otherwise be made to such holder to be retained by the Partnership, or sell such
holder's OP Units for sale proceeds, in each case up to the amount necessary to
repay such Tax Payment Loan, including all accrued and unpaid interest therein,
and such retained distributions or sale proceeds shall be applied against,
first, the accrued interest on and, second, the principal of, such Tax Payment
Loan.


                                    ARTICLE 7

             Rights, Duties and Restrictions of the General Partner

            7.1 Powers and Duties of the General Partner.

                (a) Subject to Section 7.11 hereof, the General Partner shall be
responsible for the management of the Partnership's business and affairs. Except
as otherwise herein expressly provided, the General Partner shall have, and is
hereby granted, full and complete power, authority and discretion to take such
action for and on behalf of the Partnership and in its name as the General
Partner shall, in its sole and absolute discretion, deem necessary or
appropriate to carry out the Partnership's business and the purposes for which
the Partnership was


                                      -34-
<PAGE>   40
organized. Except as otherwise expressly provided herein, the General Partner
shall, on behalf of, and at the expense of, the Partnership, have the right,
power and authority:

                         (i) to manage, control, invest, reinvest, acquire by
purchase, lease or otherwise, sell, contract to purchase or sell, grant, obtain,
or exercise options to purchase, options to sell or conversion rights, assign,
transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal with
any and all property of whatsoever kind and nature, and wheresoever situated, in
furtherance of the business or purposes of the Partnership;

                         (ii) to acquire, directly or indirectly, interests in
real estate of any kind and of any type, and any and all kinds of interests
therein (including, without limitation, Entities investing therein), and to
determine the manner in which title thereto is to be held; to manage (directly
or through property managers), insure against loss, protect and subdivide any of
the real estate, interests therein or parts thereof; to improve, develop or
redevelop any such real estate; to participate in the ownership and development
of any property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase or
lease, to sell on any terms; to convey, mortgage, pledge or otherwise encumber
said property, or any part thereof; to lease said property or any part thereof
from time to time, upon any terms and for any period of time, and to renew or
extend leases, to amend, change or modify the terms and provisions of any leases
and to grant options to lease and options to renew leases and options to
purchase; to partition or to exchange said real property, or any part thereof,
for other real or personal property; to grant easements or charges of any kind;
to release, convey or assign any right, title or interest in or about or
easement appurtenant to said property or any part thereof; to construct and
reconstruct, remodel, alter, repair, add to or take from buildings on any
property in which the Partnership owns an interest; to insure any Person having
an interest in or responsibility for the care, management or repair of such
property; to direct the trustee of any land trust to mortgage, lease, convey or
contract to convey the real estate held in such land trust or to execute and
deliver deeds, mortgages, notes and any and all documents pertaining to the
property subject to such land trust or in any matter regarding such trust; and
to execute assignments of all or any part of the beneficial interest in such
land trust;

                         (iii) to employ, engage, indemnify or contract with or
dismiss from employment or engagement Persons to the extent deemed necessary or
appropriate by the General Partner for the operation and management of the
Partnership business, including but not limited to contractors, subcontractors,
engineers, architects, surveyors, mechanics, consultants, accountants,
attorneys, insurance brokers, real estate brokers and others;

                         (iv) to enter into contracts on behalf of the
Partnership, and to cause all Administrative Expenses to be paid;

                         (v) to borrow or loan money, obtain or make loans and
advances from and to any Person for Partnership purposes and to apply for and
secure from or accept and grant to any Person credit or accommodations; to
contract liabilities and obligations (including interest rate swaps, caps and
hedges) of every kind and nature with or without security;


                                      -35-
<PAGE>   41
and to repay, collect, discharge, settle, adjust, compromise or liquidate any
such loan, advance, obligation or liability; provided, however, without the
Consent of the Class A Limited Partners, the Partnership shall not borrow from
the Realty Partnership or SLT such that neither the Realty Partnership nor SLT
has lending capacity under Section 856(c)(5)(B) of the Code to lend an amount to
the Partnership to allow the Partnership to discharge its and the General
Partner's obligations to the Class A Limited Partners under this Agreement and
under that certain Class A Exchange Rights Agreement dated February 14, 1997, by
and among SLC, the Partnership, and the Class A Limited Partners;

                         (vi) to grant security interests, mortgage, assign,
deposit, deliver, enter into sale and leaseback arrangements or otherwise give
as security or as additional or substitute security or for sale or other
disposition any and all Partnership property, tangible or intangible, including,
but not limited to, personal property and real estate and interests in land
trusts, and to make substitutions thereof, and to receive any proceeds thereof
upon the release or surrender thereof; to sign, execute and deliver any and all
assignments, deeds, bills of sale and contracts and instruments in writing; to
authorize, give, make, procure, accept and receive moneys, payments, property
notices, demands, protests and authorize and execute waivers of every kind and
nature; to enter into, make, execute, deliver and receive agreements,
undertakings and instruments of every kind and nature; and generally to do any
and all other acts and things incidental to any of the foregoing or with
reference to any dealings or transactions which the General Partner may deem
necessary, proper or advisable to effect or accomplish any of the foregoing or
to carry out the business and purposes of the Partnership;

                         (vii) to acquire and enter into any contract of
insurance (including, without limitation, general partner liability and
partnership reimbursement insurance policies) which the General Partner may deem
necessary or appropriate;

                         (viii) to conduct any and all banking transactions on
behalf of the Partnership; to adjust and settle checking, savings and other
accounts with such institutions as the General Partner shall deem appropriate;
to draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay any
checks, drafts, bills of exchange, acceptances, notes, obligations, undertakings
and other instruments for or relating to the payment of money in, into or from
any account in the Partnership's name; to make deposits into and withdrawals
from the Partnership's bank accounts and to negotiate or discount commercial
paper, acceptances, negotiable instruments, bills of exchange and dollar drafts;

                         (ix) to demand, sue for, receive and otherwise take
steps to collect or recover all debts, rents, proceeds, interests, dividends,
goods, chattels, income from property, damages and all other property, to which
the Partnership may be entitled or which are or may become due the Partnership
from any Person; to commence, prosecute or enforce, or to defend, answer or
oppose, contest and abandon all legal proceedings in which the Partnership is or
may hereafter be interested; and to settle, compromise or submit to arbitration
any accounts, debts, claims, disputes and matters which may arise between the
Partnership and any other Person and to grant an extension of time for the
payment or satisfaction thereof on any terms, with or without security;


                                      -36-
<PAGE>   42
                         (x) to acquire interests in and contribute money or
property to any limited or general partnerships, joint ventures, subsidiaries or
other entities as the General Partner deems desirable;

                         (xi) to maintain or cause to be maintained the
Partnership's books and records;

                         (xii) to prepare and deliver, or cause to be prepared
and delivered, all financial and other reports with respect to the operations of
the Partnership, and preparation and filing of all tax returns and reports;

                         (xiii) to do all things which are necessary or
advisable for the protection and preservation of the Partnership's business and
assets, and to execute and deliver such further instruments and undertake such
further acts as may be necessary or desirable to carry out the intent and
purposes of this Agreement and as are not inconsistent with the terms hereof;

                         (xiv) subject to Section 7.4 hereof, to lease real or
personal property from the Realty Partnership or its Affiliates or to any other
Person on such terms and conditions as the General Partner may from time to time
determine;

                         (xv) subject to Section 11.3 hereof, to authorize and
cause mergers between the Partnership and other Entities in which the
Partnership is the surviving Entity; and

                         (xvi) in general, to exercise all of the general
rights, privileges and powers permitted to be had and exercised under the Act.

To the extent the duties of the General Partner require expenditures of funds to
be paid to third parties, the General Partner shall not have any obligations
hereunder except to the extent that Partnership funds are reasonably available
to it for the performance of such duties, and nothing herein contained shall be
deemed to require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any specific
liability or litigation on behalf of the Partnership.

                (b) Notwithstanding the provisions of Section 7.1(a) hereof, the
Partnership shall not take any action which (or fail to take any action, the
omission of which) the General Partner believes, in its sole and absolute
discretion, (i) could adversely affect the ability of SLT to qualify or continue
to qualify as a REIT, (ii) could otherwise cause SLT to violate the REIT
Requirements or (iii) could violate any law or regulation of any governmental
body or agency having jurisdiction over the General Partner or its securities,
unless such action (or inaction) shall have been specifically consented to by
the General Partner.

                (c) Notwithstanding the provisions of Section 7.1(a) hereof, the
Partnership shall not commingle its funds with those of any Affiliate or other
entity; funds and other assets of the Partnership shall be separately identified
and segregated; all of the Partnership's


                                      -37-
<PAGE>   43
assets shall at all times be held by or on behalf of the Partnership, and, if
held on behalf of the Partnership by another entity, shall at all times be kept
identifiable (in accordance with customary usages) as assets owned by the
Partnership; and the Partnership shall maintain its own separate bank accounts,
payroll and books of account.

                (d) Without the consent of the Limited Partners, the General
Partner shall have no power to do any act in contravention of this Agreement or
possess any Partnership property for other than a partnership purpose.

            7.2 Reimbursement of the General Partner.

                (a) Except as provided in this Section 7.2 and elsewhere in this
Agreement (including the provisions of Articles 5, 6 and 8 hereof regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not receive payments from or be compensated for its
services as general partner of the Partnership.

                (b) The General Partner shall be reimbursed on a monthly basis,
or such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses it incurs relating to the ownership and
operation of, or for the benefit of, the Partnership, including, without
limitation, the Administrative Expenses. Such reimbursements shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 5.1 hereof.

                (c) The General Partner shall also be reimbursed for all
expenses incurred relating to the organization and formation of the Partnership,
the General Partner's share of public offerings of Starwood Units by the General
Partner and SLT to the extent included in Administrative Expenses, and any other
issuance of additional Partnership Interests.

            7.3 Outside Activities of the General Partner. The General Partner
shall not be restricted in its outside activities or investments if the General
Partner makes such arrangements as are reasonably necessary, including but not
limited to distributions and/or Rights, to prevent such activities or
investments from having a material adverse impact on the Limited Partners and to
assure that the Limited Partners share in the economic benefits of such
activities or investments in a fair and equitable manner as compared to holders
of Starwood Units. For purposes of Section 7.3, the interests of the holders of
OP Ordinary Units in the Realty Partnership shall be taken into account.

            7.4 Contracts with Affiliates. The Partnership may engage in
transactions, enter into contracts with Affiliates, and lend money to or borrow
money from Affiliates which are on terms fair and reasonable to the Partnership
and no less favorable to the Partnership than would be obtained from
unaffiliated third parties. The Partners hereby agree that the Partnership's
leases and loans with the Realty Partnership, as in effect on the date first
above written, are on terms fair and reasonable to the Partnership and such
terms are no less favorable to the Partnership than would be obtained from
unaffiliated third parties.


                                      -38-
<PAGE>   44
            7.5 Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partner, individually
or collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby acknowledges and confirms that any Partnership assets
for which legal title is held in the name of the General Partner or any nominee
or Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.

            7.6 Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. In no event
shall any Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner
shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (a) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (b) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (c) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.

            7.7 Liability of the General Partner.

                (a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary or other damages
to the Partnership, any of the Partners or any assignee of any interest of any
Partner for losses sustained or liabilities incurred as a result of errors in
judgment or of any act or omission if the General Partner acted without fraud,
gross negligence or willful misconduct.

                (b) The Limited Partners expressly acknowledge (i) that the
General Partner is acting on behalf of the Partnership and the General Partner's
shareholders collectively, (ii) that, subject to the terms and conditions of
this Agreement, the General Partner may, but is under no obligation to, consider
the separate interests of the Limited Partners (including, without limitation,
the tax consequences to Limited Partners or any assignees thereof except as
provided in this Agreement) in deciding whether to cause the Partnership to take
(or decline to take) any


                                      -39-
<PAGE>   45
actions, and (iii) that the General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner acted without fraud, gross negligence or willful misconduct.

                (c) Subject to its obligations and duties as General Partner set
forth in Section 7.1 hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through agents. The General Partner shall not
be responsible for any fraud, willful misconduct or gross negligence on the part
of any such agent appointed by it without fraud, gross negligence or willful
misconduct.

                (d) Any amendment, modification or repeal of this Section 7.7 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the General Partner's liability to the Partnership and the
Partners under this Section 7.7 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may be asserted.

            7.8 Other Matters Concerning the General Partner.

                (a) The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, or other document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.

                (b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the advice or opinion of such Persons as to matters which
the General Partner reasonably believes to be within such Person's professional
or expert competence and in accordance with such advice or opinion shall be
prima facie evidence that such actions have been done or omitted in good faith.

                (c) The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers and any attorney or attorneys-in-fact duly appointed by the
General Partner. Each such attorney shall, to the extent provided by the General
Partner in the power of attorney, have full power and authority to do and
perform all and every act and duty which is permitted or required to be done by
the General Partner hereunder.

            7.9 Operation of SLT in Accordance with REIT Requirements.

                (a) The Partners acknowledge and agree that the ability of SLT
to satisfy the REIT Requirements is a material inducement for the Realty
Partnership to lease its real and personal property to the Partnership, the
General Partner or Affiliates of either of them, and


                                      -40-
<PAGE>   46
that the failure of SLT to satisfy the REIT Requirements is likely to have a
material adverse effect on the Partnership. The Partners therefore acknowledge
and agree that, in addition to the other provisions of this Agreement, so long
as SLT desires to elect to be taxed as a REIT, the Partnership shall be operated
in a manner that will enable SLT to satisfy the REIT Requirements. So long as
SLT desires to elect to be taxed as a REIT, the Partnership shall avoid taking
any action which would result in SLT ceasing to satisfy the REIT Requirements.

                 (b) Without the prior consent of the General Partner, no
Limited Partner or holder of OP Units or any Affiliate shall take any action,
including acquiring, directly or indirectly, an interest in any tenant of a
property owned by the Realty Partnership or by an Entity owned by the Realty
Partnership (including, but not limited to, the Operating Partnership, SLC or an
Affiliate of either), which would have, through the actual or constructive
ownership of any tenant of any property, the effect of causing the percentage of
the gross income of SLT that fails to be treated as "rents from real property"
within the meaning of Section 856(d)(2) of the Code to exceed such percentage on
the date first above written. Each Limited Partner and holder of OP Units shall
use its best efforts to notify the General Partner on a timely basis of any
direct or indirect acquisition or potential direct or indirect acquisition of
Starwood Units by such Limited Partner or holder or any Affiliate or direct or
indirect owner of an interest in such Limited Partner or holder that could
reasonably be expected to have such effect.

            7.10 Replacement of General Partner. In the event the General
Partner is no longer a Partner (whether in accordance with the provisions of
this Agreement or otherwise), a successor General Partner shall be appointed by
a vote of a Majority-in-Interest of the Limited Partners.


                                    ARTICLE 8

                     Dissolution, Liquidation and Winding-Up

            8.1  Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting shall be made of the Capital
Account of each holder of OP Units and of the Net Income or Net Loss of the
Partnership from the date of the last previous accounting to the date of
dissolution.

            8.2  Distributions on Dissolution.

                 (a) In the event of the dissolution and liquidation of the
Partnership for any reason, the assets of the Partnership shall be liquidated
for distribution in the following rank and order:

                     (i) payment of creditors of the Partnership, including
creditors who are Partners or former Partners;


                                      -41-
<PAGE>   47
                     (ii) establishment of reserves as provided by the
Liquidating Trustee to provide for contingent liabilities, if any;

                     (iii) to the holders of Class A OP Units, pro rata in
accordance with the holders' ownership of Class A OP Units, in an amount equal
to the excess, if any, of (A) the cumulative distributions under Section 8.2(a)
of the Realty Partnership Agreement for an equivalent number of RP Ordinary
Units from February 14, 1997 to the date on which a distribution under this
Section 8.2(a) is made, over (B) the sum of all prior distributions to the
holders of Class A OP Units pursuant to this Section 8.2(a)(iii);

                     (iv) to the holders of Class B OP Units, pro rata in
accordance with the holders' ownership of Class B OP Units, in an amount equal
to the excess, if any, of (A) the Class B Liquidation Preference Distribution,
over (B) the sum of all prior distributions to holders of Class B OP Units
pursuant to this Section 8.2(a)(iv);

                     (v) to the holders of Class B OP Units, pro rata in
accordance with the holders' ownership of Class B OP Units, in an amount equal
to the excess, if any, of (A) the total of all Class B Special Distributions
that have accrued as of the date of payment of such liquidating distribution,
less (B) the total of all previous distributions made to the holders of Class B
OP Units in respect of such Class B OP Special Distributions pursuant to Section
6.2(a) hereof and this Section 8.2(a)(v); and

                     (vi) to the holders of OP Units and the General Partner, in
accordance with their respective holdings of OP Units.

Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (ii) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in accordance with the provisions of this Section
8.2(a). No Partner or holder of OP Units shall be liable to any other Partner or
holder of OP Units for a deficit balance in its Capital Account.

                (b) Notwithstanding the provisions of Section 8.2(a) hereof
which require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidating Trustee determines that an immediate sale of part or
all of the Partnership's assets would be impractical or would cause undue loss
to the Partners, the Liquidating Trustee may, in its sole and absolute
discretion, defer for a reasonable time liquidation of any assets except those
necessary to satisfy liabilities of the Partnership (including to those Partners
which are creditors of the Partnership) and/or, with the Consent of the Limited
Partners, distribute to the Partners, in lieu of cash, as tenants in common and
in accordance with the provisions of Section 8.2(a) hereof, undivided interests
in such Partnership assets as the Liquidating Trustee deems not suitable for
liquidation. Any such distributions in kind shall be made only if, in the good
faith judgment of the Liquidating Trustee, such distributions in kind are in the
best interest of the Partners, and shall be subject to such conditions relating
to the disposition and management of such properties as the Liquidating Trustee
deems reasonable and equitable and to any agreements governing the operation of
such


                                      -42-
<PAGE>   48
properties at such time. The Liquidating Trustee shall determine the fair market
value of any property distributed in kind using such reasonable method of
valuation as it may adopt.

            8.3 Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.


                                    ARTICLE 9

                                    Transfer

            9.1 General Partner. The General Partner shall not withdraw from the
Partnership and shall not sell, assign, pledge, encumber or otherwise dispose of
all or any portion of its Partnership Interest or OP Units without the Consent
of the Limited Partners, which consent may be given or withheld in each Limited
Partner's sole and absolute discretion. Upon any transfer of a Partnership
Interest in accordance with the provisions of this Section 9.1, the transferee
General Partner shall become vested with the powers and rights of the transferor
General Partner, and shall be liable for all obligations and responsible for all
duties of the General Partner under this Agreement, once such transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement with respect to the Partnership interest so
acquired. It shall be a condition to any transfer permitted hereunder that the
transferee assumes by express agreement (or pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the General Partner are
assumed by a successor trust or corporation by operation of law) all of the
obligations of the transferor General Partner under this Agreement with respect
to such transferred Partnership Interest and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor General Partner are assumed by a successor trust
or corporation by operation of law) shall relieve the transferor General Partner
of its obligations under this Agreement without the Consent of the Limited
Partners. In connection with any such permitted transfer, the successor General
Partner shall be deemed admitted as such immediately prior to the effective time
of the transfer from the transferor General Partner and shall continue the
business of the Partnership without dissolution. If the General Partner
withdraws or retires from the Partnership, in violation of this Agreement or
otherwise, or dissolves, terminates or upon the Bankruptcy of the General
Partner, within ninety (90) days thereafter, at least a Majority-in-Interest of
the Limited Partners may elect to continue the Partnership business by selecting
a substitute General Partner, which substitute General Partner accepts such
election and agrees to serve as General Partner. Such successor General Partner
shall thereupon succeed to the rights and obligations of the General Partner as
provided in this Section 9.1.


                                      -43-
<PAGE>   49
            9.2 Transfers by Limited Partners.

                (a) No Limited Partner shall have the right, directly or
indirectly, to transfer all or any part of his Partnership Interest or OP Units
to any Person without the prior written consent of the General Partner, which
consent may be given or withheld by the General Partner in its sole and absolute
discretion. The foregoing notwithstanding, the General Partner hereby grants the
consents described in this Section 9.2 to transfers of Partnership Interests
pursuant to an exercise of Rights, provided that any such transfer otherwise
complies with all of the other provisions of this Article 9 (including, but not
limited to, any additional consents required hereunder).

                (b) It shall be a condition to any transfer by a Limited Partner
(other than a pledge, encumbrance, hypothecation or mortgage) otherwise
permitted hereunder that the transferee assume by operation of law or express
agreement all of the obligations of the transferor under this Agreement
(including, without limitation, under this Article 9) with respect to such
transferred Partnership Interest or OP Units and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor are assumed by a successor corporation by
operation of law) shall relieve the transferor of its obligations under this
Agreement without the approval of the General Partner, in its reasonable
discretion (it being understood that a transferor shall be deemed relieved from
such obligations, without the necessity of any such approval, in respect of
Partnership Interests transferred to the General Partner or the Partnership
pursuant to an Exchange Rights Agreement). Upon such transfer, the transferee of
a Partnership Interest shall be admitted as a Limited Partner and shall succeed
to all of the rights of the transferor Limited Partner under this Agreement in
the place and stead of such transferor Limited Partner (which succession, in the
event of a pledge, may be entered into and become effective at the time of
foreclosure or other realization of such pledge). The foregoing notwithstanding,
a transferee of an OP Unit shall not be admitted as a substituted Limited
Partner unless the General Partner consents, which consent may be given or
withheld by the General Partner in its sole and absolute discretion. Any
transferee, whether or not admitted as a substituted Limited Partner, shall
succeed to the obligations of the transferor hereunder (unless such transfer is
a pledge, encumbrance, hypothecation or mortgage or except as otherwise provided
herein).

                (c) In addition to any other restrictions on transfer provided
herein, no Partnership Interest or OP Units shall be transferable by a Limited
Partner unless the transferor gives written notice of the proposed transfer
which notice shall state to the best of its knowledge that such transfer will
not violate any of the restrictions set forth in Section 9.3 hereof.

                (d) Any permitted transferee under this Section 9.2 who is not
admitted as a Limited Partner in accordance with this Article 9 or a transferee
who only holds OP Units shall be considered an assignee for purposes of this
Agreement. An assignee shall be deemed to have had assigned to it, and shall be
entitled to receive, distributions from the Partnership and the share of Net
Income, Net Loss, and any other items of income, gain, loss, deduction and
credit of the Partnership and rights attributable to the Partnership Interests
assigned to such transferee, but shall not be deemed to be a holder of
Partnership Interests for any other purpose under this


                                      -44-
<PAGE>   50
Agreement, and shall not be entitled to vote such Partnership Interests in any
matter presented to the Limited Partners for a vote. In the event any such
transferee desires to make a further assignment of any such Partnership
Interests, such transferee shall be subject to all the provisions of this
Article 9 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Interests.

                (e) The Limited Partners acknowledge that neither the
Partnership Interests nor the OP Units have been registered under any federal or
state securities laws and, as a result thereof, they may not be sold or
otherwise transferred, except in compliance with such laws. Notwithstanding
anything to the contrary contained in this Agreement, no Partnership Interest or
OP Units may be sold or otherwise transferred unless such transfer is exempt
from registration under any applicable securities laws or such transfer is
registered under such laws, it being acknowledged that the Partnership has no
obligation to take any action which would cause any such Partnership Interests
or OP Units to be registered.

            9.3 Certain Restrictions on Transfer. In addition to any other
restrictions on transfer herein contained, except with the consent of the
General Partner, in no event may any transfer of a Partnership Interest or OP
Units by any Person be made (a) to any person or Entity that lacks the legal
right, power or capacity to own a Partnership Interest or OP Units; (b) in the
event such transfer would be substantially likely to cause SLT to cease to
comply with the REIT Requirements; (c) if such transfer would be substantially
likely to cause a termination of the Partnership for federal income tax
purposes; (d) if such transfer would be substantially likely to, in the opinion
of counsel to the Partnership, cause the Partnership to cease to be classified
as a Partnership for federal income tax purposes; (e) if such transfer would be
substantially likely to result in the Partnership being treated as a "publicly
traded partnership" or is effectuated through an "established securities market"
or a "secondary market (or the substantial equivalent thereof)" within the
meaning of Section 7704 of the Code and the Regulations thereunder; (f) in
violation of the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (g) if
the General Partner reasonably believes that such transfer may (i) cause any
portion or all of the assets of the Partnership to be deemed pursuant to United
States Department of Labor Regulation Section 2510.3-101 or otherwise pursuant
to ERISA or the Code to be for any purpose of ERISA or Section 4975 of the Code
assets of any Restricted Entity, or (ii) cause a "prohibited transaction" (as
defined in Section 4975(c) of the Code or within the meaning of Section 406 of
ERISA) to occur, or (iii) cause the Partnership to become with respect to any
Restricted Entity a "party in interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(e) of the Code) or (iv)
cause the Partnership to be jointly and severally liable for any obligation
arising under ERISA or the Code with respect to any "employee benefit plan" as
defined in and subject to ERISA or any "plan" as defined in Section 4975 of the
Code; or (h) if the intended transferee is a Restricted Entity. Any purported
transfer described in this Section 9.3 shall be void ab initio.

            9.4 Effective Dates of Transfers.

                (a) Transfers pursuant to this Article 9 may be made on any day,
but for purposes of this Agreement, the effective date of any such transfer
shall be (i) the first day of the month in which such transfer occurred if such
transfer occurred on or prior to the fifteenth


                                      -45-
<PAGE>   51
calendar day of a month, or (ii) the first day of the month immediately
following the month in which such transfer occurred, if such transfer occurred
after the fifteenth calendar day of a month, or such other date determined by
the General Partner pursuant to such convention as may be administratively
feasible and consistent with applicable law.

                (b) If any Partnership Interest or OP Unit is transferred or
assigned in compliance with the provisions of this Article 9, on any day other
than the first day of a calendar year, then Net Income, Net Loss, each item
thereof and all other items attributable to such Partnership Interest or OP Unit
for such year shall be allocated to the transferor, and, in the case of a
transfer or assignment other than a redemption, to the transferee, by taking
into account their varying interests during such year in accordance with Section
706(d) of the Code, using any method permitted thereunder. All distributions
pursuant to Section 6.2 hereof attributable to such transferred Partnership
Interests or OP Units (i) with respect to which the Partnership Record Date is
before the effective date of such transfer (other than a pledge, encumbrance,
hypothecation or mortgage) shall be made to the transferor, and (ii) with
respect to any Partnership Record Date after the effective date of such transfer
(other than a pledge, encumbrance, hypothecation or mortgage) shall be paid to
the transferee.

            9.5 Transfer.

                (a) The term "transfer," when used in this Article 9 with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which a Person purports to assign its Partnership Interest or any portion
thereof (including OP Units) to another Person, and includes a sale, assignment,
gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise.

                (b) No Partnership Interest or OP Unit shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Article 9. Any transfer or purported transfer of a Partnership Interest
not made in accordance with this Article 9 shall be null and void.

            9.6 Nevada Gaming Control Act.

                (a) Notwithstanding anything to the contrary expressed or
implied in this Agreement, the sale, assignment, transfer, pledge or other
disposition of any interest in the Partnership is void unless approved in
advance by the Commission. If at any time the Commission finds that an
individual owner of any interest in the Partnership is unsuitable to hold that
interest, the Commission shall immediately notify the Partnership of that fact.
The Partnership shall, within ten (10) days from the date that it receives the
notice from the Commission, return to the unsuitable owner the amount of his
capital account as reflected on the books of the Partnership. Beginning on the
date when the Commission serves notice of a determination of unsuitability,
pursuant to the preceding sentence, on the Partnership, it is unlawful for the
unsuitable owner: (i) to receive any share of the profits or distributions of
any cash or other property other than a return of capital as described above;
(ii) to exercise,


                                      -46-
<PAGE>   52
directly or through any trust or nominee, any voting right conferred by such
interest; or (iii) to receive any remuneration in any form from the Partnership
for services rendered or otherwise.


                 (b) Any Limited Partner granted a delayed licensing by the
Commission which Limited Partner is later found unsuitable by the Commission
shall return all evidence of any ownership in the Partnership to the
Partnership, at which time the Partnership shall refund to the unsuitable
Limited Partner no more than the amount that such Limited Partner paid for his
ownership interest in the Partnership, and the unsuitable Limited Partner shall
no longer have any direct or indirect interest in the Partnership.

                 (c) This Section 9.6 shall apply only if the Partnership
applies for and obtains a Nevada state gaming license and only while such
license is in effect. No such license shall be applied for or obtained by the
Partnership without the Consent of the Limited Partners.


                                   ARTICLE 10

                 Rights and Obligations of the Limited Partners

            10.1 No Participation in Management. No Limited Partner, in its
capacity as such, shall take part in the management of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. Any rights expressly
granted to the Limited Partners in this Agreement shall not be deemed to be
rights relating to the management of the Partnership's business.

            10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Net Profits or Net Losses of the Partnership and
to receive distributions of Partnership funds shall, on the happening of such
event, devolve on its successors or assigns, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
In no event, however, shall such assignee(s) become a substituted Limited
Partner except in accordance with Article 9 hereof.

            10.3 No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other than
as provided in Article 9 hereof.

            10.4 Conflicts. The Partners recognize that the Limited Partners and
their Affiliates have or may have other business interests, activities and
investments, some of which may be in conflict or competition with the business
of the Partnership, and that such Persons are entitled to carry on such other
business interests, activities and investments. In deciding whether to take any
actions in such capacity, such Limited Partners and their Affiliates may, but
shall be under no obligation to, consider the separate interests of the
Partnership and shall have no fiduciary obligations to the Partnership and shall
not be liable for monetary damages for losses


                                      -47-
<PAGE>   53
sustained, liabilities incurred or benefits not derived by the other Partners in
connection with such actions except for damages for losses sustained or
liabilities incurred which result from a Limited Partner breaching a
representation, warranty or covenant hereunder or to the extent provided in the
Formation Agreement; nor shall the Partnership or the General Partner be under
any obligation to consider the separate interests of the Limited Partners and
their Affiliates in such capacity or have any fiduciary obligations to the
Limited Partners and their Affiliates in such capacity or be liable for monetary
damages for losses sustained, liabilities incurred or benefits not derived by
the Limited Partners and their Affiliates in such capacity arising from actions
or omissions taken by the Partnership. The Limited Partners and their Affiliates
may engage in or possess an interest in any other business or venture of any
kind, independently or with others, on their own behalf or on behalf of other
entities with which they are affiliated or associated, and such persons may
engage in any activities, whether or not competitive with the Partnership,
without any obligation to offer any interest in such activities to the
Partnership or to any Partner. Neither the Partnership nor any Partner shall
have any right, by virtue of this Agreement, in or to such activities, or the
income or profits derived therefrom, and the pursuit of such activities, even if
competitive with the business of the Partnership, shall not be deemed wrongful
or improper. Notwithstanding the foregoing, the provisions of this Section 10.4
shall not negate or impair any other written agreement between one or more of
the Limited Partners and the General Partner or the Partnership (including
Section 6.6 of the Formation Agreement) or any duties which a Limited Partner
may have in such Limited Partner's capacity as an officer or director of the
General Partner.

            10.5 Provision of Information.

                 (a) With respect to any information required to be provided to
the Limited Partners pursuant to Section 17-305 (or any successor thereto) of
the Act: (i) the cost of preparing or providing any such information (including,
without limitation, fees paid to any person or entity in connection therewith)
shall be paid by the requesting Partner and in no event shall such information
be required to be given to the requesting Partner until such payment has been
made to the Partnership; (ii) in no event shall any financial statements of the
Partnership be required to be provided except for such statements as have
already been prepared or are otherwise required to be provided to the Limited
Partners under this Agreement and in no event shall any statements which have
been prepared be required to be audited, reviewed or otherwise examined by a
certified public accountant, if the statements are not otherwise required to be
so audited, reviewed or examined pursuant to the provisions of this Agreement;
and (iii) in no event shall such information be required to be furnished until
forty-five (45) days after such request and unless the information is already in
the possession of the Partnership.

                 (b) In addition to other rights provided by this Agreement or
by the Act, each Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner's interest as a limited partner in the
Partnership, upon written demand with a statement of the purpose of such demand
and at such Limited Partner's own expense (excluding copying and administrative
expenses of the General Partner):


                                      -48-
<PAGE>   54
                     (i) to obtain a copy of the most recent annual and
quarterly reports and current reports on Form 8-K filed with the SEC by the
General Partner pursuant to the Securities Exchange Act of 1934;

                     (ii) to obtain a copy of the Partnership's federal, state
and local income tax returns for each fiscal year of the Partnership;

                     (iii) to obtain a current list of the name and last known
business, residence or mailing address of each Partner; and

                     (iv) to obtain a copy of this Agreement and the
Certificate, together with executed copies of all powers of attorney pursuant to
which this Agreement and the Certificate have been executed.

                 (c) Notwithstanding any other provision of this Section 10.5,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that is not material to the Limited
Partners and that (i) the General Partner reasonably believes to be in the
nature of trade secrets or other information the disclosure of which the General
Partner in good faith believes is not in the best interests of the Partnership
or could damage the Partnership or its business or (ii) the Partnership is
required by law or by agreements with an unaffiliated third party to keep
confidential.

            10.6 Power of Attorney.

                 (a) Each Limited Partner constitutes and appoints the General
Partner, any Liquidating Trustee and authorized officers and attorneys-in-fact
of each, and each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in its name, place and stead to: execute, swear to, acknowledge,
deliver, file and record in the appropriate public offices (i) all certificates,
documents and other instruments (including, without limitation, this Agreement
and the Certificate and all amendments or restatements thereof) that the General
Partner or the Liquidating Trustee deems appropriate or necessary to form,
qualify or continue the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms;
(iii) all conveyances and other instruments or documents that the General
Partner deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement or the Capital
Contribution of any Partner.


                                      -49-
<PAGE>   55
                 (b) The foregoing power of attorney is irrevocable and a power
coupled with an interest, in recognition of the fact that each of the Limited
Partners will be relying upon the power of the General Partner to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership, and it shall survive the death or incompetency of a Limited
Partner to the effect and extent permitted by law, subsequent incapacity of any
Limited Partner and the transfer of all or any portion of such Partner's
Partnership Interests and shall extend to such Limited Partner's heirs,
successors, assigns and personal representatives.

                 (c) Nothing contained in this Section 10.6 shall be construed
as authorizing the General Partner to amend this Agreement except in accordance
with Article 11 hereof.

            10.7 Ownership of Starwood Units.

                 (a) Each Limited Partner and holder of OP Units hereby agrees
to provide the General Partner within fifteen (15) days of any written request
therefor, a statement, to the best of its knowledge, describing the number of
Starwood Units actually or constructively owned by such Limited Partner or
holder of OP Units and all direct and indirect owners of such Limited Partner or
holder for purposes of the REIT Requirements as determined under Section 318(a)
of the Code, as modified by Section 856(d)(5) of the Code, or Section 544 of the
Code, as modified by Section 856(h) of the Code.

                 (b) Each Limited Partner and holder of OP Units, except to the
extent that the General Partner provides prior written consent, hereby
represents, warrants and covenants that (A) it is not and will not become a
Restricted Entity, (B) no "prohibited transaction" (as defined in Section
4975(c) of the Code or within the meaning of Section 406 of ERISA) has occurred
or will occur that would not have occurred or occur if the Limited Partner or
holder of OP Units and its Affiliates were not Limited Partners and were not
holders of OP Units, (C) the Partnership has not become and will not become with
respect to any Restricted Entity a "party in interest" (as defined in Section
3(14) of ERISA) or a "disqualified person" (as defined in Section 4975(e) of the
Code) which the Partnership would not have become or be if the Limited Partner
or holder of OP Units and its Affiliates were not Limited Partners and were not
holders of OP Units, and (D) the Partnership has not and will not become jointly
and severally liable for any obligations arising under ERISA or the Code with
respect to any "employee benefit plan" as defined in and subject to ERISA or any
"plan" as defined in the Code for which the Partnership has not become or would
not be liable if the Limited Partner or holder of OP Units and its Affiliate
were not Limited Partners and were not holders of OP Units.

            10.8 Waiver of Fiduciary Duty. Each Limited Partner and holder of OP
Units hereby waives, to the maximum extent permitted under law, any and all
fiduciary duties of the General Partner to each, all or any combination of them
and hereby agrees that the General Partner may, but is under no obligation to,
take their interests into account in performing or refraining from performing
any act permitted under this Agreement.


                                      -50-
<PAGE>   56
                                   ARTICLE 11

                  Amendment of Partnership Agreement, Meetings

            11.1 Amendments.

                 (a) This Agreement may not be amended unless such amendment is
approved by the General Partner with the Consent of the Limited Partners, except
as provided below in this Section 11.1.

                 (b) Notwithstanding Section 11.1(a) hereof, the General Partner
shall have the power, without the Consent of the Limited Partners but after five
(5) Business Days notice to the Limited Partners, to amend this Agreement as may
be required to facilitate or implement any of the following purposes:

                     (i) to add to the obligations of the General Partner for
the benefit of the Limited Partners;

                     (ii) to reflect the admission, substitution, termination or
withdrawal of Partners after the date hereof in accordance with Section 4.1(d)
or Article 9 of this Agreement, provided that the General Partner shall not be
required to give the notice referred to in the first paragraph of this
subsection (b) in respect of the transactions described in this Paragraph (ii);

                     (iii) to set forth the rights, powers, duties, and
preferences of the holders of any additional Partnership Interests issued
pursuant to Article 4 hereof;

                     (iv) to reflect a change that is of an inconsequential
nature and does not materially adversely affect the Limited Partners, or to cure
any ambiguity, correct or supplement any provision of this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;

                     (v) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law;

                     (vi) to prevent all or any portion of the assets of the
Partnership from being deemed pursuant to United States Department of Labor
Regulation Section 2510.3- 101 or otherwise pursuant to ERISA or the Code to be,
for any purpose of ERISA or Section 4975 of the Code, assets of any Restricted
Entity;

                     (vii) to prevent the Partnership from being characterized
as a "publicly traded partnership" pursuant to Section 7704 of the Code and
Regulations;


                                      -51-
<PAGE>   57
                     (viii) to enable SLT to satisfy the REIT Requirements; and

                     (ix) to maintain the Partnership's characterization as a
partnership for tax purposes.

                 (c) Notwithstanding Sections 11.1(a) and 11.1(b) hereof, this
Agreement shall not be amended without the prior written consent of each Partner
adversely affected if such amendment would (i) convert a Limited Partner's
interest in the Partnership into a general partner's interest, (ii) modify the
limited liability of a Limited Partner, (iii) alter rights of the Partners to
receive allocations and distributions pursuant to Article 6 or Section 8.2
hereof (except as permitted pursuant to Article 4 and Sections 11.1(b)(iii) and
11.1(d) hereof), (iv) alter or modify the Rights set forth in an Exchange Rights
Agreement or a Registration Rights Agreement except in compliance therewith, (v)
except in furtherance of Sections 11.1(b)(vii), (viii) or (ix) hereof, alter
such Partner's rights to transfer its Partnership Interest; (vi) amend Sections
7.7, 7.8 or 10.7 hereof or (vii) amend Sections 11.1(c) or 11.1(d) hereof.

                 (d) Notwithstanding Section 11.1(c) hereof and subject to (but
not in limitation of) the rights granted to the General Partner pursuant to
Article 4 hereof and this Article 11, this Agreement may be amended to (i) alter
the rights of any or all of the Partners to receive allocations and
distributions pursuant to Article 6 or Section 8.2 hereof or (ii) alter the
rights of any or all of the Partners to transfer their Partnership Interests if
such amendment is approved by the prior written consent of a majority of each
class or group of Partnership Interests that is treated in a uniform or pro rata
basis by such amendment.

            11.2 Meetings of the Partners; Notices to Partners.

                 (a) Meetings of Partners may be called by the General Partner
or by Limited Partners holding at least 1% of the Percentage Interests to act on
any matter specified herein or in the Act to be voted on or consented to by the
Partners. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
(7) Business Days prior to the date of such meeting. Partners may vote in person
or by proxy at such meeting. Whenever the vote or Consent of the Limited
Partners is permitted or required under this Agreement, such vote or consent may
be given at a meeting of Limited Partners or may be given in accordance with the
procedure prescribed in Section 11.2(b) hereof.

                 (b) Any action required or permitted to be taken at a meeting
of the Partners may be taken without a meeting if a written consent setting
forth the action so taken is signed by the General Partner and such percentage
or number of the Limited Partners as is expressly required by this Agreement.
Such consent may be in one instrument or in several instruments, and shall have
the same force and effect as a vote of the Partners. Such consent shall be filed
with the General Partner and copies thereof delivered to all Partners. An action
so taken shall be deemed to have been taken at a meeting held on the effective
date so certified.

                 (c) Each Limited Partner may authorize any Person or Persons to
act for him by proxy on all matters in which a Limited Partner is entitled to
participate, including


                                      -52-
<PAGE>   58
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Limited Partner or his attorney-in-fact. No proxy
shall be valid after the expiration of eleven (11) months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Limited Partner executing it. No such proxy and no such
revocation shall be effective unless a copy thereof has been delivered to the
General Partner.

                 (d) Whenever the Consent of the Limited Partners is required
hereunder, the General Partner shall provide a notice to each Partner who is a
Limited Partner on the date the notice is given setting forth the matter(s) as
to which it proposes to seek such consent at least five (5) Business Days in
advance of the date upon which such consent is sought.


            11.3 Mergers. Notwithstanding Section 7.1(a)(xv) hereof, the General
Partner may not authorize or cause a merger between the Partnership and another
Entity (a) if the Partnership is not the surviving Entity in the merger, or (b)
without the prior written consent of the Limited Partners whose consent would
have been required pursuant to Section 11.1(c) and (d) hereof if such merger had
been an amendment to this Agreement or (c) without the Consent of the Limited
Partners if such merger would otherwise have a material adverse impact on the
rights, duties or obligations of the Limited Partners


                                   ARTICLE 12

                               General Provisions

            12.1 No Liability of Directors and Others. Notwithstanding anything
to the contrary contained herein, no recourse shall be had by the Partnership or
any Partner against any trustee, director, shareholder, officer, employee, agent
or attorney of the General Partner for any act or omission of the General
Partner or any obligation or liability of the General Partner under this
Agreement, and none of the foregoing shall have any personal liability for or
with respect to any of the foregoing; provided that the foregoing shall not
relieve any trustee, officer or director of the General Partner of any liability
in his capacity as such.

            12.2 Notices. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and may
be personally served, sent by United States mail, or sent via facsimile. A
notice shall be deemed to have been given when delivered in person or, if sent
by United States mail, three business days after deposit in United States mail,
registered or certified, postage prepaid, and properly addressed, by or to the
appropriate party, or, if sent via facsimile, upon receipt by the sending party
of verification of transmission. For purposes of this Section 12.2, the
addresses of the parties hereto shall be as set forth on Exhibit B hereto. The
address of any party hereto may be changed by a notice in writing given in
accordance with the provisions hereof.

            12.3 Controlling Law. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning


                                      -53-
<PAGE>   59
limitations of actions), shall be governed by and construed in accordance with
the laws of the State of Delaware, notwithstanding any conflict-of-laws
doctrines of such state or other jurisdiction to the contrary. Each of the
parties hereto irrevocably submits and consents to the jurisdiction of the
United States District Court for the Southern District of New York in connection
with any action or proceeding arising out of or relating to this Agreement and
irrevocably waives any immunity from jurisdiction thereof and any claim of
proper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled in any such action or proceeding.

            12.4 Execution of Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

            12.5 Severability. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

            12.6 Entire Agreement. This Agreement (together with the Exhibits
hereto) and the Formation Agreement contain the entire understanding among the
parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained. The
parties hereto intend that this Agreement be treated as a separate and distinct
agreement and as not being part of any other agreement (other than the Formation
Agreement), arrangement, partnership or joint venture. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

            12.7 Paragraph Headings. The paragraph headings in this Agreement
are for convenience and they form no part of this Agreement and shall not affect
its interpretation.

            12.8 Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate. The term "including" shall mean
"including, but not limited to."

            12.9 Number of Days. In computing the number of days (other than
Business Days) for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday or holiday on which national
banks are or may elect to be closed, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or such holiday.


                                      -54-
<PAGE>   60
            12.10 Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Limited Partners in
the carrying on of their own respective businesses or activities.

            12.11 Assurances. Each of the Partners shall hereafter execute and
deliver such further instruments and do such further acts and things as may be
reasonably required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.

            12.12 Waiver of Partition. Each Partner hereby waives any right such
Partner may have to partition its interest in the Partnership or any property of
the Partnership.


                                      -55-
<PAGE>   61
                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed on their behalf as of the date
first above written.

                              GENERAL PARTNER:

                              STARWOOD HOTELS & RESORTS
                              WORLDWIDE, INC., a Maryland corporation

                              By: /s/ Thomas C. Janson, Jr.
                                  -------------------------------------------
                                  Name: Thomas C. Janson, Jr.
                                  Title: Executive Vice President and General
                                         Counsel


                              LIMITED PARTNERS:


                              STARWOOD HOTEL INVESTORS II, L.P.

                              By: STARWOOD CAPITAL GROUP I, L.P.

                              By: BSS CAPITAL PARTNERS, L.P.,
                                  General Partner

                              By: STERNLICHT HOLDINGS II, Inc.
                                  General Partner


                              By: /s/ Madison F. Grose
                                  -------------------------------------------
                                  Name: Madison F. Grose
                                  Title:


                              FIREBIRD CONSOLIDATED PARTNERS, L.P.


                              By: /s/ Madison F. Grose
                                  -------------------------------------------
                                  Name: Madison F. Grose
                                  Title: Authorized by General Partner


                                      -56-
<PAGE>   62
                              APPOLLO REAL ESTATE INVESTMENT
                              FUND, L.P.

                              By: APPOLLO REAL ESTATE ADVISORS, L.P.

                              By: APPOLLO REAL ESTATE MANAGEMENT,
                                  INC.

                              By: /s/ Ronald J. Solotrub
                                  -------------------------------------------
                                  Name: Ronald J. Solotrub
                                  Title: Vice President and Controller


                              PHILADELPHIA HSR LIMITED PARTNERSHIP


                              By: /s/ Edwin Sidman
                                  -------------------------------------------
                                  Name: Edwin Sidman
                                  Title: General Partner


                              STARWOOD OPPORTUNITY FUND II, L.P.

                              By: STARWOOD CAPITAL GROUP I, L.P.
                                  General Partner

                              By: BSS CAPITAL PARTNERS, L.P.,
                                  General Partner

                              By: STERNLICHT HOLDINGS II, Inc.
                                  General Partner


                              By: /s/ Madison F. Grose
                                  -------------------------------------------
                                  Name: Madison F. Grose
                                  Title:



                              -----------------------------------------------
                              EDWARD J. ROHLING


                                      -57-
<PAGE>   63
                              ZIFF INVESTORS PARTNERSHIP, L.P. II


                              By: /s/ Mark A. Beaudoin
                                  -------------------------------------------
                                  Name: Mark A. Beaudoin
                                  Title: Treasurer


                              MONTROSE CORPORATION


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:


                              HARVEYWOOD HOTEL INVESTORS, L.P.


                              By: /s/ Madison F. Grose
                                  -------------------------------------------
                                  Name: Madison F. Grose
                                  Title: Authorized by General Partner


                              THE HERMITAGE, L.P.

                              By: HERMITAGE OF NASHVILLE, INC.
                                  General Partner


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:


                              BRAINARD HOLDINGS, INC.


                              By: /s/ Robert K. Hamshaw
                                  -------------------------------------------
                                  Name: Robert K. Hamshaw
                                  Title: Secretary


                              /s/ Barry S. Sternlicht
                              -----------------------------------------------
                              BARRY S. STERNLICHT


                                      -58-
<PAGE>   64
                              THE BARRY S. STERNLICHT FAMILY SPRAY
                              TRUST I


                              By: /s/ Barry S. Sternlicht
                                  -------------------------------------------
                                  Name: Barry S. Sternlicht
                                  Title: Trustee


                              THE BARRY S. STERNLICHT FAMILY SPRAY
                              TRUST II


                              By: /s/ Barry S. Sternlicht
                                  -------------------------------------------
                                  Name: Barry S. Sternlicht
                                  Title: Trustee


                              THE BARRY S. STERNLICHT FAMILY SPRAY
                              TRUST III


                              By: /s/ Barry S. Sternlicht
                                  -------------------------------------------
                                  Name: Barry S. Sternlicht
                                  Title: Trustee


                              /s/ Jack Nash
                              -----------------------------------------------
                              JACK NASH


                              THE NASH FAMILY PARTNERSHIP


                              By: /s/ Joshua Nash
                                  -------------------------------------------
                                  Name: Joshua Nash
                                  Title: General Partner


                              /s/ Madison F. Grose
                              -----------------------------------------------
                              MADISON F. GROSE


                                      -59-
<PAGE>   65
                              THE MADISON F. GROSE IRREVOCABLE
                              INSURANCE TRUST


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title: Trustee



                              -----------------------------------------------
                              MAX C. CHAPMAN


                              /s/ Merrick R. Kleeman
                              -----------------------------------------------
                              MERRICK R. KLEEMAN


                              /s/ James R. Gates
                              -----------------------------------------------
                              JAMES R. GATES



                              -----------------------------------------------
                              CARLY SIMON


                              /s/ Steven R. Goldman
                              -----------------------------------------------
                              STEVEN R. GOLDMAN


                              /s/ Alan Schwartz
                              -----------------------------------------------
                              ALAN SCHWARTZ



                              -----------------------------------------------
                              JAY SUGARMAN


                              /s/ John Z. Kukral
                              -----------------------------------------------
                              JOHN Z. KUKRAL


                              /s/ Jerome C. Silvey
                              -----------------------------------------------
                              JEROME C. SILVEY


                                      -60-
<PAGE>   66
                              -----------------------------------------------
                              MICHAEL MUELLER


                              /s/ James G. Babb, III
                              -----------------------------------------------
                              JAMES G. BABB, III


                              LAMBSTER PARTNERS LIMITED
                              PARTNERSHIP

                              By: STER, INC.
                                  General Partner

                              By: /s/ Neil G. Bluhm
                                  -------------------------------------------
                                  Name: Neil G. Bluhm
                                  Title: President



                              -----------------------------------------------
                              JEFF DISHNER



                              -----------------------------------------------
                              GEOFFREY BEER


                              /s/ Lowell D. Kraff
                              -----------------------------------------------
                              LOWELL D. KRAFF



                              -----------------------------------------------
                              STEPHEN FIORE


                              /s/ Jennifer Albero
                              -----------------------------------------------
                              JENNIFER ALBERO


                              /s/ James A. Kleeman, M.D., P.C.
                              -----------------------------------------------
                              JAMES A. KLEEMAN, M.D., PC



                              -----------------------------------------------
                              ELLIS F. RINALDI


                                      -61-
<PAGE>   67
                              -----------------------------------------------
                              J. PETER PAGANELLI


                              /s/ John F. Couture
                              -----------------------------------------------
                              JOHN F. COUTURE


                              /s/ James Oldham
                              -----------------------------------------------
                              JAMES OLDHAM



                              THE PRUDENTIAL INSURANCE COMPANY
                              OF AMERICA, on behalf of Prudential Property
                              Investment Separate Account II


                              By: /s/ Roger S. Pratt
                                  -------------------------------------------
                                  Name: Roger S. Pratt
                                  Title: Managing Director


                              GARY MENDELL FAMILY PARTNERSHIP


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:



                              -----------------------------------------------
                              GARY MENDELL



                              -----------------------------------------------
                              ELLEN-JO MENDELL



                              -----------------------------------------------
                              STEPHEN MENDELL


                              /s/ Murray Dow II
                              -----------------------------------------------
                              MURRAY DOW II


                                      -62-
<PAGE>   68
                              WESTPORT HOSPITALITY, INC.


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:


                              ZAPCO HOLDINGS, INC.


                              By: /s/ [illegible]
                                  -------------------------------------------
                                  Name:
                                  Title:


                              ZAPCO HOLDINGS, INC. DEFERRED
                              COMPENSATION PLAN TRUST


                              By: /s/ Nancy S. Heinrich
                                  -------------------------------------------
                                  Name: Nancy S. Heinrich
                                  Title: Trustee


                              /s/ Orna L. Shulman
                              -----------------------------------------------
                              ORNA L. SHULMAN


                              /s/ Arthur Green
                              -----------------------------------------------
                              ARTHUR GREEN



                              -----------------------------------------------
                              MICHAEL HALL


                              /s/ Mark Rosinsky
                              -----------------------------------------------
                              MARK ROSINSKY


                              /s/ Randi Rosinsky
                              -----------------------------------------------
                              RANDI ROSINSKY


                                      -63-
<PAGE>   69
                              /s/ John Daily
                              -----------------------------------------------
                              JOHN DAILY


                              /s/ Felix Cacciato
                              -----------------------------------------------
                              FELIX CACCIATO


                              /s/ Thomas Clearwater
                              -----------------------------------------------
                              THOMAS CLEARWATER



                              -----------------------------------------------
                              HARVEY MOORE



                              -----------------------------------------------
                              TRACY DRISCOLL


                              GEOFFREY T. BOISI REVOCABLE TRUST


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:


                              /s/ Daniel Stern
                              -----------------------------------------------
                              DANIEL STERN

                              WILLIAM A.M. BURDEN & CO., L.P.

                              By: BURDEN BROTHERS, INC.,
                                  -------------------------------------------
                                  General Partner

                              By: /s/ Jeffrey A. Weber
                                  -------------------------------------------
                                  Name: Jeffrey A. Weber
                                  Title: President and CEO

                              JAW HOLDINGS I, L.L.C.


                              By: /s/ Jeffrey A. Weber
                                  -------------------------------------------
                                  Name: Jeffrey A. Weber
                                  Title: Member


                                      -64-
<PAGE>   70
                              WHWE L.L.C.

                              By: WHITEHALL STREET REAL ESTATE
                              LIMITED PARTNERSHIP V,
                              Member and Manager


                              By: /s/ Stuart M. Rothenberg
                                  -------------------------------------------
                                  Name: Stuart M. Rothenberg
                                  Title: Vice President



                              WOODSTAR INVESTOR PARTNERSHIP

                              By: MARSWOOD INVESTORS, L.P.,
                                  General Partner

                              By: STARWOOD CAPITAL GROUP, L.P.,
                                  General Partner

                              By: BSS CAPITAL PARTNERS, L.P.,
                                  General Partner

                              By: STERNLICHT HOLDINGS II, INC.,
                                  General Partner


                              By: Madison F. Grose
                                  -------------------------------------------
                                  Name: Madison F. Grose
                                  Title:



                              NOMURA ASSET CAPITAL CORPORATION


                              By:
                                  -------------------------------------------
                                  Name:
                                  Title:


                                      -65-
<PAGE>   71
                                    EXHIBIT A

               LIST OF PARTNERS, PERCENTAGE INTERESTS AND OP UNITS

                                [To Be Provided]



                                      -66-
<PAGE>   72
                                   EXHIBIT A-1

   LIST OF CLASS A LIMITED PARTNERS, PERCENTAGE INTERESTS AND CLASS A OP UNITS

                                [To Be Provided]



                                      -67-
<PAGE>   73
                                   EXHIBIT A-2

   LIST OF CLASS B LIMITED PARTNERS, PERCENTAGE INTERESTS AND CLASS B OP UNITS

                                [To Be Provided]



                                      -68-
<PAGE>   74
                                    EXHIBIT B

                          NOTICE ADDRESSES OF PARTNERS

                                [To Be Provided]



                                      -69-